Big Oil Starting To Take Notice Of Rise Of EVs
It was really only a matter of time, and now the world’s top oil companies are seeing EVs as a viable and permanent threat.
Though makers of EVs are still much more bullish about the timeline for mass adoption, several oil producers are taking note, and many are beginning to change their initial conclusions. BP and Exxon Mobil have bumped up their estimates this year, and OPEC has quintupled its future sales forecast for plug-in EVs.
Bloomberg New Energy Finance (BNEF ) believes that EVs will sell better than ICE vehicles by 2040, totalling 530 million plug-ins on the road at that time, which will account for one-third of the world’s vehicles. According to a study by BNEF, by 2040 EVs will lower the global oil demand by eight million barrels. Chief of advanced-transport analysis at BNEF in London, Colin McKerracher, shared in a note to clients:
“The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others. There is significant disagreement on how fast adoption will be, and views are changing quickly.”
“What oil companies and car companies are saying is diverging. This is a trillion dollar question, and somebody is going to be wrong.”
Though these estimates will continue to diverge, the truth is that both sides of the equation are seeing that the popularity of EVs is and will continue to increase, which will drop the demand for fossil fuels. While oil companies may be attempting to make it seem like they aren’t concerned, multiple recent forecasts sing a vastly different tune.
- OPEC’s previous 2040 estimate was 46 million EVs, and now the group representing 14 nations is forecasting 266 million.
- Exxon Mobil initially predicted 65 million electric cars by 2040, but has now upped it to 100 million.
- Norwegian-based Statoil ASA sees an electric vehicle market share of 30 percent by 2030.
- The International Energy Agency raised its 2030 EV fleet size from 23 million to 58 million.
- BP bumped its future outlook up by a whopping 40 percent, to 100 million plug-ins on the road by 2035.
Obviously, these estimates are markedly different, but the trend is the same. OPEC’s recent oil market report shows that due to EV sales, oil demand in Asia could see significant declines as soon as next year.
There are many variables, which make these type of estimates difficult. Fuel cost and battery costs are two of the most obvious, but another gray area lies in government support and subsidies (or lack thereof).
According to BNEF, top world automakers combined plans show estimated sales of six million EVs per year as soon as 2025, and eight million by 2030, and these estimates continue to rise.
Source: Automotive News