For generations, the oil industry has been a staple of the economy. However, with recent inventions like self-driving cars, it is likely that the industry will see countless changes in rapid fashion. Here are a few of the most impactful seismic shifts being predicted by experts:
Researchers are already positing that self-driving vehicles will break down less than those with internal combustion engines, and it is widely accepted that most (if not all) self-driving vehicles will run on electric. The decrease in necessary repairs is because electric motors contain fewer components than internal combustion engines and thus, fewer possible parts to break. Although not as hard-hitting as reaching peak car demand or tripling our global mileage, a decrease in repairs does have the ability to impact the oil industry.
In a lot of modern day America, most individuals of age drive their own vehicle — an impressive statistic considering that the cost of vehicle ownership is roughly $7,000-$10,000 per year. Couple that with the fact that the majority of cars sit idle and unused during both work and home hours, and we are suddenly facing a potentially unnecessary expense. Many experts predict that autonomous vehicles will bring about a surge in rideshare and rental transportation, thereby causing a decrease in oil demand.
Even though self-driving cars are hitting the market faster and faster, it doesn’t mean that oil is doomed. While gasoline demand may decline with the onset of better fuel mileage, most vehicles still need gas to run. Recent reports predict that the increase of autonomous vehicles will cause the number of global miles driven to nearly triple by 2030 so investors should pay attention to long-term trends.
A recent shale oil boom, delays in the legality of autonomous vehicles, and safety concerns from the general public have helped propel the United States into a comfortable position in the oil industry, and there are other important factors to consider when predicting the decline of an entire industry.
While 71% of oil is used for fuel and fuel technology, it is also used in producing plastics. While self-driving cars will undoubtedly make a monumental impact on the oil market and demand, they will not succeed in completely eradicating the energy source for quite some time.