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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Lexus is bringing the sports car back, but this time the LFA will be fully electric and will be developed alongside the Toyota GR GT and GR GT3. Here’s our first look at the EV sports car.
Meet the electric Lexus LFA Concept
The LFA is making a comeback as a low-slung, fully electric supercar. Lexus unveiled the new LFA Concept on Friday, calling it a next-generation battery-electric (BEV) sports car.
Lexus said the LFA name “embodies the technologies that engineers of its time should preserve,” adding it’s “not bound to vehicles powered by internal combustion engines.”
The electric LFA is being developed alongside the Toyota GR GT and GR GT3 race cars. Although it will share core technology and other components, including the GR GT’s all-aluminum frame, the new LFA will arrive with a unique design and advanced interior thanks to its electric powertrain.
Inside, the EV sports car features a yoke-style steering wheel, first showcased on the RZ electric SUV. The minimalist design is intended to create “a uniquely immersive environment,” according to Lexus.
At 184.6″ long, 80.3″ wide, and 47″ tall with a wheelbase of 107.3″, the electric Lexus LFA concept is about the size of many modern-day supercars, including the Aston Martin DB12 and Ferrari Roma.
The LFA EV will be centered on three key elements, shared with the GR GT, including a low center of gravity, a light but sturdy frame, and optimized aerodynamics.
Lexus has yet to reveal full details, aside from confirming the new LFA will be fully electric. With Toyota claiming it plans to launch its first solid-state battery in a high-performance vehicle by 2027, will the Lexus LFA be the one to debut it? We will find out more shortly.
While the new Lexus LFA is surprisingly an EV, Toyota is sticking to its roots with the GR GT, which will be equipped with a hybrid system that still uses a 4.0-liter V8 twin-turbo engine and a single electric motor.
Toyota announced similar plans to continue launching gas-powered vehicles under its new ultra-luxury Century brand.
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Environment
Tesla launches ‘Standard’ Model 3/Y in Europe with aggressive pricing to stop bleeding sales
Tesla has officially launched new “Standard” trims for both the Model 3 and Model Y in Europe after launching them in North America. The automaker is aggressively positioning these stripped-down models to undercut competitors and arrest a painful sales slump in the region, with the Model 3 now starting at an impressive €36,990 in Germany.
As we reported recently, Tesla is facing a tough quarter in Europe. Registration data from November showed sales down 12.3% year-over-year, but the reality is even starker: if you exclude Norway, which is soaring due to incentives going away at the end of the year, Tesla’s sales in the rest of Europe have plummeted by over 36%.
To counter this, Tesla updated its online configurator today with these new entry-level options that significantly lower the barrier to entry, albeit with some notable compromises in features.
The Model 3 Standard: breaking the €37k barrier
The new Model 3 Standard is priced at €36,990 in Germany, France, and Italy. This is a massive psychological breach of the €37,000 mark, putting it well within swinging distance of mass-market ICE vehicles and undercutting key electric rivals.
In the Nordic markets, the pricing is equally aggressive:
- Norway: NOK 330,056
- Sweden: SEK 449,990
Despite the lower price, the specs remain impressive. The Model 3 Standard is rated at 534 km (332 miles) of WLTP range. It achieves 0 to 100 km/h (62 mph) in 6.2 seconds.
Priced significantly lower than the next cheapest Model 3, like in North America, the new Model 3 Standard is a much better offer than the Model Y Standard,
The Model Y Standard: a tougher sell
The Model Y also gets the “Standard” treatment. It is now listed at €39,990 in the main European markets.
Tesla lists the Model Y Standard with the same 534 km WLTP range as the Model 3 Standard.
Like in North America, the proposition here is not as attractive as with the Model 3 Standard. It is closer in price to the ‘Premium’ version and, on top of losing almost 100 km of range, the Standard version comes with many fewer features.
De-contenting: What do you lose?
To hit these price points, Tesla had to cut costs. We are seeing a new level of “de-contenting” that is new for the brand. Tesla has always been known to cut costs aggressively and remove features it deemed not useful, but in this case, it cut things close to the bone.
