Big Oil Just Woke Up to Threat of Rising Electrified Car Request
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The world’s thickest oil producers are embarking to take electrified vehicles gravely as a long-term threat.
OPEC quintupled its forecast for sales of plug-in EVs, and oil producers from Exxon Mobil Corp. to BP Plc also revised up their outlooks in the past year, according to a examine by Bloomberg Fresh Energy Finance released on Friday. The London-based researcher expects those cars to reduce oil request eight million barrels by 2040, more than the current combined production of Iran and Iraq. 
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Growing popularity of EVs increases the risk that oil request will stagnate in the decades ahead, raising questions about the more than $700 billion a year that’s flowing into fossil-fuel industries. While the oil producers’ outlook isn’t almost as aggressive as BNEF’s, the numbers indicate an acceleration in the number of EVs likely to be in the global fleet.
“The number of EVs on the road will have major implications for automakers, oil companies, electrical utilities and others,” Colin McKerracher, head of advanced-transport analysis at BNEF in London, wrote in a note to clients. “There is significant disagreement on how prompt adoption will be, and views are switching quickly.”
BNEF expects electrical cars to outsell gasoline and diesel models by 2040, reflecting a rapid decline in the cost of lithium-ion battery units that store power for the vehicles. It expects five hundred thirty million plug-in cars on the road by 2040, a third of worldwide total number of cars.
The Organization of Petroleum Exporting Countries raised its two thousand forty EV fleet prediction to two hundred sixty six million from the forty six million it anticipated a year ago. Battery cars under the fresh projection account for twelve percent of the market within twenty three years, compared to two percent in the two thousand fifteen forecast. Based in Vienna, the group signifying fourteen nations expects half the number diesel vehicles as it did a year ago.
Others making similar expectations according to the BNEF note include:
- The International Energy Agency more than doubled its central forecast for EVs, raising its two thousand thirty EV fleet size estimate from to fifty eight million from twenty three million.
- Exxon Mobil boosted its two thousand forty estimate to about one hundred million from sixty five million.
- BP anticipates one hundred million EVs on the road by 2035, a forty percent increase in its outlook compared with a year ago.
- Statoil ASA, the Norwegian state oil company, says EVs will account for a thirty percent of fresh sales by 2030.
Just a fraction of the world’s cars sold today are powered by batteries instead of gasoline. Many analysts increasingly say the market will expand rapidly as almost all major auto makers bring dozens of fresh EV models to market. OPEC said in its oil market report on Wednesday that electrical vehicle sale targets could dampen request in some parts of Asia as soon as 2018.
Long-term growth depends on a broad range of factors, including policy decisions by governments seeking to tackle air pollution to the cost of the lithium-ion batteries that account for about a third of the cost of each one.
Yet even as oil majors lift their outlook, they remain much less optimistic than the automakers. The world’s top automakers have a combined plan to sell six million EVs a year by 2025, rising to eight million in 2030, according to Bloomberg Fresh Energy Finance.
Some big companies plan to go all electrified. Volvo AB expects to have an electrical motor in every car by 2019. It joins Elon Musk’s Tesla Inc. as a major EV maker and Geely Automobile Holdings Ltd., the Hong Kong-based maker of London’s black cabs, which is re-branding itself to concentrate on EVs.
“What oil companies and car companies are telling is diverging,” said McKerracher, the BNEF analyst. “This is a trillion dollar question, and somebody is going to be wrong.”