More Miles. Less Gas.
February 27, 2017
And EVs are only getting started.
Americans drove more than 3.2 trillion miles in 2016, an all-time high after years of negative or low growth during and after the Global Financial Crisis. Look inside those trillions of miles – and at vehicles sold and the capital financing them – and US road transport is even more complex than we concluded in our analysis in last week’s Sparklines.
Last November, US gasoline consumption hit its all-time high on a trailing 12-month basis. The last time it did so was in September 2007. Vehicle miles travelled hit their pre-crisis peak just a few months later that same year. Rebase both gasoline consumption and miles travelled to September 2007, and we see something intriguing: Vehicle miles travelled are up 6% in a decade…and fuel consumption is exactly the same as it was almost a decade ago.
After years of recovering consumption, gasoline demand growth is now flattening out; by one measure, as Gadfly’s Liam Denning noted earlier this week, it’s already in recession.
The spread between miles travelled and gasoline consumption, which was narrow during the early years of the financial crisis, keeps widening despite much lower pump prices since late 2014. Even if the US car and light truck are older now than they have ever been, some efficiency gains are baked into the fleet.