Higher Oil Prices Will Accelerate Electric Vehicle Adoption
While fossils celebrate a four-year high in oil prices, automakers looking at the prospect of $100-per-barrel oil and resulting higher gasoline prices as precisely the prompt that will accelerate adoption of electric vehicles.
“The higher the price of oil, the more tailwind we’re going to have behind electric cars,” Renault SA and Nissan Motors Chair Carlos Ghosn told participants at the Paris Motor Show on Wednesday.
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“We’re already seeing demand outstripping supply,” added Fiona Howarth, CEO of British car leasing firm Octopus Electric Vehicles. High oil prices “will add to the acceleration of growth. EVs are coming quicker than most people think.”
Bloomberg notes that the jump in oil prices is “concentrating consumers’ minds on the relative costs of internal combustion versus electric motors,” consistent with multiple recent predictions that rapid EV adoption will soon begin undercutting demand for petroleum fuel. “For companies preparing to bring a record number of electric and hybrid models to market in 2019, oil’s rally could turbocharge demand.”
The shift spans Asia, Europe, and the United States and a full range of models, “from cheap city runabouts to high-performance roadsters,” the news agency adds. “In total, the number of plug-in hybrid and battery vehicles for sale worldwide will rise 20% to 216 next year,” according to data from Bloomberg New Energy Finance.
“While electric and plug-in hybrid vehicles are still a tiny fraction of global sales, growth rates have been spectacular. In the second quarter, deliveries increased by 77% year-on-year to 411,000 vehicles worldwide, according to Bloomberg NEF. Even before the latest rally in oil prices, that was forecast to rise a further 49% by the same quarter next year.”
The news report also points to the rapid rise of the supporting infrastructure that keeps EVs and hybrids on the road.
“Across Europe, utilities are pouring money into charging networks, anticipating the technology will catch on,” with Enel in Italy, Vattenfall in the Nordic region, and Centrica in the UK all getting in on the transition. “A better charging network will help assuage the main consumer concern about buying an electric car: that a lack of range will leave drivers stranded by empty batteries they can’t charge up.”
“It’s a public service we have to provide. We don’t want to be a bottleneck for the development of the electric car,” said Ignacio Galan, chair of Iberdola, the biggest utility in Spain.
In California, meanwhile, Bloomberg says the state government and General Motors have buried their past disagreements over vehicle emissions to help lead a public awareness campaign promoting EVs, as part of a coalition that also includes utilities and environmental groups. Half of the US$4-million effort will be funded by penalties resulting from the Volkswagen emissions scandal.
“GM, which in 2001 sued California over a mandate requiring automakers to sell thousands of electric vehicles in the state, has been taking a more genial tack lately,” Bloomberg notes. “The company has joined other automakers in pushing the White House to negotiate with—rather than litigate against—California over emissions standards. And it has supported the state’s effort to boost EV sales with charging stations.”