Pouring oil on the EV outlook
LONDON (Reuters) - The biggest oil companies in the world have calculated that few, if any, of today's drivers will see electric cars outnumber gasoline and diesel models in their lifetimes.
While politicians and green lobby groups insist the future of transport is electric, in the past two months BP and Exxon have released data which points to electric cars making up only 4-5 per cent of all cars globally in 20-30 years.
Meanwhile some governments are targeting as much as a 60 percent market share for electric vehicles over a similar period.
The oil company forecasts may appear self-serving, but if they are widely accepted could provoke a policy shift that offers greater incentives for electric cars to end our addiction to oil.
And unlike more optimistic predictions from consultants like McKinsey, these forecast are backed by cash. They guide tens of billions of dollars in long-term investment in oil production and refining and it is oil that stands to lose if they get it wrong.
They don't, of course, take into account a major breakthrough in battery technology that could give electric cars a cost and performance edge over the internal combustion engine.
In its Energy Outlook for 2030, released earlier this month, BP predicted that electric vehicles and plug-in hybrids, will make up only 4 percent of the global fleet of 1.6 billion commercial and passenger vehicles in 2030.
"Oil will remain the dominant transport fuel and we expect 87 percent of transport fuel in 2030 will still be petroleum based," BP Chief Executive Bob Dudley said as he unveiled the BP statistics on January 18.
The balance is seen coming from biofuels, natural gas and electricity.
Plug-in hybrids can be powered from the mains and only rely on their small gasoline engines when the battery dies.
Standard hybrids are principally driven by an internal combustion engine whose efficiency is boosted by the recycling of energy generated from braking.
Exxon Mobil, the biggest oil and gas company in the world, says the continued high cost of electric vehicles compared to petroleum cars, means take-up won't even increase much during the 2030s.
In its 2040 Energy Outlook, released in December, the Texas-based company said electric vehicles, plug-in hybrids and vehicles that run on natural gas would make up only 5 percent of the fleet by 2040.
Peter Voser, Chief Executive of Royal Dutch Shell, the industry number two, sees a rosier future for electric vehicles. He predicts they will account for up to 40 percent of the worldwide car fleet, although only by 2050.
A $50 BILLION-A-YEAR OPINION
The statistics published by Exxon and BP, Europe's second-largest oil company by market value, are perhaps the most detailed long-term forecasts on electric vehicle take-up.
These Energy Outlooks guide how the oil groups allocate their annual investment budgets - among the biggest in the world, at over $50 billion combined for BP and Exxon.
The expected continued dominance of petroleum partly explains the scaling back in BP and Shell's solar, hydrogen and wind power ambitions in recent years, and Exxon's continued reluctance to get involved in renewable energy.
Insofar as the companies are active in green energy, it is mainly in the production and blending of biofuels. This is driven by U.S. and European governments' insistence that a percentage of motor fuels sold must come from plant-based sources.
If the oil companies are wrong about electric cars they will find their investments in big and expensive new oil production projects, which increasingly need crude prices around $80 per barrel to be profitable, not paying off.
The companies do see an easing in the addiction to oil, though.
Despite increased car ownership in China and India, Exxon predicts "global demand for fuel for personal vehicles will soon peak" due to an increase in average fuel efficiency.
BP expects the efficiency of combustion engines to double by 2030, with a third of vehicles on the road being hybrids.
This trend will be driven by more stringent fuel economy standards in the U.S., CO2 reduction legislation in Europe and an end to oil subsidies in developing countries.
Increased airline and commercial vehicle traffic will counterbalance some of the efficiency gains from cars but BP predicts that, helped by increased use of biofuels, demand for oil for transport overall will plateau in the mid-2020s.
GREENS FUME, POLITICIANS SEE QUICKER ADOPTION
Green groups reacted with suspicion to the oil industry forecasts.
"Exxon would say that, wouldn't they. A big take-up of electric cars is not something they would like to see," said Jos Dings, director of Brussels-based sustainable transport campaign group, Transport and Environment.
"The future for petrol and diesel doesn't look good," he countered.
Nonetheless, environmentalists like Dings fear political complacency about improving vehicle efficiency could prompt governments to ease targets to cut vehicle emissions, which could in turn delay the electrification of transport.
Big Oil's pessimistic outlook for electric cars is at odds with many governments' plans.
