Global vehicle sales will decline over the next two decades as consumers embrace on-demand ride services like Uber, but demand for oil will keep rising, according to a study released Tuesday.
Another counterintuitive finding from the study by IHS Markit was that more than 80 percent of the vehicles sold worldwide in 2040 will still use some form of petroleum-fueled combustion engine.
Annual vehicle sales in the United States, Europe, China and India will decline over the next 23 years to 54 million in 2040, as total miles traveled rises 65 percent to around 11 billion miles a year, the study projected. About 80 million vehicles a year are sold currently in those regions.
Although there will be fewer cars sold, demand for petroleum, especially for non-transportation uses, is expected to rise, from the current 98 million barrels a day to 115 million barrels a day in 2040.
According to IHS Markit, which provides economic forecasts and data to the global energy and automotive markets, battery-powered all-electric vehicles will account for about 19 percent of sales by 2040. This compares with an estimated 14 percent of production by 2030 in a forecast by Boston Consulting Group on Nov. 2.
IHS Markit forecast that plug-in hybrid electric vehicles — those with electric motors and combustion engines - will account for another 14 percent of sales in 2040.
"Consumers are starting to embrace" the advanced technologies in electric and self-driving vehicles, Tom De Vleesschauwer, IHS Markit's transport and mobility practice leader, said in an interview.
While the adoption of electric vehicles is being driven in part by technology advances and government policy, "the part that's most consumer-driven is ride hailing," the on-demand service offered by such startups as Uber Technologies and China's Didi Chuxing, according to Daniel Yergin, IHS Markit vice chairman.
He said the firm was "surprised when we saw (oil) demand increasing rather than going down." Yergin noted that cars only account for a third of oil demand.
The study's authors expect 43 million barrels a day of new oil production will need to be brought into development by 2040 as demand rises and existing fields decline naturally.
Reporting by Paul Lienert in Detroit and Jessica Resnick-Ault in New York.