Prediction when BEV will impact fuel, and more importantly statistics.

[mspohr]

Somewhat off topic: (warning paywall)

https://adage.com/article/special-report-super-bowl/why-super-bowl-commercials-are-filled-evs/2398911

Quote:
Startup electric vehicle brand Polestar today confirmed it will run an ad in the game that is already filled with spots from Kia, BMW, General Motors and Nissan—which are all pitching EVs with expensive celebrity-filled ads. There is even an electric vehicle charger maker in the game: Wallbox, whose Big Game ad doubles as its first-ever TV commercial in the U.S.

Never before have so many auto brands spent so much money advertising vehicles with such small market share—EVs only accounted for 2.6% of new vehicle sales last year in the U.S., according to Edmunds. But the Super Bowl marketing onslaught is indicative of a tipping point in the EV sector, which is poised to finally begin creeping into the mainstream after years of hype. Automakers have billions of dollars riding on it. GM alone has said it plans to pour $35 billion in electric and autonomous vehicle development through 2025, while debuting 30 new EVs globally, with two-thirds available in North America.

With that kind of investment, brands must start generating demand—lots of it. And there is no bigger stage to do that than the Super Bowl, which draws about 100 million American viewers from all corners of the country.
...

It does look like everyone has recently woken up the reality that EVs will take over... and fast.
Unfortunately, legacy auto is ten years too late and is burdened by stranded ICE assets (and dealers). It will be interesting to see how this plays out over the next few years.

 

[dgatwood]

Presumably, right now, the sales of fuel is still growing, just more slowly. The interesting inflection point will, I suspect, occur roughly when the number of EVs sold exceeds the rate at which the number of drivers increases, because that's when gasoline sales will actually begin to decline.

Each year, in the U.S., there are 3.6% more drivers than the year before, or about 8.244 million extra drivers. We can probably assume that nearly all of them represent the addition of a vehicle on the road (and this seems to be roughly in the right ballpark based on the number of new car sales, which in different years, has varied somewhat nondeterministically between 5 million and 10 million).

Right now, there are only about half a million EVs sold per year. We have a long way to go before we'll reach 8 million EVs sold per year. So:

• If we assume a linear rate of growth based on the 2020 to 2021 difference (~250k extra EVs per year), we'll hit 8 million U.S. EV sales in 2050.
• If we assume a multiplicative rate of growth based on the 2020 to 2021 difference (doubling every year), we'll hit 8 million U.S. EV sales in 2025.

Reality will probably be somewhere between those two numbers, though a large part of it depends on how government mandates affect things. If car makers are forced to reduce or eliminate sales of non-EVs, it's anybody's guess what percentage of those lost non-EV sales will be converted to EV sales.

If you're not stupid, you also can figure out that you will save about $15k over five years with a BEV which dramatically lowers TCO.

I think you underestimate legacy automakers' ability to make EVs break down more often and require more maintenance.

 

[MontyFloyd]

Never before have so many auto brands spent so much money advertising vehicles with such small market share—EVs only accounted for 2.6% of new vehicle sales last year in the U.S., according to Edmunds. But the Super Bowl marketing onslaught is indicative of a tipping point in the EV sector, which is poised to finally begin creeping into the mainstream after years of hype. Automakers have billions of dollars riding on it. GM alone has said it plans to pour $35 billion in electric and autonomous vehicle development through 2025, while debuting 30 new EVs globally, with two-thirds available in North America.

The article:

BEV's are here, they are real, and they are taking over. The only reason it is small is mfg cannot make them fast enough. Even IF by magic supply meets demand, the demand will jump again as buyer who did not want to wait run to dealer.

The race now is to be noticed while they still have a chance to be noticed. There is no coincidence Tesla is not advertising, because they are this close >< to be a generic word for Electric Vehicle.
This is a fight for second place!

 

[MontyFloyd]

Somewhat off topic:

China's Best Selling EV Is Only $5k and Has a Range of 100 Miles

Why can’t we have GM’s affordable EV in the United States? Oh yeah, laws.

www.reviewgeek.com

It is not, I posted at link to it a few posts up.

 

[ItsNotAboutTheMoney]

The question I think we are discussing is "Do we need a <$25k BEV to get above 20% sales?"
I would argue that several countries are already well above 20% sales at much higher prices.
Most people today already buy cars that cost more than $25k.
If you're not stupid, you also can figure out that you will save about $15k over five years with a BEV which dramatically lowers TCO.
I don't think purchase price is a factor impeding adoption. The main barrier to adoption is just finding a car for sale. All BEVs are backordered by months or years.

