More than 1 in 5 cars sold globally this year will be electric
The US Energy Information Agency (EIA) reported this week that gasoline demand slumped to 8.4 million barrels a day in the week ending April 19,2024 – down from 8.6 million barrels the week before and down more than 10% from the same date a year earlier, when gasoline use across the US was 9.5 million barrels a day.
The chart below shows demand for gasoline has been lower than the year before starting in February to the present.
A Reuters story points to higher prices at the pump and the expectation of relief as a possible reason. ”A spring surge in U.S. gasoline prices is set to fizzle out earlier than expected as geopolitical concerns abate, raising optimism that motorists will find some relief at the pump ahead of peak summer travel demand.
U.S. gasoline prices are under a microscope ahead of the country’s presidential elections in November, with stickiness in inflation among top issues plaguing consumers and policymakers.”
Looking longer-term The International Energy Agency (IEA) a few weeks ago cut crude oil demand forecasts for the year, with rates expected to fall further next year as consumption returns to the pre-COVID-19 trend, increasing the odds of a peak in oil consumption this decade, the agency said.
A key factor in oil consumption is the conversion of the world fleet of gasoline powered vehicles to electric. Critics have said EV sales are slumping but the counter view is that tough competition in the EV sector is lowering prices for those who want to enter into the market.
The electric car effect
A CNN story this past week adds that “Global electric vehicle sales are set to rise by more than a fifth to reach 17 million this year, powered by drivers in China, according to the International Energy Agency.
More than 1 in 5 cars sold globally this year will be electric
In a report Tuesday, the IEA projected that “surging demand” for EVs over the next decade was set “to remake the global auto industry and significantly reduce oil consumption for road transport.”
It expects half of all cars sold globally to be electric by 2035, up from more than one in five this year, provided charging infrastructure keeps pace. The IEA includes battery electric vehicles and plug-in hybrid vehicles in its definition of EVs.
The agency’s bullish long-term outlook for EVs — based on current government policies — comes just days after the world’s biggest battery EV maker Tesla slashed its prices in major markets to counter declining sales and growing competition from Chinese upstarts and established carmakers.
Recent negative headlines about slowing EV penetration are out of step with positive global trends, according to IEA executive director Fatih Birol. The data “does not at all show a reverse of the growth of electric cars. It shows an extremely robust increase of global electric car sales,” he told reporters Tuesday.
The growth is not driven just by Chinese buyers. The number of new battery electric cars sold in the European Union rose almost 4% in the first quarter of this year compared with the same period in 2023, according to the European Automobile Manufacturers’ Association.
In a statement, Birol said: “Rather than tapering off, the global EV revolution appears to be gearing up for a new phase of growth.”
Despite the upbeat trends, EV makers are grappling with slim profit margins, squeezed by price wars as competition heats.
In the past few days, Tesla and Chinese EV maker Li Auto have cut prices on major models in China, the world’s biggest EV market, with Tesla also cutting prices in Germany and the United States.
In China, more than 60% of EVs sold last year were less expensive than conventional cars, but in Europe and the United States the purchase price for new cars with internal combustion engines remains lower on average.
“Intensifying market competition and improving battery technologies are expected to reduce (EV) prices in the coming years,” the IEA said.
“Growing electric car exports from Chinese automakers, which accounted for more than half of all electric car sales in 2023, could add to downward pressure on purchase prices,” it added.
And on gasoline prices.