GlobalData’s latest report, ‘Oil and Gas Sector
Strategies for Electric Vehicles (EV)’, reveals that electric mobility is one of
the many ways oil and gas companies are diversifying their business to adapt to
the energy transition that is already in motion. Companies including Shell,
TotalEnergies, and Mitsui are developing EV charging, battery
manufacturing, and other EV value chain capabilities through acquisitions and
partnerships.
Miles Weinstein, Energy Transition Analyst
at GlobalData, comments: “Taking another tactic,
ExxonMobil has so far ignored charging infrastructure in favor of providing
solutions to improve EV performance, such as EV battery thermal management. The
company is also developing fluids, lubricants, and cooling solutions
specifically for EV motors. This is a less risky foray into the EV market than
building physical infrastructure, and overlaps with the company's current
petroleum-based fluids production. On the other hand, Woodside has elected to
avoid battery EVs altogether in favor of fuel cell electric vehicle (FCEV)
infrastructure and the production of low-carbon hydrogen, which is a reflection
of the overall lack of battery EV uptake in Australia to date. Despite their
differences from other oil and gas companies' strategies, they serve
a similar purpose of diversifying oil and gas businesses into new markets in preparation
for a decline in petroleum product sales for the transport sector.”
FCEVs have not seen large penetration into the
passenger vehicle market due to higher capital and fuel costs. While the
economics are expected to improve, especially in light of rising gas prices,
GlobalData expects FCEVs to become more practical in the medium- to heavy-duty
segment due to their longer range and quick refuelling time, while finding a
smaller niche in the passenger segment.
Sales of light EVs, specifically passenger and
non-commercial vehicles, are already outpacing those of plug-in hybrid electric
vehicles (PHEVs), with the gap set to widen in the coming years. In fact, EVs
saw their market share nearly double in 2021 compared to 2020. China and Europe
are expected to see the most EV sales, while North America is expected to have
about 60% as many sales as either region. South Korea will also have a
notable number of sales, but the rest of the world will see significantly less.
Where FCEVs are concerned, Europe is expected to see the most sales with China
at a close second. South Korea and Japan will be additional important markets,
with the North American market a fraction of the size.
Several auto manufacturers have set targets for
EV sales and allocated funding toward electrification. Among the most ambitious
are Daimler and Volvo’s targets for 50% of sales to be fully electric by 2025,
and Renault Group’s target that 100% of European sales be EVs by 2030.
Volkswagen Group plans to invest €35 billion ($37 billion) in all-electric
mobility through 2024.
Weinstein explains: “Almost
all of the national targets set thus far exclude medium- and heavy-duty
vehicles, suggesting that these segments could largely continue using
conventional fuels beyond the 2030s. Demand for petroleum products has seen a
rebound after 2020, but demand is not expected to return to 2019 levels until
2026, in part due to the increase in demand for EVs. Contributing factors to
the EV push include issues like urban air quality and the diesel emissions
scandal.”