The fuel for tomorrow’s cars is most likely being used today. But the fuel for 25 years from now may be something entirely new, which means that radical changes in vehicle powertrains may be coming.

However, based on past experience and the current situation, a switch in powertrains and fuels will take a very long time—many decades, in fact. Indeed, what may be the most likely scenario is that any new fuel would be a drop-in replacement for those currently available and powertrains may not change much at all. Also, increasing urbanisation may become a more important factor in determining future vehicles and fuels.

On the first point, any significant change in fuels and powertrains won’t take place in a vacuum, said Phil Gott, senior director for long-range planning at IHS

Automotive. “You’ve got, on a global scale, 800 million or so and on the U.S. scale, roughly 300 million vehicles
on the road that provide an awful lot of inertia to the system,” he said.

Resistance to change arises because those cars need today’s fuels and drivers expect to be able to buy those fuels anywhere. For example, the average age of cars in the United States is 11.4 years, according to a recent IHS study. That figure is forecast to grow to 11.7 years by 2019.

If that prediction proves accurate, then roughly half the cars on American roads in 2030 could be the 2018 model year and older. Such vehicles will run on familiar formulations of petrol and diesel fuel. This inventory of cars and trucks will make a significant fuel change difficult in the U.S.

What about the world’s largest vehicle market, China, or the rapidly growing Indian market?

Significant change in fuels and powertrains would seem possible there, since the current car inventory is much younger than the U.S., and the turnover, on both an absolute and relative measure, is much greater. However, both countries have adopted European emission standards, with a time lag between when the standard is implemented in Europe and a locally modified version is implemented.

With this approach, both countries get access to a proven standard and the technology needed to implement it without the associated R&D costs. But it also means that the fuel and powertrain choices are largely built in, arriving as part of the technology package.

Also, tens of millions of cars are added yearly to the vehicle fleet. Sales in China, for instance, were more than 23 million vehicles in 2014, and that figure is expected to grow by 7% this year, according to the China Association of Automobile Manufacturers.

“Every year they don’t implement a change is one year that makes it more difficult to do that. They’re quickly going down the path of getting stuck by the inertia of their own fleet and existing requirements,” Gott said.

It is possible for the Chinese or other governments to issue a mandate, such as saying that five or 10 years in the future the fuel formulation will change dramatically. In such a scenario, it might be that all cars on the road would have to run on the new fuel, unless they are awarded an exemption.

Brazil presents a successful example of such an approach. Over several decades, government mandates shifted the fuel from pure petrol to E20-E25 (20-25% ethanol mix). The most popular cars in Brazil today can run on E20, E25 or E100.

Brazil presents a successful example of such an approach. Over several decades, government mandates shifted the fuel from pure petrol to E20-E25 (20-25% ethanol mix). The most popular cars in Brazil today can run on E20, E25 or E100. in place, said Dan Frakes, director of global regulatory development for General Motors. The Detroit, Mich., U.S.A.-based carmaker has a full range of powertrain technologies either in production or prototype, including those that run on petrol, diesel, compressed natural gas, various blends of petrol and diesel with biofuels, hydrogen and electricity.

In contrast to Brazil, E85 in the United States has been less successful. In the U.S., the ratio of ethanol in E85 varies from 51 to 83%, depending upon geography and season. GM has dozens of vehicles that will run on E85, but it was a chicken and egg scenario, said Frakes.

“We brought the vehicles out there. The infrastructure and fuel was there, to some degree. But it wasn’t everywhere. And the pricing between E85 to conventional gasoline didn’t necessarily pencil in in the customer’s mind. So they didn’t make the choice or the push for having that – or raise their voice, I should say – to have E85 out there in the market,” Frakes said.

According to the U.S. Department of Energy’s Alternative Fuels Data Center, there are more than 2,400 public fueling stations in more than 40 of the 50 American states that offer E85 today, with most of these concentrated in the U.S. Midwest. The number of stations is only a tiny fraction of the 168,000 public fueling facilities in the U.S., so buying E85 can be challenging. On top of this, the energy content of E85 is lower than petrol’s, so even if the price of ethanol were the same as petrol, the consumer has to fill up more often with E85.

There are some alternative fuels, like compressed natural gas (CNG) or hydrogen, which could be successfully deployed in specific situations. The operator of a fleet of vehicles, for instance, could switch to CNG. The cost savings or other benefits might offset the additional fuel infrastructure cost.

Ethanol, whether from sugarcane, as in Brazil, or corn, as in the U.S., has a carbon intensity of a fifth to a half
that of petroleum products, according to a 2014 study by the U.S. Environmental Protection Agency. This means governments might mandate a fuel switch as part of an effort to combat global climate change by reducing greenhouse gas emissions.

Pierpaolo Cazzola is an energy and transport analyst at the International Energy Agency (IEA) based in Paris. The IEA has been looking at what would be needed in terms of transportation to limit average temperatures rising, due to global climate change, to two degrees Celsius. For light vehicles, such as passenger cars and trucks, this requires getting rid of most carbon or deep decarbonisation.

“IEA analyses that look at scenarios compatible with a two-degree-average-temperature increase are indeed focused, when talking about light vehicles, on electric and fuel cell technologies,” Cazzola said.

Two of the technology opportunities cited by the IEA are cost parity at initial purchase between petrol or diesel and refueling infrastructure changes. Such fuels would need to allow vehicles to comply with regulations and standards, not compromise vehicle life and performance, and be universally available at an acceptable price to consumers. That may be difficult to pull off, but not impossible. If so, then cars capable of running tomorrow’s fuels would already be on the road today. And tomorrow’s fuel would be, from the consumer’s point of view, no different than today’s fuel.

There is one trend that could significantly alter this picture. In 20 years, three out of five people worldwide will be living in a city, Gott said. What this means is that fewer cars will be needed and these may well be smaller than current forecasts assume. The effects of congestion and regulations aimed at reducing carbon emissions could be significant when it comes to future fuels and vehicle powertrains. “We will be driving less and burning less fuel,” Gott said.

The reduction in fuel demand could be as much as 11% and the worldwide demand could be the same in 2040 as it is today, he added. If that does come true, then it is all the more likely that there will be no substantial change in tomorrow’s fuels and powertrains. Who would make the extensive infrastructure investment, along with funding the fuel and powertrain research and development, if the market is stagnant or contracting?

In any case, it’s important to look at vehicle powertrains and fuels together. As the alternative fuel experience in Brazil and the U.S. shows, there are multiple players involved: vehicle makers, fuel suppliers, consumers, governments, environmental groups and others. Successfully switching to a new fuel requires that all stakeholders be involved in the process, and that everything be taken into account as a whole.

“Vehicles and fuels need to be considered as a system,” said Frakes.