Plug-in cars make up less than 0.10% of all car sales globally, it’s a tiny fraction of the market that ‘Big Oil’ deems to be insignificant enough to be ignored, in fact, OPEC (Organisation of the Petroleum Exporting Countries) believes that by 2040, the Electric Vehicle market might just make up 1 percent of all new cars being sold. Is this naivety, bravado or stupidity?
Given that many of the big oil suppliers are already in financial difficulty (yes, really), why aren’t they doing more about the inevitable crisis that they will face? Over half of the global oil demand is driven by transportation needs, agencies such as Bloomberg New Energy Finance predicts that 2028 will be the year of reckoning for the big oil producers, but before that, we should see an impact on the number of barrels produced as soon as 2023.
In all honesty, the figures being stated are a little hazy, much of it depends on what perspective you’re viewing them from, but sources suggest that Electric Vehicles could displace up to 2 million barrels of oil each day by 2023.
This number of barrels is significant; a similar number of ‘overstocking’ is said to have caused the oil crash in 2014, in which a number of oil producers went bankrupt, whilst others looked for bailouts from state or investors. The debts incurred are partly to blame for oil prices today, some reports suggest that the debts run into $trillions.
The rise of the electric vehicle
As with any technology, the wider the adoption, the cheaper it becomes. A significant cost of any electric vehicle is the power source, but prices for batteries fell by 35 percent last year, and with the likes of Elon Musk (Tesla) et al all working hard to develop affordable yet use-able vehicles, the prices will only come down further.
Studies show us that 2040 should see practical, long-range Electric Vehicles on sale for the equivalent of $22,000 USD in today’s money, it’s expected that they will have a 35% market share of all new vehicles being sold. Somewhat different to OPEC’s claim of just one percent.
It’s true that the current generation of fully electric vehicles leaves a little to be desired in some departments, but we’ve gone from ugly, slow and impractical to fast (very fast in fact), stylish and a ‘want’ within just a decade – where will the next ten years take us?
It seems that OPEC’s insistence on the failure of the electric vehicle is akin to sticking their fingers in their collective ears whilst shouting “la la la, we’re not listening” and hoping that it all goes away. This almost definitely isn’t going to happen.
However you view EV’s, you can guarantee that they are very much here to stay and will become an integral part of our daily lives, just as society relies on fossil fuels in today’s world, you can bet that we’ll feel the same in another decade or so about EV’s.
What do you think will happen to oil companies in the future? Have OPEC wildly underestimated the appeal for electric vehicles? Let us know in the comments below.
Image Credit – Pixabay