GM announced last week it intends to make the switch to selling only electric vehicles by 2035 — a surprise move that accelerates the pace of the conversion from internal combustion (IC) vehicles here in the U.S.  It’s a big makeover for a company that had supported the Trump rollback on clean cars.  And the company is not being shy about its EV plans – they are overhauling dealerships and adding 30 EV models to their fleet in the next 4 years.  They even appear to have a Super Bowl ad (featuring Will Farrell) lined up to take on Norway for world dominance in the EV market.  Norway might be hard to beat — EVs there represent nearly 54% of all new car sales.

Why This Matters:  Secretary Pete was confirmed and he is poised to ride the wave of the transportation transformation.  GM’s decision will push the other major automakers to do the same. And the ripple effects reach the oil and gas sector too. ExxonMobil announced yesterday a $20B loss in the fourth quarter of 2020 — its fourth straight quarter with losses.  Still, the auto companies as a group are not yet willing to submit again to the Obama era clean car standards.

To Go Deeper:  Harvard Professor Jodi Freeman connects the dots in an op/ed that appeared in the NY Times yesterday.  It is worth your time.

Norway Is Way Ahead

Norway has had an EV mandate by 2025 for several years now and they are well on their way to making it.  It’s ironic because Norway as a country got rich by selling oil and gas from its North Sea drilling operations to the world, but its government taxes gas-guzzling vehicles and gives tax breaks for buying EVs.  The government also pushed carmakers to sell many EV models and that also fueled their sales there.  Now less than 20% of the cars in Norway run exclusively on fossil fuels.  And the change has all occurred in the last 10 years.

2035 Is a Game Changer

GM’s decision to sell only EVs by 2035 fundamentally changes the calculus when it comes to the future of oil and gas.  As Professor Freemen explains, until now, no car company had been willing to put a deadline on its transition to EVs and that allowed oil companies to continue to operate under the false assumption that it would never happen, particularly when gas prices are so low and are projected to be for the foreseeable future.  The next ripple effects will be in the auto supply chain — gas stations (which are not owned by oil companies), auto parts for IC cars, and conventional car batteries.