Reinventing the Wheel covers the world’s largest automotive markets: United States, Europe and China. India, a large and fast-growing market, is also included. These markets accounted for 71% of global car sales in 2015 and 57% of car gasoline consumption and will set global trends. Our projections go out to 2040.
A sound, fact-based understanding of what is unfolding today is an essential step toward assessing how forces of change will interact and shape the automotive industry to 2040. Our aim was to develop a knowledge universe. Key driving forces that we investigated, unpacked and assessed included the following:
- Automotive policies and regulations that have an impact on Light-Duty Vehicle (LDV) technology and energy choices
- Car and ride sharing: Impact on ownership and energy consumption
- The new dimension: Autonomous LDVs-driverless cars are a truly new dimension to the future of transport
- Values and behaviors: Millennials in the United States and China
- Industry structure
- Competitive positions of energy sources to power LDVs: Gasoline, diesel, natural gas, electricity/ batteries, biofuels and hydrogen
- Chemical industry’s product interface with the automotive industry
IHS Markit, with the input of over 30 stakeholder companies, developed two scenarios that present distinctive views of the future of the automotive industry and the impact on energy to 2040, each driven by a determinative logic. Two IHS Markit scenarios, Rivalry and Autonomy, provided the starting point and macro framework. Rivalry is an evolutionary view of the future. Autonomy illustrates a disruptive pace of change.
Each content-rich scenario outlook includes a narrative describing the developments and surprises of a logically imagined future for cars and energy. The use of a scenario framework enhances decision making and tests choices in a complex, dynamic marketplace by illustrating conditions that may lead to success or failure for a company’s choices.
The narrative and associated data projections to 2040 address the following in the geographic areas that Reinventing the Wheel covers:
- China, Europe, India and the United States
- Policy and regulatory standards
- How self-driving vehicles, electric cars and ride sharing unfold and impact the automotive industrial ecosystem
- Car sales by Total Industry Volume (TIV) and by powertrain (gasoline, diesel, natural gas, mild and full hybrids, plug-in hybrid electric vehicles, pure battery electric vehicles, and hydrogen fuel cell vehicles)
- Vehicle energy consumption by source (gasoline, diesel, natural gas, hydrogen, electricity and biofuels)
- On-road fleet (car parc) by powertrain
- Total vehicle miles traveled and average vehicle miles traveled per LDV
- Average LDV fuel economy (new and on road) for cars and light commercial vehicles
- Oil prices
Reinventing the Wheel identifies and addresses the big questions facing companies in each industry. The choices that companies will need to make, particularly regarding growth opportunities and divestment, was at the heart of the discussions. These Industry Strategies—one each for automotive, energy and chemicals—provide a framework for decision making amid great uncertainty about the future.
- Automotive: Identifies and assesses key choices related to new entrants and new technologies and the effect on the automotive value chain.
- Oil and Gas: Discusses the repercussions stemming from the changes in the automotive industrial ecoysystem, particularly with regard to what source of energy will be used to power cars.
Electric Power: How the proliferation of electric power in vehicles changes the old paradigms of stationary predictable points of consumption and metering.
- Chemical: Discusses the new feedstock picture and the changing demand pattern in one of chemical's largest user demand segments.