Commentary: Are we approaching “peak car?”

Furthermore, there is an overall generational shift in the perception of the status and excitement of car ownership. Getting a driver’s license used to be a much-anticipated rite of passage for American teenagers, but more young people are turning away from car ownership. In fact, just 26% of 16-year-olds in the U.S. bothered getting their license in 2017.

Experts predict that the tipping point will come when self-driving cars take a sizable share of the road. A driverless taxi could reduce transportation costs for consumers by as much as 60%, making mobility services even more appealing in comparison to vehicle ownership. American companies like Tesla, Ford and General Motors are pouring money into research and development on self-driving vehicles and scaling back production on traditional car manufacture; GM will be closing five North American factories and funneling $1 billion annually into self-driving cars.

It is estimated that 66% of the global population will live in urban areas by the mid-century. And though migration to mega-cities is predicted to continue into the foreseeable future, there will still be people who live in rural areas and ride-sharing will not be convenient for them. And even in more populated areas, families with small children may not feel safe using mobility services if their children need a car seat. In many ways ride-sharing is a phenomena geared toward young millennials at play and commuters.

But unfortunately, those holding out against the ride-sharing and/or automated car tide could fall victim to rising sticker prices. According to the Kelly Blue Book, the average new car price was over $37,000 in 2018. This means that consumers who still want to own their own car will look towards used vehicles or to holding onto their current vehicle as long as possible. 

Is peak car really going to happen? Only time will tell…