Electric vehicle adoption and fuel demand forecasting in South America

February 2022
Electric vehicle charging

CRA supported the due diligence of a major liquid fuels pipeline transaction in South America. We used statistical modelling to develop the fuel demand forecast that underpinned the investment case for the deal. We produced a 30-year forecast based on country level demographics, fuel efficiency, energy costs, and national fleet size estimates. A critical assumption for the forecast and valuation was the overall EV penetration and adoption rate – and the resulting impact to future fuel consumption.

CRA developed an EV penetration forecast, assessed battery cost declines at a global level, EV adoption across representative countries, and produced country level EV adoption estimates incorporating major regional regulatory, demographic, and economic trends.

Our findings showed that the seller was significantly under-estimating regional EV adoption. The revised assumptions resulted in lower fuel demand over the forecast period – and thus, a lower underlying value for the asset.