In 23 years, three trends are projected to happen in the automotive industry: (1) as consumers welcome online commute services such as Uber and Grab, vehicle sales worldwide will decrease, (2) on the other hand, the demand for petroleum and gasoline will remain increasing, especially for non-transportation uses, and (3) majority of vehicles sold globally will be those that still have combustion engines, which require petroleum fuels.
These are according to a study reported last Tuesday by IHS Markit, a company that offers economic forecasts and data to automotive and energy industries.
From the current value of 80 million, the annual vehicle sales in major markets comprising United States, Europe, China, and India is projected by IHS Markit to drop to 54 million in 2040. This is in parallel with the increase in annual total miles traveled by 65 percent. The expected decline in annual vehicle sales is attributed to the on-demand ride services such as Uber Technologies and China’s Didi Chuxing, a factor in the forecast that is the most consumer-driven according to the firm as stated in an interview.
On the contrary, fewer vehicles sold do not necessarily mean lower demand for oil. Oil demand is expected to increase from the current 98 million barrels daily to 115 million barrels daily in 2040. Considering the increasing adoption of electric vehicles, IHS Markit was “surprised when we saw (oil) demand increasing rather than going down,” said Daniel Yergin, the firm’s vice chairman. He also emphasized that cars account for only one-third of this oil demand.
Although electric vehicle technologies are increasingly embraced by consumers, only 19 percent among the projected annual vehicle sales in 2040 account for all-electric vehicles, making petroleum-fueled cars, that is including hybrids, account for the remaining 81 percent. Hybrid vehicles, which are fueled by both electric and combustion engines, are forecasted to represent 14 percent of the annual sales. These values are comparable with the projection of Boston Consulting Group last November 2, indicating an estimate of 14 percent production by 2030.