Oil Is Going To Take A BIG Hit

We’ve just published our May report on global electric vehicle sales. While the US is clearly far behind the world at large, and especially China and Europe, what is clear from the report is that the car industry is electrifying. Plugin vehicles accounted for 25% of new vehicle sales, a 22% increase over May 2024. Fully electric vehicles — with no gas backup at all — accounted for 16% of the world’s passenger vehicle sales in May. That’s one out of every 6.25 car sales worldwide.

It’s fun to follow the sales, trends, and trajectories. It’s fun to follow a tech transition. But there’s also disruption here, and we haven’t really seen the results of that yet. I think we may actually be getting asleep to the disruption that’s coming.

The vast majority of the automobile fleet is oil powered — gas/petrol and diesel powered. So, even with 25% of new vehicles being plugin vehicles, we don’t actually see a big hit to the oil industry … yet. I think seeing those percentages rise so much while not seeing the oil industry hit or seemingly even bothered about it hides the kind of disruption that’s coming.

We have gotten from 10% plugin vehicle sales to 25% plugin vehicle sales quite quickly, and we will soon get to 50% plugin vehicle sales, especially with China recently shooting up to more than 50% plugin vehicle sales and being such a big portion of the world’s auto market. And also especially with Chinese EV producers sprinting to sell their EVs, which are disruptive, in developing markets around the world. We could quickly shoot up to 50% EV sales worldwide, and then beyond.

Achieving that year after year in the coming decade or so, the oil industry will start to take a hit. In fact, it may have already gotten a bit visible last year, and perhaps this will be the year that EVs really start to make a dent. But even if we sleepwalk forward for the next few years, eventually, a massive shift is coming — and disruption of the global economy and global political order as a result. Oil is going to take a BIG hit. Perhaps it’s hard to reconcile mentally at this time, but it is coming.

We are going to achieve independence from oil. Yes, oil will still be used for some things, but it won’t be the dominant economic and political force worldwide. We will achieve independence from the solid, fierce, ruthless grip oil has on our world and our lungs. The market is shifting, quickly, and the future is near.

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