Re: USA: Oil giant Shell acquires Greenlots, an EV infra company I don't know. It looks like Shell, BP etc are trying to pull wool over the eyes of shareholders. To show them that they are doing something about the upcoming restrictions on sale of petrol/diesel cars. Just think about it - how do Exxon Mobil, Total, Shell, BP etc make billions of dollars of profits every year? By going to places where nobody goes (Eg: middle of the ocean) and digging out the black gold. It is not easy to replicate what these guys do, and that's why they get multi-billion dollar valuation.
But setting up EV infrastructure all over and charging $0.50 per customer will get them peanuts in revenues and nothing in profits. Anybody can enter this charging business, because it simply has no entry barriers.
So will these oil exploration companies just roll over and die in another 20 years? Unlikely, because Oil demand is still expected to grow at 2% per annum for a long time. Slightly less than World GDP growth.
1) Petrol & diesel for private cars accounts for just about 35% of crude oil demand.
2) Cars that are already on the road still need petrol and diesel. New car sales to existing cars on the road ratio will be low.
3) Poorer countries in Africa, Latin America and Asia will take decades to adopt "EV only" rule. This is where crude oil consumption growth is above world's average anyway.
4) When usage of a commodity like crude oil falls, its price will fall. And when price falls beyond certain levels, human kind figures out new ways of using the commodity. For eg: if crude oil price crashes, it is likely to replace coal as a fuel for power plants. Demand will soar again.
Last edited by SmartCat : 4th February 2019 at 19:48.
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