Live from Posidonia 2018

The Seatrade Maritime reporting team bring you all the key stories in the run-up to, and live on the ground during, Posidonia 2018, the international shipping exhibition with the largest gathering of Greek and international shipowners.

Electric vehicle growth will start hurt tanker shipping by 2025

Come 2025 the switch to electric vehicles (EV) will start to impact the demand for gasoline, which will be bad news for shipping.

While charging infrastructure and range limits remain a concern for EVs the fact they are much cheaper to manufacture on a large scale than their petrol powered cousins will see a shift in the market by the middle of the next decade according to James Leake, an analyst at NS Lemos.

Speaking at the Bimco Power Panel at Posidonia 2018 Leake said: “EVs do represent a serious threat but not for the time being, if you ask me to put a date on it 2025 would be the point where it really starts to hurt.

“What is to me the killer fact is ultimately manufacturing an electric vehicle is much cheaper than manufacturing an internal combustion engine when you are producing them on scale.”

An electric powered car requires significant less components than one with an internal combustion engine making the structural production cost lower if the scale is large enough, and this why Leake said the likes of Volkswagen is investing $40bn into electric cars with an aim to be the world’s number one player in electric mobility by 2025.

With lower production costs car manufacturers will be much more keen to sell electric powered vehicles than petrol ones. “We will educated as customers to buy the product that will give them a higher profit.”

The issue for shipping will be that as the number of EVs grows this will impact demand growth for gasoline and diesel. “I’m not anticipating we replace gasoline or diesel as a fuel for transportation, the problem is what modest growth we rely on at the moment to support newbuilding investment, that growth becomes flattening and then declines, and that becomes a problem because people are still building ships in a sinking market,” he stated.

On the question of charging infrastructure Leake cited the entrepreneurial opportunity to turn every lamppost into a smart charging grid.

Posted 7 June 2018

© Copyright 2019 Seatrade Informa Markets. Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade Informa Markets.

Related Topics

Marcus Hand

Author Bio ▼

Editor, Seatrade Maritime News Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with nearly two decades of experience covering the shipping industry in Asia. In addition to running Seatrade's maritime and offshore news website based from Singapore he is the Asia Editor of Seatrade Maritime Review. Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Prior to joining Seatrade at the beginning of 2010 Marcus worked for shipping industry journal Lloyd's List for a decade and previous to that the Singapore Business Times covering shipping and aviation.

Sign up to get the latest Maritime News headlines emailed directly to your inbox