Will the Electric Car Destroy Our Economy?
Al-Qabas, Kuwait, February 4
I always thought that what would threaten our economy would be depletion of oil, and that Kuwait had to prepare for a period in which oil would run out. However, times have changed. Now, the most likely scenario is that Kuwait will be forced to slow down its oil production not because of limited availability, but because of declining prices. I’m not talking about seasonal drops in price. Rather, I’m referring to a permanent decline in the price of oil resulting from a massive shift to renewable energy such as wind and solar power. Even though electric vehicles still constitute less than 3 percent of total sold cars around the world, there are clear indicators that this percentage will rise sharply in years to come. The petrol-powered car is likely to disappear from the world and be replaced with the electric-powered one. Mary Barra, the president of General Motors (GM), announced last week that the company will stop producing fuel cars by 2035, sending shockwaves through the auto market. GM, employing over a million workers, is the largest auto manufacturer in the United States. Almost twenty years ago it began building its first electric car (under the brand name EVI), but it quickly abandoned that project. Now, at a time when car manufacturers are coming under heavy scrutiny and public pressure, the company decided to restore its pledge to go electric. GM isn’t alone. Volkswagen has recently announced that, by 2030, it will create an electric version of every gasoline car type it currently manufactures. Experts believe that these seismic shifts in the auto industry will result in significant workforce changes. A petrol-powered car has about 1,000 spare parts, compared to just 200 parts in an electric vehicle. This would require fewer production line workers, technicians and sales staff. On the other hand, there will be new jobs in digitization — including things like sensors and radars. Meanwhile, oil companies are carefully monitoring these developments and are taking new paths. In August 2020, BP announced that it would reduce its oil and gas production by about 35 percent within ten years, shifting investments into renewable energy. And we, in Kuwait and the Gulf states, must also be on the lookout. We must start planning for the day after oil. We got a glimpse of what this world might look like during the first weeks of the coronavirus pandemic, when people sheltered at home and there were no cars on the streets. While electric vehicles are environmentally friendly, they are far from a friendly development for us — at least at first glance. But we have to think clearly and learn to befriend it. We must adapt to these changing norms and their impact on our economy. Most importantly, we must prepare for a life of minimal global demand for oil. Otherwise, we will be taken by surprise and find ourselves unable to cope with this new global reality. –Hamed Al-Hamoud (translated by Asaf Zilberfarb)