Technology can enable energy to be used more efficiently

The fuel economy of vehicles is improving fast, largely driven by emissions standards set by governments. Looking ahead to 2035 we expect the average efficiency of new light-duty vehicles to improve 2-3% per year as a result of increased hybridization and improved powertrains, combined with advanced fuels and lubricants. 
Hence, vehicles powered by liquid fuels are likely to continue dominating global transportation through to 2035 and beyond. By 2050, with advances in battery technology, electric vehicles are likely to be competitive, while fuel cell vehicle costs still have further to go. However there are other benefits of zero emissions vehicles, especially in an urban environment, and regulations have been introduced and could be reinforced to reflect this trend.
Other technology options that can contribute to reduced emissions include natural gas and biomass, with the cost of supplying biofuels expected to fall, particularly for second generation biofuels made from grasses, wastes and other non-edible agricultural matter.
We expect the average efficiency of new light-duty vehicles to improve 2-3% per year

Passenger vehicle running costs* in 2012 and 2050

This chart shows the total cost of travel in a passenger vehicle in North America using different types of engine. The overall running costs of vehicles per kilometre travelled are projected to remain broadly flat to 2050, with the costs and benefits of fuel efficiency broadly offsetting one another.
Assumptions: Vehicle cost per kilometre is based on North America average distance travelled of ~194,000 kilometres over the vehicle life. Fuel cost assumes nominal oil and gas prices of $80/bbl and $5/mmbtu. Costs exclude all taxes and other duties.

*US cents 2012 per km for medium sized car.

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