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.
The 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.