RE:My heart is in the right place just to let you know, poor people from 3rd world countries will jump from walking, bicycling, burning firewood, cow dung to EVs. They would hardly displace oil/gas as that group hardly uses petroleum fuel presently
On the high EV adoption rate in china, did you consider the zombie EVs that maybe in the statsitic? LOL. i know not all were EVs but scrapping zombie ICE vehicles can also raise the EV adoption rate statistic as well.
Is the market alway right? SU valuation is less today than when oil price were lower few years ago all due to, IMO, institution reducing O/G holding, to be politically correct, not for fundamental earning metric reason. Good investors seek misjudged valuation assets
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Obscure1 wrote: I'm enjoying the discussion guys. Good on ya for sharing and contributing.
As part of my bad habit of wanting to be "right" about everything :) I offer the following data on the most current published EV adoption rates:
* Chinese electric vehicle sales for the first half of 2022 have hit 31 percent of the overall market (with 25 percent being pure EVs).
* As of 5 days ago, the numbers have changed to 35% with 26% being pure electric cars.
* China's new energy vehicle (NEV) sales are expected to reach 6.62 million units in 2022 and 10.36 million units in 2023.
A number of posters here have brought up the point that poor people living in poor countries without an electrical infrastructure wont be able to afford EV's.
The poorest countries in the world (the bottom10 are: Burundi, Somalia, Mozambique, Madagascar, Sierra Leonem, Afghanastan, Cental African Republic, Liberia, Niger, and Zaire) may indeed take a long time to be ready EV's. The total popultion of the bottom 5 countries is less than 100 million people.
On the other hand, China (1.4 billion population) is leading the world in EV adoption rates.
India (1.4 billion population) currently only has a 2% EV adoption rate. The primary reason that the EV adoption in India is lagging is due to the fact that the price of EV's has been higher than ICE cars. Sticker prices of EV's around the world are going to be cheaper than ICE vehicles in 2023 or 2024 at the latest. The Total Cost of Ownership of EV's is already significantly cheaper than ICE vehicles.
When you take into consideration that India is in the process of building new energy and transportation infrastructure, the choice between cheaper and cleaner EV cars, especially in densely populated areas is going to be a no-brainer.
China and India represent 35% of the world's population and China has already made its decision about EV's. Now that India is able to start importing low cost Chinese EV's, the EV vs ICE converstion is already over.
When we look at the really poor countries, we find that they are not burdened with an infrastructure support system for ICE vehicles. I think of this in the same manner that TESLA is not burdoned with the "100 year equilibrium" problems that have held back the legacy automotive companies. When infrastructure does get put in place in underdeveloped countries, it will be to support EV's.
EV's will be taking over 90% of the transportation industry much faster than virtually everyone realizes. The result of exponential adoption rates of EV's is going to kill legacy ICE vehicle sales THIS decade, not in 2035 or later as some suggest. EV's won't kill the oil industry but it is going to create a significant dent. The adoption of renewable energy will create another dent for heating and powering the grid.
My point is that the writing is on the wall for the oil industry. It won't happen overnight but it is going to happen. The new American IRAct is going to advance the agenda much faster than people think. That is why investment funds are pulling back on oil funding oil companies.
Posters have correctly identified that there is still a lot of oil out there. As demand drops, I expect that the lowest cost producers will fight for market share.
Where does all of this leave Suncor? I think SU will continue to be a cash cow for years to come. Management at SU obviously agrees (buying back its shares and buying minority interest in Fort Hills, etc). As such, SU should remain an attractive and low risk investment for years to come.
Unfortunately, the market doesn't reward sunset industry stories.
I'm happy to collect 3.25% on my TDB8150 daily interest account while the market is so volative and scary. While SU's 4.1% yield is better than 3.25%, there are just too many risk factors to the market (not necessarily to Suncor) that can drag everything down.
I know my opinions lately are not very popular here. That is ok with me. My heart is in the right place.