An overview of key evolutions in the light-duty vehicle sector and their impact on oil demand

Abstract

The light-duty vehicle (LDV) sector is undergoing many changes, including technological advancements (e.g., vehicle electrification, automation), new business models (e.g., ride-hailing), and government regulations and policies (e.g., fuel economy (FE) standards, zero-emission vehicle mandates, infrastructure investments, and incentives to encourage adoption of alternative fuel vehicles). Despite significant uncertainty, these developments, combined with demographic growth, will influence the future LDV fleet size and composition, and consequently the oil demand from LDVs. This paper provides a review of changes in the LDV sector and an assessment of their impact on oil demand. It takes into account the impact of LDV fleet growth, increasing penetration of electric vehicles (EVs) and alternative fuels (focus on biofuels), and improvements in internal combustion engine vehicles' (ICEV) FE. Our analysis indicates that oil demand in 2040 could remain unchanged relative to 2016, but depending on the development of certain trends, demand could shrink or increase by ~6 million barrels per day (±25% relative to 2016). Our findings suggest that ICEV FE improvements could have a much greater impact on oil demand than the emergence of EVs. Moreover, preliminary research indicates that automation and shared mobility could reinforce the economic attractiveness of EVs, thereby increasing their penetration and impact on oil demand. Because of uncertainties in the development of these two trends by 2040 and difficulties in quantifying the complex interactions, we have not captured these effects in our model. Therefore, the range of uncertainty on the oil demand evolution could be even higher than our model indicates.

Life Cycle Assessment of Electric Vehicles and Hydrogen Fuel Cell Vehicles Using the GREET Model—A Comparative Study

“…Light duty vehicles (LDVs), which account for the highest proportion of vehicles, are generally categorised into two types. The first type includes traditional internal combustion engine vehicles (ICEVs) that use diesel or petrol as fuel, and hybrids that combine a petrol engine with an electric motor [18]. The ICEV fleet also includes natural gas vehicles (NGVs) and those powered by biofuels (flex-fuels).…”

“…Currently, there are 15 hydrogen refuelling stations in China, and it is expected that there will be over 1 million FCEVs running on the road by 2037 [23]. Table 1 summarizes a comparison of alternative battery and fuel cell technologies [18]. The emergence of cleaner vehicles and changing work patterns is a real opportunity to embrace healthier and safer transport networks.…”

Analyzing the CO2 Emissions and Fuel Consumption of Light-Duty Vehicles

“…Reducing CO2 emissions from road transport is a critical priority in the European Union's policy agenda (Zacharof et al 2021). European Union requirements regarding vehicle emissions for passenger cars and light commercial vehicles were introduced in 2009 for type approval and in 2011 for all new types, specified as Euro 5, with further requirements (Euro 6) planned from 2014 onwards (Bielaczyc et al 2014).…”

“…The light-duty vehicle (LDV) sector is undergoing many changes, including technological advancements (e.g., vehicle electrifcation, automation), new business models (e.g., ride-hailing), and government regulations and policies (e.g., fuel economy (FE) standards, zero-emission vehicle mandates, infrastructure investments, and incentives to encourage adoption of alternative fuel vehicles). Despite significant uncertainty, these developments, combined with demographic growth, will influence the future LDV feet size and composition, and consequently the oil demand from LDVs (Albrahim et al 2019). There has been little attention given to the analysis on the temporal variation of exhaust emissions from diesel vehicles during real-world driving.…”

Are Consumers Myopic About Future Fuel Costs? Insights from the Indian two-wheeler market

“…If consumers are found to undervalue future fuel economy at the time of vehicle purchase, implementing policies such as fuel economy standards 3 that will help consumers save money is reasonable (Allcott and Wozny 2014;Chugh et al 2011). Consumers' fuel economy valuation has become even more critical, given the Indian government's recent policy announcements aimed at securing energy security by increasing the uptake of electric vehicles, which have relatively higher upfront costs and lower operating costs (Albrahim et al 2019;IEA 2020;Kumar and Alok 2020;Li and Wang 2019;Zhuge et al 2020). However, these types of analyses are difficult to undertake in the Indian context due to data availability challenges.…”