Global shockwaves from electric cars will be here sooner rather than … – The Guardian

When Jaguar Land Rover followed in the tracks of Volvo last week with its shift to an electric-powered future, the car maker didn’t just talk about hybrids and batteries.

Its chief executive also showed that his company, like governments and oil firms, is finally waking up to the global shockwaves electric cars will bring about. They are far more profound than whether drivers top up via a pump or a plug.

Ralf Speth cited the impact battery-powered cars will have on oil demand, and the “considerable stress” that could have for major oil-producing countries’ budgets.

“Many [governments] could be forced to impose substantial spending cuts within the next five years, straining living standards and so creating unrest in areas already suffering from instability. So changes in mobility, in technology, will change the geopolitical map of the world,” he said.

Those changes seem a lot closer after this summer’s rush hour of electric car announcements.

Carmakers have queued up to pledge that soon all their new models will be either hybrids or electric. Elon Musk’s Tesla delivered the first production versions of its mass market Model 3.

The UK and France said sales of petrol and diesel cars would be banned from 2040, while a bank predicted all new car sales in Europe would be electric five years before that.

On Friday, the ride-hailing behemoth Uber said all its cars in London would be fully electric or a plug-in hybrid by 2025. And with the Frankfurt motor show this week, we are guaranteed more commitments and more competition between carmakers over who is electrifying fastest.

Sceptics will say there is a need for a reality check on the high-voltage hype about battery cars. They will point to the fact there are just 2 million of them in a world of more than 1 billion cars. Or that, even with subsidies they are still more expensive than petrol and diesel alternatives. Like Jaguar Land Rover, they will also question whether there are enough charging points or electricity generation.

Unsurprisingly, big oil is in this camp. BP said earlier this year that electric cars would not be a “game-changer” for oil demand because of rising prosperity in the developing world. Last week, Shell argued that the fuel savings from the efficiency improvements in internal combustion engines would outweigh those from electric vehicles threefold.

The Anglo-Dutch company believes oil demand will not peak until the mid-2030s, despite expecting electric and plug-in hybrids cars to make up 35% of new car sales by then, up from 1% now.

“To come radically earlier than the early 2030s [peak oil demand], there has to somehow be a demand change, and it’s not going to come from electric cars,” said Guy Outen, Shell’s executive vice-president of strategy and portfolio.

But the company’s actions may tell a different story. It is hedging by shifting its portfolio increasingly away from oil towards gas, which can also supply the new power stations that electric cars will need.

And the oil giants’ record on predicting the growth of disruptive technologies has not always been stellar – for example, BP’s projections have consistently underestimated the rate at which wind and solar power have grown.

Other authorities, such as the influential Carbon Tracker thinktank, predict the rapid ascent of electric cars could stem growth in oil demand as soon as 2020.

Experts such as Bloomberg and Aston University’s David Bailey predict a tipping point in the 2020s in some parts of the world, when electric cars simply make more financial sense for drivers than those powered by a combustion engine.

And while the oil companies are right that increasingly affluent Chinese and Indians will want cars, they seem to ignore the fact that electric ones offer a fix for those countries’ air pollution problems, which their citizens are pushing further up the political agenda.

So the world is driving towards the destination of profound change that Speth touched on. It’s just a question of when – and the answer increasingly looks sooner than anyone thought.

It was Ashley versus the big investors: and he won too easily

Mike Ashley may be treating himself to a decent pint, or 12, this weekend. In the great showdown at Sports Direct last week, the founder and chief executive confounded his critics and won.

His tame chairman, Keith Hellawell, was returned with 53% of the independent votes, a margin Ashley might regard as satisfyingly slim. Sports Direct broke a promise to hold an independent review of boardroom governance but the irate crew of fund managers still couldn’t muster a majority.

How did it happen? One direct answer is that Standard Life, one of the leading rebels of a year ago, has sold its shares while Schroders returned to the register and voted its 5% stake in favour of Hellawell. Schroders’s reasoning seems woefully weak – it may have eased the chairman into the post, but that was eight years ago – but it’s fact of life that shareholders can disagree.

The result, though, is an embarrassment for the Investor Forum, the lobbying group of big shareholders that secured the pledge from Sports Direct to hold a governance review and then saw it broken. The bizarre detail of the tale is that the forum didn’t shout complaints when Sports Direct effectively closed down communication in January. There wasn’t a squeak of public protest. Events were allowed to run their course, culminating in Hellawell’s survival.

It is impossible to know if a loud lobbying campaign would have made a difference, but there was clearly potential to convert a few of the pointless abstentions into active votes. The forum may feel it did all it could, and be happy it has more teeth at firms where there isn’t a belligerent owner with 60% of the shares. Even so, it’s one thing to lose a vote: it’s another to do so without being seen to try, especially in these circumstances.

Retail investors may fairly wonder if they’re getting value for money from the investment industry, which claims great insight and influence alongside the promotion of good governance. When those princely fund fees next come under the spotlight, Ashley can line up the vodka chasers and laugh.

Unions still matter. This conference could prove it

Trade unions are a diminished force in British politics but they still have the ability to shape public opinion and government policy. Union membership has more than halved from its peak of 13 million in the mid-70s, yet the installation of Jeremy Corbyn as Labour leader will give them renewed heft should the left win the next election. The TUC’s annual gathering in Brighton, which starts on Sunday, represents an opportunity to set the political agenda for the remainder of the year at least.

It will be difficult to shift Brexit from the headlines, but there are important issues to discuss. So let’s hear about inequality, high energy bills, stagnant pay, low productivity and a shrinking manufacturing base. And some solutions a wider electorate will support.

Comments

Write a Reply or Comment:

Your email address will not be published.*