Auto Industry Is Building for a Past That's Never Coming Back
Some car companies are operating without regard for a declining customer base
WardsAuto argues that automakers are pouring resources into technologies and business models that assume a future resembling the past. The article contends that the industry's focus on incremental improvements to the internal combustion engine and traditional dealership models ignores the rapid shift toward electric, autonomous, and shared mobility. It warns that this backward-looking strategy will leave legacy automakers vulnerable to disruption from tech companies and new entrants.
The auto industry is building for a past that's never coming back.
- pmontra
You sell less to people living in the cities but maybe you sell more to the operators of fleets of rental cars, even self driving if that really becomes mainstream. Not enough to match the decrease of sales.
You keep selling to people living in countryside, where you don't go anywhere without a car and where fleets of cars would have to be very large to be able to cover the territory in a meaningful way. There will be less and less people living there but it could affect the kind of cars that are manufactured. By the way, a self driving car would be very useful to elderly people living in their house far away from the nearest town.
In any case, less cars.
- usernametaken29
If your theory is true we might see an era where supply vastly exceeds demand and car manufacturers will need to offset brand new vehicles to keep cash flow going. Sounds great to me, sign me up for 20$k brand new Ford when the time’s ready.
- owyn
"Vertical Takeoff and Landing aircraft are on track to provide urban air transit within the next few years, targeting the high-margin commuters who traditionally buy premium vehicles."
Okay. So... flying cars? Don't think so. Robotaxis make sense where taxis make sense and you can get by without a car already. The demographic decline is real.
- sohrob
Cars have become obscenely expensive and auto makers seem to be incorporating more and more planned obsolescence into their designs, so I've decided I'm just going to keep driving my aging car for as long as I can and maybe just get an e-bike for short trips to the market. It really feels like the auto industry is made up of dinosaurs who don't see the asteroid coming their way.
- mikelitoris
It was going so well until it mentioned VTOL aircraft. It's been 100 years of this sci-fi dream man... People need to understand that nobody wants drones or "flying cars" above their head or property...
- artisinal
Happy to live in a place where I can get anywhere without a car.
- bryanlarsen
Will robotaxis actually reduce demand? A taxi that does 10X as many passenger miles a day as a normal car may theoretically replace 10 cars but because of dead heading might be traveling more than 10X as many miles.
Cars today have an approximate lifespan of 200,000 miles. It might take a set of conventional owners 20 years to hit that, or a taxi company 2, but either way it's getting replaced after 200,000 miles. The taxi might be in slightly better shape, but taxi customers have higher expectations than buyers of 15 year old cars.
Replacing 1/10 the number of cars 10x as often is the same demand.
With EV technology it should be possible to design a million mile car. Electric motors can easily do that, and LFP batteries can get close. But interiors and suspensions still cannot do a million.
When we see interiors made out of the same materials as subway cars, that might be a sign of future lowered demand.
- jmward01
Technology is a fickle thing. The first production passenger car was created in 1886. The model t came out in 1908. We have had cars for 150 years, but that doesn't mean that they will be the standard for the next 150 years. In my life I have seen the land line telephone and radio go from core fixtures in a house to rare techno-memorabilia. (My house actually has a telephone nook. How many houses have tv nooks built for old CRT displays that will never be needed?) If you told me 25 years ago I wouldn't have a land line in the future I would have been shocked. Now it is ridiculous to even consider getting one and I haven't had one for a decade. Can you even buy a land line phone anymore?
Transportation is going through many massive changes right now. I haven't driven to the office in a decade. Huge segments of the workforce are migrating to exoburbs because they don't need to drive to work anymore. My son hasn't mentioned wanting to drive. My neighbor's kid flat out says she doesn't want to learn (both will be able to soon) and many of their friends don't want to learn either. There is a generation growing up far less invested in the car than the generation before them. Some of the points in this article may not be perfect, predicting the future is a fools bet, but it sure feels like the trend they are bringing up is real.