Oil and gas giant Exxon Mobil announced a decline in sales of gasoline-powered cars and said that electric cars will take the throne in the near future.
In an interview with CNBC’s David Faber, CEO Darren Woods predicted that by 2040, every new car under 10 seats sold will be electric.
According to market research firm Canalys, electric and hybrid vehicles will account for 9% of total car sales under 10 seats in 2021 and achieve a growth of 109% compared to 2020.
Because of that conjecture, Woods said Exxon Mobil is assessing how falling gasoline-vehicle sales could affect the company’s business.
Exxon Mobil is a multinational oil and gas corporation that is always in the top of the world’s largest capitalization companies and a pioneer in the industry. On its official website, Exxon Mobil boasts that the company is the largest producer and marketer of petroleum products. Exxon Mobil also identifies itself as a chemical company.
The CEO, who has spent part of his career dedicated to the company’s chemical sector, said chemicals will be key to profitability for the company in the clean energy transition. The plastic that Exxon Mobil makes can be used in the production of electric vehicles.
Exxon Mobil’s calculations predict that oil demand in 2040 will match the world’s demand in 2013 or 2014. CEO Darren Woods explained that at that point the company is still profitable.
Besides his comments on the future of electric vehicles, the CEO of Exxon Mobil also warned that the sudden switch to renewable energy will cost society “heavy price”. According to AAA, the average price of gasoline in the US is currently close to 5 USD/gallon.
Woods warns that government policy does not balance the need for affordable energy with the need to reduce emissions. He said that the lack of investment in the oil and gas industry is directly related to the escalating prices. Therefore, Woods called for charging carbon to give the market an incentive to reduce emissions.
In addition to the impact on household spending, rising oil and gas prices are driving Europeans to use other fossil fuels such as coal rather than renewable energy.
Sherlina Nageer is an American activist from Guyana. The place where she works is also where Exxon Mobil invested $10 billion in the company’s fourth offshore oil project. She told CNBC that all oil development should stop, because “the long-term negatives outweigh any short-term positives.”
Katharine Hayhoe, a scientist at the environmental organization The Nature Conservancy, emphasizes the importance of transitioning away from fossil fuels. “If we don’t tackle climate change, people will suffer,” she warned.
When asked what Exxon Mobil would look like in 10 years, Woods predicted that the company could continue to engage in oil and gas exploration and also engage in renewable energy solutions such as biofuels.
As Exxon Mobil navigates the energy transition, Woods underscores its commitment to balancing the current need for affordable energy with the future need for low emissions.