SUVs already account for more than a quarter of the increase in global oil demand per year and account for 20% of the increase in energy-related carbon dioxide emissions.
According to the latest statistics from the International Energy Agency (IEA), global consumers have become increasingly fond of larger models and sporty SUVs in recent years. SUVs already account for more than a quarter of the increase in global oil demand per year and account for 20% of the increase in energy-related carbon dioxide emissions. According to data from the International Energy Agency report, in 2023, sports utility vehicles (SUVs) accounted for a record 48% of global car sales, making them “one of the biggest forces” in global oil demand, accounting for far higher than 41.4% in 2020 and 20.58% in 2013. Compared to small cars, SUVs are heavier and less fuel-efficient, but they also have greater demand for critical minerals.
The IEA stated in the data report: “If SUVs were one country, then they would be the fifth largest carbon dioxide emitter in the world, after China, the United States, India, and Russia.” “Between 2022 and 2023, global oil consumption directly related to SUVs increased by more than 600,000 barrels per day, accounting for more than a quarter of the overall annual increase in global oil demand.”
In addition to ensuring continued strong demand for fossil fuels such as petroleum, IEA data also showed that more than 360 million SUVs on global roads last year also caused combustion related carbon dioxide emissions to reach 1 billion tons, an increase of about 100 million tons over 2022.
“Last year, large heavy passenger cars, mainly SUVs, accounted for more than 20% of the increase in energy-related global carbon dioxide emissions,” the report added.
As far as global carbon emissions are concerned, the good news is that the global consumer's preference for SUVs is also fully reflected in the increase in sales of electric SUVs.
Although electric SUVs account for less than 5% of the cars that have successfully hit the road, their share in this electrified market segment continues to grow. According to some data, globally, about 45% of electric vehicle types are SUVs, and in developed economies, this percentage has jumped to 55%. Larger vehicles also present challenges, as they are equipped with larger capacity and more powerful batteries, and the use of critical minerals has increased dramatically.
As a result, some countries raised parking fees for large energy-intensive vehicles as part of policy initiatives to reduce pollution emissions, protect the climate, and free up more walking space.
Earlier this year, parking for large SUVs in Paris, France was three times the parking fee for small cars. Relevant departments in other cities such as Lyon in France and Tübingen in Germany have also begun to include vehicle weight in the formulation of parking fee standards.
Globally, demand for SUVs seems to have been very strong in recent years. Among them, in North America, an established giant in the US automobile industry$General Motors (GM.US)$According to the first quarter earnings report released, after experiencing strong first-quarter results, the company's management expects profit for the whole year to be more optimistic, highlighting the resilience of demand for trucks and SUVs, which are dominated by fuel and oil-electric hybrid models, under the heavy pressure of the Federal Reserve's high interest rates.
On May 16, Cui Dongshu, Secretary General of the China Passenger Federation, published an article stating that in April 2024, SUV retail sales increased by 1%, which is 7 points superior to the industry. Looking at the structure, low-end consumption is sluggish, and high-end consumption is strong; the B-class in the sedan market performs better; while SUVs are more high-end, and B-class and C-class SUVs are stronger than last year.
Wall Street giant Goldman Sachs recently raised its forecast for global oil demand in 2030, and expects fuel and oil consumption driven by hybrid vehicles to peak in 2034 due to a possible slowdown in the popularity of electric vehicles, which will allow global refineries to maintain a higher-than-average operating speed until the end of this decade. The bank's research department raised its 2030 crude oil demand forecast from 106 million b/d to 108.5 million b/d. Analysts led by Nikhil Bhandari expect demand to peak at 110 million b/d in 2034, then remain stable for a long time until 2040.
Goldman Sachs expects emerging markets in Asia, particularly China and India, to drive much of the increase in global oil demand by 2040. The global refining upward cycle is likely to last longer than expected, and the refining utilization rate from 2024 to 2027 will remain above the historical average.