Electric vehicles barely register on the statistics of car sales at the moment. Nonetheless, China is targeting 5 million electric vehicles on its roads by 2020, according to media reports. This would represent around 3 percent of its predicted fleet.
The Australian government's main energy adviser, the Australian Energy Market Commission, has predicted electric vehicles will make up 20 per cent of new car sales in Australia by 2020 and 45 per cent by 2030.
The UK's Committee on Climate, which advises the government, has predicted electric vehicles will reach around 60 percent of new cars and vans by 2030. And New Zealand hopes to get to 60 percent by 2040.
The U.S. has more muted ambitions. President Barack Obama said he wants to put 1 million electric vehicles on U.S. roads by 2015, a figure that would represent less than half of one percent of the total fleet.
Many U.S. experts and officials predict a tipping point in the uptake in electric vehicles in the latter part of this decade, as technology improves, economies of scale kick in and consumer fears about being stranded when their batteries run flat, or "range anxiety," eases.
However, data compiled by the U.S. Energy Information Administration may explain the lack of an official U.S. target. Last week, the agency released an 'abridged version' of its Annual Energy Outlook 2012, due to be released in full in the Spring.
Tables used in formulating the outlook show electric vehicles and plug in hybrids are expected to account for only 1.3 percent of the U.S. fleet in 2030.
Furthermore, the agency predicts that neither consumers, nor carmakers, will get over 'range anxiety'. By 2035, the agency sees few, if any, electric vehicles on U.S. roads that can travel for 200 miles without recharging.
CARMAKER ENTHUSIASM COOLS
Many of the headlines out of autoshows in the past couple of years have been captured by the launch of electric cars such as Nissan's Leaf, the Tesla sports car, plug-ins like General Motors' Chevrolet Volt, and the latest incarnation of the Toyota Prius.
Other manufacturers including BMW, Rolls-Royce and Porsche have presented electric-powered prototypes.
On the basis of this, one could be forgiven for thinking the auto industry is betting big on electric power.
Yet few auto executives share the optimism of Renault and Nissan chief executive Carlos Ghosn who has repeatedly said he sees electric vehicles making up 10 percent of all sales in 2020.
A survey of 200 auto industry executives conducted by KPMG released earlier this month gave an average forecast for electric vehicles to account for 6-10 percent of global auto sales in 2025 - more bullish than Exxon and BP but hardly a revolution.
"Certainly a year ago or so, you could have gotten the impression from reading the press that everyone is driving electric cars in two years time," Daimler CEO Dieter Zetsche said at a roundtable at the sidelines of the Detroit auto show last month.
Zetsche said he did not see "an explosion of demand for this product."
Echoing comments from the oil companies, Gerd Kleinert, CEO of KSPG, the automotive parts business belonging to German group Rheinmetall, says take-up of electric cars will be curtailed until batteries can store energy using as little weight as gasoline does, and can be recharged as quickly as refilling a fuel tank.
"When that world exists, then we will all be driving electric cars starting tomorrow. But I personally don't see that happening, not even a hundred years from now."
(Additional reporting by Christiaan Hetzner in Frankfurt; Editing by Chris Wickham)
Comments on this article
It's clear the electric
It's clear the electric vehicle still has a long way to go before predominating the auto market, I don't need a study to show me that. None of the people I know own an electric vehicle yet, despite the fact that they would like to do so, their prices are too high and the battery life is too short to make the change acceptable. Until the electric vehicle battery life is improved, I am going to keep my old car, buying the right Jaguar parts and maintaining it.
Your approach to this topic
Your approach to this topic is unique and informative. I am writing an article for our school paper and this post has helped me. Thanks. mortgage audit
show me the data
If you look at the data BP publish it becomes clear.
Assumptions
1. North America ceases Oil imports ( Shale+ Tar )
2. Mid east Oil expands
3. Bio Fuels take off
Hence no major driver to replace current engine tech. However if you assume Oil production is flat/declining. Then a niche opens up in places with no encumbent car industry and a DIY attitude. The Philipines comes to mind,but the are lots of candidate South Africa ,Brazil,India.... Will there be sufficient electricity to meet the demand? The key here is to realise Wind and solar have a zero marginal cost and you need excess capacity to meet demand. This creates low cost electricity IFF you can use it when its there.
