As EV demand rises, this is what the future will look like for gas cars, according to new data analysis by RMI (Rocky Mountain Institute).
RMI, who worked in partnership with the Bezos Earth Fund, writes in a report released today called “X-change: Cars, The end of the ICE age” that the market share of internal combustion engine (ICE) cars is going to fall to a level of 14-38% of sales by 2030.
RMI says that gas car sales peaked in 2017 and have been falling at 5% a year since then. By the end of this decade, gas car sales will fall to between 14 million and 38 million cars a year.
But it’s not just about just new gas car purchases – it’s also about what happens to gas cars already on the road, because the gas car stock is a function of gross sales and the scrappage of existing cars.
RMI assumes the life of a car to be around 15 years. Over the past decade, RMI writes, the number of gas cars scrapped annually has been between 40 and 50 million. But using historical data from Bloomberg New Energy Finance (BNEF), RMI estimates that the gas car scrappage rate will climb to between 60 and 70 million annually by 2030, based on the number of gas car sales 15 years ago, which was at around 80 million. (Scrappage is another recycling challenge that is going to need to be urgently addressed.)
RMI gives the example that in 2022, there were sales of 64 million gas cars and scrappage of 42 million. So the net growth was 22 million. But by 2025, more gas cars will be scrapped than sold, meaning the overall fleet of gas cars will peak that year, and then will be in freefall by 2030. RMI’s research shows that by 2030, the gas fleet is likely to be falling at a rate of 40 to 70 million per year, or 3-7%.
And, the researchers say, since gas cars account for around 25% of global oil demand (and made up more than 33% of oil demand growth between 2010 and 2019), demand for oil is also going to freefall in the future, thanks to EV adoption and efficiency.
And here’s the exciting bombshell from this report: By the 2040s, RMI says that the oil demand from the car sector will fall to zero.
Kingsmill Bond, senior principal at RMI, said:
Electric vehicles are on track to dominate global car sales by 2030, signaling the endgame for the largest sector of oil demand.
And where cars lead, so the rest of transport will follow: Exponential change is spreading to two-wheelers across the Global South and to trucks in China.
This is good news for cutting emissions and improving public health. But it also shifts money from the hands of petrostates into the pockets of consumers.
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