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Saudi Aramco CEO plays down electric vehicle threat

October 25th, 2017

The head of the world’s largest oil company has acknowledged the rise in electric vehicles (EVs) but pointed out that it doesn’t represent a real transformation in relative terms.

Saudi Aramco CEO Amin Nasser played down the impact of EVs on oil demand when interviewed by CNBC this week. His views run contrary to a recent report by Barclays who forecast that cleaner-burning cars could wipe out crude consumption nearly equal to annual output from Iran, OPEC's third-biggest oil producer, by 2025.
Saudi Aramco CEO Amin Nasser
But while electric vehicle manufacturers are making "good progress," battery and hybrid cars still account for just a fraction of the overall market, Nasser told CNBC.

"Electric vehicles will continue to grow. They will take good market share, but it will be decades before they shoulder a significant percentage of the energy mix," he said.

The number of electric vehicles grew to just more than 2 million in 2016, up nearly 60 percent from the previous year, according to the International Energy Agency. They now make up about 0.2 percent of all cars on the road — a "very small percentage," in Nasser's view.

He also points out that hybrid-electric vehicles with gas engines make up a big chunk of the total. There were about 805,000 plug-in hybrid electric cars in the world in 2016, according to IEA. That's 40 percent of all electric vehicles.

By 2030, IEA projects the electric fleet could grow to 160 million, he noted. By that time, there will be 2 billion vehicles overall, Nasser estimates.

"So the number of conventional vehicles still in the market, even though they are more efficient for sure, is still a lot compared to what we have today," he told CNBC’s "Squawk Box" programme.

In a more conservative scenario, electric vehicles total 56 million by 2030, IEA reports. In another scenario in which the world tackles climate change aggressively, the electric vehicle market exceeds 200 million by that year.

A spokesperson for the European Automobile Manufacturers Association told Power Engineering International, “Alternative powertrains - including electric, hybrid, fuel-cell and natural gas-powered vehicles - will play an increasing role in the transport policy mix, and all ACEA’s members are investing heavily in them. To this end, more needs to be done to encourage consumers to buy alternatively-powered vehicles, for instance by putting in place the right incentives and deploying recharging infrastructure across the EU. In parallel, improving the internal combustion engine and clean diesel technology will continue to play an important role in years to come."

"The latest ACEA data show that electrically-chargeable vehicles accounted for 1.3 per cent of total car sales, hybrids for 2.6 per cent, and cars powered by propane or natural gas for 1.3 per cent.”

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