Electric car outlook flat, says oil giant

ELECTRIC and plug-in hybrid cars will only account for five per cent of the worldwide car fleet by 2040, oil giant ExxonMobil predicts.

Handing down its latest annual review of the industry that gazes into a crystal ball over the decades ahead, ExxonMobil says the high cost of power storage technology means battery-powered vehicles won’t come into their own until late in the outlook forecast.

“Oil will remain the predominant fuel source for transportation through 2040,” the report says.

“Around 2025, ExxonMobil expects hybrid vehicles will be less expensive and their share of sales will expand quickly, adding more efciency to the eet.

“Full hybrid vehicles will make up about 40 per cent of the eet in 2040, or more than 50 per cent of new car sales in 2040,” the report reads.

“In the latter part of the outlook, electric and plug-in hybrids (utilising a gasoline engine and battery-powered motor) will begin to play a more signicant role, making up around 10 per cent of new car sales in 2040, or about 5 per cent of the eet,” it says.

Hurting battery-powered sales will be the batteries themselves, which ExxonMobil says “will need to make substantial progress to overcome hurdles, including a $10,000 to $15,000 higher upfront cost plus range and functional limitations for drivers”.

According to the company, the average fuel efficiency of new vehicles in 2040 will hit about 5.0 litres per 100 kilometres, down from an average today of almost 9.0L/100km.

“This shift in efciency is driven by manufacturers incorporating improvements into new cars,” the report says.

“Engine and transmission improvements, along with lighter body and accessory parts, are expected to improve efciency of new cars ...

“The overall efciency improvement will also be enabled by manufacturers that introduce smaller vehicle models and engines to meet government fuel economy mandates as well as increased penetration of hybrids.” One of the big jumps in demand that ExxonMobil predicts is for diesel, which the oil giant says will jump 70 per cent over the next seven years as it becomes the fuel of choice for transportation.

Diesel passenger car sales to private buyers in Australia stagnated last year, although the number of diesel-engined soft-roaders sold jumped by more than 50 per cent, VFACTS data shows.

Likewise, sales of diesel-engined light commercial vehicles jumped by close to 30 per cent over the same period.

Meanwhile, demand for natural gas as a transport fuel is expected to increase by 50 per cent.

According to ExxonMobil, by 2040 the number of vehicles on the world’s roads will grow from 800 million to more than 1.6 billion.

Over the same period, the oil company says the world’s population will jump from six to nine billion people.

ExxonMobil says efficiency gains will flatten off demand for fuel over the outlook period.