Introduction: A Shifting Landscape for Automotive Industry
The global automotive industry is at a crossroads. New energy vehicles (NEVs)-primarily battery electric vehicles (BEVs) and plug-in hybrids (PHEVs)-are no longer niche alternatives but mainstream competitors. In 2024, NEVs accounted for 28% of global new car sales, up from 10% in 2020, according to the International Energy Agency (IEA). This surge has left many wondering: What will become of gasoline-powered vehicles (ICE vehicles)? For automakers, consumers, and policymakers, the answer lies in adapting to a future where ICE cars coexist with NEVs-at least for the next decade-before eventually taking on specialized roles.
I. The Current State of ICE Vehicles: Decline, Not Disappearance
While NEV growth is undeniable, ICE vehicles still dominate global roads-and will for years to come.
1. Market Share Still Strong (For Now)
Global Data: ICE vehicles made up 72% of new car sales in 2024, with over 1 billion ICE cars on the road worldwide. In emerging markets like India and Southeast Asia, this share is even higher-90% in India-due to lower NEV affordability and limited charging infrastructure.
Consumer Preferences: A 2024 J.D. Power survey found 45% of U.S. and European car buyers still prefer ICE vehicles, citing "no need for charging" and "familiarity with maintenance" as top reasons. For rural drivers or those with long daily commutes, ICE cars remain the most practical choice.
2. Automakers Are Not Abandoning ICEs-Yet
Phased Transitions: Major brands like Toyota and Volkswagen plan to keep producing ICE vehicles until 2035 (aligning with the EU's ban), but they're shifting investments. Toyota now spends 60% of its R&D budget on NEVs, down from 20% in 2020, but still maintains ICE production for emerging markets.
Hybrid Bridge: Hybrids (HEVs) are acting as a "middle ground." Honda's CR-V Hybrid now makes up 50% of the model's sales in the U.S., as buyers ease into electrification without fully committing to BEVs.
II. The Future Role of ICE Vehicles: Niche Markets and Specialized Use Cases
As NEVs take over mainstream segments, ICE vehicles will find new life in specific areas where electrification remains challenging.
1. Heavy-Duty and Commercial Vehicles
Long-Haul Trucking: BEVs struggle with long-haul trucking due to weight and range limits (a Tesla Semi has a 500-mile range, but a diesel truck can go 1,000+ miles). Diesel-powered trucks will dominate this segment until 2040, when hydrogen fuel cells may become viable.
Off-Road and Agriculture: ICE vehicles are still preferred for off-road use (e.g., construction, farming) because they handle rough terrain and extreme temperatures better than BEVs. John Deere's diesel tractors, for example, have no direct BEV competitors that match their durability.
2. Classic Cars and Enthusiast Markets
Collector Value: Classic ICE cars (pre-2000 models) are gaining value as NEVs become mainstream. A 1967 Ford Mustang sold for $350,000 in 2024, up 25% from 2020, as collectors view them as "historical artifacts."
Performance Enthusiasts: High-performance ICE cars (e.g., Porsche 911, Ferrari 296 GTB) will survive as low-volume, luxury products. Porsche plans to keep making the 911 with a flat-six engine until 2030, targeting buyers who value engine sound and driving feel over efficiency.
III. Challenges for ICE Vehicles: Policy, Costs, and Sustainability
Despite their niche future, ICE vehicles face significant headwinds that will limit their long-term viability.
1. Tightening Emissions Regulations
Global Bans: The EU, California, and China have banned new ICE car sales by 2035, and 20+ countries plan to follow. Even before then, stricter emissions standards (e.g., the EU's Euro 7, taking effect in 2025) will make ICE production more expensive.
Low-Emission Zones (LEZs): Cities like London and Paris already charge ICE vehicles to enter city centers, and 50% of European cities will have LEZs by 2030. This makes ICE cars less practical for urban drivers.
2. Rising Fuel and Maintenance Costs
Fuel Taxes: To fund NEV infrastructure, 30 countries have increased gasoline taxes by 10-30% since 2022. In Germany, gasoline now costs €1.80 per liter ($7.20 per gallon), up from €1.50 in 2020.
Parts Shortages: As automakers shift to NEVs, ICE parts production is declining. This has led to a 40% increase in the cost of diesel engine parts since 2022, making repairs more expensive.
IV. How Automakers Are Adapting: Efficiency and Sustainability
To extend ICE vehicles' lifespan, automakers are focusing on making them cleaner and more efficient.
1. Cleaner Fuels
Synthetic Fuels: Porsche and BMW are investing in synthetic fuels (e-fuels), which are made from renewable energy and can reduce ICE emissions by 85%. Porsche's e-fuel plant in Chile will supply its 911 models starting in 2027.
Biofuels: In Brazil, 90% of gasoline contains 27% ethanol (a biofuel), cutting emissions by 30%. Ford and GM now produce ICE vehicles optimized for biofuels in South America.
2. Lightweight Materials
Aluminum and Carbon Fiber: ICE vehicles are getting lighter to improve efficiency. The 2024 Ford F-150 uses 30% aluminum, reducing weight by 500 lbs and improving fuel economy by 15% compared to the 2020 model.
Conclusion: Coexistence, Then Evolution
The rise of NEVs doesn't mean the end of ICE vehicles-it means a shift in their role. For the next 10-15 years, ICE cars will coexist with NEVs, serving rural areas, commercial needs, and enthusiast markets. After that, they'll become specialized products, kept alive by synthetic fuels and collector demand.
As IEA Director Fatih Birol puts it: "ICE vehicles won't vanish overnight, but their days as the mainstream choice are numbered. The industry's job is to make their transition to niche roles as smooth as possible." For consumers, this means more choices: NEVs for daily commutes, hybrids for balance, and ICE vehicles for specific needs. The future of transportation isn't about one technology winning-it's about all technologies working together toward sustainability.