THE ELECTRIC VEHICLE REVOLUTION AND ITS IMPACT ON PEAK OIL DEMAND - PowerPoint PPT Presentation

THE ELECTRIC VEHICLE REVOLUTION AND ITS IMPACT ON PEAK OIL DEMAND INDONESIAN GAS SOCIETY – JAKARTA 20 TH NOVEMBER JUNE 2016 - SELECTED SLIDES JON FREDRIK MÜLLER PARTNER – HEAD OF CONSULTING ASIA-PACIFIC

When will we see peak oil demand? Other (Agriculture, lubricants, etc.) Growth 2015-2040: 0.2% Power generation Light duty vehicles (23%) and buses (2%) Gas and solar as main substitutes 1 billion (99.6% cars, 0.4% buses) Growth 2015-2040: -2.4% Efficiency gains of 2-3% and substitution of 12% cars by electric and plug-in hybrid vehicles 26% Growth 2015-2040: ? Buildings Efficiency and better insolation 6% Growth 2015-2040: -1.0% 8% 95 mmbbl/d Steam and Process Still growing, driven by economic 6% growth, but less growth due to 18% Light and Heavy Trucks efficiency gains. Global fleet of 340 million (80% Light). 12% Growth 2015-2040: 0.5% Few ready substitutes as of today 6% 6% Growth 2015-2040: 0.8% Petrochemicals Plastic material and composites Maritime Aviation gaining market shares, strong Global trade growing. Slow High underlying growth in aviation, especially in demand from emerging markets substitution by LNG and Hydrogen. Asia, driven my middle class growth Growth 2015-2040: 1.5% Growth 2015-2040: 0.9% Growth 2015-2040: 1.9% Source: Rystad Energy research and analysis 2

Norway – The world’s leading pilot market for EVs... 2017: • 100,000 EVs in Norway • 175,000 New cars sold of which 40,000 EVs or Plug in hybrids • 135,000 scrapped per year • Growth ~ 40,000 • Total of 3,070,000 cars in Norway; of which, 3.1% are EVs 3

…However, fuel consumption is still growing 4 Monthly fuel consumption in Norway 100 150 200 250 300 350 400 450 500 50 0 jan/ 95 jul/ 95 jan/ 96 jul/ 96 jan/ 97 jul/ 97 jan/ 98 jul/ 98 jan/ 99 jul/ 99 jan/ 00 jul/ 00 jan/ 01 jul/ 01 jan/ 02 jul/ 02 jan/ 03 Diesel Gasoline jul/ 03 jan/ 04 jul/ 04 jan/ 05 jul/ 05 jan/ 06 jul/ 06 jan/ 07 jul/ 07 jan/ 08 jul/ 08 jan/ 09 jul/ 09 jan/ 10 jul/ 10 jan/ 11 jul/ 11 jan/ 12 jul/ 12 jan/ 13 jul/ 13 jan/ 14 +1.3% 2015: jul/ 14 jan/ 15 jul/ 15 jan/ 16 jul/ 16 +2.4% 2016:

