Despite the electric vehicle market gaining momentum in many countries, people are also showing signs of a shift towards larger and less fuel-efficient cars, known as Sports Utility Vehicles (SUVs), which could challenge emissions reductions in the passenger car market.
More than 350 electric vehicles will be launched by 2025 by carmakers, mostly small-to-medium variants. This suggests a tenfold increase in annual electric car sales, to 20 million vehicles a year by 2030, from 2 million in 2018. This means nearly 7% of the car fleet will be electric by 2030.
But a more silent change could challenge the electric revolution. The share of SUVs has grown sixfold over the last decade, with over 200 million SUVs around the world now, up from 35 million in 2010. Around 40% of annual car sales today are SUVs, compared with less than 20% a decade ago.
Figures differ in different parts of the world. In the US, around half of all cars are SUVs — whereas in Europe, the figure is closer to 33%. In China, SUVs are considered symbols of wealth and status, and SUVs are in high demand. In India, sales are lower, but consumer preferences are changing. Similarly, in Africa, the rapid pace of economic development means that demand for premium vehicles is strong.
More SUVs on the road mean more greenhouse gas emissions. This type of car was the second-largest contributor to the increase in global CO2 emissions since 2010 after the power sector. Their emissions rose by nearly 0.55 Gt CO2 during the last decade to roughly 0.7 Gt CO2.
The reason behind their higher emissions is mainly the fact that they consume about a quarter more energy than medium-size cars. As a result, global fuel economy worsened caused in part by the rising SUV demand, despite efficiency improvements in smaller cars saved over 2 million barrels a day.
Looking at the numbers, SUVs were responsible for all of the 3.3 million barrels a day growth in oil demand from passenger cars between 2010 and 2018, while oil use from other types of cars (excluding SUVs) declined slightly.
If consumers’ appetite for SUVs continues to grow at a similar pace seen in the last decade, SUVs would add nearly 2 million barrels a day in global oil demand by 2040, offsetting the savings from nearly 150 million electric cars, according to recent estimates.
Reducing emissions would then mean a push not only for electric vehicles but also for smaller cars. Bigger ones, such as SUVs, are harder to electrify and growth in their sales would affect the outlook for passenger cars and the evolution of future oil demand and carbon emissions.