As Elon Musk backs fossil fuels, one strategist sends a warning over EV sales

Recent comments from Elon Musk astir the request for more lipid and gas bespeak a broader interest that the uptake of electrical vehicles volition beryllium hampered by rising energy prices, according to the caput of equity strategy astatine Saxo Bank.

Speaking to CNBC's "Street Signs Europe" connected Tuesday morning, Peter Garnry said car manufacturers would look headwinds going forward.

"We spot that successful the 12 period trailing car income figures coming retired of the U.S. and Europe — they're coming down and they're coming down beauteous hard successful Europe."

On the electrical conveyance front, Garnry noted that portion the conception was "still expanding, expanding rapidly" determination were besides areas of imaginable concern.

"I don't deliberation it was a coincidence that you had Elon Musk successful Stavanger, successful Norway, talking astir 'please don't decommission immoderate much atomic powerfulness plants', you cognize … 'we request lipid and state to bash the cleanable transition, we request that bridge.'"

"And I deliberation he's precise good alert that you cannot merchantability a batch of electrical vehicles with energy prices going done the extortion close now."

"I mean, the outgo vantage for electrical vehicles versus a gasoline car is accelerated diminishing present successful Europe, and I'm truly wondering to what grade that volition statesman to interaction income for EVs."

Garnry's remarks notation to a recent interrogation Musk gave astatine the ONS 2022 Conference successful Norway, successful which helium offered up his sentiment connected fossil fuels and the wider vigor transition.

"I, actually, americium not idiosyncratic who would thin to, benignant of, demonize lipid and gas, to beryllium clear," Musk said. "This is indispensable close now, oregon civilization could not function."

"And … astatine this time, I deliberation we really request much lipid and gas, not less, but simultaneously moving arsenic accelerated arsenic we tin to a sustainable vigor economy," the Tesla main went connected to state.

Musk, who besides stressed the value of renewables specified arsenic hydro, solar, geothermal and wind, aboriginal described himself arsenic "pro nuclear" and said "we should truly support going with the atomic plants."

With European economies facing an vigor situation and soaring prices implicit the coming months, determination person been concerns successful immoderate quarters that the expanding outgo of charging an EV volition disincentivize uptake among consumers.

In the U.K., astatine least, galore discussions astir the outgo of charging an electrical conveyance person taken spot successful caller weeks, particularly aft regulator Ofgem hiked the vigor terms cap.

The U.K.'s caller Prime Minister, Liz Truss, is acceptable to denote a enactment bundle to code the cost-of-living situation imminently, meaning that the wide effect of Ofgem's determination is inactive uncertain.

In the days pursuing the announcement of the caller terms cap, a spokesperson for motoring enactment the RAC sketched retired the existent authorities of play.

"Despite caller falls successful the terms of petrol [gasoline] and diesel, the outgo of charging astatine location is inactive bully worth compared to paying for either fuel, but again underlines conscionable however the rising outgo of energy is affecting truthful galore areas of people's lives," Rod Dennis said.

"We're besides alert that nationalist chargepoint operators are having nary prime but to summation their prices to bespeak the rising wholesale costs they're faced with, which volition heavy interaction drivers who person nary prime different than to complaint up distant from home," Dennis added.

In the U.K., the existent authorities of play erstwhile it comes to EVs makes for absorbing reading.

On Monday, the Society of Motor Manufacturers and Traders said new registrations for artillery electrical vehicles successful the U.K. deed 10,006 successful August 2022, a year-on-year leap of 35.4%.

The SMMT nevertheless noted that "growth successful this conception is slowing, with a year-to-date summation of 48.8%." Comparatively, it said that "at the extremity of Q1, BEV registrations had been up by 101.9%."

When it came to a longer word outlook, Saxo Bank's Garnry cautioned determination would beryllium bumps successful the road.

"If you look from mid-2008 to precocious 2020, that was a 12 twelvemonth agelong bull marketplace for intangible driven industries — truthful software, wellness care, media and entertainment, etcetera."

"Since the vaccines were announced successful November 2020, we person seen the tangible satellite travel back," Garnry said. This included car manufacturers and commodity companies.  

"They beryllium successful the carnal satellite … and we deliberation the adjacent 8 years volition … mean a batch of affirmative tailwind[s] for these tangible companies," helium added.

Medium to agelong term, this would beryllium a affirmative for carmakers, "but determination volition beryllium a pretty, beauteous nasty accommodation play going up for this industry, unfortunately," helium added.