Why Exxon and Chevron are doubling down on fossil fuel energy with big acquisitions
Prices at a Chevron Corp. gas station in Fontana, California, on Thursday, July 8, 2021.
Kyle Grillot | Bloomberg | Getty Images
On Monday, Chevron announced plans to acquire oil and gas company Hess for $53 billion in stock.
Less than two weeks prior, Exxon Mobil announced it is acquiring oil company Pioneer Natural Resources for $59.5 billion in stock.
On Tuesday, the International Energy Agency released its annual world energy outlook report that projects global demand for coal, oil and natural gas will hit an all-time high by 2030, a prediction the IEA’s executive director Fatih Birol had telegraphed in September.
“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if,’ it’s just a matter of ‘how soon’ — and the sooner the better for all of us,” Birol said in a written statement published alongside his agency’s world outlook. “Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.”
But based on their acquisitions, Chevron and Exxon are seemingly preparing for a different world than the IEA is portending.
“The large companies — nongovernment companies — do not see an end to oil demand any time in the near future. That’s one of the messages you have to take from this. They are committed to the industry, to production, to reserves and to spending,” Larry J. Goldstein, a former president of the Petroleum Industry Research Foundation and a trustee with the not-for-profit Energy Policy Research Foundation, told CNBC in a phone conversation Monday.
“They’re in this in the long haul. They don’t see oil demand declining anytime in the near term. And they see oil demand in fairly large volumes existing for at least the next 20, 25 years,” Goldstein told CNBC. “There’s a major difference between what the big oil companies believe the future of oil is and the governments around the world.”
So, too, says Ben Cahill, a senior fellow in the energy security and climate change program at the bipartisan, nonprofit policy research organization, Center for Strategic and International Studies.
“There are endless debates about when ‘peak demand’ will occur, but at the moment, global oil consumption is near an all-time high. The largest oil and gas producers in the United States see a long pathway for oil demand,” Cahill told CNBC.
Pioneer Natural Resources crude oil storage tanks near Midland, Texas, on Oct. 11, 2023.
Bloomberg | Bloomberg | Getty Images
Africa, Asia driving demand
Globally, momentum behind and investment in clean energy is increasing. In 2023, there will be $2.8 trillion invested in the global energy markets, according to a prediction from the IEA in May, and $1.7 trillion of that is expected to be in clean technologies, the IEA said.
The remainder, a bit more than $1 trillion, will go into fossil fuels, such as coal, gas and oil, the IEA said.
Continued demand for oil and gas despite growing momentum in clean energy is due to population growth around the globe and in particular, growth of populations “ascending the socioeconomic ladder” in Africa, Asia and to some extent Latin America, according to Shon Hiatt, director of the Business of Energy Transition Initiative at the USC Marshall School of Business.
Oil and gas are relatively cheap and easy to move around, particularly in comparison with building new clean energy infrastructure.
“These companies believe in the long-term viability of the oil and gas industry because hydrocarbons remain the most cost-effective and easily transportable and storable energy source,” Hiatt told CNBC. “Their strategy suggests that in emerging economies marked by population and economic expansion, the adoption of low-carbon energy sources may be prohibitively expensive, while hydrocarbon demand in European and North American markets, although potentially reduced, will remain a significant factor.”
Also, while electric vehicles are growing in popularity, they are just one section of the transportation pie, and many of the other sections of the transportation sector will continue to use fossil fuels, said Marianne Kah, senior research scholar and board member at Columbia University’s Center on Global Energy Policy. Kah was previously the chief economist of ConocoPhillips for 25 years.
“While there is a lot of media attention given to the increasing penetration of electric passenger vehicles, global oil demand is still expected to grow in the petrochemical, aviation and heavy-duty trucking sectors,” Kah told CNBC.
Geopolitical pressures also play a role.
Exxon and Chevron are expanding their holdings as European oil and gas majors are more likely to be subject to strict emissions regulations. The U.S. is unlikely to have the political will to force the same kind of stringent regulations on oil and gas companies here.
“One might speculate that Exxon and Chevron are anticipating the European oil majors divesting their global reserves over the next decade due to European policy changes,” Hiatt told CNBC.
“They are also betting domestic politics will not allow the U.S. to take significant new climate policies directed specifically to restrain or limit or ban the level of U.S. oil and gas domestic production,” Amy Myers Jaffe, a research professor at New York University and director of the Energy, Climate Justice and Sustainability Lab at NYU’s School of Professional Studies, told CNBC.
Goldstein expects the ever-expanding U.S. national debt will eventually put all kinds of government subsidies on the chopping block, which he says will also benefit companies such as Exxon and Chevron.
“All subsidies will be under enormous pressure,” Goldstein said, the intensity of that pressure dependent on which party is in the White House at any given time. “By the way, that means the large financial oil companies will be able to weather that environment better than the smaller companies.”
Also, sanctions of state-controlled oil and gas companies in countries like those in Russia, Venezuela and Iran are providing Exxon and Chevron a geopolitical opening, Jaffe said.
