If you want to really know why the Big Three’s stock prices are stagnant and GM is shuttering five plants, you need to read this article by Mark Gottfredson, a partner at Bain & Co’s automotive practice. It’s one of the more succinct single articles I’ve come across recently that spells out the impending challenges. If the inevitable next economic downturn, the uncertainty of the EV market, and the huge changes in the technology and use of vehicles/mobility weren’t challenging enough, a massive demographic time bomb is about to go off. Yes, 2018 may very likely have been Peak Car.
According to this analysis, demographic trends alone will account for a reduction of vehicle demand of 20% by 2025, or down to 11.5 M vehicles, the same as during the 2008-2009 “Carpocolypse” recession. Specifically, the 15 to 64 year old (key car buying) demographic, which will experience zero growth due to lower birth rates and sharply increased barriers to immigration. If it hadn’t been for the catch-up effect after the Great Recession, sales would have been significantly lower already. That one-time effect is over now.
Now add in the additional ingredient of an economic downturn. It’s impossible to know just when and how severe it will be, but a slowdown or recession is considered likely in the next 12-18 months.
The surplus is likely to deepen the sales drop-off in a recession. By the time the economy starts to recover, changing demographics will have significantly reduced the pool of potential car buyers.
And one product cycle further down the road, or in some 6-8 years, the next wave hits:
The one-two punch of electric and autonomous vehicles will wreak havoc on the global automotive value chain. Traditional auto dealers will suffer a steady structural decline in every profit source, including new-vehicle sales, financing, repair and maintenance. Once distinguished by powerful brands, autos increasingly will become commodities, particularly to the next generation of consumers.
…a shift to EVs, autonomous cars and mobility services could leave automakers saddled with plants and other vital assets unable to earn expected returns, a shock that many may not survive.
The double punch of a recession and shifting demographics on the eve of that transition could cripple automakers before new technologies even take off.
What to do? Commit or wait?
We can see how various auto makers are doing variations of that. In Europe, VW is all-in on EVs, and BMW, Mercedes and others are close behind. But they really don’t have a choice. All of them are falling behind the tough EU CO2 emission limits, because of the steep decline of diesels and the growing size of cars. EVs are the only solution, or be faced with massive fines. The big three Germans are committing $68 billion in just the next three years alone on EVs, AVs, and related mobility technology. There’s no walking back now.
And it’s important to remember that the Germans have a huge exposure in China, which is mandating massive increases in EVs.
GM has put a big chunk of its future on Cruise, its automation unit, as has Ford with Argo. But while all three American manufacturers have been talking about coming EVs, (genuine mass-market cars, not loss-leader “compliance-mobiles” like the Chevy Bolt), they’re clearly not as deeply committed yet as the Germans.
Meanwhile, Toyota is straddling the fence somewhat with their well-established and cost-efficient hybrid system. That’s currently working out very well for them in Europe, where their sales are up strongly, and over 60% of their sales are hybrids. In the US, that’s not so much the case, as the current crush with big trucks and SUVs and cheap gas have actually reduced their hybrid sales. And Toyota is late to the battery EV game too.
One apparent alternative to going all-in like Tesla, at least for the time being. Or just to be as nimble as possible, and batten down the hatches. Will that be good enough?
In the real world, it is adapt or die. No matter how much one might like internal combustion engines, their days are clearly numbered.
so said
Thomas A. Edison, 1910
“Gasoline engines will soon be rendered obsolete.”
and each year, despite predictions, proven oil reserves keep going up
just in the past week China discovered massive oil reserves in its north
Regulations are largely driving EV development and adoption today. Not exactly “the real world”.
This is the real world, Phil.
Besides, people actually *like* EVs. A Tesla is hardly a government-mandated appliance. It’s outselling Mercedes and Audi.
It is being mandated in other parts of the world though.
Look, I’m not against EVs in general. I may consider one in the next 5 years as a daily commuter. And if I had to replace our minivan today it would likely be with a plug-in Pacifica. But probably not without the $7500 credit. I just feel that sometimes the environmental advantages are overstated and the potential impact on the power generation infrastructure is usually ignored. To be clear, that does not mean I believe they offer no advantages as some like to claim.
Yep. That information is easy to find.
What is not so easy to find is whether or not EVs will have any noticeable impact on that overall trend as power demands continue to increase around the world.
