- A sudden drop in miles traveled by car triggered by social isolation measures will have immediate ramifications for gasoline demand. IHS Markit analysis shows that for the United States gasoline demand could fall by as much as 4.1 MMb/d—or more than 50%—during the COVID-19 response period. The magnitude of gasoline demand decline will be much greater than the impact of the 2008 recession—and could be further protracted depending on how effective social distancing measures are at controlling the spread of the COVID-19 virus.
- The global auto industry is expected to witness an unprecedented and almost instant stalling of demand in 2020, with global auto sales forecast to plummet more than 12% from 2019, to 78.8 million units, according to the latest IHS Markit forecasts. This represents a downgrade of 10 million units compared to pre-coronavirus IHS Markit forecasts made in January 2020. A fall of 12% for 2020 would be considerably worse than the two-year peak-to-trough decline of 8.0% during the global recession in 2008/2009. EDITOR’S NOTE: Go here for more on the impacts on auto demand from IHS Markit automotive experts: https://bit.ly/2xmudUk
“The magnitude of gasoline demand decline will be much greater than the impact of the 2008 recession—and could be further protracted depending on how effective social distancing measures are at controlling the spread of the COVID-19 virus.”
– Jim Burkhard, vice president, IHS Markit
- Following a deceleration of electric vehicle (EV) sales growth in 2019, we expect EV sales to stagnate in 2020 and likely into 2021. A faltering global auto market will have a big hit on sales of EVs. EVs also face another headwind with low oil prices, making them less competitive in terms of fuel cost savings vis-à-vis their internal combustion engine counterparts. Global climate ambitions, however, are unlikely to be downgraded and will continue to support the path ahead for EVs over the longer term.
- Over the longer term, the global response to COVID-19 could have significant structural effects on mobility patterns around the world. A key variable will be to what extent the remote working patterns established in the response period will become entrenched in the future. The longer-term impact on personal mobility choices—whether a boon for the personal car or mobility services—remains unclear.