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Advanced batteries could “tip the oil market from growth to contraction earlier than anticipated,” concludes the credit rating agency Fitch in a new study. Bloomberg New Energy Finance (BNEF) has already told investors to expect the ‘big crash’ in oil by 2028 — and as early as 2023. Fitch Ratings agency warns that if recent technology trends continue, we may see an “investor death spiral” as first the smart money — and then everyone else’s — sell off oil company assets (bonds and stocks). That would in turn increase the industry’s costs for both debt and equity — while oil prices would be stuck at low levels as the world hits peak demand. This would affect industries whose stocks and bonds are cumulatively valued in the trillions of dollars. In particular, Fitch notes, “an acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile.”
Electric car revolution may drive oil ‘investor death spiral’
Tesla’s recent purchase of German manufacturing automation specialist Grohmann Engineering comes as an increasing number of Gigafactory rivals spring up across Europe. Tesla announced the Grohmann deal last month after Swedish media reported that its former supply chain vice president, Peter Carlsson, was planning to open a battery gigafactory of his own in Sweden. The announcement means at least five gigafactories are now slated for the continent. Tesla itself is planning a European gigafactory in the wake of the Grohmann acquisition. The facility will be used to build batteries and cars.
European Rivals Line Up Against Tesla in the Race to Build Gigafactories | Greentech Media
Many of the big carmakers are developing models and predicting large-scale roll-outs in the 2020s. Indeed, they predict the technology could change their business model from selling vehicles to providing transport as a service. That would be a big boost for electric engines. Electric cars are expected to remain more expensive than combustion engine vehicles for the foreseeable future but their operating costs are much lower than gasoline. That extra cost can be quickly recouped if the vehicle is part of an autonomous fleet with a high utilization rate – as ride hailers like Uber Technologies envisage emerging in the next decade.
Oil firms and carmakers diverge in costly debate | Reuters
UBS auto analyst Colin Langan published a research note this week in which he assessed the impact of Congress' corporate tax reform plan — primarily a tax cut and a deal to repatriate offshore cash — and a "border adjustment" proposal that would tax imports to the US, but exclude exports. "The ... rules would have a large impact on the automakers as imports would face significantly larger taxes than domestic production," Langan wrote. "However, GM and Ford are far better positioned than their competitors. Over 95% of F & GM US sales are from N American plants. Within N America, only 21% and 37% of Ford and GM production is in Mexico or Canada." Together, Ford and GM control over a third of total market share in the US.
Trump could give the US auto industry exactly what it wants - Business Insider
On another front, under Trump, the Environmental Protection Agency could roll back higher fuel-economy standards. This is a big one. "Trump's senior policy advisor said the Trump administration would review all federal regulation including fuel-economy and emissions standards, which could ease pressure from costly fuel economy targets," Langan wrote in an earlier note.
Trump could give the US auto industry exactly what it wants - Business Insider
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Auto industry leaders are now seizing a chance to get President-elect Donald Trump's administration to give them a break, while at the same time not completely backing off the EV aspects of their product portfolios. Here's Bloomberg's John Lippert and Jamie Butters: Ford Motor Co. plans to lobby President-elect Donald Trump to soften U.S. and state fuel-economy rules that hurt profits by forcing automakers to build more electric cars and hybrids than are warranted by customer demand. “In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry,” Mark Fields, chief executive officer of Ford, said in an interview at Bloomberg’s Southfield, Michigan, office Friday. “Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.” Fields is as committed as anyone to making sure that Ford is part of whatever revolution in transportation occurs in the coming decades, but he doesn't have the luxury of being a starry-eyed visionary. His job is to make sure that Ford is profitable, that it's balance sheet is strong, that it maintains or grows market share in critical parts of the world, and that it doesn't fall behind on innovation, in all areas of the business.
Ford CEO biggest problem for electric cars - Business Insider
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More than 2 million electric vehicles may be on the world’s roads by the end of 2016, writes the Guardian, citing data from the electric vehicle world database EV Volumes. That should be good news for electric carmaker Tesla. It is not. A closer look at the data shows that most of the growth comes from Tesla competitors, and from regions where Tesla is weak.
For Tesla, Electric Car Sales Explode In All The Wrong Places
A Mustang souped up with electric power and a sport utility vehicle that can go 300 miles on a single charge are among seven new battery-powered vehicles Ford Motor Co. promised Tuesday. There’s just one problem: It’s not at all clear consumers will buy them.
