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Russian Oil Chief Says Tesla, Electric Cars Are Overrated

The market expectations for electric vehicle makers are significantly overestimated, Igor Sechin, CEO of Russia’s oil giant Rosneft said on Friday, adding that the evaluation of Tesla is based on “extremely aggressive” sales expectations.

Speaking at the St. Petersburg International Economic Forum, Sechin also criticized Tesla’s business model and capital spending.

“The unconditional truth remains in the fact that the hydrocarbon power industry has been and will be in demand,” Sechin said, as quoted by Bloomberg, adding that “The market’s assessment of the prospects of electric car producers, in our view, is significantly overestimated.

“Until the electric transport industry becomes as user-friendly and attractive for consumers as the cars with internal combustion engines, the prospects for electric vehicles remain largely uncertain,” Rosneft’s CEO noted.

It’s still early to speak of a commercial success of the electric vehicle industry, Sechin said, quoted by Forbes Russia. Sales volumes are small, and they depend on incentives in various countries, the head of Russia’s biggest oil company said.

The only country that has seen a notable increase in EV sales is Norway, where incentives are around US$18,000-19,000, Forbes Russia quoted Sechin as saying.

At the beginning of April, Tesla became the most valuable U.S. car maker, overtaking General Motors to become the first automaker not based in Detroit to be America’s most valuable. Tesla also overtook Rosneft by market value for the first time on May 31, according to Bloomberg.

Although Tesla is not making profits, Tesla believers argue that the company market valuation is justified with the long-term expectations for growth. Skeptics, on the other hand, say that Ford, GM, and other carmakers will boost their EV offerings and directly compete with and overtake Tesla.

By Tsvetana Paraskova for Oilprice.com


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  • Josh Gregner on June 05 2017 said:
    It is depressing to read the comments on this website: I don't mind that people hate EVs - that's their perfect right. What I find troubling is, that underlying economics are ignored: the EV cost curve is declining for the past years. There is a whole host of new EV start-up companies (no traditional ICE start-ups to be seen anywhere). And there is aggressive moves of countries like India and China towards EVs.

    What do people think this will lead to?

    Yes, in 1930 batteries may have been too expensive, heavy, small capacity etc. When I grew up, battery driven model planes were SciFi - today you get a battery driven drone at any Walmart for less than 20 USD.

    And as for costs? People look to Norway & Co. and say "see BEVs only sell with tax incentives!". The point is different: if a small tax advantage can tilt a market to 20% EVs - how long will it take for all markets world-wide to go fully electric if EVs enjoy a 7% annual decline in battery costs?

    This will not go as fast as all the "organic hipsters" want it. But it will go mighty fast if you earn your money in the incumbent oil&gas / traditional car industry. The point is: there is no loyalty to electric cars. And no loyalty to fossil fuel cars. It comes down to what is cheaper. Today, fossil fuel cars are cheaper. But that's about to change. Big time.
  • Bill Simpson on June 05 2017 said:
    Petroleum powered cars are doomed because oil is a finite resource. The sun will always shine and the wind will always blow to generate electricity.
    Elon Musk said he started his electric car company to get the process of moving away from oil powered cars going, so the economy wouldn't collapse as the oil supply declined. In that, he has already succeeded.
    And then, there is the first returning rocket in human history. For that, he will be remembered for hundreds of years, thousands by future rocket scientists.
  • Countyboy on June 05 2017 said:
    Of course, it is based on aggressive expectations. That's what you call growth stocks. Igor must be mad as the market cap of Tesla has taken over Rosneft. Igor must be scared of power of EVs in the future otherwise, I would have expected him to make comments like that. EV is the future folks, whether you like it or not. Whether you deny it or not. EVs, AI, auto pilot cars all is future.
  • Max on June 05 2017 said:
    Meanwhile Kodak still maintains that digital cameras are overrated.
  • Timmie Tee on June 05 2017 said:
    I think EV will top out at about 10%... it's just not worth the hassle of the higher initial cost, charge times, extra weight, and diminishing battery capacity. ICE cars are getting upwards of 40mpg highway now with direct injection and CVT transmissions, so the tradeoff in EV vs ICE efficiencies is really not that great.
  • Dan on June 04 2017 said:
    Soon Tesla owners will realize there are no buyers for their EV. Toyota just sold all their shares and ended partnership.
  • snoopyloopy on June 04 2017 said:
    "'Until the electric transport industry becomes as user-friendly and attractive for consumers as the cars with internal combustion engines, the prospects for electric vehicles remain largely uncertain,' Rosneft’s CEO noted."