I think purchase price is a huge impediment. Other countries have much higher sales, but they have huge disincentives on fuel prices, and huge incentives on EVs. The UK's increase in EV sales, for example, has been driven by high fuel taxes, an EV purchase incentive, a very low income tax on company cars, and a salary sacrifice scheme that allows people to lease a car using gross salary. The current market share is in significant part because of a 28.7% drop in the market.

If you're saying 20%, then sure you could get there without a $25k EV But they're not going to get there if they can't build a profitable $25k EV.

The ZEV scheme only requires about 6% BEV sales in 2025, so the regulatory credits won't help. And at 20% market share, that's 3.4M EVs per year, so the tax credits will be gone way sooner than that.

And how do you get savings of $15,000? If somebody can save that much, they've been wasting a ton of money with their current vehicle choices.

 

[mspohr]

I think purchase price is a huge impediment. Other countries have much higher sales, but they have huge disincentives on fuel prices, and huge incentives on EVs. The UK's increase in EV sales, for example, has been driven by high fuel taxes, an EV purchase incentive, a very low income tax on company cars, and a salary sacrifice scheme that allows people to lease a car using gross salary. The current market share is in significant part because of a 28.7% drop in the market.

If you're saying 20%, then sure you could get there without a $25k EV But they're not going to get there if they can't build a profitable $25k EV.

The ZEV scheme only requires about 6% BEV sales in 2025, so the regulatory credits won't help. And at 20% market share, that's 3.4M EVs per year, so the tax credits will be gone way sooner than that.

And how do you get savings of $15,000? If somebody can save that much, they've been wasting a ton of money with their current vehicle choices.

That $15,000 estimate is from Kelly Blue Book. Lots of others have done calculations.
Here's a link to some others

The Push for Electric Vehicles Could Affect How Much Your Next Car Costs

President Biden is nudging more Americans to go electric.

money.com

 

[mspohr]

Looks like 2019 was peak oil:

 

[MontyFloyd]

Looks like 2019 was peak oil:
View attachment 767780

2020 was COVID, and even 2021 is in COVID Hangover. 2022 will be telling.

 

[RubberToe]

Related to battery manufacturing is battery cost, and until someone can crank out thousands of BEV for <$25k MSRP, no way global fleet gets to 20%. (The top selling cars by volume are about $20k.)

Model Y was the second best selling vehicle in California last quarter. Almost beat the Camry. Accord was third best seller at half the price of a Model Y. The Model Y will be the world's best selling vehicle in Q4 2022 and all of 2023.

 

[bruce4000]

While bev affect on oil demand is still low, I think already impacting on the supply side. Investment in oil production is down (partly from Covid), and supply getting tighter so prices are up which will feedback into bev sales. If you need to do maintenance on an oil refinery which will extend the life another 20 to 40 years, is that a smart investment? Will make more sense to just milk the existing oil infrastructure till it dies and then retire.

 

[Big Dog]

Model Y was the second best selling vehicle in California last quarter. Almost beat the Camry. Accord was third best seller at half the price of a Model Y. The Model Y will be the world's best selling vehicle in Q4 2022 and all of 2023.

As a TLSA stockholder, I'd love that to be true but I also realize it is economically impossible.

 

[David_Cary]

Unfortunately 2019 will not likely be the peak. US production is one marker and very price dependent. Given the sustained increase in oil price, production will go up. But the oil producers also study the EV trends. The reality though is that worldwide demand will not get hit hard for many years to come.
Passenger vehicles consume just 26% of worldwide oil. Think about that.
Given the rate of economic and population growth, you could come up with a scenario with all new cars being EVs (today if somehow possible) thereby eliminating passenger vehicle oil use over 15 years and oil use could still go up worldwide.
The reality is that even optimistic projections have 2030 as essentially 100% new cars being EV (which is still very optimistic). So then you aren't really making a dent until 2035. And you are just making a dent in 26% of use - and by dent I mean 50% or 13% of worldwide use.
Do we not think the economy will grown 13% in the next 13 years?

But - other things will get better. Sure. The USPS under a Democratic administration is replacing its fleet with ICE vehicles that have a predicted 20 year life. Ships are pretty hard to electrify. We all know that planes are very hard to electrify. The list goes on and on.

