The global thirst for gasoline is unlikely to return to pre-pandemic levels, the International Energy Agency predicted, calling for a spike for the fuel that has driven personal transportation for more than a century.
The Paris-based energy watchdog, in its closely watched five-year forecast, said an accelerating global shift toward electric vehicles, coupled with increased fuel efficiency among gasoline fleets, will far outpace the growth in demand from developing world countries.
The forecast comes as automakers have recently taken a turn to boost their electric vehicle fleets, after years of industry skepticism about whether car buyers would adopt all-electric models. General Motors Co. said it would stop selling gasoline vehicles by 2035. Volvo Cars of Sweden has said it will be fully electric by 2030.
The world will have 60 million electric vehicles on its roads by 2026, the IEA said, up from 7.2 million in 2019. The agency closely follows electric vehicle trends as an important signal for demand for gasoline and oil. raw.
The shift toward electric vehicles has been driven by government regulation, strong incentives in developed countries, and increased consumer acceptance of the technology, in part thanks to popular models like those sold by Tesla. Inc.
Electric vehicles still make up a small proportion of the world’s total fleet, and automakers say they expect to see growing demand for gas-burning internal combustion engines, particularly in the developing world, in the coming years.
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The forecast comes at a time when the pandemic has revolutionized global fuel consumption, raising questions about whether the global energy mix will change more generally in the coming years. Energy watchers have debated for years the timing of so-called peak oil, a point at which demand for crude will begin to wane. Amid the crushing demand pandemic that began last year, some forecasters, including those at the Organization of the Petroleum Exporting Countries, have said the day may already have dawned in the developed world.
The IEA said Wednesday that it forecasts a recovery in global demand for crude, reaching 104 million barrels per day by 2026, up 4% from 2019 levels, thanks to the developing world. Economic powers such as China, India and other Asian countries will account for 90% of the net increase in oil demand in the next five years, the agency said.
But for the first time, the agency said it no longer forecasts a full rebound in demand for gasoline, the product that for years sustained the world’s thirst for crude.
“We do not believe that gasoline consumption will return to 2019 levels,” said Fatih Birol, executive director of the IEA. Meanwhile, global demand for jet fuel will not recover to pre-pandemic levels before 2024, the agency said.
Amid widespread government-imposed coronavirus restrictions on travel, the IEA said daily gasoline demand fell by a record 2.9 million barrels in 2020, more than 10% from 26.6 million. barrels per day burned in 2019.
The adoption of electric vehicles is not the only thing that reduces demand. The IEA and the US Department of Energy, in a report last month, cited the improvement in fuel efficiency of cars that burn gas. The US agency said it expects US gasoline consumption in the transportation sector to peak in 2022.
The IEA said global gasoline demand will start to return as economies reopen. But the shift to electric vehicles in wealthier countries is now accelerating at such a rate that shortage of demand will outpace expected growth from developing countries like Indonesia, India and China.
Plug-in electric vehicles worldwide accounted for about 4.2% of new car sales last year, with sales increasing 43% to 3.24 million vehicles, according to ev-volumes.com, a group of research that tracks sales of electric vehicles. In Europe, where electric vehicle sales are booming, plug-in electric vehicles accounted for 10.5% of new cars sold in the fourth quarter of 2020.
“Electric mobility has won the race,” Volkswagen Chief Executive Herbert Diess told reporters this week as he revealed large new investments in car battery factories and electric charging stations.
Mr. Diess said that battery electric vehicles will account for 50% of Volkswagen new car sales worldwide by 2030. However, he said that in some markets conventional internal combustion engine vehicles would continue to dominate.
“We will continue to sell ICE in some regions longer than others,” he said. “Electric mobility will reach different speed levels globally depending on local policies and CO2-free energy supply.”
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