EUR 850.00 For Business Accounts Only

Morningstar | RDS.B Updated Forecasts and Estimates from 25 Jan 2019

Amara's law states that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. We'd posit that is the case today with ride-hailing, electric vehicles, and autonomous vehicles, and their impact on private vehicle ownership and fuel consumption. Our analysis suggests these technologies will be beneficial for mobility, but the net impact on U.S. gasoline demand will be negative. Specifically, we think the introduction of AVs will materially reduce ride-hailing costs, potentially resulting in 30% of private vehicle owners switching to ride-hailing full time. This conversion results in a smaller vehicle fleet, though auto sales should remain stable as higher utilization of ride-hailing vehicles drives greater scrappage. Vehicle miles traveled is likely to increase as consumers expand their use of ride-hailing/-sharing and forgo car ownership in greater numbers, but the impact on fuel consumption is easily offset by the rapid uptake of fully electric and hybrid vehicles over the next few decades. On balance, we estimate that gasoline demand could fall 70% from 2017 by 2050, well below the U.S. Energy Information Administration's forecast of a 35% decline. But over the next decade or so, the opposite holds true. The more rapid adoption of ride-hailing, combined with the relaxation of fuel-efficiency standards, will keep our gasoline demand forecast above consensus through 2030. Therefore, we still consider independent refiners to be viable investments today, even though our conclusions portend difficulties for this industry over the long run.

For more see our January Energy Observer, "EVs, AVs, and Ride-Hailing: Gauging the Impact on Long-Term U.S. Gasoline Demand and Vehicle Ownership."