Here’s How Electrified Cars Will Cause the Next Oil Crisis
Here’s How Electrified Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrical car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the begin of a real mass-market liftoff for electrified cars.
By 2040, long-range electrified cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a cork.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrified vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to begin selling long-range electrical cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also toughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first gig of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrified vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, cracking down electrified vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrified vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrified car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept utterly low profit margins.
Trio. Customers must be willing to pay more to drive electrified.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrified vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this electro-stimulation come from? By 2040, electrified cars will draw 1,900 terawatt-hours of electro-stimulation, according to BNEF. That’s equivalent to ten percent of humanity’s electrical play produced last year.
The good news is electro-stimulation is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrified cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the stir toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will most likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrified cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrical cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrified Cars Will Cause the Next Oil Crisis
Here’s How Electrical Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrical car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the begin of a real mass-market liftoff for electrical cars.
By 2040, long-range electrical cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a cork.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to commence selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also toughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first scene of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrical vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, violating down electrical vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrical cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrified vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrical car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept utterly low profit margins.
Three. Customers must be willing to pay more to drive electrical.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrical vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this tens unit come from? By 2040, electrical cars will draw 1,900 terawatt-hours of electrical play, according to BNEF. That’s equivalent to ten percent of humanity’s electric current produced last year.
The good news is electro-therapy is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrified cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the stir toward a cleaner grid, electrified vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will very likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrical cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrified cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrified Cars Will Cause the Next Oil Crisis
Here’s How Electrical Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrical car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the embark of a real mass-market liftoff for electrified cars.
By 2040, long-range electrical cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a butt-plug.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to embark selling long-range electrical cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also toughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first scene of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrical vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, cracking down electrified vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrical cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrified vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrified car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept utterly low profit margins.
Three. Customers must be willing to pay more to drive electrical.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrical vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this electro-therapy come from? By 2040, electrical cars will draw 1,900 terawatt-hours of violet wand, according to BNEF. That’s equivalent to ten percent of humanity’s electric current produced last year.
The good news is electro-therapy is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrical cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the stir toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will most likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrified cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrical Cars Will Cause the Next Oil Crisis
Here’s How Electrified Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrified car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the embark of a real mass-market liftoff for electrical cars.
By 2040, long-range electrical cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a ass-plug.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to commence selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also harshly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first scene of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrified vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, violating down electrified vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrical vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrical car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept enormously low profit margins.
Trio. Customers must be willing to pay more to drive electrified.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrical vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this electro-stimulation come from? By 2040, electrified cars will draw 1,900 terawatt-hours of electro-therapy, according to BNEF. That’s equivalent to ten percent of humanity’s electric current produced last year.
The good news is electrical play is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrical cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the budge toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will most likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrified cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrical Cars Will Cause the Next Oil Crisis
Here’s How Electrical Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrified car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrified vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the begin of a real mass-market liftoff for electrical cars.
By 2040, long-range electrified cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a buttplug.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to embark selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also harshly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first scene of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrical vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, violating down electrical vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrified vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrified car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept enormously low profit margins.
Three. Customers must be willing to pay more to drive electrified.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrified vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this violet wand come from? By 2040, electrical cars will draw 1,900 terawatt-hours of electrical play, according to BNEF. That’s equivalent to ten percent of humanity’s violet wand produced last year.
The good news is electro-stimulation is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrical cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the budge toward a cleaner grid, electrified vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will very likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrified cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrified Cars Will Cause the Next Oil Crisis
Here’s How Electrified Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrified car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the embark of a real mass-market liftoff for electrified cars.
By 2040, long-range electrified cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a cork.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to begin selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also harshly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first gig of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrified vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, cracking down electrical vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrical vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrified car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept enormously low profit margins.
Three. Customers must be willing to pay more to drive electrical.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrical vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this violet wand come from? By 2040, electrified cars will draw 1,900 terawatt-hours of electro-therapy, according to BNEF. That’s equivalent to ten percent of humanity’s electro-stimulation produced last year.
