Oil Economist Forecasts Major Increase In Plug-in Vehicle Auto Sales

An optimistic forecast on global sales of plug-in vehicles has been released by a major oil producer.

Joel Couse, chief energy economist at Total SA, forecasts that electric vehicles will make up 15 to 30 percent of new vehicles sold worldwide by 2030. The economist spoke at the Bloomberg New Energy Finance’s conference in New York on Tuesday.

Demand for oil-based fuel will reach its peak and then flatten out after that, he said, and “Maybe even decline.”

The Total SA forecast is the highest sales volume predicted by a major oil company and is a higher percentage than what’s expected by BNEF.

“That’s big,” said Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance. “That’s by far the most aggressive we’ve seen by any of the majors.”

The Bloomberg report didn’t specify whether Couse included both battery electric and plug-in hybrid electric vehicles in his forecast. It’s assumed that all of the plug-in electrified vehicles are included, based on the 1 percent global sales figure used in the article.

Royal Dutch Shell also sees oil demand reaching a peak in the near future. CEO Ben van Beurden said in March that oil demand may peak in the late 2020s. The major oil company has established a new business unit to identify the clean technologies where it could be most profitable when demand for oil softens.

Skyrocketing from 1 percent to as much as 30 percent of global auto sales could seem highly unlikely for PEVs over such a short time period. Several analysts do see these sales jumping in the next decade based on a few important market developments.

Diversity of offerings is one of them. Several major automakers, including Volkswagen, BMW, Daimler, General Motors, Ford, and Honda, have committed to make PEV product launches and marketing a large share of global sales, especially in China and Europe.

“By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.”

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Another important expected trend is improvements in battery packs. Automakers have been surprised to see Tesla sell a growing number of more expensive packages of the Model S and Model X with longer battery range. The launch of the 238-mile Chevy Bolt and the upcoming Tesla Model 3 have heightened anticipation.

The cost of PEV batteries has been the major barrier in making the technology more competitive on the market. It can make up half the total cost of the PEV, according to BNEF.

Battery prices are starting to see a drop in price of about 20 percent a year. As 2020 approaches with its broad selection of new PEV offerings, reduced sticker prices should help grow interest and purchases among consumers.

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