It’s true. We’re at a tipping point in global standard of living. “Just over 50 percent of the world’s population, or some 3.8 billion people, live in households with enough discretionary expenditure to be considered middle class or rich,” says Brookings. That’s happy news… and they all want to drive cars.
Phil, have you ever been in Beijing on a hot day in summer?
Have you ever climbed a hill in Paris and tried to look in the sky?
Where you live may in fact be a lot different from where other people live. Other people as a society might want to clean the air they breathe and attempt to mitigate climate change.
The fact is, we can’t keep destroying the planet at this rate.
I did go for a run in Seoul. That was not smart.
But isn’t the biggest issue in Beijing the coal plants? And the largest issue in Paris the diesel particulates? It seems to me public transportation is the best solution for dense urban areas. I visited NYC this past summer and even as a car guy I can’t imagine car ownership being very desirable there.
As somebody who spends most of my recreational time outdoors, I am not against reasonable environmental protections. I just feel a lot of the benefits of EVs are being overstated and the challenges understated. For example from what I have found our current infrastructure can only handle the load of about 15% EV market penetration. New power generation is something that, ironically due largely to environmental concerns, can take decades to bring online. Wind turbines are becoming a blight on our landscape around my area. The bottom line is that there are no easy answers and many (but certainly not all) of the ideas being pushed by politicians today are rooted in feelings rather than reality.
We had a Prime Minister who tried to stop wind turbine development because they were a “blight” on the landscape. How exactly are they a blight?
Gasoline may become a “boutique fuel” only available from specialty suppliers to keep collector cars on the road.
There may be an emerging market for electric conversions for popular classic cars. I could see people wanting to buy a kit to electrify their ’57 Chevy, for instance. If only they could get a decent battery to fit in the space of a conventional fuel tank.
Lots of room under the hood for batteries too. A modern EV motor is about the size of an old automatic transmission.
Having said that, I’d rather see genuine Curbside Classics keep their original drivetrains. There are so few, driven so few miles in general, it makes no difference to the environment.
A Tesla battery pack weighs 1200lbs, the effect on dynamics would be the equivalent of putting TWO 454s under the hood!
I, for one, would definitely electrify my ’57 Chevy, given the opportunity. Given the improvements in acceleration and fuel savings, I’d be interested!
They’re doing it to Beetles already.
Due to closed nuclear plants and Merkel’s green ambition, electricity rates in Germany are very high – even for Europe – and about 3x US rates.
So the push for electric cars in Germany seems cockeyed.
As for China, we all know China will favor its domestics and will use the Western cos for tech and then displace them as they have in other tech areas.
Germany is going solar in a big way. My friend there just built a new home. With the solar panels, they’re saving 75% on their electric bill. The payback is only five years.
I spend at least a month a year in Germany. Germans don’t want pollution in their environment.
“Yes, 2019 may very likely have been Peak Car.”
Actually it may have been 2018. Some are already predicting less than 17 million units to be sold in the United States in 2019.
Of course. That was a typo.
There’s no doubt that 2019 sales will be well off from 2018.
Just letting you fix it, Amigo. 😉
It will be interesting to see which automakers get most desperate most quickly. I see GM is already offering 0% for 72 months on many many vehicles again as if it was post-9/11 or 2008-2009 all over again.
Interesting viewpoint, and grim. Hard to argue that these are frightening and uncertain times for vehicle makers.
Beyond all the threats to traditional OEMs covered here, I’d add another: ride sharing apps/services. With booming services like Didi Chuxing, Uber, Lyft etc., consumers can access a ride when they need it, without the overhead and hassle of actually having their own personal car. City dwellers, suburbanites, the elderly, young adults–the list goes on and on as to the groups that can clearly benefit from the easy-to-use, on-demand, app-based transport model. Conventional wisdom says these services disrupt taxi cabs, and maybe traditional car rentals, but in reality these businesses can and will challenge basic vehicle ownership expectations for millions of consumers.
My Toyota dealer has dropped their courtesy shuttle for service customers (and presumably its driver had to find a new job). Instead they gave me a prepaid Lyft ride home, and offered a free Lyft ride back when my car was ready. (Just a hybrid software recall, front brakes and oil.) I used to have to wait awhile for the shuttle to come around, but the Lyft car got out there before I did.
