Automotive majors switch focus on EVs as consumers’ concerns remain – Chevron

RIO DE JANEIRO (ICIS)–In just a few years, global automotive majors have switched their focus from a quick, all-electric production to a more hybrid model, an executive at US crude oil major Chevron said on Tuesday.

Chris Castanien, global industry liaison at Chevron and lubricant additive expert, said that most automotive majors who had set up target to go all-electric or nearly all-electric by 2030 have dropped those plans as intake among consumers remains slow.

This has happened even after authorities in North America or Europe have poured “tremendous amount of money in trying to force everyone” into the energy transition.

Castanien was speaking to delegates at the 14th International Summit with the South American Market 2024 organized by specialized publication Lubes em Focus, which focuses on base oils. ICIS is a partner in the event.

BILLIONS – BUT THE JUMP IS NOT HAPPENING
Anyone in the lubricants industry would be pleased to see the initially quick transition to electric mobility some authorities had planned is not happening – they are an interested party which would lose out much if ICE engines – combustion engines – ran on fuels would go out of the market.

Therefore, Castanien was somehow pleased to list the many plans in the EU and the US which had planned for a quick electric vehicles (EVs) implementation, including the US’ $1 trillion New Green Deal in 2021 or the consequent $67 billion investments contemplated in the CHIPS Act or the $369 billion in the Inflation Reduction Act (IRA).

“The US’ EPA [Environmental Protection Agency] had forced a ruling that by 2032 around two thirds of cars should be EVs; the EU issued a ban on ICE engines by 2035 – well, I think those targets will not happen,” said Catanien.

“Moreover, now we are seeing a lot of protectionist tariffs against Chinese EVs: we want people to make and use EVs, but we don’t want the Chinese to make them.”

The Chevron executive went on to say that the US is still a “long way” to meet its own targets on charging points, for instance, which added to the considerably higher cost of EVs is putting off consumers.

And this consumers’ reluctance, he went on to say, is even happening when many jurisdictions are implementing fiscal incentives and rebates for EVs.

“In the US, you even get the case of California, where HOVs [high occupancy vehicle lanes] are now allowing EVs even if it’s only the driver inside the car…” he said.

Thus, the initial change planned by automotive majors – even with thousands of redundancies of ICE engines engineers – is giving way to a slower implementation of the EV push and mentioned the case of Germany’s major Mercedes.

“Only a few years ago, Mercedes said they would be making all vehicles electric by 2030 – they don’t say that anymore. Their updated target is aiming to make 50% of its fleet electrical by that year,” said Castanien.

“[US major] Ford has said it is losing $64,000 every time they sell an EV. Tesla was planning a gigafactory in Mexico: they have dropped those plans. The shift towards more hybrid vehicles and not purely EVs is happening – this is a big change.”

The automotive industry is a major global consumer of petrochemicals, which make up more than one-third of the raw material costs of an average vehicle.

The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA).

Base oils, also called lubricants, are used to produce finished lubes and greases for automobiles and other machinery.

The 14th International Summit with the South American Market 2024 runs in Rio de Janeiro on 2-3 July.