What GM’s EV Plans May Mean For Oil Patch
U.S. automobile manufacturer General Motors a couple of weeks ago shocked the industry when it announced that by 2035, the majority of vehicles produced at its factories will be electric. The Detroit manufacturer said it would be investing at least US$27 billion in electric vehicles over the next 5 years.
When comedian Will Ferrell appeared in a Super Bowl commercial by General Motors on Sunday, it wasn’t to promote a new flick. Instead, Ferrell’s antics of smashing a globe, catching a flying arrow in his mouth, and taking a trip to Sweden on a storage tanker, was all about announcing the largest automaker in the United States’ new ambitions as a maker of mainly electric cars.
The company’s plans include SUVs, trucks, crossovers, and sedans – all electric.
While some might argue that GM’s aspirations have the potential to be transformative from an environmental and climate change perspective, others are of the opinion the 112-year-old auto manufacturing giant may be smoking more than just the green peace pipe.
Even so, amid growing calls for climate change, the manufacturer’s decision to go predominantly earth-friendly is already making waves in the North American energy sector. Oil and gasoline producers, especially, will now want to understand and adapt to the electric vehicle push more urgently than ever before.
The Canadian oil patch, so believes Warren Mabee, director of the Institute for Energy and Environmental Policy at Queen’s University, may even find GM’s announcement to be more significant to its own future than U.S. President Joe Biden’s decision to pull the plug on Keystone XL. Mabee said that what GM will be doing is creating a situation that eats away even further at the side of the demand of the supply-and-demand gasoline driven motor vehicle equation.
The Future Is Electric
But despite the massive implications such a move will have for the oil industry, Mabee said he sees a promising future for those willing to understand their potential role in the supply of hydrogen or electric vehicle batteries.
Not only will massive input be required at the manufacturing and sourcing end of the spectrum, but also in terms of the supply chain. Also left to be established is the type of infrastructure that will be able to cope with the demands of the provision of renewable energy for “plug-in” EVs.
Whichever way the chips fall, however, so believes Fred Krupp, who is the head of the Environmental Defence Fund, and who is working with General Motors on its strategy, the future of transportation is undoubtedly electric.