Spurred by rising incomes, increases in employment rates, and population growth, total annual sales of new light-duty vehicles (LDVs) in the United States in the Reference Case increase after the 2020 economic downturn before leveling off after 2025. EIA projects fewer sales of new LDVs in every year in the projection period than in 2019, although the market continues to grow for alternative technologies, particularly battery electric vehicles (BEVs). Gasoline and flex-fuel vehicles—which may use gasoline blended with up to 85% ethanol—accounted for 95% of the new LDV market in 2020, but their share of new-vehicle sales decreases to 79% in 2050. Both BEVs and electric hybrids increase their market shares of annual new LDV sales.
Because most light-duty vehicles have internal combustion engines, motor gasoline remains the major transportation fuel through 2050 as personal travel returns to pre-pandemic per-driver levels in the longer term. After pandemic response-related demand losses in 2020, consumption of motor gasoline in transportation peaks in about 2022 as fuel economy improvements partially offset travel growth. Motor gasoline use slowly trends lower thereafter as a result of further fuel economy improvements in new LDVs relative to travel growth, as well as increasing sales of energy-efficient alternative-fueled vehicles that further displace motor gasoline use.
Sales of new light-duty vehicles remain lower than the 2019 level for the entire projection period, although the market continues to grow for alternative technologies, particularly battery electric vehicles.