DETROIT -- Amid the flurry to showcase future electric vehicle offerings at the Detroit auto show, one booth stands alone.
Saudi Arabian Oil Co., otherwise known as Aramco, occupies more than 3,000 square feet on the main show floor at Cobo Center. The world's largest oil company -- Aramco generates more than 12.5 million gallons of oil and $1 billion in revenue every day -- is at the Detroit auto show to remind people that oil is still very much part of the auto industry.
"The internal combustion engine is here to stay," said Mike Traver, commercial transport fuels team lead for Aramco's North American research center near Detroit in Novi, Mich. "Our research teams exist to make sure the combustion engine provides a sustainable future, cutting carbon emissions, etc."
Aramco's Novi location opened in 2015 and employs 35, mostly engineers, to research advanced combustion engine technologies, Traver said. Its other research centers are in Paris and at its global headquarters in Dhahran, Saudi Arabia.
Aramco dedicated its own engineering teams about 10 years ago to research fuel efficiency in support of the continued use of the combustion engine, but the public display highlights the threat posed by the increasing electrification of the automotive industry.
Electric vehicle adoption has been relatively stagnant in the U.S. over the past dozen years, but is rising thanks to global efforts driven by federal initiatives to drop the internal combustion engine. In September, China announced it would ban gasoline and diesel engines in the future -- joining the U.K. and France, which have pledged to ban those engines by 2040.
By default, domestic automakers, who have been aligning global platforms for years, are pivoting toward electrification. Electric vehicle sales topped 1 million globally for the first time in 2017, according to Bloomberg. General Motors expects to sell 1 million of its own electric vehicles by 2026 and Toyota Motor Corp. by 2030.
However, Traver said internal combustion engines will make up 70 percent to 80 percent of the automotive market in 30 years, down from 99 percent today. Experts are slightly more skeptical. Researchers at the Massachusetts Institute of Technology predict combustion engines will be on 60 percent of light-duty vehicles, including hybrids, by 2050.
Those figures still represent a major dent in Aramco's future revenues.
In response, Mohammad bin Salman bin Abdulaziz Al Saud, the deputy crown prince of Saudi Arabia, which owns Aramco, unveiled a plan to diversify Saudi Arabia's economy away from oil. The plan, Vision2030, unveiled last year calls for an initial public offering of 5 percent of Aramco shares in 2018.
It's expected to be the largest IPO in history, valuing the oil company as high as $2 trillion -- making it by far the world's most valuable company. The Saudi government plans to invest the proceeds of the IPO into its public investment fund, which already owns stakes in Japan's SoftBank, South Korea's Posco Engineering & Construction Co. and Uber.
The fund more recently announced business agreements with General Electric Co., Lockheed Martin and The Blackstone Group and plans to invest $40 billion into infrastructure projects, mostly in the U.S.
While it's somewhat ironic for Aramco to show a presence at the Detroit auto show, the oil company is not foreign to the U.S. Aramco was founded by Standard Oil of California, now Chevron Corp., as the California Arabian Oil Standard Co. in 1933. The Saudi government purchased the company, after acquiring a majority of its shares, in 1980, moving the company to Saudi Arabia in 1988 and renaming it Aramco.
Aramco pays royalties and an 85 percent tax rate to the Saudi government, which is why the country has become so wealthy in recent decades.
So while Aramco sticks out amid the auto industry's newest achievements, it's still right at home in Detroit ... for now.