The BP forecast may be right for North America and some parts of Europe. Its probably dead in the water for rest of world
EVs reduce the health cost burden
An important matter not mentioned in this article is the improvement in air quality for town and city dwellers that will result from a transition to EVs. Currently more people die per year from illnesses relating to pollution from vehicle emissions than from road accidents. Transitioning to EVs will reduce this mortality rate and the associated health cost burden.
It surprises me that Government and community leaders don't fight harder for the clean transport transition, that is in everyone's best interests. The big oil companies will protect their business model to the bitter end.
Overnight solar PV
Trevor: Try here - www.nilCO2.com.au
the EV outlook - cars and PV panels
the EV outlook - cars and PV panels -
cars will soon have PV panels as part of their roof and bonnets and maybe their tinted windows too -
the batteries might be half the weight - but "fully charged" after sitting in the work carpark for 8=>9hrs a day - then plug into the "smart-power" meter overnight. -
as Henry Ford said (?) any colour as long as it is PV coloured ! - er - powered ! - - think Darwin to Adelaide solar car race and their roofs
Overnight solar PV
A wonderful breakthrough.... where can I get one? Probably came from the same Irish lab. as the solar powered night vision goggles?
EV Outlook
History shows that at the beginning of every period of major change, those who stand to lose, deny that the change is happening, for as long as they can get away with trying to postpone the inevitable.
In a couple of months it will be possible in Australia for a Prius Hybrid to be converted into a Plug-in Hybrid (PHEV).
The EV-only range will be 100Kms. That’s well within most people’s usual daily drive distance and the bigger battery will be re-charged at home overnight using green electricity from the grid or your own solar installation.
Of course the owner will still be able as usual to fill up with petrol when necessary, giving an effective 850 kms range on one tank of petrol.
Because the Prius is such an outstandingly well engineered and long lasting car, that solution will last well beyond 2020. By which time there will be plenty of choice of affordable EV’s.
Why do it now? Multiple reasons:
Energy Security: The growing World oil demand curve is getting too close to the declining world oil production curve.
Protest: Against the oil companies who put their interests ahead of mankind’s survival (including their own!) by spreading FUD about the climate science
Environment: We must stop burning fossil fuels asap.
Cost: fuelling an EV costs only 20-25% of what an ICE costs to fuel.
Convenience: EV’s can be re-fueled easily overnight.
EV Cars
My PV Panels on my roof Make 6000kwhs per year the next step is get plug in EV cars in everybodys Home big Oil will fight all the way to protect there cash flow. To people out there learn about PV Panels and install them as a first step.
Electric Motor Vehicles
To move a 1 tonne vehicle requires the same amount of energy no matter the power source.
Batteries cannot compete with the cost or the power to weight properties of a petroleum vehicle. Batteries are very expensive to manufacture in energy and monetary terms.
Electric vehicles will always be heavier, have less range and performance and be considerably more expensive to produce than similar sized petroleum powered vehicles. The batteries have a very finite life and are expensive to replace, and the demand for the metals to manufacture the batteries would not be able to be easily met sending prices skyrocketing.
The production and distribution of the electricity is no more energy efficient than the petroleum motor in the first place. More carbon will be released into the atmosphere to manufacture and charge the batteries of an electric vehicle than to produce and power a conventional motor vehicle. Electric and hybrid vehicles may save petrol but they don’t save energy and they don’t save money.
Power production capacities world wide are being challenged by growing demand, limited fossil fuel supplies, rising fossil fuel prices, the high expense and limited capacity of renewable alternatives, and control of green house gas emissions. To add transportation to this power load with electric vehicles is economic and environmental vandalism.
Why don’t we promote, provide for, and use the most energy efficient transportation device yet invented by man, it’s non-polluting and it uses only renewable bio-fuel. It is called a bicycle.
Dan
RE: THERE ARE OTHER ALTERNATIVES
Ammona driven cars area joke - Toyota in Japan has a future tech team that has been living this dream for years and has produced nothing.
Liquid air is impractical and ridiculous
For most of the fleet fast charging would be very rarely required as they would return to base or turn up at their destination port (workplace / shopping centre car park) and recharge before going another 170km.
THERE ARE OTHER ALTERNATIVES
One version of the TESLA has a 40kWh battery. It takes about three minutes to fill the tank of a conventional car. To recharge 40 kWh in 6 minutes requires a current of 800 kW. So even if the battery problems are solved rapid recharge is hardly practical unless there are major advances to flow through batteries.
