Experts predict 2018 to be peak year for internal-combustion engine sales


LT5 6.2-liter supercharged V-8 crate engine

LT5 6.2-liter supercharged V-8 crate engine

We may have lived through the peak year of car sales with internal-combustion engines (ICE) in 2018. Experts and analysts from several firms believe sales of ICE-powered cars will only shrink from here on out.

The analysis comes from a Financial Times (subscription required) report on Sunday, Dec. 30. Analysts believe a number of factors could make 2018 the peak year for ICE. Foremost, global auto sales are forecasted to either fall or rise slower than the rate of growth of battery-electric vehicles. The ongoing trade war between the United States and China, Britain's exit from the European Union (Brexit), the embargo on Iran, credit problems in China, and new emissions standards across Europe may lead to fewer sales of ICE vehicles this year and in the years to come.

Exhaust emissions from tailpipe [photo: Simone Ramella, 2005, used under Creative Commons 2.0]

Exhaust emissions from tailpipe [photo: Simone Ramella, 2005, used under Creative Commons 2.0]

This isn't to say no one will buy ICE-powered cars, but their share of the sales pie is expected to slowly decline after the projected peak year in 2018.

A growing number of automakers are focused on electric cars. As more zero-emission cars become available, their sales are expected to grow faster than the overall market, especially in the world's largest auto market, China, and the EU, another major market.

Felipe Munoz, global automotive analyst at Jato Dynamics, said the firm he represents forecasts 2018 as peak ICE production based on sales through October with estimates for November and December. His firm initially had a more optimistic view of the global market, which Moody's projected at 95.5 million cars in 2018. Stalled auto sales in China and other markets led to the reimagined forecast.

Shell charging station in Britain (higher res)

Shell charging station in Britain (higher res)

Consumers are expected to gravitate more toward zero-emission models moving forward. Evidence of the change already exists in China. While ICE-powered car sales fell under 18 million units in the first 10 months of 2018 (down from 18.7 million at the same time in 2017), zero-emission vehicle sales nearly doubled from 405,000 to 793,000. AlixPartners, a consultancy, predicts electric cars will take another 1.6 percent of the overall auto sales pie in 2019, another sign ICE-powered cars peaked in 2018.

Other analysts aren't unified on what exactly 2019 will bring for global auto sales. Various firms predict small contractions of 0.6 percent, while another predicts Chinese auto sales will rebound and grow global totals by 1.2 percent. The prediction is in sharp contrast to projections that do not include a Chinese government stimulus. Worst-case scenario, Barclays foresees a 15-percent decline in China's auto sector.

BMW iX3 Concept plug

BMW iX3 Concept plug

This year will be a major turning point for the auto industry as more electric cars come to market. BMW, Audi, Mercedes-Benz, Porsche, and Volvo all plan to reveal and launch electric models that will no doubt fuel the growth of electric cars.

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