“They likely hope that any geopolitically driven market shortfalls to come can be filled by their own production, even if demand for oil overall is reduced through decarbonization policies around the world,” Jaffe told CNBC. “If you imagine oil like the game of musical chairs, Exxon Mobil and Chevron are betting that other countries will fall out of the game regardless of the number of chairs and that there will be enough chairs left for the American firms to sit down, each time the music stops.”
An oil pumpjack pulls oil from the Permian Basin oil field in Odessa, Texas, on March 14, 2022.
Joe Raedle | Getty Images News | Getty Images
Oil that can be tapped quickly is a priority
Known oil reserves are increasingly valuable as European and American governments look to limit the exploration for new oil and gas reserves, according to Hiatt.
“Notably, both Pioneer and Hess possess attractive, well-established oil and gas reserves that offer the potential for significant expansion and diversification for Exxon and Chevron,” Hiatt told CNBC.
Oil and gas reserves that can be brought to market relatively quickly “are the ideal candidates for production when there is uncertainty about the pace of the energy transition,” Kah told CNBC, which explains Exxon’s acquisition of Pioneer, which gave Exxon more access to “tight oil,” or oil found in shale rock, in the Permian basin.
Shale is a kind of porous rock that can hold natural gas and oil. It’s accessed with hydraulic fracking, which involves shooting water mixed with sand into the ground to release the fossil fuel reserves held therein. Hydrocarbon reserves found in shale can be brought to market between six months and a year, where exploring for new reserves in offshore deep water can take five to seven years to tap, Jaffe told CNBC.
“Chevron and Exxon Mobil are looking to reduce their costs and lower execution risk through increasing the share of short cycle U.S. shale reserves in their portfolio,” Jaffe said. Having reserves that are easier to bring to market gives oil and gas companies increased ability to be responsive to swings in the price of oil and gas. “That flexibility is attractive in today’s volatile price climate,” Jaffe told CNBC.
Chevron’s purchase of Hess also gives Chevron access in Guyana, a country in South America, which Jaffe also says is desirable because it is “a low cost, close to home prolific production region.”
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Metro Detroit is about to get a big boost of fast EV chargers, with more than 40 new ChargePoint ports set to come online across multiple sites owned by the Dabaja Brothers Development Group.
The first ultra-fast charging site just opened in Canton, Michigan. It’s owned and operated by Dabaja Brothers, who plan to follow it with additional ChargePoint-equipped locations in Dearborn and Livonia.
“We started this project because we saw a gap in our community – there was almost nowhere to charge an EV in Canton, and a similar lack of charging across metro Detroit,” said Yousef Dabaja, owner/operator at Dabaja Brothers.
Each metro Detroit site will feature ChargePoint Express Plus fast charging stations, which can deliver up to 500 kW to a single port, can fast-charge two vehicles at the same time, and are compatible with all EVs. The stations feature a proprietary cooling system to deliver peak charging speeds for sustained periods, ensuring that charging speed remains consistent.
The stations operate on the new ChargePoint Platform, which enables operators to monitor performance, adjust pricing, troubleshoot issues, and gain real-time insights to keep chargers running smoothly.
Rick Wilmer, CEO at ChargePoint, said, “This initiative will rapidly infill the ‘fast charging deserts’ across the Detroit area, allowing drivers to quickly recharge their vehicles when and where they need to.”
Read more: ChargePoint just gave its EV charging software a major AI upgrade
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Mercedes-Benz High-Power Charging and Starbucks have officially opened their first DC fast charging hub together, off the I-5 in Red Bluff, California.
The 400 kW Mercedes-Benz chargers are capable of adding up to 300 miles in 10 minutes, depending on the EV, and every stall has both NACS and CCS cables – they’re fully open DC fast chargers.
Mercedes-Benz HPC North America, a joint venture between subsidiaries of Mercedes-Benz Group and renewable energy producer MN8 Energy, first announced in July 2024 that it would install DC fast chargers at Starbucks stores along Interstate 5, the main 1,400-mile north-south interstate highway on the US West Coast from Canada to Mexico. Ultimately, Mercedes plans to install fast chargers at 100 Starbucks stores across the US.
Mercedes-Benz HPC opened its first North American charging site at Mercedes-Benz USA’s headquarters in Sandy Springs, Georgia, in November 2023 as part of an initial $1 billion charging network investment. As of the end of 2024, Mercedes had deployed over 150 operational fast chargers in the US, but it hasn’t disclosed an official number of how many chargers are currently online.
Andrew Cornelia, CEO of Mercedes-Benz HPC North America, is leaving the company at the end of the month to become global head of electrification & sustainability at Uber.
Read more: Mercedes-Benz is deploying 400 kW US-made EV fast chargers with CCS and NACS cables
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The race for autonomous driving has three fronts: software, hardware, and regulatory. For years, we’ve watched Tesla try to brute-force its way to “Full Self-Driving (FSD)” with its own custom hardware, while the rest of the automotive industry is increasingly lining up behind NVIDIA.
