Thank you very sincerely. You are of course correct, I was thinking in terms of leveling or declining energy requirements...Have you read anything by Peter Zeihan? It, and some of his earlier books, call for a much quicker reduction in global populations, and in some cases regional reductions (think China and much of Europe) already under way.
Great chart comparing the IEA's OMR to OPEC's MMOR. Interesting that the IEA's predictions are closer to the mark, at least for the period you looked at (as opposed to the coming years). 2024 looks like an acid test, it will be interesting.
Thanks Arjun, always appreciate your perspective. Home charging has many advantages, especially if done when asleep. Yes I thinks it's natural to think about your own objectives in isolation, forgetting about the knock-on effects or that other countries have different priorities.
In the words of a sage in the Caddyshack movie...: "...become one with the ball,Arjun....see the ball,Arjun...become one with the ball..." Your handicap will fall like a Niagara surge after the rainy season.
I agree with much of what you say about EV's. It's not possible to apply past performance on EV's in countries where adoption is high and say that it will be replicated everywhere. Path dependency, individual incentives, and local geography matter a great deal. That's why the US is only at 8.1% of new sales, far short of the 18.1% average for 20 countries at the same point on the adoption curve.
I do think analysts need to be mindful of not allowing ones perception of how EVs fare in your own country colouring their view of adoption elsewhere in the world. For example, although Europe remains at the centre of EV adoption some of the fastest growth is happening elsewhere. EV adoption in Thailand only passed the 5% threshold in Q1 2023, but by the end of the year it had already reached 13%.
I think people focus too narrowly on EV sales as a measure of progress. Analysis by the World Bank suggests that governments would have made a lot more progress if they had invested in EV charging infrastructure than subsidising EV ticket prices. The global EV charging stock increased by more than 40% in 2023, and it seems governments are positioning supporting more charging infrastructure so this growth should continue to accelerate.
A final point on the impact on gasoline/diesel demand. The launch of EU ETS II, Europe's second carbon market (on road transportation and buildings) could result in reduced fuel demand. The carbon price is expected to be very high, perhaps €200 per tonne, and the only real way of abatement will be via EV growth.
It’s truly remarkable how large the gap is between reality and the vague assumption held by millions of people that some kind of miraculous “cure for oil use” will arrive “pretty soon now”.
Many, many thanks for so much important evidence packed into one piece. I don't trust any other analyst to present unbiased data on whether EV penetration is impacting oil demand. Your check of the relative accuracy of IEA and OPEC oil reports reminds me why.
As always pointing out the real facts and the elephant in the room mostly ignored that the other 7+ billion want to improve their lives with affordable access to energy. CGEP does great work but I have yet to see this adequately addressed.
I made this chart a week ago and the order might have changed since then. Anyway, Petrobras' ($PBR.A) 3-year total return, from April 16, 2021 to April 19, 2024, is higher than those of all embers of magnificent 7. During the same period, $XOM also beat every member but $NVDA.
Thank you again Arjun. Excellent work. It seems that many golfers forget about the “having fun” part of golf. Life is too short to confuse playing a round of golf with friends with practicing for the U.S. Open.
Thank you very sincerely. You are of course correct, I was thinking in terms of leveling or declining energy requirements...Have you read anything by Peter Zeihan? It, and some of his earlier books, call for a much quicker reduction in global populations, and in some cases regional reductions (think China and much of Europe) already under way.
Great article, with 1 question: Are we sure population continues to rise?
Arjun,
Great article, lots to ruminate on there. I am a Houston guy as well. If you want to play golf some time, let me know.
Great chart comparing the IEA's OMR to OPEC's MMOR. Interesting that the IEA's predictions are closer to the mark, at least for the period you looked at (as opposed to the coming years). 2024 looks like an acid test, it will be interesting.
Thanks Arjun, always appreciate your perspective. Home charging has many advantages, especially if done when asleep. Yes I thinks it's natural to think about your own objectives in isolation, forgetting about the knock-on effects or that other countries have different priorities.
In the words of a sage in the Caddyshack movie...: "...become one with the ball,Arjun....see the ball,Arjun...become one with the ball..." Your handicap will fall like a Niagara surge after the rainy season.
I agree with much of what you say about EV's. It's not possible to apply past performance on EV's in countries where adoption is high and say that it will be replicated everywhere. Path dependency, individual incentives, and local geography matter a great deal. That's why the US is only at 8.1% of new sales, far short of the 18.1% average for 20 countries at the same point on the adoption curve.
I do think analysts need to be mindful of not allowing ones perception of how EVs fare in your own country colouring their view of adoption elsewhere in the world. For example, although Europe remains at the centre of EV adoption some of the fastest growth is happening elsewhere. EV adoption in Thailand only passed the 5% threshold in Q1 2023, but by the end of the year it had already reached 13%.
I think people focus too narrowly on EV sales as a measure of progress. Analysis by the World Bank suggests that governments would have made a lot more progress if they had invested in EV charging infrastructure than subsidising EV ticket prices. The global EV charging stock increased by more than 40% in 2023, and it seems governments are positioning supporting more charging infrastructure so this growth should continue to accelerate.
A final point on the impact on gasoline/diesel demand. The launch of EU ETS II, Europe's second carbon market (on road transportation and buildings) could result in reduced fuel demand. The carbon price is expected to be very high, perhaps €200 per tonne, and the only real way of abatement will be via EV growth.
Thanks. Great post as usual.
It’s truly remarkable how large the gap is between reality and the vague assumption held by millions of people that some kind of miraculous “cure for oil use” will arrive “pretty soon now”.
Many, many thanks for so much important evidence packed into one piece. I don't trust any other analyst to present unbiased data on whether EV penetration is impacting oil demand. Your check of the relative accuracy of IEA and OPEC oil reports reminds me why.
As always pointing out the real facts and the elephant in the room mostly ignored that the other 7+ billion want to improve their lives with affordable access to energy. CGEP does great work but I have yet to see this adequately addressed.
Fantastic article - really concise and important to remind us to read data carefully and take our own considerations.
Such a good point on the (lazy) usual geographical extrapolation of S-curves. Terrific note as usual Arjun.
I made this chart a week ago and the order might have changed since then. Anyway, Petrobras' ($PBR.A) 3-year total return, from April 16, 2021 to April 19, 2024, is higher than those of all embers of magnificent 7. During the same period, $XOM also beat every member but $NVDA.
https://pbs.twimg.com/media/GLjebKrbsAAgLWC?format=jpg&name=4096x4096
Thank you again Arjun. Excellent work. It seems that many golfers forget about the “having fun” part of golf. Life is too short to confuse playing a round of golf with friends with practicing for the U.S. Open.
excellent
Tell the WSJ this. In today’s story on XOM and CVX, they quote an “analyst” that is concerned about the “sunset nature” of the industry ….