Electric vehicles are becoming more popular in recent years as countries around the world seek to reduce the environmental impact of transportation.
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Recent comments from Elon Musk about the need for more oil and gas According to Saxo Bank’s head of equity strategy, it reflects widespread concern that the uptake of electric vehicles will be hampered by rising electricity prices.
On Tuesday morning, Peter Garnley told CNBC’s Street Signs Europe that automakers will face headwinds ahead.
“US and European 12-month car sales are trending downwards, with a significant drop in Europe.”
In the electric vehicle space, Garnry noted that while the segment is “still growing and expanding rapidly,” there are potential areas of concern.
“I don’t think it’s a coincidence that Elon Musk was in Stavanger, Norway saying ‘Don’t phase out any more nuclear power plants’… ‘We need oil and gas to make a clean transition’, We need that bridge.”
“And I think he’s fully aware that we can’t sell many electric cars right now with the price of electricity so high.”
“So the cost advantage of electric cars over petrol cars is rapidly declining here in Europe, and I really wonder how much that will start to affect electric car sales.”
Garnry said, A recent interview with Mr. Musk At the ONS 2022 conference in Norway, he spoke on fossil fuels and the broader energy transition.
“Frankly, I’m not the kind of person who demonizes oil and gas,” Musk said. “This is necessary now, otherwise civilization would not work.”
“And … at the moment, I think we really need to use more oil and gas, not less, but at the same time, I think we need to move as fast as possible towards a sustainable energy economy,” said Tesla. Chief Executive Officer said.
Musk, who also stressed the importance of renewable energy sources such as hydro, solar, geothermal and wind, later described himself as a “nuclear advocate” and said, “We really should keep pushing nuclear power plants.” .
With the European economy facing an energy crisis and prices soaring in the coming months, there are fears in some regions that rising EV charging costs will hamper consumer adoption.
At least in the UK, there has been a lot of debate over the cost of charging electric vehicles in recent weeks, especially after regulator Ofgem. Increased energy price cap.
Britain’s new prime minister, Liz Truss, is set to announce a package of aid to address the impending cost of living crisis, meaning the overall impact of Ofgem’s decision is still uncertain.
In the days following the announcement of the new price caps, a spokesperson for automotive organization RAC outlined the current situation.
“Despite the recent drop in petrol prices, [gasoline] and diesel, the cost of charging at home is still worth paying for either fuel, but it reiterates that rising electricity prices are impacting so many areas of people’s lives. I’m here.
“We also recognize that public charging point operators will have no choice but to raise their prices to reflect the rising wholesale costs they are facing. It will have a big impact on the world,” added Dennis.
The current state of EVs in the UK is an interesting read.
On Monday, the Association of Automobile Manufacturers and Traders said: New registration of battery electric vehicles In the UK, it will reach 10,006 in August 2022, a 35.4% year-on-year increase.
Nevertheless, SMMT said, “Growth in this segment has slowed, up 48.8% year-to-date.” By comparison, “BEV registrations increased by 101.9% at the end of Q1,” he said.
As for the long-term outlook, Saxo Bank’s Garnry warned that the road will be bumpy.
“Looking from mid-2008 to late 2020, it was a 12-year bull market for invisible industries such as software, healthcare, media and entertainment.”
“Since the vaccine was announced in November 2020, we have seen the visible world return.
“They’re sitting in the physical world…and I think the next eight years…will mean a lot of positive tailwinds.[s] For these tangible enterprises,” he added.
In the medium to long term, this will be positive for automakers, but “unfortunately, it’s going to be a pretty nasty adjustment period for the industry,” he added.