Business is brisk at one of London’s top electric-vehicle (EV) charging hubs, owned by BP PLC, in the western suburb of Hammersmith. Spend time there watching how Tesla Inc’s and competitors’ EVs come and go and you might leave convinced that gasoline’s days are numbered in Europe.
However, turn to the right and that impression would vanish like disappearing ink: A conventional fuel station is doing even brisker business selling fossil fuels for conventional vehicles.
Perhaps gasoline does not have a future, but its present is rather healthy. Blame the lopsided world of vehicles and oil in Europe, where old and new trends collide in tense and counterintuitive ways. Consider fuel consumption. In the UK, gasoline demand was the strongest for the January-to-June period this year since 2015, Bloomberg calculations based on government data showed.
In France, demand hit a 20-year high during the summer. In Spain, it has risen to the highest in more than a decade and in eastern European nations like Poland, it is the strongest ever.
How is this trend possible in Europe when EV sales are also surging? And does it reflect a swan song or a shift toward stronger-for-longer fuel consumption? To answer these questions, one must investigate the bowels of the region’s vehicle and oil markets, which have changed beyond recognition since 2015, and how consumers drive those automobiles.
For a time, European gasoline demand was dropping year after year, with oil executives assuming that consumption would fall somewhere between 1 and 2 percent per annum, driven by two factors: more efficient engines and the rise of diesel-powered vehicles, particularly in Germany and France. That trend changed about 10 years ago. First, gasoline use stabilized, and then it started to climb. Based on preliminary data, it looks like EU gasoline consumption hovered this summer at a 10-year high.
The shift, from falling to plateauing to rising, has much to do with one of the biggest business scandals in recent memory. In 2015, Volkswagen AG, the German automaker synonymous with diesel vehicles, admitted that its engines polluted more than the company had ever made public. The scandal, dubbed “dieselgate,” soured European appetites for the cheaper, but more polluting fuel. Gasoline became the choice for many in the continent, boosting demand. At the same time, Europeans were keeping their vehicles far longer than in the past, damping the impact of newer, more fuel-efficient models on overall consumption.
Cost is one reason: New vehicles are pricey and families are more budget conscious. Another was supply, with fewer new models due to chip shortages. Then add the fact that automobiles today are better built and thus age more gracefully than they did one or two decades ago. Finally, consumers fear choosing the wrong kind of vehicle as battery technology quickly advances, opting to delay their purchases as long as they can.
The result of all those trends together is an older fleet. In 2006, the average European vehicle was 8.4 years old; today, it is more than 12.
There are more automobiles on European roads, too. Over the past decade, the number has surged by nearly 40 million, reaching almost 250 million last year. Even if EVs are taking a progressively larger share of new registrations, the overall increase means the absolute number of gasoline-powered vehicles is holding.
Then there is the question of how Europeans drive — and fuel — their vehicles. The post-COVID-19 era shows contrarian trends. Working from home has reduced commuting into downtown from the suburbs. In the US, that trend has curbed distance driven; but in Europe, where public transport networks are stronger, it has not eroded fuel demand as much.
On the other hand, remote work has made it possible to live in the countryside, making time on the roads a daily need rather than a weekend necessity.
Now add the post-pandemic desire for holidaying and traveling. In polls, most Europeans say climate change is one of their biggest worries. That concern was mostly absent on the continent’s roads this summer, with highways to beaches packed.
Ironically, the shift toward greener vehicles might be escalating gasoline demand as well. Not every electric vehicle is the same. Some are powered only by their battery; others are plug-in hybrids, sporting an internal-combustion engine to supplement their batteries. The problem is that it is clear some consumers are not plugging in those vehicles, instead largely running them on gasoline. Ultimately, gasoline demand will decrease as people replace their fossil-fuel vehicles for battery-powered ones. When — and if — the cost of electric vehicles falls, the shift could be quick, but the current surge in consumption indicates that, for now, the stylized graphics governments often parade of declining oil use are misleading.
The energy transition will have fits and starts; perplexing, illogical and contradictory trends, as well as parting shots. The future is electric, but in the world of today, gasoline is king. Even in green-conscious Europe.
Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. He is a former reporter for Bloomberg News and commodities editor at the Financial Times.
As it has striven toward superiority in most measures of the Asian military balance, China is now ready to challenge the undersea balance of power, long dominated by the United States, a decisive advantage crucial to its ability to deter blockade and invasion of Taiwan by the People’s Liberation Army (PLA) of the Chinese Communist Party (CCP). America expended enormous treasure to develop the technology, logistics, training, and personnel to emerge victorious in the Cold War undersea struggle against the former Soviet Union, and to remain superior today; the US is not used to considering the People’s Liberation Army Navy (PLAN)
The annual summit of East Asia and other events around the ASEAN summit in October and November every year have become the most important gathering of leaders in the Indo-Pacific region. This year, as Laos is the chair of ASEAN, it was privileged to host all of the ministerial and summit meetings associated with ASEAN. Besides the main summit, this included the high-profile East Asia Summit, ASEAN summits with its dialogue partners and the ASEAN Plus Three Summit with China, Japan and South Korea. The events and what happens around them have changed over the past 15 years from a US-supported, ASEAN-led
Lately, China has been inviting Taiwanese influencers to travel to China’s Xinjiang region to make films, weaving a “beautiful Xinjiang” narrative as an antidote to the international community’s criticisms by creating a Potemkin village where nothing is awry. Such manipulations appear harmless — even compelling enough for people to go there — but peeling back the shiny veneer reveals something more insidious, something that is hard to ignore. These films are not only meant to promote tourism, but also harbor a deeper level of political intentions. Xinjiang — a region of China continuously listed in global human rights reports —
President William Lai’s (賴清德) first Double Ten National Day address had two strategic goals. For domestic affairs, the speech aimed to foster consensus on national identity, strengthen the country and unite the Taiwanese against a Chinese invasion. In terms of cross-strait relations, the speech aimed to mitigate tensions in the Taiwan Strait and promote the coexistence and prosperity of the People’s Republic of China (PRC) in China and the Republic of China (ROC). Lai is taking a different stance from previous Democratic Progressive Party (DPP) administrations on domestic political issues. During his speech, he said: “The PRC could not be the
RSS