In November, I wrote on the biggest trends reshaping the automotive industry, covering key pressures and what the sector might look like in 2030 and beyond. One topic not covered in depth is what it all means for oil. Spoiler alert: it's bad.
LESS THAN 1 PER CENT
There are currently over one billion petrol driven vehicles globally and roughly 45 per cent of all barrel oil powers them.
The US and China are the world's largest car markets and in 2015 less than 1 per cent of cars on the road in the US and China were electric. However, adoption rates have been staggering.
Compared with2013, this sub-1 per cent share still represents a 130 per cent increase in in the US, and 800 per cent increase in China. Even in some of the fastest automotive growth markets – China, India and ASEAN – which are still inclined to buy petrol cars today, the infrastructure is growing and the culture leaning towards it.
Even this growth is a snapshot taken at the hockey stick point of the S-curve (a typical technology adoption model) - that is, at a point of least impact before a surge.
As hybrids become cheaper, all-electric vehicles and the infrastructure to support them becomes viable. As hydrogen and other technologies come online, the sensibility gap to petrol engines will widen further.
This accelerated adoption is also compounded by global regulatory pressure and incentives and a crisis of confidence in diesel which spread from a brand-specific issue to another nail in the coffin for combustion.
OPEC expects just 5 per cent of vehicles will be all electric by 2040. This is seems a ludicrous assertion when auto and tech firms are investing billions in all electric autonomous vehicles today. Norway alone is already at 22 per cent.
Either OPEC is wrong or Google and the entire auto supply chain will be bust by 2040. I know which side I would back.