Global car manufacturers’ electric car production targets 1/3 1 Total vehicle BEV+PHEV Target annual sales share of 2016 sales BEV+PHEV [million cars/ Car volume 2016 sales [million cars] [%] (cars) % of sale] manufacturer Comments 10 BEV and PHEV models combined announced in year 2018 alone. 2025: 30 different BEV models and an unspecified number of additional PHEV models. 2025: 3 million Aiming at being the world’s leader in electric cars 10.1 0.6 % BEVs/PHEVs Sell 2-3 million BEVs equivalent to around 20–25% of the Group’s expected total unit sales. Toyota currently has 33 traditional hybrid passenger car models (HEV) and 1 plug-in 2030: 3 million hybrid (PHEV). Toyota claims conventional engines will have disappeared by 2050. Group 10.0 0.1 % recently made a U-turn in favor of Plug in hybrids, traditionally discriminating this power PHEV train in favor for simple (non-plug in ) hybrids Top ICE vehicle manufacturers 2016 The company expects 5% of all the cars will be electric by 2020 and 10% soon after. 8.5 2020: 1.5 million Intends to launch the first autonomous car by 2020. 20% of its sales in Europe in 2020 to 1.0 % be EVs. Before 2020, Nissan states to be able to reach a range of about 300 miles on a BEV/PHEV single battery charge H-K plans to launch 31 eco-friendly cars: hybrids 21 (12), plug-ins (6), EVs 8 (2) and fuel- 8.2 2020: 0.3 0.2 % cells 2 (2) vehicles by 2020. Aim to become 2nd largest manufacturer of eco-friendly cars BEV/PHEV with annual sales of 300 000 (incl. PHEVs and Fuel Cell Vehicles) Company missed the target of having 500 000 electric cars on US roads by 2017. The 8.0 0.4 % No stated estimate company has high electric car ambitions for the future. Through 2020 GM will announce or target more than 10 new EV models. To launch 10 electric and hybrid vehicles by 2020 in the Chinese market alone 2025: ~1 million Ford plans USD 4.5 billion investment in 13 New EV models by 2020. Ford estimates that 6.3 0.4 % 40% of Ford models will be electrified by 2020. BEV/PHEV Honda wants partially or fully electric vehicles to account for two-thirds of global sales by 4.9 0.0 % 2030: BEV/PHEV at 2030. Plug-ins and hybrids would likely account for about half of sales in 2030, and BEVs 75% of sales will account for 25%. Plans to introduce BEV model in China in 2018 *Hydrogen cars (fuel-cells), HEVs (combines a conventional internal combustion system (ICE and an electric propulsion system); ** Assumed increased in sale for Renault Nissan similar to expected increase in global vehicle fleet; *** FCV=Fuel cell vehicle Source: Company reporting 5

Extrapolating ambitious growth cases could give 35-40 million EVs by 2030 - However, infrastructure, cost parity to combustion engines & availability of minerals for batteries could constrain growth… Targeted/ estimated annual sales of BEVs and PHEVs from the top car manufacturers Million vehicles 45 40 Stated target Rystad Energy optimistic estimate 35 Based on BYD 2020- 30 2025 CAGR 25 Tesla 20 Volvo BMW Honda 15 FCA Ford Hyundai-Kia 10 Renault-N GM 5 Toyota VW 0 2015 2017 2020 2025 2030 Source: Rystad Energy research and analysis 6

If constraints are handled and production targets met  global car sales could be revolutionized by a shift to EVs... Global car sales towards 2060 200 Electric cars and 180 hydrogen cars 160 140 Peak Fossil Vehicles 120 2026: 83 million 100 80 Fuel cars 60 40 20 - 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 2060 Source: Rystad Energy research and analysis 7

In order for EV disruption to occur – it needs to happen in India, China & developing world Based on in-house RE fleet model, Private light duty vehicle fleet forecast in selected countries Million vehicles future fleet growth will happen primarily in India, China and the 1400 developing world. In order for EV disruption to occur, 1200 we should see significant electric vehicle sales growth in those same regions (China, India and developing countries). 1000 Electric vehicle risk in OECD countries remains quite probably on 800 the country level, but insignificant on a global scale. 600 Rapid electric vehicle penetration in OECD cannot alone cause peak demand in private light duty vehicle 400 consumption 200 0 France Germany UK Netherlands Norway US Japan India China Other World Source: Rystad Energy research and analysis 8

On the other hand, global vehicle manufacturers start seeing EVs as a core technology • Daimler mentions “electric” 238 times in 321-page 2016 annual report • Diesel is mentioned 59 times • Gasoline 10 times • Combustion engine 20 times 9

This scenario gives peak oil demand in the early 2030’s Potential oil demand development towards 2040 Million bbls/d excluding biofuel 120 100 80 60 Maritime Aviation 40 Light and Heavy Trucks 20 Cars and buses 0 jul/ 15 jul/ 17 jul/ 19 jul/ 21 jul/ 23 jul/ 25 jul/ 27 jul/ 29 jul/ 31 jul/ 33 jul/ 35 jul/ 37 jul/ 39 10

QUESTIONS? Jon Fredrik Müller JUNE 2016 Partner – Head of Consulting Asia-Pacific Jon.Fredrik.Muller@rystadenergy.com +65 8305 6684 your oil & gas knowledge house