Changing lanes: a roadmap for transport and future energy markets

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It’s easy to get carried away with the hype surrounding electric vehicles (EVs). Sales of battery-powered cars may be surging, but the technology is still in its infancy and batteries are by no means the only low-carbon solution for global mobility.
What’s clear is that understanding the changing face of transport in whatever form it takes is one of the big challenges facing the energy and commodities industries. This special report — bringing together the very best of S&P Global Platts news and analytics insights — will help to shape the debate and provide decision makers with the key facts and information they require to future-proof their business models.

Like any disruptive technology, there will be winners and losers in the drive for more fuel-efficient internal combustion engines, or the development of cheaper and more usable EVs. Big oil companies are already adapting fast by investing heavily into the production of cleaner transportation fuels, such as liquefied natural gas, and by installing charging points into their service station networks. Some are going a step further by investing in power generation and distribution.

Despite these new business strategies, S&P Global Platts Analytics’ current projections are that oil production will have to increase in order to meet rising demand from road transport for years to come. EVs are likely to remain a small part of the overall global vehicle fleet unless the technology improves significantly and the cost of production falls. “It is important to emphasize that oil is expected to remain the most important fuel in the global energy mix for decades to come,” says OPEC Secretary General Mohammed Barkindo in the report.

If changes to mobility are a challenge for oil producers, they represent a new opportunity for the $800 billion global mining industry. Some battery resources such as lithium exist in abundance. Data from the US Geological Survey shows 400 years of supply at current production levels. However, other vital commodities face bottlenecks. Copper, nickel and aluminum could all see prices rise from growing EV demand. Cobalt—another key ingredient in batteries—is heavily dependent on high-risk areas such as the Democratic Republic of the Congo. The possible outcomes for metals producers are also explored in the report.
The growth of EVs in developed markets such as Europe is dependent on subsidies and policies designed to push consumers into battery-powered transport, especially in urban areas. How the market for this emerging form of passenger transport will hold up once these incentives are removed is uncertain.

Finally, we should recognize that EVs are also not the only solution for future mobility. Autonomous vehicles could transform the traditional model of car ownership, while hydrogen may eventually provide another alternative fuel, especially for larger commercial vehicles. The advantages of all these scenarios are considered in depth in the report, which I believe will be an indispensable guide for business to the future of mobility.

Martin Fraenkel
S&P Global Platts