Oil demand: the rise of autonomous vehicles?

We are raising our medium-term oil demand forecasts by 2.5-3.0 Mbpd to reflect the growing reality of autonomous vehicles. AVs eventually improve fuel economy in cars and trucks by 15-35% and displace 1.2 Mbpd of air travel. But their convenience also increases total travel demand. This 20-page note outlines the opportunity and leading companies.

Patent activity into autonomous vehicles is accelerating at the second-fastest rate of any technology in the future of energy. We review fifty patents into AVs and conclude Level 5 autonomy remains science fiction, but Level 4 applications are credible within 2-5 years (pages 2-5).

Impacts on trucking fuel economy are explored on pages 6-8, including technical papers into platooning and other efficiency gains.

Impacts on passenger vehicles are presented on pages 9-10. Efficiency gains are offset by greater demand for increasingly convenient mobility.

Long distance journeys above 100-miles comprise 40% of all travel miles today. 50% of this market is currently serviced by plane, but we expect switching from aviation to autonomous vehicles (pages 11-14).

Impacts on total oil demand are bridged on pages 15-17, running through our assumptions, category-by-category. Our 2030-40 oil demand forecasts are raised by 2.5 – 3.0 Mbpd.

Five broad implications for different industries and sub-industries are spelled out on page 18. We are increasingly constructive on fuel retail businesses, particularly those selling carbon offsets to decarbonize long-distance car trips.

Leading companies in autonomous vehicles are diligenced in our full screen. Ten of the most exciting companies are profiled on pages 19-20.

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