Could China’s switch to electric vehicles speed end to era of oil?

An electric car in the rush-hour commute in Beijing. A switch to EVs could save China — a world leader in the technology — $80 billion each year by 2030. (AFP)
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Updated 21 November 2020

Could China’s switch to electric vehicles speed end to era of oil?

  • Move from petrol and diesel engines could save $250 billion annually and slash growth in global demand by 70 percent

PARIS: Emerging markets switching from petrol and diesel engines to electric vehicles (EVs) could save $250 billion annually and slash expected growth in global oil demand by as much as 70 percent, an industry analysis showed on Friday.

As more and more nations such as China and India look to grow their electic fleet, they are in turn reducing reliance on imported oil, with EVs forecasted to soon be cheaper to make and run than their fossil-fuel-fired cousins.
An analysis of EV cost trends by industry watchdog Carbon Tracker found that a switch to EVs could save China — a world leader in the technology — $80 billion each year by 2030.
Increased EV production would drastically reduce the cost of oil imports, which account for 1.5 percent of China’s GDP and 2.6 percent of India’s.
The analysis found that the EV revolution could essentially fund itself as component costs fall over time and governments turn away from fossil fuel infrastructure such as pipelines and refineries which risk becoming stranded assets as transportation gets greener.

FASTFACT

61% Last year, EVs accounted for 61 percent of China’s two-wheeler sales and 59 percent of bus sales.

“This is a simple choice between growing dependency on what has been expensive oil produced by a foreign cartel, or domestic electricity produced by renewable sources whose prices fall over time,” said Kingsmill Bond, Carbon Tracker energy strategy and lead report author. “Emerging market importers will bring the oil era to an end.”
Analizing the International Energy Agency’s business as usual emissions scenario, the report found that half of that growth is forecast to come from China and India.
It calculated that by switching to the IEA’s Sustainable Development Scenario — under which EVs account for 40 percent of car sales in China and 30 percent in India — oil demand growth would be slashed by 70 percent this decade. The authors said that a fall of 20 percent in battery costs in a decade had driven “huge new markets” for EV growth.
Using industry baseline figures, the analysis calculated that the cost of importing oil to run an average car over its 15-year lifetime ($10,000) is already 10 times higher than the cost of the solar equipment needed to power an equivalent EV. Last year, EVs accounted for 61 percent of China’s two-wheeler sales and 59 percent of bus sales. “Factor in the war on plastics hitting petrochemical demand and rising EV penetration in developed markets, it becomes ever more likely that we have seen peak oil demand in 2019,” Bond said.


US sanctions Chinese and Russian firms over Iran trade

Updated 29 November 2020

US sanctions Chinese and Russian firms over Iran trade

  • Four companies accused of ‘transferring sensitive technology and items’ to missile program

LONDON: The US has slapped economic sanctions on four Chinese and Russian companies that Washington claims helped to support Iran’s missile program.

The four were accused of “transferring sensitive technology and items to Iran’s missile program” and will be subject to restrictions on US government aid and their exports for two years, Secretary of State Mike Pompeo said in a statement.

The sanctions, imposed on Wednesday, were against two Chinese-based companies, Chengdu Best New Materials and Zibo Elim Trade, as well as Russia’s Nilco Group and joint stock company Elecon.

“These measures are part of our response to Iran’s malign activities,” said Pompeo. “These determinations underscore the continuing need for all countries to remain vigilant to efforts by Iran to advance its missile program. We will continue to work to impede Iran’s missile development efforts and use our sanctions authorities to spotlight the foreign suppliers, such as these entities in the PRC and Russia, that provide missile-related materials and technology to Iran.”

The Trump administration has ramped up sanctions on Tehran after withdrawing from the Iran nuclear deal in 2018.

Earlier this week, Pompeo met Kuwaiti Foreign Minister Sheikh Ahmad Nasser Al-Mohammad Al-Sabah, when the campaign of pressure on the Iranian regime was also discussed.

“I want to thank Kuwait for its support of the maximum pressure campaign. Together, we are denying Tehran money, resources, wealth, weapons with which they would be able to commit terror acts all across the region,” he said.

It is not yet clear how the incoming administration of Joe Biden will deal with Tehran and whether it wants to revive the nuclear deal which would be key reviving the country’s battered economy. The Iranian rial has lost about half of its value this year against the dollar, fueling inflation and deepening the damage to the economy.

Iran’s economy would grow as much as 4.4 percent next year if sanctions were lifted, the Institute of International Finance (IIF) said last week. 

The economy is expected to contract by about 6.1 percent in 2020 according to IIF estimates.