BloombergNEF just published its latest annual Light-Duty Vehicle Outlook.
BNEF’s transportation research mostly focuses on decarbonization, including how drivetrains change. But another essential aspect of road transport emissions is how many vehicles are on the road.
We believe that the fleet will continue to grow for at least another ten years.
This latest report outlines a scenario for road passenger transport for the coming decades in which the global passenger car fleet grows from 1.2 billion to a record of just over 1.5 billion by 2039.
BNEF expects global annual sales to peak in 2036, ending more than a century of growth.
Population changes in the major age group are a powerful factor in the outlook. According to United Nations figures, Europe’s workforce will fall by 11% by 2040, while that of Japan and South Korea will shrink by more than 20%.
China – the world’s largest car market – will see its population of working age shrink by 14%. In the same period, the proportion of the world population that is 69 years of age or older increases from 4% to 10%. These changes prevent our outlook for passenger car use from being higher.
Urbanization is another important driver in our vision. Due to urbanization in India and other low-middle income markets such as Brazil, Russia, Mexico, South Africa and Turkey, most city dwellers, especially those living in densely populated megacities, will find owning a passenger car more expensive or less convenient than owning a two-wheeler, using shared mobility services or taking public transportation.
This leads to passenger car sales in India, for example, approaching nearly 8 million units by 2040, but will never exceed that number due to increased urban congestion and higher sales of two-wheelers, which already represent the majority of vehicles sold each year in the country. country to be sold.
The number of vehicles on the road also depends on who or what is behind the wheel. On average, shared and self-driving vehicles cover more kilometers per car than passenger cars.
In our view, shared and autonomous vehicles are a growing part of the fleet, but are still heavily outnumbered by private vehicles.
This trend has a significant effect on the powertrain mix, as shared and self-driving vehicles are much more likely to be electric.
At the end of last year, the private vehicle fleet consisted of just over 1% of EVs, much lower than compared to 6% of shared vehicles (e.g. ride-hailing, taxis and fleet-based carsharing) and autonomous vehicles. However, private vehicles make up 98.7% of the global passenger car fleet and have 15 times the absolute number of EVs as shared and autonomous vehicles.
Policy measures affect the speed at which shared cars electrify. Either in anticipation of upcoming regulations or a growing sense of what their customers want, all major ride-hailing companies now have programs in place to encourage drivers to buy electric vehicles.
The majority have set specific goals for the full adoption of EVs on their platforms. While these companies typically don’t own the vehicles used on their platforms, they are testing the levers they can pull to encourage EV adoption.
Long-term forecasts like this report involve many factors that, even if slightly modified, can have a significant effect on results.
We will continue to closely monitor near-term developments around vehicle sales, shared vehicle business models and self-driving technology, as these will clearly impact the transport sector’s ability to decarbonise.
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