Now that we know Tesla’s new AI5 chip is delayed and won’t be in vehicles until 2027, it’s worth comparing the two most dominant “self-driving” chips today: Tesla’s latest Hardware 4 (AI4) and NVIDIA’s Drive Thor.
Here’s a table comparing the two chips with the best possible specs I could find. greentheonly’s teardown was particularly useful. If you find things you think are not accurate, please don’t hesitate to reach out:
| Feature / Specification | Tesla AI4 (Hardware 4.0) | NVIDIA Drive Thor (AGX / Jetson) |
|---|---|---|
| Developer / Architect | Tesla (in-house) | NVIDIA |
| Manufacturing Process | Samsung 7nm (7LPP class) | TSMC 4N (custom 5nm class) |
| Release Status | In production (shipping since 2023) | In production since 2025 |
| CPU Architecture | ARM Cortex-A72 (legacy) | ARM Neoverse V3AE (server-grade) |
| CPU Core Count | 20 cores (5× clusters of 4 cores) | 14 cores (Jetson T5000 configuration) |
| AI Performance (INT8) | ~100–150 TOPS (dual-SoC system) | 1,000 TOPS (per chip) |
| AI Performance (FP4) | Not supported / not disclosed | 2,000 TFLOPS (per chip) |
| Neural Processing Unit | 3× custom NPU cores per SoC | Blackwell Tensor Cores + Transformer Engine |
| Memory Type | GDDR6 | LPDDR5X |
| Memory Bus Width | 256-bit | 256-bit |
| Memory Bandwidth | ~384 GB/s | ~273 GB/s |
| Memory Capacity | ~16 GB typical system | Up to 128 GB (Jetson Thor) |
| Power Consumption | Est. 80–100 W (system) | 40 W – 130 W (configurable) |
| Camera Support | 5 MP proprietary Tesla cameras | Scalable, supports 8MP+ and GMSL3 |
| Special Features | Dual-SoC redundancy on one board | Native Transformer Engine, NVLink-C2C |
The most striking difference right off the bat is the manufacturing process. NVIDIA is throwing everything at Drive Thor, using TSMC’s cutting-edge 4N process (a custom 5nm-class node). This allows them to pack in the new Blackwell architecture, which is essentially the same tech powering the world’s most advanced AI data centers.
Tesla, on the other hand, pulled a move that might surprise spec-sheet warriors. Teardowns confirm that AI4 is built on Samsung’s 7nm process. This is mature, reliable, and much cheaper than TSMC’s bleeding-edge nodes.
When you look at the compute power, NVIDIA claims a staggering 2,000 TFLOPS for Thor. But there’s a catch. That number uses FP4 (4-bit floating point) precision, a new format designed specifically for the Transformer models used in generative AI.
Tesla’s AI4 is estimated to hit around 100-150 TOPS (INT8) across its dual-SoC redundant system. On paper, it looks like a slaughter, but Tesla made a very specific engineering trade-off that tells us exactly what was bottling up their software: memory bandwidth.
Tesla switched from LPDDR4 in HW3 to GDDR6 in HW4, the same power-hungry memory you find in gaming graphics cards (GPUs). This gives AI4 a massive memory bandwidth of approximately 384 GB/s, compared to Thor’s 273 GB/s (on the single-chip Jetson config) using LPDDR5X.
This suggests Tesla’s vision-only approach, which ingests massive amounts of raw video from high-res cameras, was starving for data.
Based on Elon Musk’s comments that Tesla’s AI5 chip will have 5x the memory bandwidth, it sounds like it might still be Tesla’s bottleneck.
Here is where Tesla’s cost-cutting really shows. AI4 is still running on ARM Cortex-A72 cores, an architecture that is nearly a decade old. They bumped the core count to 20, but it’s still old tech.
NVIDIA Thor, meanwhile, uses the ARM Neoverse V3AE, a server-grade CPU explicitly designed for the modern software-defined vehicle. This allows Thor to run not just the autonomous driving stack, but the entire infotainment system, dashboard, and potentially even an in-car AI assistant, all on one chip.
Thor has found many takers, especially among Tesla EV competitors such as BYD, Zeekr, Lucid, Xiaomi, and many more.
Electrek’s Take
There’s one thing that is not in there: price. I would assume that Tesla wins on that front, and that’s a big part of the project. Tesla developed a chip that didn’t exist, and that it needed.
It was an impressive feat, but it doesn’t make Tesla an incredible leader in silicon for self-driving.
Tesla is maxing out AI4. It now uses both chips, making it less likely to achieve the redundancy levels you need to deliver level 4-5 autonomy.
Meanwhile, we don’t have a solution for HW3 yet and AI5 is apparently not coming to save the day until 2027.
By then, there will likely be millions of vehicles on the road with NVIDIA Thor processors.
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