Demand for oil will grow through 2040 even as dominance of the internal combustion engine weakens in road transportation, according to base-case projections by IHS Markit.
But gasoline consumption will decline as fuel economy improves and as gasoline-fueled vehicles lose their share of new-vehicle sales, the firm says in research it calls Reinventing the Wheel.
The base case assumes electric vehicles-including plug-in hybrids and battery electric vehicles-account for more than 30% of new cars sold in four key automotive markets covered by the study by 2014. That compares with 1% in 2016.
The study assumes battery-pack costs decline enough in the 2030s to make electric vehicles competitive with cars with internal combustion engines.
It expects autonomous vehicles to claim "a significant share of new vehicle sales after 2030."
IHS Market says individual vehicle ownership will give way to companies that provide mobility as a service. They'll be key adopters of electric and driverless cars.
"The cheaper cost of electricity versus gasoline, easier maintenance from fewer moving parts, and the ability to utilize centralized charging depots and networks for fleet-based transportation are among the factors expected to contribute to adoption of electric and autonomous vehicles for mobility as a service," IHS Markit says in a press release about the study.
With demand for gasoline and diesel fuel in light-duty vehicles weakening, oil will move toward petrochemical manufacture in a shift that encourages investment in naphtha crackers in Asia, according to IHS Markit analysts.
The study predicts vehicle-miles traveled will increase by 65% from 2017 levels to 11 billion miles per year in 2040 in China, Europe, India, and the US.
At the end of the study period, cars primarily powered by gasoline and diesel will account for 62% of new-vehicle sales. Global oil demand will rise to 115 million b/d in 2040 from 98 million b/d at present in the base case.
Under a "more radical scenario," according to IHS Markit, projected oil demand in 2040 is less than at present.
