Gas-Powered Cars Aren't Going Away For Decades

With all the hype about electric vehicles, it’s easy to assume that gas-powered cars will quickly become dinosaurs...a relic of the past that we look at in museums. While gas-powered vehicles will eventually become obsolete, it's likely that this won't occur for several decades. The reason? For specific use cases, you just can't beat the convenience of petroleum.

Three Things Every Auto Industry Prognosticator Needs To Know

There are three things anyone thinking about the future of the auto industry needs to consider:

1. There are 245 million gasoline powered vehicles in operation today (give or take a few million). Most of these vehicles will not be scrapped for several years. According to this article, there are 257 million registered vehicles in the US, almost all of which are powered by gasoline (only about 5% of US vehicles are diesel or 'other'). 60 million of these vehicles (or so) are more than 16 years old.

Even if every new car sold today was a plug-in electric, there will still be tens of millions of gas powered cars on the road 20 years from now.

2. 50+ million vehicles on the road today are for more than just commuting. Statistics vary, but there are about 40 million pickup trucks on the road today (see below). There are also about 30 million commercial trucks on the road, only there is likely some double-counting of pickups and commercial vehicles (not all pickups are commercial, but a lot of them are).

Conservatively, that makes for 50 million vehicles that are for more than just going from point A to point B.

Towing rv
It's easy to forget that millions of people use their vehicles for towing, hauling, construction, etc. These vehicles will be powered by gasoline (or diesel) for a long time to come.

3. Consumers are buying more pickup trucks and SUVs than cars every year. The auto industry is transitioning from a "car" industry to a "truck" industry, with SUV and truck sales growing year over year while sedan and coupe sales shrink. Truck and SUV sales were up 7% in 2016, while cars were down 8%. In 2016, trucks and SUVs outsold cars by a 1.5 to 1 ratio (for every 3 trucks and SUVs sold in 2016, there were about two cars sold). This is a continuation of a long-term trend.

Notably, there aren't many electric SUVs available for purchase, and no electric pickup trucks on the market (VIA Motors isn't yet offering their electric trucks to the general public). This is a big obstacle to EV sales, as the consumer is less and less interested in cars of any kind.

Speaking of EV Sales...

If we look at all the new cars sold in the US 2015, 2016, or 2017 (thru July):

  • 2015 - 17.4 million cars sold in the US, 115,000 of which were plug-in electric
  • 2016 - 17.55 million cars sold in the US, 159,000 of which were plug-in electric
  • 2017 - Thru July, sales are on pace to reach 16.7 million cars sold in the US, with plug-in electric sales up about 35% year-over-year, projecting 215,000 sales

While 215,000 cars is nothing to sneeze at, it's a tiny percentage of the market - just 1.3%. One can argue about why EV sales are such a small percentage of the total, but suffice to say that consumers have yet to embrace EVs. If someone buys a new car, there's about a 99% chance that car will be powered by gasoline or diesel fuel.

Gas to elec

While EV sales are going to grow, current sales suggest we're very much near the beginning of the transition away from gasoline. There are lots of argument about how quickly this transition will occur, with estimates ranging from EVs being 10% of the new car marketing in 2040, to 50%.

But whatever estimate you accept - Bloomberg, Greentech Media, the US EIA - none of these entities are projecting 100% EV sales in the next 20 years.

Why Gasoline Is So Hard To Replace

Gasoline has four key benefits that make it difficult to replace with battery electric power:

1. It's energy dense. One kilogram of gasoline contains at least 40 times as much energy as a kilogram of lithium ion battery pack, and this assumes a battery pack that has a higher energy density than any available data suggests.

Now, let's discount this multiple a bit, as electric cars convert energy much more efficiently than gas powered vehicles...about 90% of the power you store in a battery pack can be converted to motion. Only about 30% of the energy in a gallon of gas can be converted. So, we'll knock the ratio down from 40:1 to just 13:1.

Imagine you want to tow your boat to the lake. Assume that you'll burn an entire tank of gasoline hauling your boat to and from and the lake. If you have a 26 gallon fuel tank (pretty typical for trucks), you'll need about 160 lbs of gas (or 72 kilograms) to make the trip. A battery pack with equivalent range will weigh about 2,000 lbs.

