Why are major oil companies in confrontation with EV cars in the US?

2024-02-09 19:29PM UTC

Global oil companies are cooperating now with biofuel producers in a united front against EV cars, according to an interesting Bloomberg article published this week, which notes the rapid increase in EV cars, in turn threatening two industries that were usually at odds with each other.


What’s happening now is that both industries are uniting against Federal policies that aim to promote EV cars as the only alternative for the future, no matter the cost. 


According to Bloomberg, the American Petroleum Institute joined the National Corn Growers Association and several other industrial groups to support a Republican proposal in the Congress that imposes the sale of gasoline mixed with higher parts of ethanol throughout the year. 


Only during the cold months that E15 fuel is usually sold, while E10, with fewer ethanol parts, is sold usually in the summer, amid concerns about smoky fog resulting from E15 if sold in summer. 


Usually, oil companies oppose the selling of higher ethanol-fuel as it means less gasoline in the tank and less sales, however they now took a radically different position under pressure from EV sales. 


Traditional oil and fuel companies are now actively collaborating with biofuel companies, especially those depending on corn, in a united front against mass electrification of the automotive industry.


Last year, EV automotive sales hit a record 7% of total sales in the US in 2023, however sales are expected to slow down this year. 


The demand for gasoline isn’t expected to collapse anytime soon as the appeal for traditional means of transportation remains strong, pushing major oil companies to agreement with major corn-based biofuel companies. 


Amazingly, even in Norway, the current with the highest rate of EV car ownership in the world, fuel demand remains stable. 


Why are Oil Companies Concerned? 


They’re mainly concerned about the growing pressure from Washington and the hand of the government moving against their industry. 


EV car ownership has so far only displaced 1.5 million bpd of daily global oil sales, which remains a tiny percentage, as EV cars are still a more expensive choice with less appealing infrastructure. 


Traditional industries alongside biofuel industries have sown doubt about President Joe Biden’s announced goal for turning half of all car sales in the US to EV by 2030, with several officials saying such a thing won’t happen unless people were actively forced to purchase EVs under threat of violence. 


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