Market Overview

The Future of Cars 2040: Miles Traveled Will Soar While Sales of New Vehicles Will Slow, New IHS Markit Study Says


The new era of mobility—selling miles traveled instead of cars—will
bring about the greatest transformation since the dawn of the automotive

The automotive future will be different—though with some noticeable
similarities—as the convergence of disruptive technologies, government
policies and new business models usher in a new era of multidimensional
competition, says a new major research initiative by IHS
(NASDAQ:INFO), a world leader in critical information,
analytics and solutions.

This press release features multimedia. View the full release here:

Vehicle Miles Traveled - Light Duty Vehicles in China, Europe, India and the United States (Baseline ...

Vehicle Miles Traveled - Light Duty Vehicles in China, Europe, India and the United States (Baseline Scenario). IHS Markit, "Reinventing the Wheel."

A shift from buying cars to buying "mobility" will be a driving force of
change in the automotive future, the study says. By 2040, vehicle miles
traveled (VMT) will have grown to an all-time high of around 11 billion
miles per year (a 65 percent increase since 2017) in China, Europe,
India and the United States—the key markets examined for the study—and
will keep growing. At the same time, sales growth of new light-duty
vehicles will slow substantially.

The findings are part of Reinventing the Wheel, a major new
multi-client, scenarios-based research initiative by IHS Markit that
combines the industry-leading expertise of the company's energy,
automotive and chemical teams to provide a first-of-its-kind,
system-wide analysis of the new reality of transportation. The project
focuses on the world's largest automotive markets: the United States,
Europe and China. It also covers India, a large and fast-growing market.

The competition between the internal combustion engine and electric
vehicles, the disruptive force of "mobility-as-a-service" (MaaS)—such as
ride hailing—and the much-anticipated emergence of autonomous vehicles
will lead to more profound changes in personal transportation than
experienced over the past century combined, the study says.

"A great ‘automotive paradox'—where more travel via car than ever, but
fewer cars will be needed by individuals—will be a defining quality of
the new automotive future," said Daniel Yergin, IHS Markit vice
chairman, Pulitzer Prize-winner and project chairman. "The shift is just
beginning. By 2040, the changes in transportation will be accelerating
in a way that will be visible on roads and highways around the world.
The pace and degree of this dynamic shift will have significant
implications for industry, for public transportation systems and for how
people get to work and live their lives – and spend their money on

"We could very well be on the cusp of the greatest transformation in
personal transportation since the dawn of the automotive age," added Jim
Burkhard, vice president, global energy markets and mobility.
"Understanding the implications of such a transformation requires a
broad perspective that goes beyond any single industry or market."

The continued emergence of mobility-as-a-service (MaaS) providers will
be among the most important and disruptive forces in the future, the
study says. The MaaS industry is expected to purchase more than 10
million cars in the study's key markets in 2040—compared to just 300,000
in 2017.

"Mobility service companies will be a prime driver of shifting car sales
from personal to fleet economics," said Tom De Vleesschauwer, transport
and mobility practice leader, IHS Markit. "Ride hailing has the
potential to be so disruptive because it is often the most convenient
for consumers and can significantly increase access to car transport,
particularly in markets with low car ownership rates."

Oil's monopoly as a transport fuel will erode, though it will remain a
major part of the automotive landscape, the study says. Market share for
cars primarily powered by gasoline and diesel will still account for 62
percent of new cars in 2040 in the four major key markets (down from 98
percent in 2016) with a total of 54 million new vehicle sales in 2040,
according to the study's baseline scenario. In this scenario, global oil
demand still rises from 98 mbd today to 115 mbd in 2040 (the study also
explores a more radical scenario in which oil demand in 2040 is less
than it is today).

The dominance of the full internal combustion engine (ICE) will slide
away, the study says. ICE vehicles still comprise a majority of new car
sales in 2040—buoyed by sales of mild to full hybrids, which still
primarily rely on internal combustion engines. However, cars powered
solely by gasoline or diesel will have fallen below 50 percent of new
car sales by 2031.

Higher fuel economy and emissions standards and the reduction in
gasoline's share of new vehicle sales will lead to a decline in
aggregate gasoline demand in key markets during the 2020s, the study
says, even though overall oil demand will rise.

"Oil's monopoly as a transport fuel will erode as a new era of
multidimensional competition takes hold—but it will remain a major
player," Burkhard said. "Many of its advantages as a fuel, such as its
high energy density, will persist. And the size of the current
automotive ecosystem will moderate the pace of change."

