Mobility gains may hurt car sales
Rise of ride sharing, automation may cut sales 20% by 2040
The growing popularity of ride-hailing services, coupled with the rise of electric and selfdriving cars, will eventually put a dent in new car sales, according to a study from IHS Markit.
The study predicts sales of vehicles to private users will decline nearly 20 percent to 54 million units annually in the four major car markets — the U.S., Europe, China and India — by 2040.
At the same time, the study forecasts a sharp rise in the vehicle miles traveled per year in those areas — up 65 percent to 11 billion miles per year by 2040. This is reflecting a shift in the market from traditional consumer car buying to fleet purchasing by on-demand ride and shuttle services like Uber and Lyft.
“We’re doing more with fewer resources, which from a tech perspective means we’re able to optimize and efficiently use our resources a lot better,” said Jeremy Carlson, an automotive analyst for IHS Markit.
Ride-service companies are expected to purchase more than 10 million vehicles in the U.S., Europe, China and India in the next 23 years. Those companies are only expected to purchase about 300,000 vehicles in 2017, as the study predicts these companies will move away from asking drivers to provide their own cars.
While consumers favor ride services over car-ownership, these mobility companies are expected to also be among the most influential adopters of disruptive technology like electric vehicles and driverless cars. The study says individual car buyers will also start to favor electric vehicle technology as the cost of battery packs should be slashed in half to just $100 per kilowatt hour — the price point necessary to make electric power competi- tive with fossil fuels.
“Consumer adoption in general is going to be key to all of this,” Carlson said. “We need to better understand how consumers will react to autonomous vehicles, especially, but electric vehicles too.”
The study says electric vehicles, including hybrids, will capture about 30 percent of the new car market in the countries studied by IHS Markit by 2040, up from just 1 percent last year.
But another paradox arises in the study, which predicts that gasoline-powered cars will still hold the majority of the new car
The study forecasts a sharp rise in vehicle miles traveled per year.