Oil prices will need to fall to between $10 and $20 per barrel if it is to remain competitive in the mobility sector, according to a recent report from BNP Paribas Asset Management.
The report's author, Mark Lewis, told CNBC's Squawk Box Europe Friday that such a view reflected how the economics of renewables were changing "very dramatically" and the way in which electric vehicles were becoming more competitive.
"We have to be very clear here," Lewis, who is global head of sustainability research at BNP Paribas Asset Management, added.
"What we're saying is if you're comparing investing money in renewable energy in tandem with electric vehicles, you can get six to seven times the energy yield at the wheels – useful energy, mobility – for the same capital outlay as you can spending on oil at the current market price of $60 a barrel, and then refining it into gasoline and using it in an internal combustion engine, which loses 80% of the energy as heat."
On Friday morning, WTI was trading at around $56.20 a barrel, while Brent was priced at around $61 a barrel.
Lewis qualified his statement by noting that storage would have to be "in play" on a much grander scale. "That's why we say this is over the long term, but that's really where the economics are taking you."
According to the International Energy Agency (IEA), "electric mobility is expanding at a rapid pace." The IEA says that 2018 saw the planet's electric car fleet exceed 5.1 million, an increase of 2 million compared to 2017.
While the number of electric cars may be increasing, there are undoubted challenges when it comes to charging infrastructure and energy storage for renewables. Sources such as solar and wind do not promise a constant and predictable stream of power in the way that fossil fuels do.
Challenged on the lack of progress with regards to energy storage, Lewis took a historical view.
"What we have to do is compare a very well established, well capitalized industry like the oil industry, with deep political roots, with what's happened in the European utility industry over the last 10 years," he said.
Describing that industry as deeply entrenched and well capitalized, he said that renewables had "completely disrupted it in a manner that nobody foresaw."
"What you have here is an energy source that's got a zero short run marginal cost and the capital costs are plummeting, so now is the time to invest in energy storage," he added.
"Ten years ago – even five years ago – putting capital into that didn't really make sense because renewables themselves were still expensive and still needed subsidies. They don't need subsidies anymore."