Despite The Election, Oil and Gas Are On Their Way Out
Leading up to November 8th the writing was on the wall for the Oil and Gas Industry. Tesla was destroying performance records and setting new standards on automotive pre-orders. General Motors was gearing up for the release of its first mass-produced EV, every major automotive manufacturer staked a claim to commit to building EVs, and VW quietly committed $2B to building out public charging infrastructure (thanks to Dieselgate).
And as of today all of those things are still happening.
Despite rhetoric from a certain president-elect and the potential appointments he will make, the wheels of change in the auto industry will not stop and that is very bad news for big oil.
The Table's Already Set
Had this election happened four years ago things may have been different, Tesla would have never been able to break the industry like it did, never able to break consumer reports testing scores, never able to garner 400,000 reservations in less than a month, never scare the automotive giants into action. Fortunately for us that did happen and now there is no stopping it.
The dust has already settled the industry is moving forward.
For all the bluster surrounding green tech and electric vehicles in general, the fact remains that people have seen a glimpse of the future and they're not likely to step back. Simply put, EVs are cheaper to operate, more efficient, more powerful, and very soon less expensive to buy than gas powered vehicles. If you were thinking EVs are reliant on government subsidies you should know, many automotive manufacturers are rapidly approaching the cut-off, meaning they have already sold so many EVs or Plug-in Hybrids they no longer qualify. The dust has already settled the industry is moving forward.
The auto industry is a massive beast and once its been ramped up its very hard to slow down. Even sweeping government changes that weaken the electric vehicle industry will have a hard time overcoming the havoc Tesla has wrecked. The fact is many manufacturers have already gone too far to turn back now. However that's not the only nail in the oil industries coffin, the global economy makes it nearly impossible to stop EVs.
The US is Only One of Many
For a century the United States was far and away the world's largest automotive market and due to this most cars were built solely to satisfy our wants and needs. For better or worse, those days are done. Yes the US is still a major auto market, its still the second largest in the world and that most likely won't change for some time, but China is quickly becoming the driving force in the automotive world.
China's rapidly growing middle-class and their growing love affair with cars combined with dangerous levels of airborne pollution have made electric vehicles essential and forced the government to push automakers toward an electric future. With the world's largest auto market making an abrupt turnaround (look at the graphic above, the yellow is China), automotive manufacturers don't have much choice but produce EVs.
Furthermore, Europe has faced high gasoline prices for decades and with electric vehicles proving their worth has triggered many countries to outright ban gasoline-powered auto sales in the near future. These two regions account for more than half of the world automotive market, and if both are making strong moves toward electrics you can bet the US will be forced to follow suit.
5 Largest Auto Markets:
China = 32%
United States = 28%
European Union = 22%
Japan = 7%
India = 4%
This all brings us back to the main point, despite everything that has happened and will happen within the US government, oil and gas are rapidly on their way out. They cannot rely on one region to dictate the industry as in years past, the world is simply bigger than that now. Oil and gas had their heyday but now electrics are taking over and there isn't much that is going to stop it.