I keep asking how they plan to charge EVs that are parked on the street in large cities, or smaller, with no driveway or garage.
EVs are not for everyone, obviously. The same question was often raised in the early diesel days. Diesel owners had to carry guidebooks to find stations/truck stops that sold the stuff.
In the future, street-side chargers may become more common. There’s already some parking meters that include chargers.
EVs are part of the mix. At least for the foreseeable future.
I expect in the long run charging times will get faster and faster, approaching the time it takes to get gas. Lots of research is currently going on with battery chemistries and solid state batteries. Demand will grow, and ultimately I think it’ll be more effective to improve charging times than to build out a lot of public charging infrastructure. Commercial upside for car makers and charging stations. (Starbucks in the charging business?)
Starbucks, McDonalds, Carls Jr or any other quick serve food & beverage purveyor who wants people to hand around for 20-40min.
One issue I see is having more than 1-2 200kW units around gets you into a very expensive upgrade cycle for the electrical service upgrades and peak demand charges.
Wal-Mart is starting to install chargers at select locations.
https://www.cnet.com/roadshow/news/walmart-vw-electrify-america-ev-charging-station/
So figure for those who can’t plug in at home &/or work 20min twice a week somewhere will suffice.
It’s hard not to see potentially massive shifts in car sales, ownership, and corporate fortunes for a number of reasons. Demographics and technology have been cited, but the other leg of the stool is simple economics.
At a time when cities continue to grow rapidly, costs for housing in those cities rises, and many incomes are under longterm pressure from inevitable globalization trends, people inevitably prioritize their spending. And it is at this particular juncture that vehicle costs are also rising disproportionately, due to necessary technology investments. The trimming of $6000-$8000 a year in spending from one’s after-tax budgeting starts to look very attractive when other transportation options are increasingly available in many cities, especially for younger people.
It’s a question of spending priorities, and a gradual shift of cars out of the ‘essential purchase’ category for many city dwellers.
One of the side effects of the lack of car ownership on cities is the fact that many parking structures will no longer be needed and the land can be repurposed for people rather than cars. That little change has huge impact. Urban planning often comes down to being economically feasible to build based on both the building itself and the required parking spaces per the local code. Without need for parking, the overall footprint and cost of a project comes down, thus theoretically making the space more affordable. Thus, a new apartment block with 0 parking spaces can be built and rented out at a lower monthly cost to the tenant. Existing parking lots, now obsolete, would become available for redevelopment.
And to those who say that cars will never go away, consider NYC. They do have barns still for the horses in Central Park, but those are few and very expensive, and only used by those who are willing to pay the price. The Carriage operators need them for business, and are willing to pay the price. The same will be for parking of cars. If you really want to have a spot, you will really have to pay. And some will. Just not many.
One other thought, this whole mode of transportation is really a bit over 100 years old, and really just a blip in the scope of history. Since it is our present, we only consider how it affects us in the moment. 1,000 years down the line, will they really care how we got around in this speck of history? Do we care how Caesar got to the Forum, on foot, by Chariot, or by being carried on the shoulders of his guards?
That’s already happening somewhat in Sacramento. The cite recently relaxed their requirement for new developments to provide parking as long as it’s within a certain distance from a light rail stop.
“options … in cities… by younger people”
True, that rich kids moving to cities aren’t buying new cars. But, many Millennials in Chicago, love, love, love the Uber/Lyft “option”. They call bus riding “icky”. But guess what? Someone has to provide the car! So there will be some people in city who still have to do this ‘essential purchase’ .
But also, it isn’t so simple to say “everyone will be hailing a driverless car in 5 years”. Where will these be parked overnight? Who will do the obvious software updates?” Will these cars suddenly stop in traffic and say “need to an update, then reboot”?
When these AV’s hit a pedestrian, and they will, who is liable?
So try taking that to its logical(?) extreme – let’s say every millenial living in Chicago that also works in Chicago and hates the bus decides to Uber/Lyft to work and other places. Let’s say that a typical Uber/Lyft can handle 6 riders between the hours of 7 and 9am. (20 minutes each A to B, B area to C, C area to D, D area to E, E area to F, F area to G).
