Peak Combustion Cars Reached by 2025

A new study by the Rocky Mountains Institute (RMI) shows that the number of internal combustion vehicles sold worldwide peaked back in 2017 and has fallen by an average of five percent annually since then. By 2030, the number of internal combustion vehicles sold annually will have fallen to between 14 and 38 million units.

Scrappage figures are lagging behind sales, which means that the number of internal combustion vehicles in use is currently still rising, but more internal combustion vehicles are expected to be scrapped than sold as new vehicles as early as 2025.

RMI assumes a vehicle service life of 15 years. In an example, the study authors calculate the current and forecast sales and scrapping figures and use them to calculate the fleet stock for the next few years.

The stock of ICE cars is a function of gross sales and the scrappage of existing cars. In 2022 for example, we saw sales of 64 million ICE cars and scrappage of 42 million. So the net growth was 22 million. As the chart below shows, our two ranges for these variables cross each other very shortly. By the middle of the decade, scrappage will be higher than new sales.

The implication is very clear: the ICE fleet is about to peak. And by the end of the decade the size of the ICE fleet is likely to be falling at a rate of 40 million to 70 million per year, or 3%-7%.

Forecasts of sales and scrapping figures for internal combustion vehicles and the stock

For electric cars, on the other hand, the study authors see the number of sales following an S-curve. Leading countries such as Northern Europe and China, supported by politics, are driving this development. It took six years for electric cars to reach a market share of one to ten percent of new car sales, and another six years to reach a market share of 80 percent in the aforementioned regions.

Development of market shares as S-curve for the leading countries and regions

If electric cars are already significantly cheaper than internal combustion vehicles in terms of consumption and maintenance, falling battery costs will mean that by 2030 at the latest, new e-car prices will also be at the same level as or below those of internal combustion vehicles in all segments.

Lithium-ion battery pack prices ($/kWh 2022 real)

Therefore, according to the study, electric cars are expected to account for between 62 and 86 percent of sales in the aforementioned regions by 2030, with China achieving a market share of at least 90 percent.

Customer behavior has also been shown to have changed, according to the EY Mobility Index. For example, the number of customers surveyed who intended to buy an electric car as their next car was 55 percent in 2023, compared with just 30 percent three years ago. In the U.S., the figure also jumped from 29 percent in 2022 to 48 percent just one year later.

Globally, the number of electric car sales rose from 5 percent in 2020 to 18 percent in 2023. Automakers have also adjusted their strategy and product portfolio. While there were just 15 electric cars on offer in 2015, there are now over 500.

As the number of internal combustion vehicles is expected to dwindle, so too will the demand for oil. Peak oil” is expected in 2025, and demand will fall continuously from then on.

Forecast for oil consumption for mobility sector

In view of these forecasts and the rapid development away from internal combustion vehicles toward electric cars, it is clear that investments in the development and production of internal combustion vehicles and e-fuels are a bad investment and the wrong strategy, both in terms of climate technology and business management.

The study X-change: Cars, The end of the ICE age with many more details can be found here.

This article was also published in German.

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