Contributed by Robert Lyman © 2019
Robert Lyman is an Ottawa energy policy consultant who spent 27 years as a public servant in senior policy advisory roles related to Kyoto and GHG reductions; prior to that, he was a diplomat for 10 years.
This article is one of a continuing series in which I report on and analyse trends in global personal light duty vehicles sales, with a special focus on the role that plug-in electric vehicles play in total sales and vehicle stock and the potential consequences for global oil demand.
In previous reports, I have described the International Energy Agency’s projections, as part of its Energy Technology Perspectives reports, that the global electric light duty vehicle (i.e. cars and SUVs) stock would increase from two million in 2017 to 56 million in 2030. In its recent World Energy Outlook 2019 report, British Petroleum projected (under its “Evolving Transition” scenario) that all-electric light duty passenger vehicle on the roads might increase to 300 million by 2040 and constitute 15 per cent of the global passenger vehicle stock.
I previously proposed a scorecard by which one might assess whether plug-in electric vehicles are on track to meet the expectations of their proponents. I suggested that if, by 2020, the global inventory of EVs is three million or less, this would demonstrate conclusively that the technology is facing serious market barriers that might limit its growth for decades. A 2020 EV population of 20 million would align with the more optimistic claims. A stock in the range of 7.4 million to 13 million is consistent with growth trends seen to mid-2018, and while impressive, would not substantiate promoters’ more optimistic claims.
What Has Happened?
In keeping with past reports, I have used the best online sources of data available concerning plug-in electric light duty vehicle sales. These include InsideEVs, which provides data on monthly and annual sales for the United States and the world, and the International Association of Motor Vehicle Manufacturers (OICA) for national and global sales of all light duty vehicles. I also use the reports of the U.S. Energy Information administration to document current and projected global oil demand trends.
The following table shows EV sales since the beginning of 2014.
Sales of Electric Plug-In Light Duty Vehicles
Both U.S. and global sales showed strong growth in from 2017 to 2018, rising 80 per cent and 64 per cent respectively. This has been supported by continuation of substantial subsidy programs in most countries. The sales data for the early months of 2019 are somewhat less robust. For the first four months of 2019, U.S. sales are only 10 per cent higher than in 2018. Global sales during the first three months of 2019 are 63 per cent higher than the comparable period of 2018, showing perhaps that the global trends are stronger. The highest vehicle sales usually occur later in the year.
What Does This Mean for the Global Vehicle Fleet?
The following table provides some context by comparing plug-in vehicle sales to the sales of all light duty vehicles.
Sales of All Light Duty Vehicles (million)
As you will note, light duty vehicle sales in the United States have declined for the past four years, while global sales have increased. In 2018, there were almost 71 million light duty vehicle sales globally.
The following graph, also from OICA, shows how global personal vehicle sales have increased since 2005.
Table 3 compares EV sales to total personal vehicle sales globally and in the U.S.
Plug-In EV Sales as a Share of Total Sales (%)
So EVs are increasing their percentage share of light duty vehicle sales, with one out of every 20 cars sold in the U.S being a plug-in and but only 3 out of every 100 cars sold worldwide. .
The picture is even more striking if one views it in terms of the total vehicle stock (i.e. all the light duty vehicles now on the roads). There are no authoritative estimates of this, but a 2014 study by Navigant Research estimated the total to be almost 1.2 billion then, and more recent vehicle industry reports project that this total will reach 1.3 billion by 2020. OICA’s published figures only go to 2015, and indicate a stock of 947 million personal vehicles then.
Inside EV’s estimates of the total stock of plug-in vehicles is shown in Table 4.
Global Stock of EVs 2014 – 2017
If we assume that the total personal vehicle stock is now at least 1.2 billion vehicles, then EVs constitute five one-thousandths of the present stock.
At present rates of growth, a total EV stock in the range of 7.4 to 13 million EVs in the world by 2020 is probable, but the high end of the range looks like a stretch. If EVs attained that milestone, they would constitute just over one per cent of the total personal vehicle fleet.
World Oil Demand
According to the BP Statistical Review of World Energy, the world’s consumers used 98.2 million barrels of crude oil in 2017. While the number varies depending upon the characteristic of the crude oil, on average somewhere between 50% and 55% of a barrel is used to produce gasoline and diesel fuel for light duty vehicles and trucks. Road vehicles are more than 97% dependent on oil for motive power.
Global oil demand has been rising at the rate of over one million barrels per day per year since 2012. This is the fastest rate of demand growth in history. Over the past decade of 2009 to 2018, global crude oil demand has risen from 84.3 million barrels per day to 99.3 million barrels per day, an average of 1.5 million barrels per day per year.
According to the most recent short-term energy outlook report from the U.S. Energy Information Administration, global oil demand will rise by 1.4 million barrels per day in 2019 and by another 1.5 million barrels per day in 2020, to reach a total of over 103 million barrels per day, a level many forecasters had thought would not be reached until 2030 at the earliest.
In summary, EV sales continue to grow at a fast pace from a low starting point and have carved out a niche, especially in markets where governments can afford the large subsidies that underpin sales. The pace of future sales growth remains uncertain but the growth that has occurred so far shows that plug-in vehicles have passed the first hurdle in terms of being a viable alternative to internal combustion engines in some markets. Unless present trends accelerate, however, it seems unlikely that the size of the total EV stock will reach the 13 million figure globally by 2020. Where sales go after that is anyone’s guess.
While impressive, EVs are still a small part of the total vehicle stock, and even rapid growth in EV sales seems likely to have little impact on the growth of oil demand, or global carbon emissions, for some years to come.