Sure the driver needs a car but none of the passengers do. So that’s now reduces sales from 7 (driver and 6 pax) to 1, an 85% reduction in sales to millenials living and working in Chicago that hate the bus… That is what is keeping automakers awake at night.
Yes, but that Uber/Lyft driver will wear out their car much faster than the owner who just uses it for themselves. Full time drivers can do 50k per year and some locals are imposing mileage limits. For example in Houston the car can’t have more than 150K. So that is a new car every 3 years or a a lease return every 2 or so. Not to mention the brakes, tires and all the other servicing the vehicles will need much more frequently.
However those millennials will start having kids, move to suburbia and buy a car to save significant money and time vs taking an Uber everywhere.
All of the above looks true to me as a non-millenial working, but not living, in SF. If I was young and living in the city there is no way i would have a car. Parking anywhere is painful, parking at your residence is expensive, cars are expensive and mysterious and need maintenance, and Uber/Lyft is a cheaper option even if it is used regularly. And yes, this city and others are in no way interested in making driving and parking easier. In suburbia and smaller places this may not be true, but in large population centers, that’s the way it is
EVs aren’t gonna sweep the market. The D3 won’t have much success here because that’s simply not the product those customers want, any more than they want Five Guys to start making all vegan food.There’s simply no demand without government basically bullying ICE’s off the market as we’re seeing in Europe. If the yellow vest protests are any indication, I think that’s going to get UGLY. Let alone here in America.
EVs are a HORRIBLE value for dollar proposition. A Chevy bolt starts at $36K before all the tax credit trickery begins…which is NOT sustainable or sound business. What does it say that it takes this kind of begging and pleading to move these things? The Corolla hatch is a comparable ICE car that starts at $19K. So at $17K more, you can almost buy the corolla twice. Let’s move up the ladder: to get an EV that’s just competitive with a $60K Hellcat its gonna cost $135K to get into a ludicrous mode Tesla. Granted it’s two radically different customers and likely zero cross shopping. But the point still stands.
Theres likely to be a paradigm shift. What needs to happen for the industry to survive is first off for the beauracrats and politicians to get a rude awakening. They only call the shots as long as we let them, and this isn’t about politics. Let the D3 shed off unprofitable compliance garbage that no one wants to buy and only exists to game a system with the rules stacked against them. Customers choose American when we want powerful stylish vehicles and those customers could give a damn about mpgs or emissions. Accept it. People who want efficiency, economy and enviro-friendliness are already choosing to buy it from the Asian companies. That’s what they do best. Let the market sort itself out, people —especially Americans—don’t like being told how to live.
As to EVs…buying them for private use is a losing proposition. As autonomous rideshare pods…they might have a future. Id have no problem with an AV/EV hailed from my Uber/Lyft app for an airport ride, a liftto/from a rowdy celebration, a brewfest or just to get downtown when I don’t want to deal with congestion or for kludging through some garbage weather. But my garage will ALWAYS have something powered by a gas guzzling V8. Cars are a passion for many of us still and that’s not going away nor will any electric pod ever fill that role.
Tesla is outselling Mercedes, Audi, BMW, Infiniti, Acura, Cadillac, Lincoln, on and on. Tesla has the highest customer satisfaction of any brand says CR. Drivers and owners Love their electric cars. On this planet anyway…
By the way the $35K Tesla Model 3 “electric pod” has 130mph top speed and 5.6 second 0-60 acceleration. Can your V8 match it?
Yes.
0-60 in 4.5, limited top speed of 160mph. Seats five large adults comfortably, huge trunk (yikes, a sedan!), lifetime avg. 22mpg. Makes fun sounds as I manually shift, too!
EVs currently (ha!) don’t fit my use case, so they’re not an option I will consider (yet).
Impressive.
The Challenger Hellcat and the Performance Model 3 are two sedans that seat 5 with a lot of trunk space. The 3 is slightly cheaper and slightly quicker, even with no fed subsidy. There are many reasons to choose a Hellcat over a Tesla, but room, price, and performance aren’t among them.
Where you live, that might be the case. In Asia and Europe, it will be all EV in a very short time-think 2030.
