S&P Global Ratings’ latest report details the ramifications of wider adoption of electric vehicles (EVs) on the following sectors: automotive; oil and gas utilities; power utilities; and metals and mining.
EVs, both battery electric vehicles (BEV) and plug-in hybrids (PHEV), will have a widespread impact on multiple industries. Disruption will be felt most in the automotive sector, albeit differently for automakers than for auto suppliers. Longer term, we also see oil and gas producers and refiners feeling the disruption, but general energy savings will likely offset demand upside from EVs for power utilities. Finally, EVs can be a boost for metals and mining companies with exposure to cobalt, lithium, or copper.
• Oil and gas: Over the next decade, oil demand decline could only be a limited risk because every 1 million EVs may only equate to a 20,000 barrels/day decline in usage. Further, oil demand growth should continue to trend upward from other sources.
• Utilities: The electrification of transportation presents growth opportunities, for both power demand and investment in charging station infrastructure. Over the next 15 years, EVs could contribute about 1%-4% to total projected load, which will likely offset the industry’s energy efficiency savings.
• Metals and mining: The introduction of electric cars will result in higher demand for certain commodities, like cobalt, lithium, copper, and nickel. Among the most pressing market concerns is that healthy demand for EVs could become hindered by the short supply of lithium and cobalt, especially.
Source: S&P Global Ratings