    The unattractive parts about EVs at present are the range, charging times, and price. As it is, charging at home is far more user-friendly than going to fuel stations to fill up and a new crop of vehicles is hitting the streets over the next 12-15 months with both bigger batteries to provide more range and faster charge capabilities that reduce the impact of the range limits. Additionally, prices are going down and will continue to do so as the technology matures.

    Additionally, his comments are too myopically focused on the light-duty vehicle market. Electric buses and trucks continue to make great strides forward and present a much larger threat because fleet managers are far more likely to worry solely about TCO savings than the average consumers. Also, they use a lot more fuel, so each one replaced represents the oil usage of a couple dozen light-duty vehicles.
  • Dan on June 04 2017 said:
    Tesla mad because AAA hits them with higher premiums because of sooooo many claims. Russian knows his stuff. On zerohedge.
  • Mike I on June 04 2017 said:
    Any EV is better than Musk EV
  • Thomas on June 04 2017 said:
    "Dan on June 03 2017 said:
    Although Tesla is not making money, that says it all. If it were GM or Ford they would be bankrupt. Get off taxpayers funding and face the real world."

    GM & Ford were also bailed out by taxpayers; Tesla paid their debt off first though.
  • Messiah on June 03 2017 said:
    Take away the government subsidies around the world and EV sales around the world will collapse. The recent episode in Denmark is a case in point where Elon flew into the country (and spewing tonnes of CO2 emissions while doing) to lobby the Danish Gov to maintain EV subsidies.

    The Tesla business model is funded by taxpayers through subsidies. Such business models are not sustainable.
  • Adolfo Rios on June 03 2017 said:
    I had a porsche, started on a leaf after the diesel cheating fiasco, and upgraded to a tesla. They drive so nice I have no intention of ever going back to dirty, stinky, loud, gas cars and their century old design. I especially take great pride in never needing to buy an Russian or Saudi oil. I hope barrel prices drop to $5 bucks and Russia and Venezuela undergo revolutions as their economies collapse. Overthrow your dictators spreading racism and fascism around the world.
  • Dan on June 03 2017 said:
    Electric cars have been around still 1930s? Some people think this is new? Study people, study.
  • Henry on June 03 2017 said:
    Your average person comenting on the EV has not even rode in one or seen one in person. Every Tesla gets over 250 miles to a charge. Tesla is also an ant.........China EV makers make 50 times the cars. India and China far exceed the US. This year over 1 million EV will be sold....Tesla a few thousand.a drop of rain at best.
  • Josh Gregner on June 03 2017 said:
    If Tesla is overrated - why does this fine gentleman talk about Tesla then?

    Fact is: nobody is forced to invest in Tesla. There is no government money in Tesla (the loan is paid back, and any subsidies go to the customers and other car makers have equal access to the same subsidies). So what is the problem? If people want to "lose" their money, let them invest it in Tesla! Just like people "lost" their money in Apple, Amazon, Netflix and Microsoft over the past 2 decades...

    Investing in coal, oil and gas however has been a bit painful lately. And if we don't start taxing the heck out of renewables, they will kill fossil fuels very soon...
  • Dan on June 03 2017 said:
    Although Tesla is not making money, that says it all. If it were GM or Ford they would be bankrupt. Get off taxpayers funding and face the real world. Silly Con Valley is a fraud.
  • Jhm on June 03 2017 said:
    Sechin is talking smack against Tesla because Tesla is now more valuable than Rosneft. What a looser.
  • spin on June 03 2017 said:
    There is an S curve associated with the adoption of any successful technology and with EV's we are at the early stages where we are below 1% in most markets. This is with vehicles that travel less than 100 miles, take 40 minutes to get back to 80% of the few fast chargers there are available and cost considerably more than their ICE equivalents. The next generation of cheaper non Tesla vehicles have metrics of 200+ miles and 20 minutes or less to 80% so again another section of the market will have their requirements met and the adoption will increase rapidly as it breaks out of the wealthy and early tech adopters markets.
  • John on June 02 2017 said:
    What else former KGB officer could say? Just lie. Russia has nothing except oil and gas.They will deny any success achieved by civilised world. Poor things...)))

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