When/If EV batteries reach the recharge speeds comparable to the pump the market wont have any excuse not to embrace them. The EV faithful know and point out that range anxiety for most commuters is all mental with current technology, but it’s something that needs to be overcome in everyone who are even less inclined to embrace it, I think we share similar skepticism there. What I think you can’t see past the power bulge hood of a Hellcat is that 99.9% of the average car buying public is buying a smooth quiet 2-3l/8-9 speed automatic (or CVT) run of the mill ICE cars, which is simply a less enjoyable driving experience than a EV, be it Teslas or the compliance cars.
I love V8s, the smell of gas and shifting gears. I’m not giving it up even if Lake Michigan became the new Atlantic coastline. However, I don’t see what it accomplishes to outright oppose EVs, can’t there be a healthy selection of both? That’s what seems like the most likely outcome in the US after all the bickering. Subsidies for oil production has existed for a hundred years, I see no real problem doing the same for EVs if it makes them better and better.
To hell with AVs, however.
Yeah pure EVs are not for everyone. But we are going to see a lot more turbochargers with lots of boost on smaller and smaller engines and hybrid drivetrains to take advantage of regenerative braking. And more EVs too. And fewer car sales. Car enthusiasts are a dying breed. Cars are going to be an appliance that nobody cares for anymore than they do the water heater in their basement.
Personally for me at 66 my peak car was at 61. That is when I bought my 2014 Acura Sportwagon. With the price of new cars and Honda reliability I’m pretty sure it will be my last new car.
We are mixing up multiple trends here, but I think the biggest may be population levels. The US has had a relatively robust birth rate (being only slightly under replacement level). The birth rates have been much, much lower in Europe, Japan and (especially) China. I have read that China’s population may actually start decreasing by 2025, which will be a trend difficult to reverse without massive changes in birth rates or immigration.
Older people use cars more lightly than younger people and tend to keep them longer. Nonexistent people, of course, do not buy cars at all. Countries with these dangerously low birthrates will have difficulty supporting their older members, let alone living at levels of prosperity that support the current level of new car purchases.
People are waiting longer to have kids and as a result they are having less of them.
When my mom was born her mother was 20 years old (and 2 years married.)
I was born when my mother was 22 years old (and 2 years married.)
I didn’t have my first until I was 37 years old and my 2nd until I was 41.
Jim, I am in China regularly, and there is simply not enough space on the streets for more cars. It is a major hassle trying to go anywhere in China by car. In fact, by high speed train it is hugely cheaper and a lot faster.
The hip set in China is no longer driving. They use ride sharing or taxis, or when they are in a hurry, the subway. It’s simply not worth having a car in China. It’s really just a status symbol.
It’s very dangerous to try and predict the future.It isn’t too long ago that the future was hydrogen. BMW may have hit the nail on the head with the ( now discontinued ) twin cylinder range-extender on their i3. I read about tiny turbine based range extenders coming on stream at attractive prices. A new discovery might make storage batteries cheaper or more environmentally friendly – or maybe not. There is technology on the way to make diesels much cleaner at a more attractive price, maybe without the current reliability problems of clean diesels. And then there are companies like Mazda aiming to improve the efficiency of gasoline/petrol engines. You just never can tell.
“The future is going to be bleak and horrifying – so quickly – give me your freedoms and liberties so you can survive the apocalypse I see ahead!”
CO2 is going to destroy Earth!
Stop eating meat!
Stop living in single family homes!
Stop burning any energy sources that come from below ground – scary!
We have only 12 years to save the Earth!
I mean 20!
25!
Any time now!
Count me with VanillaMan.
I’ve seen too much over too long a period of time to believe otherwise.
And YES, I stated above that I would electrify my ’57 Chevy, given the opportunity. Because IMPROVED PERFORMANCE, the very essence of Hot Rodding. Especially when that improvement lowers day-to-day driving costs.
To AV technology, I offer a piece from a well-respected blog in my industry. And I’ll add that apparently the REAL issue with Millennials holding off on motor vehicle ownership is more ECONOMIC than their desire to change the world. They simply can’t afford the payment as long as college loans are strangling their finances.
Then again, we could open up a whole other can of worms regarding the merits of learning and mastering a trade vs. a college degree. But to elaborate would go beyond the parameters of our discussion.
https://jacobsmedia.com/did-the-autonomous-car-movement-just-hit-the-brakes-or-a-speed-bump/
No, VanillaMan, CO2 isn’t going to destroy Earth. It’ll just become horrible for people to live here. The cockroaches will love it.