Ford’s Seven Electrified Models Face Risk of Buyer Indifference - Bloomberg
We're in the early stages of what could be a major structural shift in the auto industry, away from passenger cars and into SUVs and pickup trucks. Fiat Chrysler Automobiles CEO Sergio Marchionne already says the change is underway. Other industry leaders aren't yet ready to give up on cars, but they're struggling to figure out what to do with small cars: vehicles that are priced in the same ballpark as the forthcoming Model 3. Admittedly, it's much harder to make a decent profit off a small car that sells for around $20,000, so Tesla has some cover by pricing the Model 3 about $10,000 higher.
Tesla may not be able to afford to make Model 3 - Business Insider
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The global electric vehicle (EV) revolution reached another milestone last month as EVs made up 37 percent share of Norway’s car market. Norway understands the future of ground transport is electric and has been pushing EVs harder than almost any other country in the world with incentives such as an exemption from the 25 percent VAT tax for new cars. In December, the country hit 100,000 zero-emission EVs on the road, and they are projected to quadruple to 400,000 by 2020. These numbers are especially remarkable for a country of only 5.2 million people. Over five percent of all of Norway’s cars are EVs, up from one percent two years ago. Norway’s transportation minister says it is “realistic” that sales of new fuel-burning cars could end by 2025. EVs may win on straight economics then, but the country — and others — have been considering outright bans.
37% of Norway’s new cars are electric. They expect it to be 100% in just 8 years.
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Moving to electric reduces the number of moving parts in a car by something like an order of magnitude. It's less about replacing the fuel tank with a battery than ripping out the spine. That remakes the car industry and its supplier base (as well as related industries such as machine tools), but it also changes the repair environment, and the life of a vehicle. Roughly half of US spending on car maintenance goes on things that are directly attributable to the internal combustion engine, and much of that spending will just go away. In the longer term, this change might affect the lifespan of a vehicle: in an on-demand world vehicles would have higher loading, but absent that, fewer mechanical breakages (and fewer or no accidents) might mean a longer replacement cycle, once the rate of technology implementation settles down.
Cars and second order consequences — Benedict Evans
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“Any automaker that is a global automaker has to be focused on China, the world's biggest market now and likely into the future,” said Michelle Krebs, a senior analyst for Autotrader. “About 28 million new vehicles were sold in China last year, compared with last year's record-breaking 17.5 million sold in the U.S. China is too big to ignore.”
China may lead the electric car revolution - The Verge
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India’s potential plan to sell only electric cars by the end of next decade would require nearly eight times the global stock of such vehicles, according to the International Energy Agency. The country would need to sell more than 10 million electric cars in 2030, compared with the almost 1.3 million on the road worldwide in 2015, the agency said in an emailed response to questions. The goal also equals 10 percent of the 2030 target for electric vehicles on the road globally agreed to in the Paris climate talks.
India's 2030 All-Electric Car Target Seen `Ambitious' by IEA - Bloomberg
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Wireless charging is, for the most part, still something that requires an aftermarket solution. But BMW will offer its own setup starting with the 5 Series in 2018. The 2018 BMW 530e plug-in hybrid will be able to wirelessly charge its battery using a BMW-branded induction pad. It can be installed in the open or under cover. Once it's connected to power, the 530e will position itself over the pad such that a current can transmit wirelessly from pad to vehicle.
BMW will offer wireless charging for 530e plug-in hybrid in 2018 - Roadshow
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Now research from Bloomberg New Energy Finance indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025. Batteries currently account for about half the cost of EVs, and their prices will fall by about 77 percent between 2016 and 2030, the London-based researcher said.
Pretty Soon Electric Cars Will Cost Less Than Gasoline - Bloomberg
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The cost of owning an electric car will fall to the same level as petrol-powered vehicles next year, according to bold new analysis from UBS which will send shockwaves through the automobile industry. Experts from the investment bank’s “evidence lab” made the prediction after tearing apart one of the current generation of electric cars to examine the economics of electric vehicles (EVs). They found that costs of producing EVs were far lower than previously thought but there is still great potential to make further savings, driving down the price of electric cars.
Electric vehicles to cost the same as conventional cars by 2018
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