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Global vehicle sales to fall by 2040, but oil demand to rise: Study

The study's authors expect 43 million barrels a day of new oil production will need to be brought into development by 2040

Paul Lienert Jessica Resnick-Ault | Reuters 

Crude Oil
Crude Oil

will decline over the next two decades as consumers embrace on-demand ride services like Uber, but demand for will keep rising, according to a study released Tuesday. Another counterintuitive finding from the study by Markit was that more than 80 per cent of the vehicles sold worldwide in 2040 will still use some form of petroleum-fuelled combustion engine. Annual vehicle sales in the United States, Europe, and India will decline over the next 23 years to 54 million in 2040, as total miles travelled rises 65 per cent to around 11 billion miles a year, the study projected. About 80 million vehicles a year are sold currently in those regions. Although there will be fewer cars sold, demand for petroleum, especially for non-transportation uses, is expected to rise, from the current 98 million barrels a day to 115 million barrels a day in 2040.

According to Markit, which provides economic forecasts and data to the global energy and automotive markets, battery-powered all-vehicles will account for about 19 per cent of sales by 2040. This compares with an estimated 14 per cent of production by 2030 in a forecast by Boston Consulting Group on November 2. Markit forecast that plug-in hybrid vehicles — those with motors and combustion engines — will account for another 14 per cent of sales in 2040. reuters “Consumers are starting to embrace” the advanced technologies in and self-driving vehicles, Tom De Vleesschauwer, Markit’s transport and mobility practice leader, said in an interview. While the adoption of vehicles is being driven in part by technology advances and government policy, “the part that’s most consumer-driven is ride hailing,” the on-demand service offered by such startups as Uber Technologies and China’s Didi Chuxing, according to Daniel Yergin, Markit vice chairman. He said the firm was ”surprised when we saw (oil) demand increasing rather than going down.” Yergin noted that cars only account for a third of demand. The study’s authors expect 43 million barrels a day of new production will need to be brought into development by 2040 as demand rises and existing fields decline naturally.

First Published: Wed, November 15 2017. 02:09 IST