I do see a future in EVs. My concerns:
a) range anxiety (Tesla seems to have addressed this, GM not)
b) some type of standardized charging stations. From what I understand, Tesla is not compatible with other systems.
c) charging stations as common as gas stations
In may not happen in my life time (61 yrs old), but my niece and nephews will benefit from EV’s.
Regarding b), as far as I know Teslas can use any kind of charging station, although it may not charge as quickly as Tesla’s proprietary chargers. I say this because I always see Teslas plugged into the generic charging stations at work. Now the reverse may not be true; Tesla charging stations may not work with other makes of EVs.
That’s right. Common public and home charging stations are “level 2”, providing 220 VAC, which can fully charge any modern EV from almost empty in four to eight hours depending on the car’s battery size, its charger and the current available. They all have an SAE J1772 standard plug (see below). My home level 2 station is hooked onto a breaker that used to run an electric stove.
Fast charging is high voltage DC charging, typically 400V at 120 kW. Tesla Superchargers only work on Teslas, which have a proprietary connector. If I’m not mistaken Teslas either have a J1772 adapter or they have two sockets.
Since you mentioned that your charger is wired to a breaker that once ran an electric stove, that brings to mind something I’ve long been curious about: My washer and dryer just happen to be in the garage, and we all know that household dryers run off of 220 VAC, the same as your car charger. If I were to get an EV someday, could I just unplug the dryer and plug the car into the dryer’s outlet, perhaps with some sort of adapter?
“could I just unplug the dryer and plug the car into the dryer’s outlet,”
Electrically speaking, yes. The charger and dryer can both run off 220 Volt AC.
However, the local electrical code may require the charger to be hard wired into the home’s electrical circuit, which would prevent you from using the dryer outlet (if you want to keep your house up to code).
Agreed with Dave on the code. What’s often called a “charger” is actually an EVSE, which is a smart gatekeeper between your AC power and the actual battery charger, which is in the car. Keeps you and the car safe.
Yes you can use your dryer plug to charge your EV it is done all the time and many EVSE are available in hard wire and plug versions.
This was the first thing that came up at HD https://www.homedepot.com/p/Siemens-VersiCharge-Gen-2-30-Amp-Indoor-Outdoor-Electric-Vehicle-Charger-Plug-In-Bottom-Rear-Fed-with-20-ft-Cord-VC30GRYU/205491633
Note however that most of the plug in version come with a NEMA 14R-50 plug and the standard dryer plug is a 14R-30.
The reason the 30a and 40a chargers have that 50a plug is that a load deemed continuous use which is defined as 3 or more hrs must be down rated by 20%.
So yes technically you could be against code using the 50a to 30a adapter if your charging needs are more than 3hrs worth.
If Tesla offered a tumble dryer option for the trunk, it could be the tipping point. 🙂
Bingo. A 10′ three-prong (older house) dryer extension cord brings the outlet from behind the dryer. The dryer is plugged 3 hours a week, the car charger the other 165, whether it needs it or not. The 30 amp outlet puts out about 22 miles of charge every hour. No electrician, no charging station, that’s it. And if you don’t like plugging/unplugging, google Dryer Buddy.
And if you have off-peak electricity rates, you program the car to charge when it is cheap.
I should have been a bit more clear on item b. I would like it where any EV can use any public charging station.
From what I’ve seen on YouTube, Tesla stations are only compatible with Tesla cars (ie: no Nissan Leaf or Chevy Volt can charge at a Tesla station).
None of this matters to me too much…I’ve been priced out of the new car market for years. Plus most cars today are unattractive to me anyway so I wouldn’t want one if I could afford it. I am irretrievably linked with my old heaps which should last me until I’m on the slab.
Speculating. Everyone likes to do it. Seems that most of what is called “news” is actually speculating. Here’s what will happen if _____ happens.
Maybe.
And we’ve seen more than a few “peak” eras come and go for various things.
All we can know for certain is postmortems. Have we reached peak car? Check back in 20 years.
I am in the mood to comment tonight. I am done with my day, I am showered and fed. I am in a good mood. Unfortunately I have nothing to contribute. Even my go-to “all new cars are ugly” schtick doesn’t feel right. I enjoyed reading the comments and though they at times verged on hostile political debate, everyone was civil and decent to each other. So I have nothing to add. You are an interesting group of people, and I hope you all have a good night.
