Big Oil Is Not Prepared For The Electric Car Revolution
THE ‘VOLT-AGE’ IS COMING AND BIG OIL ISN’T READY
While car consumers increasingly buy into the impending transition to electric vehicles, Big Oil remains a bit flat-footed. According to Giles Parkinson (via Renew Economy), “Big Oil, it seems, can see the EV revolution on its radar, but still can’t figure out how far it is away, or what it should do about it. Denial is one popular option.”
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Above: Tesla’s Model 3 (Instagram: _mn_cars_612_)
At the Australian Petroleum Production & Exploration Association (APPEA) conference, a new report “Enter the Volt-Age: Electric vehicle disruption of the oil and gas industry” was presented by consultancy Deloitte to conference attendees. After gaining access to the report, Parkinson notes, “nearly half of oil and gas companies are not preparing for the shift to EVs. They could be in for a shock.”
Deloitte’s report explains that “demand for crude oil… may soon stall. This is because of a new technology which offers superior qualities in all three dimensions of the energy trilemma – security of supply, affordability and environmental sustainability – the electric vehicle (EV). The EV is a game-changer in the evolution of both the energy and transport industries.”
Above: Oil and gas executives expect EVs to impact their business in the coming decade(s) or “never” (Source: Renew Economy via Deloitte)
Yet some in the oil industry haven’t accepted this reality (see above). Perhaps they should — Steve McGill, one of the authors of Deloitte’s report notes, “All the countries that are looking to ban sales of cars with internal combustion engines are among the major oil importers.”
In addition, Parkinson notes that the “graph below is interesting. It highlights how the big growth economies – particularly China and India – are looking to EVs for the future. In both countries, more than 85 percent of consumers are showing an interest in EVs.”
Above: In countries represented in dark green, including China and India, more than 85% of consumers show interest in EVs (Source: Renew Economy via Deloitte)
Even though EVs aren’t commonplace today, Deloitte’s report predicts “this is set to change, and fast. Every major car manufacturer has outlined plans for electrification over the next decade.” Parkinson also points to an increasing selection of lower cost EV options like the “Nissan Leaf and the new Tesla Model 3” as examples of where the industry is heading.
While these trends converge, there’s something else that could accelerate EV adoption en masse. It turns out, as internal “combustion engine ban legislation [continues] in a number of cities and countries globally, the world sits on the cusp of a global transportation transformation that will impact all market segments.” Deloitte’s authors conclude, “The EV opportunity is enormous – oil and gas operators must recognize this and should not ignore the rise of EVs.”
Source: Renew Economy
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