Outlook for gas cars ‘stark’ — report

Source: David Iaconangelo, E&E News reporter • Posted: Wednesday, May 15, 2019

The spread of electric vehicles could slash demand for oil almost twice as deeply as previously thought in the next two decades, according to a new analysis from Bloomberg New Energy Finance.

Sales of conventional gas cars also will peak and start to decline by 2030, analysts said at the firm.

Ten years later, the advent of battery-powered cars will cut demand for oil by 13.7 million barrels per day — an estimate that surpasses last year’s Bloomberg forecast of 7.3 million barrels.

David Doherty, a London-based oil specialist with BNEF, said the firm had adjusted its forecast in part because of the growing prominence of EVs in automakers’ portfolios.

Company commitments to electrify portions of their future fleets have mounted in the past year. A few, like Daimler and Volkswagen, have set dates to eliminate or offset their fleets’ carbon footprint.

To comply with fuel efficiency rules, many carmakers will lean harder on electric models than in the past, when they simply improved the efficiency of gas cars, said Doherty.

“Essentially we expect that automakers are likely to use clean energy vehicles to meet their fuel economy/emission targets,” he wrote in an email to E&E News.

BNEF also assessed for the first time how electrification of commercial vehicles — a category including smaller types, like delivery vans, as well as the heaviest class of trucks — might proceed.

About 56% of the light-duty kinds and 31% of the medium-duty types, it found, will electrify by 2040, within the world’s major markets for vehicles. Heavy trucks will take longer: Less than 20% of new sales will be electric by that date.

“With a higher penetration of electric passenger and commercial vehicles in Europe, the U.S. and China, these markets are expected to see a higher level of oil displacement, sooner,” said Doherty.

By 2040, 57% of new passenger vehicles will be electrified, and over 30% of all passenger cars around the world will be electric, according to the outlook. Adoption of EVs will ramp up in 2024 — after cheap batteries bring the price of electric models down to about the same level as gas cars — and slow again in the 2030s, due to problems with the availability and convenience of EV chargers.

City-owned fleets will decarbonize faster, with over 80% of public transit buses converted to electrics by that date. Ride-shares and cabs will hit a similar percentage by that time, as they make up an increasing portion of all miles traveled.

Overall, global sales of single-occupancy EVs will go from 2 million last year to 56 million by 2040, said analysts.

During that same period, sales of conventional gas cars will halve, falling to 42 million. And sales of that vehicle type may “have already passed their peak,” said Colin McKerracher, BNEF’s head of advanced transport.

Once electrification gains momentum in the middle of the next decade, he said, it will take hold in a growing number of vehicle classes.

“Our conclusions,” he said, “are stark for fossil fuel use in road transport.”