BP Predicts the Future of Cars (Hint: Yours Probably Isn't Part of It)

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Car trafficIf you own a gas guzzler, here's a public service announcement for you: Sell it soon. According to global oil giant BP, you've got maybe 18 years left before that vehicle is obsolete -- and probably a lot less than that.

It doesn't really matter what kind of car you drive -- Ford or Chevy, Toyota or Nissan. If it's got four wheels and only runs on gasoline, it's headed for the scrap heap sooner rather than later.

That's the upshot of a new report out of BP entitled the "BP Energy Outlook 2030," which contains a wealth of information and speculation on the future of the global auto industry for the next 20 years.

Some of these things won't be news to you. For example, the observation that over the coming two decades:
  • The world's population will grow by 20% to approximately 8.2 billion souls.
  • Car ownership will rise three times as fast -- up 60% over the next 20 years.
  • Even with gains in fuel efficiency, global energy demand will rise 40%.
Other observations will downright shock you. For example, we're used to hearing that "as Detroit goes, so goes the nation," right? Maybe not. According to BP, while car ownership is still on the uptrend around the globe -- in China and India, in particular -- certain "mature markets" have already reached "saturation levels" at which car ownership will stagnate and decline.

And here's a newsflash: We're one of them. Even as U.S. population grows, car ownership per person in these United States has already begun declining and is set to drop even further over the coming years. That sounds like good news for car-sharing companies like Zipcar, but it's probably not good news for the used-car market generally.

$5 Gas? (Yeah, If You're Lucky)

More specific threats loom for older used cars in particular. You've probably noticed gasoline prices rising, right? Well, that trend is likely to continue and even accelerate in future years as the number of cars on the road globally increases, and gasoline and diesel fuel continue to provide the go-juice for roughly 87% of these vehicles.

Higher prices and limited supplies of oil, however, are going to catalyze an astounding increase in automotive fuel efficiency. Right now, U.S. cars require more than a gallon of gas, on average, to travel just 30 miles. But BP projects that by 2030, the average U.S. automobile will travel the same distance on just a half-gallon. Cars sold in Europe, meanwhile, have already hit that mark, and Chinese autos aren't far behind.

Turn On, Plug In, Gas Out

More miles to the gallon is good news, right? Well, yes and no.

It turns out that replacing steel auto parts with plastic and aluminum only gets you so far in the race to fuel efficiency. Internal combustion engines, too, can only be tweaked so much. The real advances in fuel efficiency, says BP, will be a massive -- nearly wholesale -- shift in the market toward hybrid, plug-in hybrid, and all-electric vehicles.

BP estimates that current levels of "hybrid" adoption (currently just a couple percent of all cars sold globally) will balloon toward 20% by the end of this decade, cross the halfway mark a few years later, and comprise a supermajority (66%) by 2030.

The Bottom Line

What does all of this mean to you and the value of that minivan parked in your driveway? Maybe this is just an oil company's bias talking, but BP does not believe all-electric cars are the way of the future. BP's report cites driver worries about car range and the simple fact that all-electrics are downright expensive as obstacles to widespread adoption of the "EV" concept.

BP does, however, believe that we'll soon see a tectonic shift among car buyers toward hybrid vehicles that can run on battery power for daily commuting, then switch to gasoline for longer trip, giving the edge to cars like GM's Chevy Volt and Toyota's popular Prius. You don't necessarily need to rush right out and buy a $60,000 Tesla all-electric Model S Sedan, or even a cheaper Nissan Leaf just yet. But you really don't want to shell out $40,000 for a 15-mpg SUV today and get caught trying to trade the thing in 10 years from now, when the shift to 60-mpg hybrids kicks into overdrive.

If you are in the market for a new car now, or expect to be soon, it's time to give serious thought to making the switch to hybrids.

Motley Fool contributor Rich Smith does not own shares of any company mentioned above. The Motley Fool owns shares of Ford Motor and Zipcar. Motley Fool newsletter services have recommended buying shares of General Motors, Ford Motor, Zipcar, and Tesla Motors. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor.

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94 Comments

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djhector20000

i love gas power car but Electric to Hybrid sucks i hope gasoline still be around for next 90 years also what about clean gas that should be for the future.

May 09 2014 at 6:17 PM Report abuse rate up rate down Reply
Wayne Bradshaw

Louis Vuitton Replica Handags usually was manufactured from China ,it is not authourized by louis vuitton .But they will come with the high quality that almost the same materials and handwork,So it is hard to distingush the Repilicas.

