Oil giants could be big EV players: report

A new report by Deloitte suggests oil and gas companies are among the least prepared for the electric car revolution.

Oil and gas companies could be leading the electric vehicle revolution but are instead among the least prepared sectors, a new report says.

Almost half of global oil and gas companies aren't preparing for the impact of electric vehicles despite many acknowledging the new automobiles' potential to disrupt their business models, consultancy firm Deloitte says.

But that doesn't mean all in the resources sector are set to be caught unprepared.

A survey of nearly 100 executives in Australia and around the globe suggests mining companies are among the most active sectors in preparing for EVs.

One anonymous mining operator in the report said converting vehicles to electric drivetrains was cheaper than mine-proofing them and it was now looking to completely electrify its vehicle fleet.

Though, unlike oil and gas companies, EVs are a blessing for a key product of many large miners: copper.

Fully electric vehicles require nearly four times more of the conducting material than a conventional medium-sized car.

The Deloitte report suggested most industries were monitoring rivals' approach to EVs, upskilling their employees, developing new business models and units, and undertaking risk analysis.

But very few companies were thinking about merging or taking over companies in that space as a means of enhancing their capabilities and resources.

While acknowledging some oil and gas majors such as French giant Total had bought up renewable energy businesses, the report's authors said new energy remained only a small part of those businesses.

But given deep pockets are required to play in fossil fuel industry, oil and gas companies were among the best placed to buy themselves a leading position in the renewable energy and EVs space.

"While past forays into renewable energy by oil majors have been fraught with loss, this time the economics are different, and the momentum has certainly shifted," Deloitte's Bernadette Cullinane and Steve McGill said.

"Once bitten, twice shy, but third time's a charm, and in this case, it may be the last chance."

Published 19 May 2018 at 3:34am
Source: AAP