29 Jul The Future of the Industry: Is car ownership a thing of the past?
In perhaps some of the boldest predictions we’ve seen about the future of the automotive industry, Tony Seba, a Lecturer in Entrepreneurship, Disruption and Clean Energy at Stanford University, claims the following will be true by 2030.
- All new energy will be provided by solar or wind.
- All new mass-market vehicles will be electric.
- All of these vehicles will be autonomous (self-driving) or semi-autonomous.
- The car market will shrink by 80%.
- Gasoline will be obsolete. Nuclear is already obsolete. Natural Gas and Coal will be obsolete.
- Up to 80% of highways will not be needed.
- Up to 80% of the parking spaces will not be needed.
- The concept of individual car ownership will be obsolete.
- The Car Insurance industry will be disrupted.
- The taxi industry will be obsolete.
It’s a lot to unpack, so we’ll start with the basics. By what metrics does Seba make such striking forecasts? As a Silicon Valley entrepreneur himself, Seba’s understanding of the automotive industry comes from a technology point of view. He feels it won’t likely take running out of other fuel sources to transition to clean energy, but rather technology that makes alternative energy and transportation less expensive and more efficient will squash competitors and make older models of business obsolete.
As for the mechanics of the change, Seba theorizes that the future fleets of self-driving vehicles will be owned by fleet operators rather than individuals, mimicking the current trend towards ride-sharing. The data backs that consumer perspectives are indeed changing, a study by Lyft discovered that nearly 250,000 rideshare passengers sold or didn’t replace a person car because of the availability of ridesharing. Like the smartphone, Seba feels the takeover will be quick and swift.
Assuming Seba’s predictions are accurate, what should dealerships do now to survive a change? There are two markets unlikely to change much: rural buyers and luxury buyers. So as a dealership, start looking for ways to cater to these audiences. Continue to be on the lookout for partnership opportunities with ridesharing services and make absolutely sure your service department is fully equipt for a shift in vehicle types. Besides that, it’s a watch and wait game.
What do you think, are Seba’s predictions dead on or dead wrong? Leave a comment below!
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