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You’ll be Driving an Electric Vehicle Sooner Than You Think

The biggest oil companies in the world want you to believe that electric cars are inferior to their gas-guzzling counterparts. Recent reports by ExxonMobil (NYS: XOM) and BP (NYS: BP) say that few, if any, of you will see electric cars outnumber gas vehicles in your lifetimes. However, recent breakthroughs in electric powertrain technology tell a different story. With or without biased reports, disruptive innovation ultimately leads to change.

It’s important to understand that oil behemoths like Exxon and BP get hundreds of billions in backing each year, which is put toward new and expensive oil projects. It would be much harder for these companies to validate those investments without optimistic reports on the demand for oil in the future.

A sponsored opinion
So it’s hardly a surprise that Exxon, the biggest oil and gas company in the world, says that in 20 to 30 years only 5% of the world’s cars will be electric. BP voiced a similar outlook. According to Reuters, the company’s CEO said, “Oil will remain the dominant transport fuel and we expect 87% of transport fuel in 2030 will still be petroleum based.”

Someone should tell big oil that its self-serving opinion clashes with government initiatives aimed at green technologies and independence from foreign energy. Less biased reports project a brighter future for electric vehicles, or EVs. Data from Deloitte suggests that by the year 2020 a third of all cars purchased in developing countries will not be powered by an internal combustion engine.

The not-so-distant past
To put this in context, let’s take a realistic look at the automotive industry. The past few years, the industry’s been in peril. A struggling global economy put the brakes on consumer demand and led to industry-wide restructuring. One of the nation’s largest automakers, GM (NYS: GM) , filed for bankruptcy protection at the height of the financial crisis and only recently swerved back on track. Today, the industry is making a steady recovery. GM recently returned to profitability after being bailed out by taxpayers in one of the largest restructurings in U.S. history. But now the company faces new challenges, including a race to make more fuel-efficient vehicles.

The cost of gas isn’t going down. In fact, according to the U.S. Energy Information Administration, American drivers will pay an average of $3.55 per gallon this year for regular-grade gas. That price is expected to increase to $3.59 in 2013. With fuel prices spiking, energy alternatives are starting to look a lot better.
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