Haven’t wrote on the comment boards here in a while; I tend to lurk. I’ll go one step further into the future; one that I hear mentioned very little. Obviously, battery life and charging station availability becomes a major issue with people, but the in the overall grand scheme of things, one has to wonder and be concerned with the actual infrastructure of electricity and whether that infrastructure can support the actuality of millions of cars being driven on a daily basis.
I live in Manitoba, Canada, and hydro power has always been a major source of our exports, because we have lots of water and have harnessed it to generate electricity (i’ve long speculated that places like Manitoba would turn into the boom economy that oil rich places currently are or used to be). Not every place is like this; we sell a lot of our electricity already to the US.
The question then becomes: how affordable does it become to use electricity as a major power source? We won’t know the answer to that question until whatever bottleneck arises in the system, and that will partly dictate the cost of electricity, but also, supply and demand….either perceived or real. My guess is that the upgrades, maintenance and repair that are needed to keep the infrastructure *reliable* are going to be astronomical, and we’ll only find out the hard way after everyone takes their cut in the profit chain and realizes that they need to charge more to make it viable. It may be affordable at first, but there may be some losses involved that some industries won’t be able to sell as a loss leader forever–even Tesla is still finding their footing in losing money, hoping that they can amortize costs and infrastructure of EV’s over the course of time, as costs (hopefully) come down.
Food for thought……
The existing grid has gobs of excess capacity at night, enough to charge millions of EVs overnight. Power companies are salivating at this, as a way to increase revenue without having to increase capacity.
This is one of the beauties of EVs, the utilization of otherwise excess electric capacity.
But yes, if folks are going to use daytime charging extensively, it will lead to the eventual need to increase capacity.
Good point, Paul, in that night time usage will be favorable. Peak usage times, of course, does become one of the bottlenecks in the system–sort of like roads during rush hour and during the busiest times of the day.
Interestingly enough, I’d watched a documentary on Nikola Tesla, and how his AC generator far surpassed Edison’s DC generator; making electricity far more easy to produce and use. We’re still reaping the benefits of alternating current. Tesla was a genius.
“Power companies are salivating at this, as a way to increase revenue without having to increase capacity. ”
Exactly. They can capture a big share of total energy spend from the oil & gas industry.
Some of the studies I’ve seen show that EV and Plug Hybrids have to get to 20-25% market share before it starts stressing the electrical grid.
Now when all houses n the same transformer are charging their EVs at once you can have local brownouts and said transformer will wear out much faster.
Besides all these discussions I kind of wonder if the basic premise of the one car per person society can be sustained. Individual mobility has given us the freedom to make many choices that at one time (pre 1900s) were unavailable. We can decide where to live, to work, to go for education and recreation, We can decide on our own time schedule. Of course, as a society we are kind of bumping up against the limits of this paradigm. Our choices have resulted in highways congested with cars creeping along at walking speeds. Typical commute times to outlying exurbs of one to two hours, each way.
Urban mass transit systems can be effective. Long distance mass transit for daily commuting is a bigger challenge. Yesterday I was part of a 90 minute commute of only forty miles. Normally this isn’t part of my routine. I have chosen to live in the city that I’m employed in. This was a conscious decision made over thirty years ago. I will admit that there were more housing options available to people of my financial position at that time, than there are now. It seems that there are bigger problems than which propulsion system that is powering our cars.
I agree with that editorial about the demographic and political realities manifesting themselves in the automotive world.
I just hope my 2012 Impala lasts a very long time, because the way prices are going, I won’t be able to afford a new car anymore!
I work at a car dealership. It will be interesting to see what happens the next few years.
Maybe this should be a topic in itself, but it makes me wonder what will happen to all the older well-kept cars and classics. Younger generations may not care so much what happens to the GTO, T Bird or whatever they inherited. Do they get sold to another country? Do they get turned back out onto the street and live out a life span then?
I’ll keep driving older cars. I’ll keep fixing up old Rangers and such. I sure can’t afford the price of a new one despite working in the car biz for 30 plus years.
Look at how any antique or collectable is treated, and there is your answer.
