Lang Aftermarket iReport: Cancel the obituary of the Internal Combustion vehicle

“Electric Vehicles (EV) are being promoted as a superior automotive technology that will eliminate Internal Combustion Engine (ICE) cars and light trucks. However, despite all the hype, the ICE light vehicle population on U.S. roads will climb by 36 million during 2020 through 2030.

“The growth of ICE vehicles through 2030 and the massive numbers of ICE cars and light trucks that will remain in operation for many years thereafter are good news for the continuation of a robust light vehicle aftermarket.”

— Jim Lang, publisher, Lang Aftermarket iReport

The Electric Challenge to Internal Combustion Engines

There are two types of Electric Vehicles: Battery Electric Vehicles (BEV), all-electric vehicles powered solely by batteries, and Plug-In Electric Hybrid Vehicles (PEHV), hybrids with large plug-in batteries.

According to many predictions, Electric Vehicles will rapidly replace Internal Combustion Engine cars and light trucks in the minds of new vehicle buyers.

Although there is often more hype than hard data behind these predictions, automakers are scrambling to introduce a flood of EVs over the next five to ten years.

EV Sales to 2025

So far, EVs have not cracked the mainstream new vehicle market. Last year, EV sales in the U.S. actually declined, with annual volume slipping to 328,000, less than 2% of 2019 new light vehicle volume.

Electric Vehicles sales will accelerate between 2020 and 2025, as their annual volume climbs by more than four-fold. Lang Marketing projects that EVs will account for nearly 8% of the 2025 light vehicle market in the U.S.

Three Key Factors Affecting EV Sales During 2026 to 2030

Three factors will greatly influence EV sales growth from 2026 to 2030: battery technology, regulations, and the battery-charging infrastructure.

Advanced battery technology and production will be critical to reduce the cost of automotive batteries, extend EV operating range, reduce battery charging times, and expand the sizes and weights of vehicles that batteries can effectively power.

Regulations are the second factor that will significantly impact EV sales during 2026 through 2030. The corporate average fuel efficiency (CAFE) regulations in effect after 2025 will influence the types and volume of EVs produced by automakers, which will be a major determinant of the power source mix of new light vehicle sales.

A national infrastructure enabling the quick and convenient charging of auto batteries will be necessary to support a large population of EVs. However, the plans and means to develop this infrastructure have so far been elusive.

EV Sales Predictions: 2026 to 2030

Lang Marketing has three predictions for the three key factors determining EV sales growth: game-changing battery technology will be slow to develop and implement during this decade, market forces (rather than regulations) will be the primary drivers of consumer vehicle buying during 2026 through 2030, and an adequate battery-changing infrastructure in the U.S. will be slow to develop.

On that basis, Lang Marketing projects that EVs will account for less than 17% of new car and light truck volume during 2030, with EV sales totaling just under 3 million light vehicles.

More ICE Vehicles on U.S. Roads

Despite the growth of EV sales, the population of Internal Combustion Engine cars and light trucks on U.S. roads will increase significantly during 2020 through 2030. Lang Marketing estimates that the ICE light vehicle population will climb by 24 million during 2020 through 2025.

Although EV sales will increase sharply during 2026 to 2030, more than doubling their share of the new vehicle market, the number of ICE vehicles on U.S. roads will increase by at least 12 million during this six-year span. This will push the population growth of ICE vehicles to more than 36 million during 2020 through 2030, up from approximately 282 million light vehicles in operation last year.

Regular Hybrids and Mild Hybrids (both of which have smaller batteries that are not plug-in charged) are included as ICE vehicles in this analysis since most mileage of non-plug-in Hybrids is powered solely by their Internal Combustion Engines.

Regular Hybrids will diminish in sales significance in the next few years as automakers replace them with EV models. Mild Hybrids (unlike Regular Hybrids) cannot be driven solely on battery power, which is used only to supplement their internal combustion engine and to operate some accessories.

Peak ICE Year

The year of Peak ICE (when Internal Combustion Engine vehicles reach their maximum number on U.S. roads) will be determined by two factors: the annual new vehicle sales mix of ICE and EV vehicles, and annual ICE vehicles scrappage.

Lang Marketing projects that Peak ICE in the U.S. will not be reached until 2032 or 2033. In fact, Peak ICE, under certain circumstances, could occur as late as 2035.

Aftermarket Implications

The growth of ICE vehicles on U.S. roads through 2030 and the massive number of Internal Combustion Engine cars and light trucks in the U.S. in operation beyond 2030 will generate many additional years of robust aftermarket volume.

Six Major Takeaways

• There are two types of Electric Vehicles (EV): Battery Electric Vehicles (BEV), which are all-electric vehicles powered solely by batteries and Plug-In Electric Hybrid Vehicles (PEHV), which have gasoline engines along with large batteries that must be plugged in to recharge.
• EV sales declined in the U.S. last year, contrary to the predictions of many experts, as the EV share of the 2019 light vehicle fell below 2%.
• Lang Marketing estimates that EV sales will increase more than four-fold during 2020 to 2025, climbing from less than 2% to nearly 8% of car and light truck volume.
• Despite growing EV sales, the population of ICE cars and light trucks in the U.S. will expand by an estimated 36 million during 2020 to 2030, up from approximately 282 million light vehicles in operation last year.
• The year of peak ICE (the year when Internal Combustion Engine vehicles reach their maximum number on U.S. roads) will not be reached until after 2030, with 2032 or 2033 the most likely Peak ICE year. Under certain circumstances, Peak ICE in the U.S. could occur as late as 2035.
• The growing number of Internal Combustion Vehicles on U.S. roads through 2030 and the large numbers of ICE cars and light trucks that will remain in operation for many years thereafter will generate a robust light vehicle aftermarket for decades.

Copyright 2020 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.