Here is what is gone compared to the Premium/Long Range trims:
- Seats: The full vegan leather is replaced by “partially textile seats”.
- Rear Screen: The 8-inch rear display introduced with the Highland refresh has been removed.
- Comfort: Heated rear seats are no longer included.
- Audio: The system is downgraded to 7 speakers, removing the subwoofer and amplifiers.
- Wheels: The alloy wheels are gone, replaced by steel wheels with plastic aero covers.
That’s on top of the more obvious exterior changes, such as removing the light bars, updating the front end, and losing the panoramic roof.
The Competition
This move puts Tesla in a fiercely competitive position against the influx of Chinese EVs and legacy European automakers.
- Volkswagen: The VW ID.3 Pure has recently seen price cuts bringing it to around €29,760 in Germany with bonuses, but the Model 3 offers significantly more range and space. The ID.4 Pure, a direct Model Y competitor, sits around €40,335 , making the Model Y Standard slightly cheaper and arguably better specced in terms of software and charging network.
- BYD: The Chinese auto giant is Tesla’s main headache right now. The BYD Atto 3 is priced at €37,990 in Germany. The Model 3 Standard now undercuts it by €1,000, while the Model Y is only €2,000 more expensive for a much larger vehicle.
- Volvo: The successful EX30 starts around €36,000–€39,000 depending on the market. Tesla could threaten the higher end of the demand for this one.
As you can see, there’s some room for Tesla to work.
Electrek’s Take
There is no denying that Tesla is hurting in Europe. We always said that this was due to a combination of a stale lineup facing increased competition and what we’ve called “brand toxicity” stemming from Elon Musk’s political activism.
I’m actually a fan of the “Standard”/ de-contenting idea in the sense that it offers more options. Not everyone needs a rear screen or heated seats in the back.
However, I do worry about the value proposition, especially with the Model Y. The Model 3 makes a lot more sense to me.
I think this should help Tesla in Europe. It could stop the bleeding and help Tesla form a bottom in Europe.
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![Meet the Kia Vision Meta Turismo: Could this be the EV8? [Images]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/12/Kia-Vision-Meta-Turismo-side.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
Kia is celebrating its 80th birthday with a bang. The new Kia Vision Turismo concept offers a glimpse of what will likely arrive as the EV8. Here’s our first look at it.
The Vision Meta Turismo is more than a concept car. It’s “Kia’s vision for a new era of mobility,” and what will likely become the EV8.
Kia unveiled the futuristic concept car during an event in Korea on Friday, celebrating the brand’s 80th anniversary.
Several high-profile executives were in attendance, including Hyundai Motor Group executive chair Euisun Chung and Kia’s president and CEO, Ho Sung Song.
The Vision Meta Turismo concept pays homage to the 1960s era of long-distance touring, blended with Kia’s bold “Opposites United” design theme showcased on its latest electric vehicles, such as the new EV4, EV5, and EV6.
Although details are still pretty slim at this point, the concept car is expected to fill the EV7 or EV8 spot when it arrives in production form.
The low-riding GT looks like an electric successor to the Stinger, similar to the Polestar 5, with a sporty silhouette and aggressive front end.
Inside, the Kia Vision Meta Turismo offers a “lounge-inspired interior” with futuristic digital tech, unique design elements, and a spacious layout.
The yoke-style steering wheel “reimagines the next-generation intuitive driving interface,” Kia said. It’s equipped with three different digital modes: Speedster, Dreamer, and Gamer, which use an AR Head-Up Display (HUD) to create an immersive, personalized driving experience.
Featuring smart glass that’s integrated into the vehicle, the AR HUD projects graphics in front of the driver “as if they are floating above the road in three dimensions.”
Given Kia has already confirmed plans to cover nearly all segments, from the EV1 to the EV9, the concept is expected to be named either the EV7 or EV8 when it launches.
A flagship EV8 GT could be a lower-cost rival to the Tesla Model S or Porsche Taycan, opening a new market for Kia.
Kia said it will reveal full details about the concept car in the near future, so check back soon. We’ll keep you updated with the latest.
What do you think of Kia’s sporty concept car? Let us know your thoughts in the comments below.
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