Mo­bil­ity gains may hurt car sales

Rise of ride shar­ing, au­to­ma­tion may cut sales 20% by 2040

The Detroit News - - Front Page - BY NORA NAUGHTON The Detroit News

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

Justin Sul­li­van / Getty Images

The study fore­casts a sharp rise in ve­hi­cle miles trav­eled per year.

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