Big Oil’s demise may not be due to a lack of oil, but a lack of demand, driven by the rise of electric vehicles (EVs). EVs are on the brink of becoming cheaper and more convenient than their petrol-fuelled counterparts. With the cost of batteries falling, EVs could reach price parity with traditional cars by 2025. Additionally, the lifespan of an EV is significantly longer, making it a more economical choice in the long run.
The shift to EVs could happen rapidly, similar to the swift transition from horse-drawn carriages to cars in the early 20th century. As EVs become more common, petrol stations will become less profitable and start to disappear, making petrol cars even less convenient.
Moreover, the shift to EVs will have a knock-on effect on the oil industry. With demand for petrol plummeting, oil prices could collapse. This would render many oil investments worthless, leading to a financial crisis for those heavily invested in the oil industry.
The potential for a rapid transition to EVs is further supported by the fact that they are significantly more energy efficient than petrol cars. This means that even if the electricity used to power them comes from coal, they would still emit less CO2. Therefore, in the fight against climate change, EVs hold the upper hand.
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