This is what peak car looks like

For many people, privately owned vehicles are becoming replaced by new forms of mobility. Once, the most celebrated vehicle of the 20th century, the automobile is becoming less favorable in many cities around the world today. The reasons are manifold – new transportation options are becoming more popular and concerns about pollution are increasing. People are moving to megacities, where a car is rather inconvenient than helpful and many major cities, such as London, Madrid and Mexico City, are restricting the access to certain places. Furthermore, young people are not so keen on having a license, as the numbers in the United States and in the United Kingdom show. At the same time, mobility services, such as electro scooters and robo-traxis, are being used more frequently, than in the years before. Global policymakers are talking about the so called “peak car” phenomenon, which basically predicts that car sales will decline and the transportation system per se will transform in the future. Now this does not necessarily mean that the automobile, the way we know it today, will disappear. It is rather the idea that through re-urbanization and the sharing industry, owning a car will be regarded as obsolete.

Mark Wakefield, head of the automotive practice at AlixPartners, says, that the breaking point will come, when self-driving cars will be widely popular and used. The reason for this is that replacing drivers with robots, makes travels much cheaper than driving your own car or taking a taxi.

Another reason for the decline in car sales lies within the development of technology. Automakers have included expensive, high-tech extras in their designs, which leads to higher costs of private vehicles. As a result, many people now hold on to their old cars, to save money. This is not only a phenomenon to be observed in the United States, in Europe, similar trends can be identified. Companies in the car industry, such as Daimler AG and BMW AG, are investing more money into the car-sharing industry. According to Accenture, while earnings from traditional car making decline, profits from mobility services will come to dominate the car industry by 2030. Logically, the big companies in the industry are interested in tapping into these profits.

However, converting from privately owned vehicles to new forms of mobility, bears some challenges for customers. The industry has to convince people to give up their old cars and invest in electric vehicles. Ultimately, due to the technological affordances, giving up your old car for a not privately-owned car, which can be called up on via app at any time, will become more and more popular in the (near) future.

Source: Bloomberg