“General Motors believes in an all-electric future,” Mark Reuss, GM’s head of global product development, announced in a corporate press release Monday.
These are remarkable words for a company that has become a global behemoth over the past century by making and selling tens of millions of cars, SUVs, and light trucks that run on liquid fossil fuels. When you add in plans from huge, fast-growing markets like China and India to quickly shift to EVs and end the sale of petrol cars, it’s clear that upending the car market will also upend the oil market.
Reuss said GM would accelerate the transition to electric vehicles (EVs), with two new EV models coming out in 2018, and “at least” another 18 by 2023. On the same day, Ford Motor Co. announced it would release 13 new EV models in the next five years.
The electric vehicle revolution has been supercharged by plummeting lithium-ion prices, which are half of what they were in 2014. Bloomberg New Energy Finance (BNEF) forecasts EVs will be as cheap as gasoline cars by 2025 and keep dropping in price until EVs overtake them in yearly sales, by which time EVs will be displacing 8 million barrels of oil a day — more than Saudi Arabia exports today.
But BNEF pointed out last year that the 2014 oil price collapse was triggered by a global glut of just 2 million barrels a day. So they’ve already told investors to expect the big crash in oil as soon as 2023.
Indeed, what makes the GM and Ford announcements so “stunning,” as the New York Times explains, is that the two companies together sell “more large pickup trucks and full-size sport utility vehicles than the rest of the global industry combined.” Ford already plans to offer a crossover EV with a 300-mile range by 2020.
So the gas guzzlers are going to be replaced by electricity sippers, super-efficient vehicles that have one-quarter the annual fuel bill, even running on carbon-free renewable energy. In fact, EVs might have a zero fuel bill if utilities keep making deals with car companies and car owners to sell power back to the grid when needed.
At least in Europe, the major oil companies can see the writing on the wall. The CEO of Shell Oil said this summer that oil demand might peak within 15 years and that his next car would be electric.
But in the U.S., tragically, Big Oil has a key ally in the Trump administration, which is doing everything possible to promote oil use, boost carbon pollution, and slow down the clean energy revolution. This week’s moves by GM and Ford offer some hope, however, that U.S. workers won’t be completely left behind as rest of the world goes electric.