So does the entire auto industry. The allure of owning a car is fading. Young people would rather rideshare, and urban planners are rethinking transportation.
The EV competition is heating up, Tesla’s cachet is in the toilet, prices for its current inventory, especially in China, are being slashed and the company’s stock continues to crater. But Elon doesn’t seem to care as he continues to tweak and twiddle with Twitter, and allegedly search for its next CEO. The fact that he would even consider hiring any of his craven and clueless cronies like Jason Calacanis is beyond sad and demonstrably desperate.
But the Tesla tribulations are really just a sideshow that is masking the looming and much more serious threat to the auto industry, one that’s been growing for years.
In part, we’re seeing the increasing impact of the inescapable fact that kids and young adults don’t really care about cars anymore. The industry’s response has been flaccid– stuffing more tech gadgets and connectivity into cars to make them appeal to younger audiences simply isn’t getting the job done.
Major demographic shifts toward urban living signal a clear need to change the utilization of our increasingly dense urban areas, where vast amounts of real estate are presently wasted for parking, both on the street and off. There’s also the continuing decrease in overall personal driving preferences; the rising acceptance of basic transportation as a shared service much like buses, trains, and planes; and the massive growth in inner-city biking, and even walking. These commuting alternatives are combining to create greater and greater pressures on the auto industry. Of course, the latest legislative triumph of lobbyists over logic — the new federal tax incentives for EVs in the Inflation Reduction Act — totally ignores electric bikes, scooters, and other transportation modalities.
There really isn’t much debate about the reasons why even the coolest cars don’t elicit the same kind of excited reactions they did in previous generations. There are no longer the kinds of emotional ties and other psychological connections we had to our cars in the old days. No one’s identity (other than a few gangbangers and drag racers) is bound up in their Mustangs or Beemers. Gen Z’s don’t connect to, or even understand, that there may be civic or patriotic elements to vehicle ownership. Millies don’t care to see the USA in their Chevrolets. We don’t know the first mechanical or technical thing about our cars and we’re somewhat intimidated by them — 95 percent of drivers couldn’t change a tire if their life depended on it. The complexity of the underlying technologies — where opening your hood may void your warranty — and the skyrocketing costs of service and maintenance make ownership less and less attractive.
And apart from the EVs, which have their own environmental and safety issues, the rest of the fleet on the street is a gas-guzzling, polluting, and rapidly depreciating set of assets that have become an unfortunate bundle of costs, responsibilities, and liabilities to be avoided if at all possible.
Finally, with more than a decade of Uber and Lyft in their rear-view mirrors, anyone under 25 believes that, for them, the utility and cost-effectiveness of ridesharing and on-demand access beat the daylights out of ownership. Transportation as a service is a fully embedded part of their driving DNA. They’d just as soon never own a car if it isn’t job essential or supplied and fully funded by their employer. This is why fewer and fewer kids are rushing to the DMV on their 16th birthday. More than 25 percent of all Gen Y’ers don’t have a driver’s license and almost 30 percent of 19-year-olds aren’t licensed to drive.
If anything, the past two years of Covid angst have just made things even worse for prospective high school drivers. As they’ve said for quite a while now, “If I’m not going anywhere, I certainly don’t need to drive there.” Even more to the point, they believe that constant connectivity over social media makes travel and physical gatherings even more pointless. With school being largely remote for the past two years, and there being no desire to get into any car with a potentially infected instructor and a bunch of other students, the appetite for driver’s ed classes was slim. They didn’t, and they still don’t, really mind waiting for wheels.
A much more existential concern for the auto industry has to do with the intentions of most major urban areas to reduce personal driving in their downtowns and central business districts; to recapture the millions of square feet of space presently occupied by low-rise parking garages and the millions of miles of on-street parking (with up to four million parking spots in New York City alone); and to automate and streamline transportation within those newly limited and reorganized city “hubs” through the use of electric, autonomous, 24/7 shuttles, robotaxis, buses, and conveyors and other walkway systems. The goal is to make their cities cleaner, less congested, more efficient, and less subject to external natural conditions like weather. A number of prototypes, many located underground, are already in operation in places like Las Vegas (where the shuttle vehicles are Teslas, for the moment) and in parts of Europe.
Personal vehicles will be largely or entirely excluded from these areas and required to be parked at garages located around the perimeter of these new vehicle-free zones. Cities are also increasingly abandoning restrictions and regulations that require developers to construct a minimum amount of parking spaces for newly constructed buildings. Within the next decade, as more of the world’s population moves into urban areas — with their places of employment being closer and more readily accessible by public transportation — there will be a further substantial decline in new car purchases, especially by the critical 18-to-34-year-old population of first-time buyers.
Hybrid work from homes located anywhere, an irreversible shift that is here to stay for certain, will only add further reasons and arguments to avoid committing limited financial resources to vehicles likely to sit parked somewhere more than 90 percent of their existence. Eventually a horse may once again be more desirable than a Honda.