Electric vehicles (EVs)1 will account for more than 30
percent of new cars sold in key automotive markets examined for the
study by 2040—up from just 1 percent of new car sales in 2016. A key
tipping point will be battery pack costs, which are expected to decline
to a price point in the 2030s that will make EVs cost competitive with
internal combustion engine vehicles, the study says.

Autonomous vehicles are also expected to emerge as a significant share
of new vehicle sales after 2030, the study finds.

"It's not only a matter of technology," said Yergin. "Political,
regulatory, social and psychological barriers to adoption will also need
to be overcome."

Mobility-as-a-service companies are expected to be among the key
adopters of electric and driverless cars with a shift towards buying
their own fleets as opposed to drivers providing their own cars. The
cheaper cost of electricity versus gasoline, easier maintenance from
fewer moving parts and the ability to utilize centralized charging
depots and networks for fleet-based transportation are among the factors
expected to contribute to adoption of electric and autonomous vehicles
for "mobility-as-a-service."

Reinventing the Wheel also examines the impacts of the new
automotive future on important industries such as chemicals and electric
power. For chemicals, changes to the automotive ecosystem will deeply
impact what is a major market for the industry, affect the availability
of feedstocks and have critical implications for investments and
competitive strategy.

"The move from ICEs to EVs offers one example of the big impacts that
will result from coming changes in the automotive industry," said
Anthony Palmer, vice president, chemical consulting for IHS Markit. "The
growth of EVs as a share of new vehicle sales means decreases in demand
for chemicals and plastics materials traditionally used in
'under-the-hood' applications, including engineering plastics, that can
withstand high temperatures, as well as for commodity plastics, used in
gasoline tanks. But the transition to EVs also means new opportunities
for chemical companies, which are preparing for the changes by investing
significantly in future production for battery materials."

The change in the use of liquid transportation fuels, as the automotive
industry moves toward EVs, will also affect the chemical industry,
Palmer said. "As the demand for gasoline and diesel fuel used in
light-duty vehicles weakens, more refinery products will be available to
serve as chemical feedstocks. Such a shift would encourage investment in
naphtha crackers in the growing Asian demand centers, including China
and India."

For the power industry, greater adoption of EVs will nudge electricity
demand higher in the United States and Europe by 2040. With U.S.
and European on-grid electricity demand growth slowing relative to
historical rates, EVs provide an uplift to the electricity market, the
study says.

Though the coming decades will be a transformative period for the
automotive future, the sheer scale of the current automotive ecosystem
will serve as a moderating influence on the pace of change, the study

"The automotive future will be defined by transformation unlike anything
we've seen since the dawn of the automotive age," said Tom De
Vleesschauwer. "Still our analysis shows that there will be much that
looks familiar, even in 2040. The majority of new cars sold and miles
traveled will be in vehicles purchased for personal use. And a large
share of those will have internal combustion engines that run on refined
crude products. But the future of automotive transport will be an era
defined by multidimensional competition. And the changes that future
brings about will be profound and permanent."

About Reinventing the Wheel

Reinventing the Wheel is a major multi-client research initiative
that provides a first-of-its-kind, system-wide analysis of the new
reality of transportation and the potential implications for the oil,
gas, automotive, electric power and chemical industries.

Chaired by Daniel Yergin, IHS Markit vice chairman and Pulitzer
Prize-winning author, Reinventing the Wheel combines the
industry-leading expertise from the chemical, automotive and energy
teams within IHS Markit. The project utilizes IHS Markit's long track
record of scenarios development to envision content-rich scenarios that
encapsulate possible futures for cars and energy, combined with
comprehensive analytics and datasets based on the modeling expertise of
IHS Markit.

Reinventing the Wheel focuses on the world's largest automotive
markets—the United States, Europe and China, as well as India—with
projections out to the year 2040.

Forthcoming research will assess the specific impacts, investment
implications and strategic choices for the automotive, oil, gas,
electric power and chemical industries.

The findings provided in this press release represent the findings of
the project's baseline scenario, Rivalry.

Reinventing the Wheel also includes an accelerated scenario, Autonomy
which examines an increased pace of change exceeding the baseline

For more product information about Reinventing the Wheel, please
contact Kate Hardin (Energy),;
Jabir Khammal (Automotive);
or Anthony Palmer (Chemicals),

For media inquiries, please contact Jeff Marn (Energy),;
Michelle Culver (Automotive),;
or Melissa Manning (Chemicals),

About IHS Markit (

IHS Markit (NASDAQ:INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world's leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd and/or its
affiliates. All other company and product names may be trademarks of
their respective owners © 2017 IHS Markit Ltd. All rights reserved.

1 Electric vehicles (EVs) are
defined as both plug-in hybrid electric vehicles and battery electric

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