The world’s largest pro­duc­ers are tak­ing the grow­ing pop­u­lar­ity of elec­tric cars se­ri­ously,


The world’s big­gest oil pro­duc­ers are start­ing to take elec­tric ve­hi­cles se­ri­ously 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 their out­looks in the past year, ac­cord­ing to a study by Bloomberg New En­ergy Fi­nance (BNEF) re­leased on Fri­day. The Lon­don-based re­searcher ex­pects those cars to re­duce oil de­mand by eight mil­lion bar­rels come 2040, more than the current com­bined pro­duc­tion of Iran and Iraq.

Grow­ing pop­u­lar­ity of EVs in­creases the risk that oil de­mand 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 nearly 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, elec­tric 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 fast adop­tion will be and views are chang­ing quickly.”

BNEF ex­pects elec­tric 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 530 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 2040 EV fleet pre­dic­tion to 266 mil­lion from the 46 mil­lion it an­tic­i­pated a year ago. Bat­tery cars un­der the new pro­jec­tion ac­count for 12 per cent of the mar­ket within 23 years, com­pared to 2 per cent in the 2015 forecast. Based in Vi­enna, the group rep­re­sent­ing 14 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, which more than dou­bled its

“There is sig­nif­i­cant dis­agree­ment on how fast adop­tion will be and views are chang­ing quickly.” COLIN MCKERRACHER BLOOMBERG NEW EN­ERGY FI­NANCE

cen­tral forecast for EVs, rais­ing its 2030 EV fleet size es­ti­mate from to 58 mil­lion from 23 mil­lion. Exxon Mo­bil boosted its 2040 es­ti­mate to about 100 mil­lion from 65 mil­lion. BP an­tic­i­pates 100 mil­lion EVs on the road by 2035, a 40-per-cent in­crease in its out­look com­pared with a year ago. Sta­toil ASA, the Nor­we­gian state oil com­pany, says EVs will ac­count for 30 per cent of new sales by 2030. Just a frac­tion of the world’s cars sold to­day are pow­ered by bat- ter­ies in­stead of gaso­line. Many an­a­lysts in­creas­ingly say the mar­ket will ex­pand rapidly as al­most all ma­jor au­tomak­ers bring dozens of new EV mod­els to mar­ket.

Long-term growth de­pends on a wide range of fac­tors, in­clud­ing pol­icy de­ci­sions by gov­ern­ments seek­ing to tackle air pol­lu­tion to the cost of the lithium-ion bat­ter­ies that ac- count 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 New En­ergy Fi­nance.

Some big com­pa­nies plan to go all elec­tric. Volvo AB ex­pects to have an elec­tric 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 re­brand­ing it­self to fo­cus on EVs.

“What oil com­pa­nies and car com­pa­nies are say­ing is di­verg­ing,” said McKerracher, the BNEF an­a­lyst. “This is a tril­lion dol­lar ques­tion, and some­body is go­ing to be wrong.”


Volvo AB said it ex­pects to have an elec­tric mo­tor in ev­ery car by 2019, join­ing Tesla Inc. as a ma­jor elec­tric-ve­hi­cle maker.


The world’s top au­tomak­ers plan to sell a six mil­lion EVs a year by 2025.

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