Oil Companies Prepare For The Rise of Electric Vehicles
When there is proven money to be made on alternative fuels, even big oil takes notice.
- Test Drives
Electric cars only make up 1 percent of total vehicle sales, but that hasn't stopped big oil companies from adjusting their forecasts. According to Bloomberg, Shell's CEO estimated that oil demand may finally peak somewhere in the mid 2020s. This is large part to greater interest in electric vehicles, the lower cost of battery technology, and the increase in model availability.
“By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.”
In a previous article, we discussed the human costs of battery technology including mining conditions for cobalt. While prices continue to drop by 20 percent annually, it is uncertain whether or not battery supply will keep up with demand.
While electrifying vehicles is now an upward trend, a majority of EVs on the market are only capable of less than 150 miles on a single charge. Infrastructure and battery manufacturing will continue to play a major roll in the continued success. Meanwhile, big oil companies like Shell have developed a business unit to study alternative fuel vehicles to identify which will be the most profitable. If big oil diversifies and invests in battery tech the more likely consumers will see lower prices and more options in the future.