Look at the current state of antiques in general. The ‘market’ has been ruined by several factors. One, the internet has exposed that many items thought rare are actually not. This presumed rarity led folks to overvalue many things they should not have. What some may have believed was genuinely of value has been proved otherwise in all too many cases. That 1937 Nash? Yeah, there are more of them out there than you thought, and as such it is worth $3000, not $30,000 or $300,000. Second, what is collectable to one generation is often not desired at all by the next. The Greatest Generation seems to be the ones who really liked Brass Era and Full Classics that were not Duesenbergs, and Boomers like muscle cars and finned wonders. Perhaps it takes a couple of generations for the item in question to become interesting again. Third is the fact that cars are just not as interesting to the generations of now as they were to us older folks, so the interest in collecting them is going away.
The best example is Fiesta Ware china. Twenty years ago, it was white hot on the collector market. Original 1950s pieces were going for top dollar, up until everyone realize that it was still out there in great number, and it was being reproduced by the company that first made it as well, and one could go to Kohl’s and buy an entire set on sale. Suddenly, it became passe, and only the dedicated collectors have it. Everyone else donates it to Goodwill when cleaning out Aunt Edna’s house after she passes.
The old cars will still have a dedicated few holding on to them, some stored, some driven, but many will be returned to the great auto recycler once the current owner meets his or her maker. Scrap is only another way of saying S(omeone’s)CRAP.
I’m a bit less pessimistic than that. In most cases popular “antiques” create a demand for reproduction pieces to substitute for the real deal when a style makes a resurgence. Makers of clothing, accessories, furniture and collectibles can respond to these market demands on a scale and timetable for a reasonable price point far more nimble than automakers can, or are even allowed to(retro cars are just barely passable recreations of the originals at best). On top of that, while not truly antiques, the recreations ultimately water down the value of the real deals nonetheless. Besides a few popular kit cars, antique cars don’t face that kind of oversaturation.
Now I absolutely believe values will plummet, as we have seen with other collectibles, but that’s a long way from being sent to scrap(I can positively say I’ve seen zero brass era cars at the pick n pull junkyards despite their demo being extinct), and I don’t see how that’s a bad thing. I fell in love with muscle cars as a little tike in the 1990s, due in no small part to actually seeing even the most sought after models in normal traffic occasionally, maybe not in (over)restored condition, but there all the same. When they turned into six and sometimes seven figure collectibles all those street sightings instantly vanished, even from local cruise nights, I’d welcome seeing them driven by people willing to drive them again.
You’re conflating those televised Barrett-Jackson auctions with the old car hobby. The latter existed long before the former became popular.
People were restoring old cars for fun long before some were doing it for a profit. The Antique Automobile Club of America (AACA) was formed in 1935.
If the prices of some vehicles fall – and they will – it will put them within the reach of people who have been priced out of the hobby by the “Barrett-Jackson effect.” They will be buying and tinkering with cars as a hobby, not as a money-making venture.
The old-car hobby will change – by once again becoming more of a hobby – but it isn’t going to shrivel up and die.
One reason I play in the Classic Semi Truck part of the Classic Vehicle game. There is no Barret Jackson hype-o-matic pushing up the prices of 80s Freightliner FLAs and Ford L9000s.
Uh oh, now you just jinxed it……once someone mentions the deals to be had, then that’s when the market goes up, hahahaha.
I’m not too worried
Its not like 90% of the population suddenly want a classic vehicle that weighs 8tons, is 9-13′ tall, requires a CDL or non commercial A or B License and gets 4-8mpg.
2 stroke Detroit with a 4×4 twin stick trans and arm strong steering is a nice cover charge to keep out the Riffraff.
I figure in another 20-30 yrs when Electrics has made them all commercially obsolete they will be as cool as old steam engines.
Thanks again, Paul, for posting these. While predicting the future is always risky, big companies that don’t consider future options are at risk. While GM is an obvious target for ridicule, Toyota may be a big looser unless they get with pure EV’s soon. Hydrogen, while interesting, seems to be a dead end, where Toyota made a bet.
My current view is that battery EV’s will eventually (~20 years) dominate the personal vehicle fleet, personally owned, shared or autonomous. Many existing fuel retailers can survive by replacing gas/diesel pumps with rechargers, and still make the majority of profit, as they do now, selling food and lottery tickets. The service station business model of fuel, tires, batteries and repairs already died, so they adjusted.