Battery investors beware: EVs aren’t going to ice internal combustion for at least 10 years
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Electric vehicles (EVs) will wreak havoc on oil producers — but not until 2030.
Market researcher Wood Mackenzie says demand for light vehicles and two-wheelers is expected to slow over the next decade and decline after 2030, all because of EVs.
The two categories make up about 30 per cent of crude consumption and Wood Mackenzie is basing its forecast on doubled EV sales in 2017-18. That’s nearly 2m but still only 2 per cent of the total cars sold that year.
And the fact that vehicle fleets normally take about 10 years to turn over.
But Wood Mackenzie analysts say China and India, which account for about 36 per cent of the world’s population, will drive a surge in oil demand in the medium term as rising middle class spenders prefer SUVs.
Yujiao Lei is forecasting Chinese car fuel demand to rise by 20 per cent to 2025 even as aggressive EV policies create a surge in demand for battery-powered cars.
Aman Verma says Indian car sales are growing fast as people on rising incomes shift up from motorcycles and she reckons fuel demand will rise by 50 per cent from 2018 to 2025.
Scott Nargar, Hyundai’s local government relations manager, told Stockhead in March he thinks EV sales will start kicking off around 2025 as they gain price parity with internal combustion cars.
Any uptick in EVs, which already have a footprint in the US and Europe but are still a luxury in Australia, will be good for battery makers.
ASX companies like Magnis Energy (ASX:MNS), Talga (ASX:TLG) and even HIPO (ASX:HIP) which claims it’s got a Ukrainian secret sauce — prototype yet to come — hope to be in the mix when the upturn comes.
Investors in this theme could definitely do with a boost. Despite the tsunami of electric vehicle/battery-related news this year, battery metals had a disappointing month.
Vanadium is down, cobalt is still in the dumps, while lithium and graphite look pretty flat.