As the world begins to reopen in the midst of the coronavirus pandemic, many questions remain about the future, making it near to impossible to gain meaningful perspective. Yet at times like these, we should remember the fundamentals of the market in which we operate and absorb the informed analyses of others to help guide our planning. Within the transportation energy space, not everything is as confused as it may seem.

In fact, some of the trends we were watching in early 2020 remain true today, perhaps with some modifications due to the economic shutdown. While there is great uncertainty regarding the next several months—or even years—the fundamentals of the transportation energy market appear to remain on track.

Consumer Behavior
Deloitte reported earlier this year that in most countries the percentage of consumers who claim to frequently use ride-hailing services has dropped significantly since 2017. And this trend has only been accelerated by the pandemic, as approximately two-thirds of global consumers plan to limit their use of mass transit and ride-hailing services, opting instead for the security of their own vehicles. In Europe and North America, two-thirds of consumers reported that “the idea of owning a vehicle is valuable to me.”

Electric Vehicles
The growth of the electric vehicle market slowed a little at the end of 2019, and the pandemic is not doing the technology any favors. Guidehouse projects EV sales globally will drop 16% in 2020, but this contrasts with an expected 30% drop in overall light-duty vehicle sales and does not necessarily affect the long-term outlook for the segment.

Entering 2020, Guidehouse projected global EV sales would reach approximately 12 million units by 2025 and, despite the disruption of the pandemic, the firm believes EVs remain on track to meet that forecast. Underlying their confidence is the important role of government policies and the more aggressive approach being pursued by some governments, including those in Europe. In fact, many automobile manufacturers are adjusting their global deployment strategies to satisfy regional regulatory requirements, diverting the delivery of future EVs from other regional markets to Europe and Asia.

Petroleum Markets
The impact of EVs on the petroleum markets, however, is still likely many years away. Despite the turmoil experienced in the oil markets this year, IHS Markit projects the market to recover rapidly and reverse the current global oversupply situation as soon as the third quarter of 2020. The global analytics provider forecasts that demand for oil will return to pre-COVID levels by the end of 2021. Of course, a rebound of the pandemic and additional control measures implemented by governments would change this forecast. But IHS Markit does not believe a potential second round of mandatory containment measures would have as significant an impact on demand as the first round, which provides additional confidence in their outlook.

Predicting how events will develop in the aftermath of the coronavirus pandemic is challenging due to the complexity of various influencing factors. But it is possible to make more sense of the future by leveraging the insights of market analysts and combining their perspectives with your own. Organizations should not react and create strategies to deal with the next pandemic; rather they should build future robust strategies, evaluate various potential scenarios and develop the skills that will allow them to be nimble and adapt to whatever the next disruption might be—and that begins with understanding the fundamentals of their market and the needs of their customers.