Demand for gasoline has peaked, according to the global forecast

The forecast comes when carmakers have recently pivoted to increase their electric vehicle fleets, after years of skepticism in the industry about whether vehicle buyers would ever accept fully electric models. General Motors Co. said it would stop selling gas-powered vehicles by 2035. Volvo Cars of Sweden has said it would be fully electric by 2030.

The world will have 60 million electric vehicles on its roads by 2026, the IEA said, above the 7.2 million in 2019. The agency closely monitors VE trends as an important signal for the demand for gasoline and crude oil.

The shift to electric vehicles has been driven by government regulation, strong incentives in developed countries, and wider acceptance of technology by consumers, in part thanks to popular models such as those sold by Tesla. Inc.

Electric vehicles continue to account for a small proportion of the world’s global fleet and automakers say they expect to see growing demand for gas-fired internal combustion engines, especially in developing countries, in the coming years.

The forecast comes at a time when the pandemic has increased global fuel consumption, raising questions about whether it will change the world’s energy mix more generally in the coming years. Energy observers have been debating for years about the timing of the so-called peak oil, a time when demand for crude oil will begin to decline. Amid the crushing pandemic of demand that began last year, some forecasts, including those of the Organization of the Petroleum Exporting Countries, have said that day may have already appeared in the developed world.

The IEA said on Wednesday that it is recovering global demand for crude oil, which reaches 104 million barrels per day in 2026, 4% more than 2019 levels, thanks to the developing world. Economic powers such as China, India and other Asian countries will account for 90 percent of the net increase in oil demand over the next five years, the agency said.

But for the first time, the agency said it no longer anticipates a complete rebound in demand for gasoline, the product that for years sustained global crude thirst.

“We don’t believe gasoline consumption will return to 2019 levels,” said Fatih Birol, IEA executive director. Meanwhile, global demand for aircraft fuel will not recover pre-pandemic levels until 2024, the agency said.

Amid widespread government restrictions imposed by coronavirus on travel, the IEA said daily gasoline demand fell to a record 2.9 million barrels in 2020, down more than 10% from 26, 6 million barrels a day burned in 2019.

Picking up electric vehicles isn’t the only thing driving demand down. The IEA and the U.S. Department of Energy, in a report last month, cited improving the fuel efficiency of gas-consuming cars. The U.S. agency said it expects U.S. gasoline consumption in the transportation sector to peak in 2022.

The IEA said global demand for gasoline will begin to return as economies reopen. But the shift to electric vehicles in richer countries is now accelerating at such a high rate that demand for deficits will exceed the expected growth of developing countries such as Indonesia, India and China.

Plug-in electric vehicles worldwide accounted for approximately 4.2% of new car sales last year, and sales rose 43% to 3.24 million vehicles, according to ev-volumes.com , a research group that tracks sales of electric vehicles. In Europe, where sales of electric vehicles are booming, plug-in electric vehicles accounted for 10.5% of new cars sold in the fourth quarter of 2020.

“Electronic mobility has won the race,” Volkswagen CEO Herbert Diess told reporters this week as he unveiled major new investments in car battery factories and electric charging stations.

Diess said battery-powered electric vehicles would account for 50% of Volkswagen’s new vehicle sales worldwide by 2030. However, he said that in some markets conventional vehicles with internal combustion engines would continue to dominate.

“We will continue to sell ICE in some regions longer than in others,” he said. “Electronic mobility will reach different levels of speed globally depending on local policies and CO2-free energy supply.”

Write to David Hodari to [email protected] and William Boston to [email protected]