Are We Seeing A Last Gasp From Oil Lovers & Apologists?

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A few recent trends got me thinking that we might be seeing a “last gasp” for oil lovers and apologists as they try to cling onto their oil-related wealth and cultural inertia.

I’ll give the most credit to a comment from a reader, Tom Storey, under a recent article of mine:

From a dealer marketing perspective there is a $7,500 incentive for a lot of new EV’s. The US isn’t in the “early majority” phase of adoption yet. There really isn’t much to be done about it, people will jump in as the wave develops. The EU is ahead of the US by 18 to 24 months. Seems that EU BEV sales share is about 15% overall and the US is about 8%. Thus, perhaps the US will hit 15% by second half of 2026 give or take with almost 60 new EV models available by then? By that time the EU should be closing in on 27% BEV share and will be in the “early majority.” China is an odd ball as the incentives come and go. They seem to be early majority though at around 25% BEV sales share the first half of 2024.

Product adoption always seems to follow this “S” curve. From flip phones to CRT monitors consumers do one very predictable thing first of all. They begin the process of abandoning the legacy technology. They don’t buy the flat screen TV first, they stop buying the Console TV first.

EU sales of new IC vehicles are down 30% since 2019.

US sales of new IC vehicles are down 20% since 2018

No idea on China, their numbers don’t seem that reliable, but new IC vehicle sales are down similarly.

I put the key part for this article in bold. It’s a very good point, and one not often thought about or discussed. People stop buying the old tech quicker than they start buying the new tech, because who wants to be left with some old, out-of-date, low-value tech? Also, perhaps they are expecting prices to come down on the new tech soon and drag out their ownership of the old tech a little longer than they normally would in a stable market.

But let’s go a little further.

As you know, much of the hype these past 6–7 months has been around EV sales “not growing as much as anticipated,” whatever that means. The odd thing has been that EV sales have been growing a lot at the same time. In fact, one of the culprits of the anti–EV growth hype, Ford, has seen tremendous growth this year.

Overall, even from the beginning of the hype, the narrative has felt a bit like a last gasp — like people hoping, in the last minute, that something will change and electric vehicles will stop taking over their beloved oil-fueled market. And when you think more about it, think about all of the people with investments in the oil industry, working in the traditional oil-powered car industry, working in the oil industry, just addicted to gas-powered car technology and culture, or simply afraid of change in general. The idea that, actually, EVs aren’t taking over the world and aren’t going to replace the cars and fossil fuels they are used to (and perhaps make money on) must be thrilling and something like a “last gasp.”

And let’s bring it around to one final point. As I noted in my last report on the US auto industry, US auto sales were down 5% in the first quarter compared to the first quarter of 2019. As I noted in an article yesterday, the number of cars and trucks on dealer lots in the USA is growing. Production has been higher than sales, with growing inventory being the result. In short, it seems like what Tom Storey wrote in that comment above may be what’s going on here. The old technology is not selling as well as it used to, and even amidst massive growth of the new technology (EVs) in recent years, a little in that growth rate (not even a dip in sales, but a dip in sales growth) has people hoping that things are going to turn around and the old technology is going to survive.

Well, maybe it will survive in the form of classic cars. For sure it will. But I think misplaced hopes of electric vehicle adoption faltering and people racing back to oil-powered cars are just that — misplaced hopes, a last gasp for a time that once was.