Home Business As Elon Musk backs fossil fuels, one strategist warns against sales of...

As Elon Musk backs fossil fuels, one strategist warns against sales of electric cars


The proliferation of electric vehicles has increased in recent years as countries around the world try to reduce the environmental impact of transportation.

Simonskafar | E+ | Getty Images

Latest comments from Elon Musk about necessity more oil and gas reflect broader concerns that the spread of electric vehicles will be hampered by rising electricity prices, according to Saxo Bank’s head of equity strategy.

Speaking to CNBC’s “Street Signs Europe” on Tuesday morning, Peter Garnry said carmakers will face headwinds.

“What we’re seeing over the last 12 months are the car sales numbers in the US and Europe — they’re down, and they’re down quite a lot in Europe.”

On the electric vehicle front, Garnry noted that while the segment is “still expanding, expanding rapidly,” there are potential areas of concern.

“I don’t think it was a coincidence that Elon Musk in Stavanger, Norway was talking about ‘please don’t decommission any more nuclear power plants,’ you know… ‘we need oil and gas to make a clean transition “. , we need this bridge.”

“And I think he knows very well that you can’t sell a lot of electric cars when electricity prices are going through the roof right now.”

“I mean, the cost of electric cars compared to gasoline cars is coming down fast here in Europe, and I’m very curious to what extent that will start to affect sales of electric cars.”

Learn more about electric cars from CNBC Pro

Garnry’s remarks refer to a Musk gave a recent interview at the ONS 2022 conference in Norway, where he gave his views on fossil fuels and the wider energy transition.

“I’m not really one to demonize oil and gas, just to be clear,” Musk said. “It is necessary right now, or civilization cannot function.”

“And … at this time, I think we really need more oil and gas, not less, but at the same time moving toward a sustainable energy economy as quickly as possible,” the Tesla executive said.

Musk, who also emphasized the importance of renewable energy sources such as hydro, solar, geothermal and wind, later described himself as a “nuclear power advocate” and said “we really should continue with nuclear plants.”

With European economies facing an energy crisis and price spikes in the coming months, there has been concern in some quarters that increasing the cost of charging electric cars will not encourage consumers to do so.

In the UK at least, there has been much discussion in recent weeks about the cost of charging an electric car, particularly after the regulator Ofgem raised the price limit for energy carriers.

New UK Prime Minister Liz Truss is set to announce a support package to tackle the cost of living crisis soon, meaning the overall effect of Ofgem’s decision remains uncertain.

Days after the new price cap was announced, a spokesman for motoring body RAC outlined the current state of play.

“Despite the recent drop in gasoline prices [gasoline] and diesel, the cost of charging at home is still good compared to paying for any fuel, but highlights once again how the rising cost of electricity affects many areas of people’s lives,” said Rod Dennis.

“We also recognize that public charging point operators have no choice but to raise prices to reflect the rise in wholesale costs they have faced, which will have a major impact on drivers who have no choice but to charge away from home.” , – added Denis.

Learn more about energy from CNBC Pro

In the UK, the state of the art when it comes to electric cars makes for interesting reading.

This was reported by the Society of Motor Manufacturers and Traders on Monday new registrations of battery electric vehicles in the UK, their number reached 10,006 in August 2022, an increase of 35.4% year-on-year.

However, SMMT noted that “growth in this segment is slowing, with year-to-date growth of 48.8%.” By comparison, it says “BEV registrations were up 101.9% at the end of the first quarter.”

When it came to the longer term, Saxo Bank’s Garnry warned that there would be bumps in the road.

“If you look from mid-2008 to the end of 2020, it was a 12-year bull market for intangible industries like software, healthcare, media and entertainment, etc.”

“Since the vaccines were announced in November 2020, we’ve seen the return of the material world,” Garnry said. This included car manufacturers and commodity companies.

“They’re sitting in the physical world … and we think the next eight years are going to … mean a lot of positive tailwinds[s] for these material companies,” he added.

In the medium to long term, that would be positive for automakers, “but unfortunately the industry is going to have a pretty, pretty nasty adjustment period,” he added.

Previous articleBengaluru vs Noida: Fierce debate over best IT city divides netizens
Next articleBarclays is taking over StanChart’s head of global sustainable finance, Reuters reports