Economists and reporters have been saying that electric cars could actually kill the oil industry for a little while now, but it hasn’t made a lot of real-world impact so far. But now Fitch, an enormously influential financial ratings agency, is issuing dire warnings over electric cars.
It actually seems impossible at this point to overstate just how screwed the oil industry as we know it appears to be by electric vehicles. “Resoundingly negative,” “serious threat,” and “investor death spiral” were all actual terms used by Fitch Ratings in a report detailing the future of oil in a world of electricity, the Financial Times says:
“An acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile,” says the Fitch report.
“In an extreme scenario where electric cars gained a 50 per cent market share over 10 years about a quarter of European gasoline demand could disappear.”
The “death spiral” scenario entails a situation in which nervous investors start selling all of their assets attached to oil companies, the Fitch report says, making loans more expensive, which depresses the companies’ value further, which makes investors more nervous, which makes them sell, which makes loans more expensive, which depresses the oil companies’ value further, and on and on.
The electric car could completely eliminate the oil industry, and it won’t even take a complete lack of gasoline-powered cars to do it.
Read more: Jalopnik