July 09, 2020

How is COVID-19 Affecting Vehicle Fleet Outlooks?

Stratas Advisors

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As the world is grappling with the health and economic effects of the novel coronavirus (COVID-19), vehicle fleets are feeling the lasting effects. From decreased trust in public transportation to loss of economic output to varying approaches to electrification incentives going forward, each country’s situation has changed since the virus swept across the global. In this roundup brief, Stratas Advisors seeks to illuminate some of the changes in the intermediate term, through 2030. Virtually every country in the world is expected to show economic contraction as a result of the virus and the associated economic shutdowns in 2020; however, there is greater volatility around the world expected in terms of how quickly and in what shape economic output will return to pre-COVID-19 levels.

In countries, or areas of countries, where there are high levels of public transportation usage historically, Stratas Advisors expects that there will be some increased vehicle utilization as citizens return to normal patterns of life – going to work, shopping, socializing – but want to avoid the crowds of a subway car or bus. In such instances, there is an expected increase above previous forecasts with a reversion to the previous levels over time, as the global health situation becomes more predictable.

Germany's overall fleet is expected to fall behind originally forecast totals but only by 217.3 thousand vehicles in 2030, losing ground steadily throughout the decade. Gasoline is expected to lag dramatically below prior expectations across the decade, each year falling further below original expectations. By 2030, there are expected to be more than 3.5 million fewer gasoline LDVs on the road in Germany than expected before COVID-19. When accounting for shifts due to COVID-19, diesel vehicles are expected to outperform previous forecasts as diesel becomes more economic and compliant in the search for increasing fuel economy. EVs will outperform pre-COVID-19 expectations by over 550 thousand units, guided by increased investment in electrified infrastructure and public purchase and use incentives.

Source: Stratas Advisors

France's overall LDV fleet is expected to be more buoyant in the coming years than originally thought. This is due to a probable switching process away from public transportation to personal vehicles in a post-coronavirus world, in addition to existing vehicles remaining in the fleet longer. Over the decade, the holdover vehicles will be scrapped out of the fleet, and the overall LDV fleet will begin reversion back to pre-COVID-19 levels, though the fleet will remain elevated through 2030. Gasoline vehicles are expected to slip below previous expectations, and diesel powertrains will become increasingly attractive due to fuel prices and efficiency. EVs will outpace previous forecasts on the back of possible renewed incentives and the opportunity for discounts among those who can afford it in a meddling economic period.

Source: Stratas Advisors

In South Korea, the vehicle fleet is expected to fall below pre-COVID-19 outlooks through 2027. In 2027, COVID-19 is accountable for 716.0 thousand fewer vehicles in the fleet. The largest lagging powertrain is expected from gasoline, with 389.3 thousand fewer units in 2017 before beginning to revert to the pre-COVID-19 base case. Diesel vehicles will return to the base case in a more rapid timeframe. Electric vehicles (EVs) are expected to lag by 7.3 thousand units in 2030.

Source: Stratas Advisors

The overall fleet in the United States is expected to swell 12.3 million units above originally forecast levels through the mid-2020s before declining toward previously expected levels in the 2030s. This is due in part to vehicles remaining in the fleet longer as consumers elect to not spend in an economically rough time, as well as some transitioning to personal vehicle use over public transportation in urbanized cities with good public transportation infrastructure. Gasoline vehicles are expected to make up the bulk of the upward revision for the next few years before returning toward originally forecast fleet levels. Post-COVID-19 diesel vehicles are expected to outperform original forecasts as greater numbers of diesel trucks fill the streets and are expected to fill fleet volumes as gasoline tapers back to pre-COVID-19 forecast levels in the early 2030s. EVs will lag behind pre-COVID-19 expectations as initial manufacturer incentives dissolve into lower levels of support as more EVs are sold, in addition to consumers opting for cheaper gasoline and diesel vehicles amid the economic recovery fears within the population.

Source: Stratas Advisors


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