EV Demand Increases Despite Energy Prices

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Oil supermajor Shell sees electric vehicle (EV) enthusiasts buying into the ‘cool factor’ of zero emission vehicles, driving EVs fleet growth regardless of the oil price fluctuations, the head of Shell’s global retail business, Istvan Kapitany, told Bloomberg in an interview published on Tuesday.

“They get a joy out of it, they feel passionate about it, they think it’s a great driving experience,” Shell’s executive said, noting that EV enthusiasts are emphasizing the social desirability of zero-emission fun-driving-experience cars—a factor important enough to ignore the fact that EVs are currently more expensive than vehicles with internal combustion engines (ICEs).

“Customers don’t always make rational decisions -- if it weren’t like that, it would be very difficult to sell sports cars,” Kapitany told Bloomberg.

Shell’s executive is not the first top manager at a Big Oil firm to say that customers’ passion to own EVs could be a big driver for EV fleet growth.

As early as in 2016, BP’s group chief economist Spencer Dale said that the ‘cool’ EV factor could lead to faster penetration of zero-emission vehicles.

“Suppose people buy electric cars, even if they are more expensive, because they like what the car says about them: how modern they are; their responsibility to the planet. Because they’re cool. Economists don’t do cool, but it can be a huge factor in how quickly some new technologies are adopted,” Dale said two years ago.

Over the past two years, both BP and Shell have been busy making deals with EV charging networks. Last year, Shell bought NewMotion, one of Europe’s largest electric vehicle charging providers. Less than a month before that, Shell had announcedan agreement with high-powered charging network operator IONITY—a joint venture between BMW, Daimler, Ford, and the Volkswagen Group with Audi and Porsche—to offer charge points across ten European countries.

BP said in June this year that it would buy the UK’s largest EV charging company Chargemaster in one of the latest deals of a major oil company venturing into EV charging networks.

According to Wood Mackenzie, EVs will become competitive on commercial terms with ICE vehicles by 2027.


Tsvetana Paraskova for OilPrice.com