Global prospects for the oil market. Will it be destroyed by electric cars?
Recently, various media like to speculate on the future of the oil and gas industry. They say, very soon will come the time of massive intervention of electric vehicles. The hydrocarbon market will collapse, and with it the super income of the oil states will disappear. Should the sheikhs be afraid of Elon Musk? Experts of the company Facts Global Energy (FGE) insist that it is not worth it.
The Financial Times forecast predicts that the prevailing majority of cars will use traditional fuel in the nearest quarter of the century. Experts have estimated the growth rate of the world auto industry. In their opinion, 1.8 billion cars will be moving around the world by 2040. Only ten percent of them will be equipped with electric motors.
Analysts at Facts Global Energy state categorically that the awareness raised by the press around the phenomenon of Tesla has no real basis. It’s too early to speak about the collapse of the hydrocarbon market as well as discuss the full migration of people to the moon.
Experts note that consumer demand for electric vehicles is significant in those countries where it is stimulated by the state. Moreover, the purchase of electric vehicles does not affect the market of cars with a gasoline or diesel engine. The example of Norway is a confirmation, as the consumers buy electric vehicles without stopping using a classic car. The interest in electric vehicles is caused primarily by huge government subsidies. Denmark, for example, eliminated subsidies for environmentally friendly transport at the beginning of 2016, and sales in this sector fell by 80% during the year. So the eco-consciousness of the Scandinavians has nothing to do with it.
The US market stands apart. Americans continue to adore SUVs. An electric car for a US citizen is more like an expensive gadget than a vehicle. And the situation in the next 10-20 years is unlikely to change.
The development of the market for electric vehicles is hampered by such objective factors as slow development of technologies in the field of car batteries, limited production capacity and slow development of infrastructure.
So the sheikhs can sleep peacefully as in the next 20 years there won’t be a threat for the market of hydrocarbons from the green car industry.
The material was prepared with the participation of Inna Dobrinina,
a leading analyst of the brokerage company VOSPARI.