May 05 2012 at 11:57 PM Report abuse rate up rate down Reply
Lord Rumfish

Unfortunately, what this isn't accounting for is a concept called "fleet turnover." Essentially, due to an unstable economy the length of time people wait before buying a new car has been quite long in the tooth in recent years. Everyone hopes we'll see a hybrid/electric fleet, but the fact is that our poor citizens can't afford such luxuries, and since hybrids/electrics exist in such small numbers at the moment you can't really find one used, and certainly not for cheap even if it is used. Instead, people will look at the money they could spend on a hybrid vehicle, let's say $30,000 to be generous, or at a cheap used car, with prices ranging all the way down to $2000 or less for a half-decent running vehicle. How many years of driving will you expect to get out of a cheap used car before the gas expenditure catches up to the price of a new hybrid? A lot, to be blunt.

The optimism in the article is misplaced, because we have a top-heavy economy saturated with cheap cars. The fleet turnover simply isn't going to happen fast enough, so fuel demand will rise faster than BP has anticipated. All of that being said... buy a cheap used car that gets 25-40 MPG if you can, rather than 10-15 MPG. You'll thank yourself later.

April 19 2012 at 8:29 PM Report abuse rate up rate down Reply
suprg1969

To bad they can't predict their next oil spill or disaster they cause. To bad they can't pay people here on the gulfcoast and beyond for the losses and damage they have cuased. Don't buy any BP products I no longer do.

March 06 2012 at 4:34 PM Report abuse rate up rate down Reply
electronx16

Weird that BP should think that cars like plug in hybrids are the future but pure electrics aren't because they are too expensive. Fact is that plug-in hybrids contain most of the parts of a pure electric + a whole lot more for the range extender and the systems needed to make it all work together.

March 03 2012 at 7:03 AM Report abuse rate up rate down Reply
Doug Click

There are already systems that can replace oil such as source hydrogen generation, your car runs on water. China ia bankrupt and will collapse in the next few years. India, really, India? I have talked to them on the phone and they tend to be the stupidist people on earth. Not India. Brazil, too busy chasing girls and taking a nap then rushing off to a soccer game. Russia- corrupt, broke, crumbeling infastructure, population in a rapid decent. We need to look into the mirror and realise that our problems are not that bad.

March 02 2012 at 1:04 PM Report abuse rate up rate down Reply
tevroc143

Competing with China and India on the world markets is going to keep the cost of gas high. Then add in the oil speculators to the mix and there is little hope for affodable gas.

March 02 2012 at 11:55 AM Report abuse rate up rate down Reply
kevin

Uh-huh....they said we'd be in flying cars by the 70's too.

March 02 2012 at 11:04 AM Report abuse rate up rate down Reply
george3373

and what fuel will creat the electricity to charge the vehicles. Today the grid is over capacity in the summer and is 80 plus percent fossil fuel at far less efficiency than the combustion engine. Not a real blue print for carbon reduction. We will need extensive (not a little solar and wind) increase in our electcity capacity . That only options today are hydro, nuclear and natural gas driven systems and they are 30 years away if not started as of now.

March 02 2012 at 10:20 AM Report abuse rate up rate down Reply
2 replies to george3373's comment
100thMonkey

Sorry, you sound too confident in what you are saying for how little homework you have apparently done. Today, a huge amount of our electricity capacity goes to waste because we have to maintain base load 24 hours a day. Most electric car charging happens at night where the off peak waste can finally be captured. There is enough capacity already to charge tens of millions of EV's each night without burning any more coal, given that most folks drive about 30 miles a day and will only need a partial charge to fill up each night. The DOE ran a study years back that found that we have enough grid capacity to handle 180 million EV's, roughly the equivalent to the entire import of OPEC oil! The really good news is that electricity can be generated renewably and the grid is getting cleaner and cleaner. Solar is reaching grid parity in some places already in the US. EV's are so efficient that it only takes a relatively small one time investment in a solar array to nearly zero out one's car's electricity use. I've put about 13,000 miles on the 100% electric Nissan Leaf in the last 10 months for around $350 in electricity... less than my hot water heater!! We've already saved nearly $2,000 in gas in less than a year and that return only increases as gas prices rise!

March 06 2012 at 12:16 AM Report abuse rate up rate down Reply
100thMonkey

?

March 06 2012 at 12:16 AM Report abuse rate up rate down Reply
BUFFALO

Just come up with a battery that gives us a 300 mile range and I would be more than happy to drive a electric.
Thats a pretty good bet that it will be a reality within the next 10 to 29 years?

March 02 2012 at 9:20 AM Report abuse rate up rate down Reply