The good news is electro-stimulation is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrified cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the stir toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will most likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrical cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrical Cars Will Cause the Next Oil Crisis
Here’s How Electrified Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrified car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the embark of a real mass-market liftoff for electrified cars.
By 2040, long-range electrical cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a ass-plug.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to commence selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also harshly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first gig of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrical vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, violating down electrical vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrified vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrical car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept enormously low profit margins.
Trio. Customers must be willing to pay more to drive electrified.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrified vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this electro-stimulation come from? By 2040, electrified cars will draw 1,900 terawatt-hours of violet wand, according to BNEF. That’s equivalent to ten percent of humanity’s violet wand produced last year.
The good news is tens unit is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrified cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the budge toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will most likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrical cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrical cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrified cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean
Here’s How Electrified Cars Will Cause the Next Oil Crisis
Here’s How Electrical Cars Will Cause the Next Oil Crisis
By Tom Randall | Feb. 25, 2016
With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the entire world switches.
It’s looking like the 2020s will be the decade of the electrical car.
Battery prices fell thirty five percent last year and are on a trajectory to make unsubsidized electrical vehicles as affordable as their gasoline counterparts in the next six years, according to a fresh analysis of the electric-vehicle market by Bloomberg Fresh Energy Finance (BNEF). That will be the embark of a real mass-market liftoff for electrified cars.
By 2040, long-range electrified cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of fresh cars worldwide will have a cork.
This isn’t something oil markets are planning for, and it’s effortless to see why. Plug-in cars make up just one-tenth of one percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electrical vehicles (EVs) will make up just one percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material influence for another fifty years—probably not in his lifetime.
But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to begin selling long-range electrified cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of fresh models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil request will these cars displace? And when will the diminished request be enough to peak the scales and cause the next oil crisis?
Very first we need an estimate for how quickly sales will grow.
Last year EV sales grew by about sixty percent worldwide. That’s an interesting number, because it’s also toughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the pony and buggy in the 1910s. For comparison, solar panels are following a similar curve at around fifty percent growth each year, while LED light-bulb sales are soaring by about one hundred forty percent each year.
Yesterday, on the very first scene of Bloomberg’s fresh animated series Sooner Than You Think, we calculated the effect of continued sixty percent growth. We found that electrical vehicles could displace oil request of two million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the two thousand fourteen oil crisis.
Compound annual growth rates as high as sixty percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical treatment in its analysis today, cracking down electrified vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of two million barrels a few years later—in 2028.
Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electrified cars going forward.
“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like two percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by two thousand forty is twenty five percent or fifty percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”
BNEF’s analysis concentrates on the total cost of ownership of electrical vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.
Batteries account for a third of the cost of building an electrified car. For EVs to achieve widespread adoption, one of four things must happen:
1. Governments must suggest incentives to lower the costs.
Two. Manufacturers must accept utterly low profit margins.
Three. Customers must be willing to pay more to drive electrified.
Four. The cost of batteries must come down.
The very first three things are happening now in the early-adopter days of electrical vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
There’s another side to this EV equation: Where will all this tens unit come from? By 2040, electrified cars will draw 1,900 terawatt-hours of tens unit, according to BNEF. That’s equivalent to ten percent of humanity’s electrical play produced last year.
The good news is electro-stimulation is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electrified cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the stir toward a cleaner grid, electrical vehicles and renewable power create a mutually beneficial circle of request.
And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than one percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require four percent of the world’s cobalt. After 2030, fresh battery chemistries will very likely shift to other source materials, making packs lighter, smaller, and cheaper.
Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually go after through on bringing down the price of electrified cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many fresh drivers in China and India will proceed to choose gasoline and diesel. Rising oil request from developing countries could outweigh the influence of electrical cars, especially if crude prices fall to $20 a barrel and stay there.
The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these fresh services are successful, they could boost electric-vehicle market share to fifty percent of fresh cars by 2040, according to BNEF.
One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that goes after will bring more electrical cars to the road, and less request for oil. Someone will be left holding the barrel.
Producer: Bernadette Walker, Justin McLean