Led by cars like the Tesla Model 3, the electric car revolution shows no signs of stopping. Auto landscape today is very different from what it was many years ago. At first, only Tesla and some car manufacturers pushed electric cars, and model S showed that the industry could be objectively better than combustion cars. Today, almost all automaker plans to release electric cars. EV Startup Bollinger Motors CEO Robert Bollinger summed up the best: "If you want to start a (car dealership) now, it has to be electric."
Catalysts for a transition
A critical difference between then and now is that the veteran car manufacturers today come up with decent electric cars. EVs were no longer glorified golf cars and compliance cars; Today's electric vehicles are as attractive, slim and powerful as their combustion members. The automotive industry has also warmed itself to electric cars. Jaguar I-PACE has collected awards since then and recently Kia Niro EV was named Popular Mechanics as the recipient of the Car of the Year award.
A survey by CarGurus earlier this year showed that 34% of car purchases are open to buying an electric car for the next ten years. A survey among young people in the UK last year showed even more encouraging results, with 50% of respondents saying they want electric cars. In the midst of the disturbance achieved by the Tesla Model 3, which has anything but dominated EV sales since the production hit last year, experienced car manufacturers have been in shape. Volkswagen recently debuted ID.3, Audi has e-throne, Hyundai has Kona EV, and Mercedes-Benz has EQC. Even Porsche, a low volume car maker, attracts the advanced Taycan heritage market.
At this point, it seems that Tesla's mission is well underway. With the market now open to the idea of electric vehicles, there is an excellent chance that EV adoption will only increase from this point on.
Big oil feels a change in the wind
Passenger cars are the No.1 source of demand for oil and with the potential emergence of a transport industry whose life and death do not rely on a gas pump, Big Oil could soon find herself defensive. Depending on how quickly the automotive industry can shift to sustainable transportation and where serious governments deal with issues such as climate change, peak oil can happen a few decades or a few years from now. This can adversely affect investors in the oil industry, which may be in danger of losing investments if top oil is faster than expected. JJ Kinahan, Marketing Director at TD Ameritrade, described this potential scenario in a statement to CNN . "Look at what happened to the coal industry. You must keep it in mind and be vigilant. It can be very, very fast," said the strategist.
Paul Sankey from Mizuho Securities mentioned earlier that a "Tesla Effect" is beginning to be felt in the oil markets. According to the analyst, Tesla Effect is an increasingly widespread concept today that, while the 20th century was powered by oil, the 21st century will be powered by electricity. This, together with the growing movement against climate change today, is not good for the oil industry. Adam White, an equity strategist at SunTrust Advisory, stated that investors may no longer look at the oil market with optimism. "A lot of damage has already been done. People are jaded against the industry," he said.
An analysis by Barclays points to the world's dependence on oil pricing somewhere between 2030 and 2035, provided the countries adhere to their carbon targets. The investment bank also noted that top oil could occur as early as 2025 if aggressive climate change initiatives were adopted on a larger scale. All of this makes investments in oil stocks very risky in the 2020s, and this risk is enhanced if electric cars become more common. Sverre Alvik from research firm DNV GL described this concern. "By 2030, the oil owners will feel the effect. Electric vehicles are likely to increase the oil impact on light cars by almost 50% by 2040," says Alvik. In the midst of the pressures of shareholders, BP, Royal Dutch Shell and Total, they have expanded their activities to solar energy, wind and electric charge, apparently as a means of future-proofing themselves. In the month, financial titan Warren Buffet, who recently expressed his skepticism towards Elon Musk's plan to introduce an insurance service for Tesla's electric cars, committed $ 10 billion to Occidental Petroleum, one of the largest oil and gas exploration companies in the US. ] A Point of No Return
The automotive industry is now at one point a real transition to the electrification Tesla's efforts over the years, from the original Roadster to Model 3, have played a major role in this transition. Tesla, in addition to CEO Elon Musk, has aroused public awareness of the viability of electric cars, while the automotive industry shows demand for good, well-designed EVs. Nevertheless, Tesla still has a long journey ahead, as the company is affecting its activities in the energy storage sector. If Tesla Energy mobilizes and becomes so disruptive as the company's electric car department, it will agree another blow for the oil industry.
At this point, it is relevant to veteran automakers who have released their own electric cars to ensure they do not stop. Legacy carmakers had talked long talked about electric vehicles, but today it is time to go on a trip. German automaker Volkswagen could be a major player in this transition, as indicated by the receipt of its electric car, ID.3. The ID.3 launch was successful, with Volkswagen getting 10,000 vehicle pre-orders in just 24 hours. The German car manufacturer should see this as writing on the wall: the demand for electric motors is there.
Volkswagen ID.3 is not as fast or slim as a Tesla Model 3, nor does it last long between charges. But considering the price point and its mark, it doesn't have to be. Volkswagen says ID.3 will be priced below $ 40,000 ($ 45,000) in Germany, which will allow car buyers in the country. If it is done correctly, ID.3 may be Beetle's second come, and is becoming a car that dissolves the company from the stigma to the Dieselgate scandal. Thus it would be a shame if Volkswagen dropped the ball on ID.3.
Tesla will probably remain a divisive company for years to come; Elon Musk, even more. Yet, Tesla and what it stands for, slowly becomes an idea, one that means hope for something better and cleaner for the future. And if history's victories and tragedies are any indication, when something becomes an idea, an intangible concept, it becomes impossible to kill.