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A look at a fleet of electric vehicles from industry leader Tesla (Source: EVANNEX; Photo by Casey Murphy)

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Exxon CEO: All New Cars Electric by 2040 — What That Actually Means

Once upon a time, all new car sales being electric by 2040 was a bold prediction. In fact, many countries still have a much more pessimistic target. However, anybody following the sector somewhat closely knows that even not-so-aggressive automakers are aiming to be fully electric by 2035 or sooner. Tesla’s Elon Musk has also estimated the whole market will go electric by about that time, and California aims to be selling 100% electric cars by 2035.

There are still people in the industry who think new gas and diesel cars will still be sold in 2040 or 2050, but the number of people who think that is dwindling. Just as a side note highlighting that point, I’ve spoken to various automotive suppliers over the years, and they’ve said (even a few years ago) that almost all new designs they work with from automakers are electric. It takes several years to develop a new car, and the results of work done this year won’t show itself on the market for several years to come, but if new fossil-powered car designs are few and far between these days, don’t expect a lot of new fossil fuel car sales in 8 years, let alone 18 years.

As Steve Hanley wrote yesterday, Darren Woods, the CEO of ExxonMobil, just told CNBC that ExxonMobil expects all new car sales to be electric by 2040. Yes, ExxonMobil. That’s a bit of a shocking statement if you believe country targets to phase out fossil fuel vehicles by 2050 (a full decade after 2040) and simply because ExxonMobil is an oil company, but it’s not too shocking if you believe the forecasts from Volvo, GM, Volkswagen, and Tesla. That said … what does it actually mean that the CEO of Exxon is saying this?

There are a few things it could mean.

First of all, if the CEO of ExxonMobil is saying all new car sales will be fully electric by 2040, there’s a chance — a tiny little chance — that the real crossover to 100% electric will happen well before 2040. After all, you would expect the CEO of an oil giant to be more pessimistic about the timeline than optimistic or realistic.

Another possibility is that Darren Woods is indeed providing their best available forecast and speaking out about it now because he knows everyone else knows that the oil industry’s days of ever-rising demand and production are ending, and that he’s simply trying to guide or shift the narrative about what that means for oil companies like his little baby Exxon. His point, as Steve Hanley summarized, was that “the decrease in demand for motor fuels will only mean the company will go back to where it was in 2013, and its business was quite good then.” In simple terms, even if the oil market contracts due to the rising demand for EVs, oil companies can still make massive profits just as they were doing a decade ago. No worries, stockholders! Everyone who looks can see that European countries and China are achieving 17% to 30% plugin vehicle market share, or 11% to 17% BEV share. And it’s only 2022.

By using the year 2040, Woods could also be cleverly implying to people that electric cars aren’t ready yet. It could be his “bullish” way of telling potential customers that they can buy another fossil-fueled giant truck or SUV and don’t need to panic and buy an electric car yet.

If you have more ideas for what this could mean, chime in down in the comments!

 
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Written By

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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