However, there are pure electric alternatives that don't involve batteries or capcitors. The first of these are ammonia driven cars. Ammonia can be made using electricty and water. Ammonia can be stored at relatively low pressures and tank filling times would be similar to that of conventional cars.
The second is liquid air driven cars. Liquid air is produced from air and electricity and is stored in insulated tanks at atmospheric pressure. Once again tank filling times would be similar to conventional. The liquid air could be produced at the service station using existing technology.
Kodak example even better than typewriter
In the Kodak example, digital cameras were inferior to 35mm with film processing. The film was always better quality.
But people were able to do away with paying the big central chemical (liquids) company for their proprietry printing and DIY at home for cheaper. They went ahead and purchased digital cameras even though the upfront capital cost was much higher.
The fossil fuel industry stooges can believe there own bullshit until the sales revenues get hit and they can't pay their creditors anymore...
Fossil fuel liquid suppliers will be done away with and peopel will happily charge at home off local solar PV -- My system produces 18,000kWh per year or off cheap off peak grid electricity (maybe 1PM when everyone is feeding PV generated power into the grid and prices are going negative.)
It seems to me that the oil
It seems to me that the oil companies are assuming that there will be no further innovation in personal transport, and that fossil-fuel-powered vehicles are the pinnacle of development.
To that, this quote seems apropos (note the date):
That the automobile has practically reached the limit of its development is suggested by the fact that during the past year no improvements of a radical nature have been introduced.- Scientific American, Jan. 2, 1909.
It also strikes me as an attempt at a "self-fulfilling prophecy" - if they make enough noise about alternatives not being good enough, then plenty of people will believe them, and continue to invest heavily into fossil-powered vehicles. And a car bought today is likely to be around for at least 10-15 years or more, ensuring demand for their products for decades to come, as not many people can afford to throw away their investment in a car (resale is irrelevant, it's the fact that the car is still on the road burning fuel that matters to the oil companies).
EV Cars, Typewriters, Iceboxes, steam ships, digital cameras
Step change technology is not welcomed or adopted by incumbents. When the tipping point is reached, the market changes swiftly - no icebox makers made fridges, shipping companies didn't morph into airlines, and Kodak just went broke. The issue with the EV cars is cost and technology, and the envirnmental total cost equation is not easy to get right. If all Australians switched to EVs, it would be an enviromental disaster as the electricity to power them comes from burining coal at the moment. And the technology in EV cars and batteries is not at all environmentally sound, which is not widely discussed. People dream of public transport despite the worldwide rush to have private cars. The future as one commentator said, is hard to predict. If fuel cell technology gets going the switch could be very quick. Right now people are waiting, but not really buying EVs.
Typewriter nonsense
It is a laugh reading the inevitable typewriter company comparisons. While we might all happily and accurately mock IBM and others for their lack of foresight keep in mind that back then computers could actually DO the job of typewriters - they were just too expensive and no one foreshadowed the incredible drops in prices of electronics.
But Electric Vehicles are being held back by cost. essentially, they dont work. You could drop the price by 90% and people would only buy them alongside their petrol car.
When EVs actually work and are a viable alternative to petrol cars then they will sell like hotcakes. Until then no one (almost literally) wants to buy a car that is inferior in every practical aspect to a petrol car.
What we drive vs when we drive
Perhaps the biggest impact on petrol/oil use will come when more people realise that using a private vehicle for short trips such as to the supermarket just isn't good for their health, their wallet or the planet. With some proper urban design, we might expect to see only a fraction of our transoprt occuring in private vehicles - and more pedestrians, cyclists and public transport on our streets.
I do hope Big Oil is wrong, though. I won't miss the eyesore of petrol stations...
A survey 200 typewriter industry executives
In 1985 a survey of 200 typewriter industry executives didn't see computers taking over the typewriter anytime soon.
FAST FORWARD 2000 - not on typewriter manufacturer exists today selling typewriters.
The future is so hard to predict
NEW YORK (1978) - Typewriter manufacturing giant IBM says that computers are likely to remain a niche product are unlikely to replace typewriters within the foreseeable future. "Computers are very costly compared to typewriters and it's hard to see them replacing typewriters for everyday use," said a company spokesman. IBM will continue to produce computers for specialised scientific applications, but has no plans to move into the domestic market.