Should Exxon be Afraid of Electric Cars?
Car manufacturers under the direction of many governments are steadily producing more electric cars and you would think this will eventually be a big problem for oil companies. Exxon Mobil says that there is no reason to be alarmed because by 2040 only an estimated 6% of all vehicles on the road will be electric. Today, there are over one billion vehicles on the road which will only increase by then. The current worldwide oil demand is over 100 million barrels a day and Exxon feels that even if their estimates are way off it will only put a minor dent into consumption.
Exxon says that they do have a backup plan to invest more in diesel fuel which shows no sign of decline in case electric vehicles start to severely affect profits. They also make a tremendous amount of money on petrochemicals and doing are research on renewable energy as an alternative to the oil decline. Industry experts predict that by 2031, less than 50% of vehicles will feature a conventional gasoline engine and the rest will be hybrids and electric. Fortunately for Exxon and other oil companies, the majority of people will still drive older cars or simply won’t prefer electric so it will take many decades to completely phase out gasoline engines. The average vehicle on the road today in the United States is almost 12 years old.