Fitch Ratings: EVs Pose "Resoundingly Negative" Threat To Oil Giants −

Electric Vehicles

Published on October 29th, 2016 | by James Ayre


Fitch Ratings: EVs Pose “Resoundingly Negative” Threat To Oil Giants

Despite much of the mass media not acknowledging the disruptive nature of electric vehicle and battery technologies, they do pose a “resoundingly negative” threat to the oil giants, according to analysts at Fitch Ratings.

Tesla Model X front cornerThe credit analyst firm argues in a new report that the industry is facing a much more extensive threat from the growth of electric vehicle sales than is generally acknowledged, and that industry players should gear up for the “radical change” that’s now in store.

The report is focused more generally on the impact of battery technologies on established industries, such as the oil industry, rather than just electric vehicles (EVs) themselves, but the potential that EVs will result in market disruption makes the technology a major part of the report.

The report does note, though, that EV adoption could prove to be a long, slow process, depending on various factors.

Green Car Reports provides more:

“Nonetheless, analysts predict that electric cars will soon reach the point where they become price-competitive with internal-combustion vehicles. It’s also possible that electric-car adoption will proceed more rapidly than anticipated in ’emerging markets,’ such as China, the report noted.”

“Transportation accounted for fully 55% of global oil use in 2014, according to the Fitch report. In an ‘extreme scenario,’ where electric cars achieved 50% market share in 10 years, a quarter of Europe’s gasoline demand could evaporate, the report said. As revenues decrease, Fitch also believes worried asset holders may sell their shares in oil companies, leading to an ‘investor death spiral.’ This has already happened to the coal industry, with multiple bankruptcies of large North American producers.”

The report notes that battery technologies could also have a pronounced effect on the electric utility industry — with stationary energy storage systems working to make wind and solar energy technologies more economically viable at a faster rate than would otherwise be possible.


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About the Author

‘s background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Carlos Lemos

    What will happen with the petrochemical industry (plastics, rubbers, lubricants, asphalt, etc) when demand for fuels decline? is it possible and economical to convert fuels into other stuff? will it disappear too?

    • Tom610

      If that industry isn’t profitable now, they will just raise prices to the point where it is profitable.

  • Eric Lukac-Kuruc

    Fitch sells reports pretendedly about the future while they are simply catching up with current facts that anybody can read here.

    And yes, the change will compound and accelerate in ballistic mode.

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