Tesla event
All the hype about electric cars might have you thinking that gasoline cars are going away. While that may happen eventually, we're likely 40 or 50 years away from that day...and there's a chance that there will always be vehicles that use gasoline.

A 2,000 lb battery pack isn't ideal. Because it's so heavy, the vehicle has to be designed around it. Because a battery pack this heavy also takes up quite a bit of space, it can be difficult to integrate into existing vehicle can't just add 2,000lbs of battery to an existing design (at least not easily). When you design an all-new vehicle to accommodate this big battery, you'll need to make sure you upgrade the frame, the brakes, the suspension, etc. too. Oh, and 2,000 lbs of battery pack isn't cheap either (more on that below).

Or, you can just bolt a 26 gallon fuel tank to an existing vehicle design.

2. Gasoline powertrains are inexpensive (relatively speaking). Gas engines cost somewhere between $2,000 and $5,000 to manufacture. We know this because you can buy brand new replacement engines for $2,000 to $5,000, with a handful of engines costing more. Transmissions are a little less than this amount - somewhere between $1,500 and $3,000. That puts the cost of a total gasoline vehicle powertrains between $3,500 and $8,000, including profit.

While it's hard to know for sure how much lithium ion battery packs cost, the estimates range between $145/kWh and $227/kWh. This means that a vehicle with a relatively small battery pack - say, a 50kWh battery pack, like the one in the new Tesla Model 3 - will cost somewhere between $7,000 and $11,000.

What's more, this is the cost for the battery only. Electric cars also need an electric motor (or two), and high torque electric motors that can spin at high RPMs are not exactly cheap.

3. Gas is easy to find. If you're one of the millions of Americans that tows a boat, an RV, a trailer with ATVs, a trailer with dirt bikes, a trailer with snowmobiles, etc., you are probably counting on easy access to fuel. If you intend to go off-road or overlanding, you're probably counting on the ability to haul extra fuel with you in gas cans or a supplemental fuel tank. etc.

Rural gas
If you're wandering around in the rural areas of the USA, your odds of finding gasoline are pretty good. Your odds of finding a quick charger for your EV? Not so good (yet).

There are 168,000 gas stations spread all over the United States, and only about 16,000 electric vehicle charging stations peppered around the country. Gas stations can provide fuel to multiple vehicles at once, and in the course of an hour can fill up several dozen cars. Chargers can't operate as quickly, so we're going to need many, many more chargers than gas stations to serve the same number of vehicles.

To say nothing of the fact that consumers who like to travel, tow, go off-road, etc. will want to be able to count on finding a charger wherever they go.

4. Gasoline can be paired with electric vehicle technology. Plug-in hybrid electric vehicles (PHEVs) offer all the benefits of a pure electric car, but they also offer the benefits of gasoline. A PHEV owner isn't looking for a charging station if they decide to go camping in the wilderness. A PHEV owner doesn't have to worry about running out of charge on a cross-country trip.

Even if pure battery electric vehicles become lighter and cheaper, the convenience of gasoline plus electricity will be compelling for a lot of vehicle owners. While it's just one projection, ExxonMobil’s Outlook of Energy program predicts that new hybrid sales will jump from 2 percent today to over 40 percent by 2040.

Prius prime
Toyota's new Prius Prime follows in the footsteps of the Chevy Volt, offering a combination of plug-in power and gasoline in an affordable package.

Summing Up

Gasoline powered vehicles aren't going away for decades. Even if we ignore the fact that there are 250 million gas powered vehicles on the road right now, there are 50 million plus vehicles used for towing, hauling, camping, etc. that can't be replaced by any commercially viable EV (at least not anytime soon).

Additionally, with all the benefits of gasoline power, it's likely that automakers will be producing PHEVs to try and help consumers transition from gasoline cars to pure electric cars. This makes a ton of sense from a consumer's perspective, and so far PHEV sales are solid. So far in 2017, the Prius Prime and Chevy Volt have outsold every plugin vehicle except the Tesla Model S.

While we may be biased, it seems as plain as can be that EVs aren't going to completely replace gasoline powered vehicles anytime soon. There are still a lot of big obstacles to 100% adoption, and they will likely take several decades to clear. Forty or fifty years from now, odds are very good you'll still be able to buy gasoline for your truck, Jeep, etc.