Categories: Base Metals / Energy / General Market Commentary / Precious Metals
Topics: General Base Metals / General Energy / General Market Commentary / General Precious Metals

Electric cars to reshape copper and oil demand

Electric cars to reshape copper and oil demand

According to Bloomberg New Energy Finance, EVs could displace 2 million barrels a day of oil demand as early as 2023. “That would create a glut of oil equivalent to what triggered the 2014 oil crisis.”

The first half of 2016 saw 128 percent growth in the critical Chinese market, and far stronger than expected sales in the United States, hinting that the world’s EV fleet could grow even faster in the coming years than Bloomberg New Energy Finance’s already bullish expectations, SAFE reported in its Energy Fuse website, saying Wood Mackenzie, the IEA and other agencies believe the EV market is set to grow fast enough to destabilize oil demand.

BHP’s VP of Market Analysis and Economics, Huw McKay, published an analysis of the metals demand vs. oil as demand is displaced by the EV industry. The analysis was published in the Financial Times Commodities Note on Oct. 31.

“The Tesla Model 3 and Chevy Bolt (both of which will be launched imminently) will be the first mass market EVs that can be driven 200 miles on a single charge — the minimum many commentators say is needed if cars solely powered by batteries are to go mainstream in the U.S.,” McKay said.

McKay hit on the turning point for EVs: “Once EVs start matching conventional vehicles for convenience, the speed at which they become commonplace will depend primarily on price,” which he says is driven today by expensive battery packs. “The packs needed to power a midsized car for 200 miles currently cost about $15,000. So the models that use them are more expensive than a $25,000 Toyota Camry — America’s top selling passenger car last year.”

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