Exxon (undoubtedly biased) basically says the same thing. Even with aggressive and nearly unrealistic EV production timelines, you don't actually reduce petroleum demand, you just reduce the increase.

Back to ... we are screwed. We can't even get the population to avoid concerts/sporting events, take a shot and wear a mask to avoid dying. And you are expecting a peaceful phase out of petroleum? To prevent people in far off places from dying? HA. We can't even eliminate or really reduce significantly worldwide coal use and that is horrible stuff and easily replaceable. It will probably take 10 years to get that to 50% of peak (and we may not be at peak yet - forecasts have 2022 beating out 2013).

 

[Bouba]

Unfortunately 2019 will not likely be the peak. US production is one marker and very price dependent. Given the sustained increase in oil price, production will go up. But the oil producers also study the EV trends. The reality though is that worldwide demand will not get hit hard for many years to come.
Passenger vehicles consume just 26% of worldwide oil. Think about that.
Given the rate of economic and population growth, you could come up with a scenario with all new cars being EVs (today if somehow possible) thereby eliminating passenger vehicle oil use over 15 years and oil use could still go up worldwide.
The reality is that even optimistic projections have 2030 as essentially 100% new cars being EV (which is still very optimistic). So then you aren't really making a dent until 2035. And you are just making a dent in 26% of use - and by dent I mean 50% or 13% of worldwide use.
Do we not think the economy will grown 13% in the next 13 years?

But - other things will get better. Sure. The USPS under a democratic administration is replacing its fleet with ICE vehicles that have a predicted 20 year life. Ships are pretty hard to electrify. We all know that planes are very hard to electrify. The list goes on and on.

Exxon (undoubtedly biased) basically says the same thing. Even with aggressive and nearly unrealistic EV production timelines, you don't actually reduce petroleum demand, you just reduce the increase.

But it doesn’t always work that way....just the prediction of a reduction in demand can cause the price of oil to fall...this leads to a lack of investment in oil, from exploration all the way to distribution in your neighborhood. This then accelerates the decline....a sort of virtuous circle

 

[ItsNotAboutTheMoney]

But it doesn’t always work that way....just the prediction of a reduction in demand can cause the price of oil to fall...this leads to a lack of investment in oil, from exploration all the way to distribution in your neighborhood. This then accelerates the decline....a sort of virtuous circle

Hence fossil lobbyists putting laws in place to force banks to lend to fossil fuel companies.

 

[mspohr]

Hence fossil lobbyists putting laws in place to force banks to lend to fossil fuel companies.

A rather desperate move unlikely to have much effect

 

[David_Cary]

Remember, if the price of oil falls, the case for EVs and reduction in other oil products becomes harder to justify.
Hard to get people to buy EVs but it is much easier with $4 gas. Really hard with $1 gas.

The fact is that the "all-knowing market" works pretty well with oil - albeit with long lag time. If the price goes down, exploration etc goes down and supply decreases - particularly in the US. As the price goes up, the supply gradually increases.

So, yes, a low oil price does reduce investment. But we have already found enough oil to destroy civilization. So it isn't like a decade of low investment means we can't pull it out when it becomes expensive again. There just will be a lag time.

Even if the capital markets dry up, at some point dirty capital will invest. The returns will justify it. So I fully applaud the divestment but it all has limited power on its own.

 

[MontyFloyd]

100% new cars being EV

100% will never happen in 2030. For both practical and emotional reasons fuel cars will be in production for decades.
I guess around 2% fuel will remain in production, still much better than today.

 

[mspohr]

100% will never happen in 2030. For both practical and emotional reasons fuel cars will be in production for decades.
I guess around 2% fuel will remain in production, still much better than today.

100% never happens.
Look at the S-curve.
90% in 2030 will happen.

 

[MontyFloyd]

100% never happens.
Look at the S-curve.
90% in 2030 will happen.

Yes.
I was not clear when I said about 2%, I mean that is forever.
People still ride horses for work, there will places were BEV is completely impractical (for example the arctic).

 

[ItsNotAboutTheMoney]

Yes.
I was not clear when I said about 2%, I mean that is forever.
People still ride horses for work, there will places were BEV is completely impractical (for example the arctic).

* In the cold and remote bits of the Arctic, not the Norwegian Arctic, where EV market share has grown rapidly.

Electric vehicles account for 80% of sales in Norway’s northernmost region

Coldest winter in years doesn’t scare customers in Finnmark region on the top of Norway from buying battery-powered cars.

thebarentsobserver.com