Oil Industry Begins to Feel The Impact of Electric Vehicles

///Oil Industry Begins to Feel The Impact of Electric Vehicles

It looks like the electric vehicles market has grown big enough to upset big people: Oil companies are reviewing their predictions about the market and realizing – perhaps a little late, that electricity-powered car is a near-inevitable future.

A study conducted by Bloomberg New Energy Finance revealed that OPEC, the Organization of Petroleum Exporting Countries, has increased its forecast for the sale of electric vehicles by 2040 – from 46 million to 266 million units.

Other major companies in the segment, such as Exxon Mobil and BP, also decided to revise the numbers that were lifted last year, with the two companies raising their forecasts from 60 million to 100 million vehicles.

In all, the expectation of the oil industry is that the inherent arrival of the electric will reduce the demand for oil by 8 million barrels by 2040, equivalent to the current production of Iran and Iraq combined.

This could lead to stagnation in the demand for oil in the coming decades and a significant impact on the amount of money that is moving through this industry – about $700 billion per year.

“The number of electric vehicles on the streets will have serious implications for carmakers, oil companies, energy service providers and others,” explains Colin McKerracher, director of advanced transport analysis at BNEF. “There is a significant disagreement between how fast the adoption should be and the visions are changing fast.”

While some consulting firms estimate that electric power will account for 90 percent of sales by 2050, BNEF believes that the exchange of fuel for electricity will only happen in 2040, with 530 million new electric vehicles – or one-third of the world’s fleet – circulating around.

By |2017-07-17T13:39:02+00:00July 17th, 2017|Current Events, Lifestyle|4 Comments

4 Comments

  1. Ogeto Omwancha October 11, 2017 at 11:13 am - Reply

    It is a fact that Electric cars are poised to become prominent in the coming decades, and are well positioned to eventually replace traditional oil-based gasoline-burning engines entirely. Increasing emission standards across the United States and Europe, as the primary driver of innovative startups targeting the automotive industry, are pushing manufacturers to make more fuel-efficient cars that produce fewer amounts of harmful emissions. There is also a lack of infrastructure to support a fully electric car, meaning you have to plan out trips based on the locations of each charging station. But as emission standards continue to get stricter and digital technology drives down the price of the electric batteries (the largest cost to an all-electric vehicle) EVs will become more affordable to purchase. Electric car sales have risen dramatically over recent years, from less than 50,000 vehicles in 2010 to more than 500,000 in 2015(source Wood Mackenzie as published at Bloomberg). The International Energy Agency estimates annual worldwide sales will reach almost 120 million vehicles by 2050. Combined the decrease in revenue, stock price, and statements similar to the one above are proving that the oil industry has been caught off guard by the popularity surge of an EV future. Oil companies are currently scrambling to come up with solutions that will reduce the effect of EVs and one clear path involves the transition from earning revenue from gasoline sales to offering a full charge or the time that it will take to fully charge an electric vehicle.

    • Joan Yancen December 22, 2017 at 2:01 am - Reply

      Besides, Oil industry in spite of the risk shown through the last years has been “hiding”, Alex Griffiths, Managing Director of Fitch, in an interview for Financial Times said that it will cause radical changes for the companies and the oil sector will not be the only affected, the big enterprises of electricity who have used fossil fuel like gas and coal face the risk in batteries can solve the problem of intermittent solar plants that can not produce energy during the night. The competition is dying for the oil industry and the fault is mostly on the hands of those who manage it. In my opinion, this is a good step and I hope it will arrive as fast as it can. This innovation is going to bring us the decrease of the pollution.

  2. George Mburu December 29, 2017 at 12:00 pm - Reply

    The gradual fall of the oil industry in the market is evidence of digital transformation and emerging technology as better ,cheaper and more efficient sources of energy are coming up every day. The electric vehicle was ounce an idea but now a threat as it might pose competition to the oil industry due to technology. It means that all petrol stations might end up being an ancient , dusty and all a decline in workers in oil mining companies due to decrease in demand of oil in the market . The electricity industry which highly depends on wind , solar and hydro power need to increase their output due to their increase in demand and lower costs in order to catch the market.

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