Global Electric Car Demand Soars Alongside Oil Profits
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Global Electric Car Demand Soars Alongside Oil Profits

There are more than 10 million electric cars on the world’s roads after a surge in sales last year.There are more than 10 million electric cars on the world’s roads after a surge in sales last year.  

According to the International Energy Agency (IEA), global electric car sales rose 41% in 2020 despite the global pandemic. A record three million new electric cars were registered last year to take the global total past the 10 million mark.   

The boost appears to be driven by consumers, whose spend was up 50% to $120 billion USD on electric cars. Government support was $14 billion USD, the fifth consecutive year in which spending has fallen as a share of total spending.   

In contrast, gas-powered car sales fell 12.6% globally in 2020. Still, major oil companies announced huge first quarter profits for 2021. 

The Lowdown On Electric Cars   

The IEA reported that, for the first time, Europe is now the electric car hotspot. The continent doubled its registrations to 1.4 million in 2020, overtaking China, which increased registrations 9% to 1.2 million.   

The three million electric car sales in 2020 represented a 4.6% share of global auto sales.   

There are now 370 electric car models available, which is 40% more than in 2019. Some 18 of the 20 largest automakers have announced plans to expand their fleet and electric car production capacity.   

The United States’ switch to electric vehicles is led by California. By the end of 2019, drivers in the Golden State owned almost 600,000 electric and plug-in hybrid vehicles and at $5.6 billion in 2020, electric vehicle manufacturing and sales were the state’s most valuable export.   

We reported earlier how studies found that electric vehicles require 58% less energy to run and generate less waste than gasoline cars. A typical electric car battery produces 30kg of waste material, comparing favorably to the 17,000 liters of fuel used by an average gas-powered car. 

Oil Giants Rise Up From the Pandemic   

Electric car sales are a success for clean energy, but some of Europe’s largest oil companies have reported strong profits for the first quarter of 2021. While environmental campaigners may be alarmed at the headline figures, diversification into renewable energy plays a part in many of their strategies.   

BP’s headline profit figure was $2.6 billion, which is twice its 2020 figure. The company cited “exceptional gas marketing and trading performance, significantly higher oil prices and higher refining margins,” as well as “building a high-quality offshore wind business.”  

France’s Total reported headline profits of $3 billion in the same period, up 69% from last year. It also noted a boost from $2 billion invested in Indian renewable energy company Adani Green Energy Limited.   

Norway’s Equinor posted a first-quarter profit of about $5.5 billion. Dutch company Shell saw a more modest rise of 13% to $3.2 billion.  

Tellingly, Shell has pledged to be a net-zero emissions energy business by 2050 — it believes its oil production peaked in 2019. The net-zero target includes emissions from the oil and gas others produce that Shell then sells as products to customers. 

Global Fossil Fuel and Renewables at a Crossroads   

The steep rise in electric vehicle adaptation is promising yet it remains a niche in the auto industry. Renewable energy sources are vying for position with coal as well as oil for market position.   

The IEA wants directives to be state-led. Executive Director Fatih Birol said: “Governments should now be doing the essential groundwork to accelerate the adoption of electric vehicles by using economic recovery packages to invest in battery manufacturing and the development of widespread and reliable charging infrastructure.” 

Opinion writer: Tom Shearman

The opinions, beliefs, and viewpoints expressed by the various authors do not necessarily reflect the opinions, beliefs, or viewpoints of Interactive Energy Group, LLC (IEG) or its parent companies or affiliates and may have been created by a third party contracted by IEG.  Any content provided by the bloggers or authors are of their opinion and are not intended to malign any individual, organization, company, group, or anyone or anything.

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