Lang Aftermarket iReport: ‘Internal Combustion’ vehicles will dominate past 2035

“The 2020 Virus will have a dramatic impact on the volume and mix of new vehicle sales in the U.S. for a number of years. Both the sale of Electric Vehicles and rollout of Mobility as a Service (MaaS) will be altered significantly in the U.S.

“These developments and their consequences will extend the dominance of Internal Combustion (ICE) vehicles on U.S. roads well past the time previously estimated by many experts.”

— Jim Lang, publisher, Lang Aftermarket iReport

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Aftermarket Impact of the Virus to 2023 and Beyond: In-Depth Report coming in June
“This iReport, along with more special iReports focusing on the 2020 Virus through May, will provide a preview of the comprehensive and detailed report to be published in June by Lang Marketing, with six monthly updates of key developments to be issued from July through December.”

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Two Forces Predicted to Doom ICE Vehicles

The rapid rise of Electric Vehicle (EV) sales and the growth of Mobility as a Service (MaaS) have been touted as indomitable forces that together will eradicate the sales of ICE vehicles and their presence on U.S. roads.

These predictions foresee a surge in Electric Vehicle sales that will begin to significantly reduce the number of ICE vehicles in operation by 2026. The growth of Mobility as a Service (MaaS) is seen as reducing the personal ownership of vehicles and converting most new vehicle sales to EVs over the next 10 to 15 years.

Three Factors Will Reduce EV Sales

Three factors will deal crippling blows to EV sales in the U.S. for a number of years.

First, the attraction of EVs to consumers will plummet under the weight of their high price tags and the economic gloom caused by the 2020 Virus.

Second, the rock-bottom gas prices at the pump, which are likely to continue for the foreseeable future, have eliminated a key financial reason to purchase an EV.

Third, it is unlikely that government incentives will be provided for the purchase of Electric Vehicles, given the unprecedented financial demands faced by the government. These incentives have been critical to boosting EV sales during the past few years.

Over One Million EV Sales Will Evaporate

Lower total vehicle sales and a number of disincentives to purchase EVs mean that the projected sales of nearly 2 million Electric vehicles during 2020 to 2023 (which is part of many experts’ scenarios for the elimination of ICE vehicles on U.S. roads) will be slashed by more than half.

As a result, the rise of EV sales and their growing share of vehicles in operation projected for 2025 through 2030 will be slow to develop in the U.S.

MaaS Threatened by Covid-19

Mobility as a Service (MaaS) has been touted as the future of transportation in the U.S. Under this concept, U.S. consumers will not own vehicles, but rather use them, on-demand, from “transportation utilities.” The vehicles, virtually all electrically powered, would be shared by consumers.

The 2020 Virus, and the urgency it has abruptly placed on social distancing, puts into question the viability of sharing vehicles on a quick-exchange basis, something that would make it nearly impossible to rapidly sanitize vehicles from one user to the next.

Autonomous Vehicle Success Depends on MaaS

Without the mass sharing of autonomous vehicles, the reduction in traffic congestion (promised by MaaS) cannot be achieved if individuals own autonomous vehicles.

If individually owned autonomous vehicles are shared among family members, traffic congestion will skyrocket as empty vehicles are sent on countless “zombie” trips to various points where different family members need them.

Peak ICE Year Pushed Beyond 2035

The year of peak ICE in the U.S. (when ICE vehicles reach their maximum number) will be determined by two factors: the annual sales of ICE and EV vehicles, and ICE vehicle scrappage.

The 2020 Virus will reduce Electric Vehicle sales for a number of years and flatten their predicted sales surge in 2028 and beyond. At the same time, low overall new vehicle sales will reduce the scrappage of ICE vehicles.

Early this year Lang Marketing projected that 36 million more ICE vehicles will be on U.S. roads by 2030 and that peak ICE will not be reached before 2032.

The unprecedented and abrupt impact of the 2020 Virus “Black Swan” means that peak ICE will not occur before 2035 and could be delayed years beyond that. By 2033, that will add over 40 million more ICE vehicles than there are today on U.S. roads.

Aftermarket Impact

ICE cars and light trucks generate greater aftermarket parts and repair volume annually per vehicle than do Electric Vehicles.

ICE vehicle growth on U.S. roads past 2035, coupled with their dominant VIO share beyond 2040, will generate robust aftermarket volume in the U.S. for the next 20 years.

Six Major Takeaways

• The rapid rise of Electric Vehicles along with the growth of Mobility as a Service (MaaS) have been predicted to doom the sales of ICE vehicles and their presence on U.S. roads.
• The high-price tag of Electric Vehicles, rock-bottom gas prices, and the lack of government incentives for EV purchase will reduce Electric Vehicle sales significantly in the U.S. for a number of years.
• New vehicle sales in the U.S. will plunge this year and EV sales will be hit hardest. The projected sale of EVs will be slashed by over 1 million vehicles during 2020 through 2023, flattening the curve of EV VIO growth through the end of the decade.
• Mobility as a Service (MaaS) is threatened by Virus fears that will remain in the collective consciousness of the U.S. public for many years (if not decades). A successful autonomous vehicle rollout depends on MaaS.
• The year of ICE (when Internal Combustion Engine vehicles reach their maximum number) will not occur until after 2035.
• The growth of ICE vehicles in the U.S. coupled with their dominant VIO share beyond 2035 will boost aftermarket product volume in the U.S. for the next 20 years.

Copyright 2020 by Lang Marketing Resources, Inc.

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