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Page added on December 3, 2018

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Have we reached Peak Car?

Have we reached Peak Car? thumbnail

General Motors has announced it’s shuttering five production facilities and killing six vehicle platforms by the end of 2019 as it reallocates resources towards self-driving technologies and electric vehicles.

The announcements should come as a surprise to no one, as they echo a similar announcement made by Ford earlier this year that it will exit all car production other than Mustang within two years.



Why the sudden attitude adjustment toward cars? Well, both firms cite a focus on trucks, SUVs and crossovers. OK, sure — that’s what more people are buying when they buy a vehicle today. But there is a broader and more long-term element to this discussion.

Have we reached Peak Car?

Many may remember the dialogue associated with Peak Oil, or the idea that we had reached or would soon reach the peak production levels of oil around the globe.

Such forecasts and predictions were likely related to price run-ups on commodity and investment strategies in the oil industry. However, new exploration discoveries and extraction technologies ultimately mean we are a long way from running out of oil. While we may still hit peak production in the near future, it is more likely due to a decreasing need as society moves to alternative energy sources.

But what about cars? North American car production hit 17.5 million vehicles in 2016, and dropped marginally to 17.2 million in 2017. Interesting, but perhaps not significant.

More telling are changes in driver behaviour. In North America, for example, fewer teens are getting driver’s licences. In 1983, 92 per cent of teens were licensed, while by 2014, that number had dropped to 77 per cent. In Germany, the number of new licences issued to drivers aged 17 to 25 has dropped by 300,000 over the last 10 years.

The future is driverless

Factor in ride-sharing services like Uber and Lyft, the comprehensive cost of vehicle ownership and more effective public transportation (everywhere but Canada) and we get a sense of some of the reasons for these evolving automotive strategies.

Most significant, however, is the evolution of self-driving technology. Picture this scenario:

Julie is an ER doctor at the local hospital, on the 7 a.m. to 3 p.m. shift. She jumps in the family car at 6:30 a.m. and is at the hospital by 6:50 a.m.

After dropping Julie off, the car then heads home, arriving in time to take Julie’s two children to their high school; one of them tosses their hockey equipment in the back of the car. The car then returns home to take Julie’s husband to the law office where he starts work at 9 a.m.

The car then swings by the school to take Julie’s daughter to hockey practice at 2:30 p.m., and then returns to the hospital to pick Julie up. And so on.

A Range Rover self-driving car on display during a demonstration of connected and autonomous cars that will park, emergency brake and show other emergency vehicle and warning features for the first time on open public roads in Milton Keynes, England in March 2018. Frank Augstein/AP

The technology to support the scenario above exists now, and will result in reduced car ownership through a more economical and efficient approach to managing cars, whether accessed through independent household ownership or fleet membership.

As it is today, a family like Julie’s would need two or possibly three vehicles, and those vehicles would largely sit still most of the day. Tomorrow, the family could be down to one vehicle, possibly an SUV for the hockey gear. What happens when families or groups of people further pool their assets for more ride-sharing or increased capacity?

Fewer cars on the road within a decade

We are moving from a do-it-yourself (DIY) transportation economy to a sharing or do-it-for-me (DIFM) economy. Many of us won’t like it — I honestly like to drive — but the numbers and the technology are there.

As safety technologies improve and societal paradigms shift, this evolution will gather momentum. Based on the young driver statistics above, it seems reasonable to anticipate a reduction in cars per capita of 20 to 30 per cent in the next decade.

Unions at GM and Ford are justifiably unhappy, but they shouldn’t be surprised. It is quite possible that we have reached Peak Car in North America and Europe.

Companies that want to succeed in this new environment will need to be different, and especially better in some way. If car volumes drop by 30 per cent over the next 10 years, there better be something special about the car company that hopes to survive, let alone prosper — like better technology, better comfort or better service.

If current trends continue, we can anticipate more shutdown announcements — like GM’s — from car companies and parts suppliers, as there won’t be room for all of them.

the conversation



30 Comments on "Have we reached Peak Car?"

  1. Cloggie on Mon, 3rd Dec 2018 12:10 pm 

    British consultancy firm: by 2030 you won’t own a car anymore, you will be driving in a robot-on-demand at a fraction of per mile cost and will be picked up from your door. By 2030 car and oil companies will be dead.

    https://deepresource.wordpress.com/2017/05/16/by-2030-you-wont-own-a-car/

  2. Skeptical on Mon, 3rd Dec 2018 12:13 pm 

    “The [self-driving] technology to support the scenario above exists now..”

    Does it though? It seems to me that there are lots of “corner cases” in which it fails. When that happens you’ll like get pile-ups and weird congestion patterns forming since it’s not like someone will be monitoring all these cars, ready to step in when things go sideways.

  3. Davy on Mon, 3rd Dec 2018 12:20 pm 

    “by 2030 you won’t own a car anymore, you will be driving in a robot-on-demand at a fraction of per mile cost and will be picked up from your door. By 2030 car and oil companies will be dead.”

    LMFAO we may not have cars period especially not with robots

  4. Outcast_Searcher on Mon, 3rd Dec 2018 12:22 pm 

    The driverless technology is only “there” in spots. It will take a LONG time, likely decades, before driverless cars are safer than humans (level 5 FSD) on all roads — i.e. without strict ring fencing.

    Once that actually happens, and is cheap enough, convenient enough, reliable enough, to consistently replace human drivers at a reduced cost, then sure — things will change dramatically. Just don’t expect that “tomorrow” any more than expecting the 2% or so of BEV’s to suddenly become 80% to 85% of the auto fleet. That transition will also take decades.

  5. Outcast_Searcher on Mon, 3rd Dec 2018 12:23 pm 

    Davy, if doomers’ predictions were even vaguely reliable, such claptrap would be worth listening to.

    As it is, except for the Cassandra crowd, you doomers are just talking to yourselves, and being at least 90% wrong in your predictions (especially timing), as per usual.

  6. Davy on Mon, 3rd Dec 2018 12:34 pm 

    “Davy, if doomers’ predictions were even vaguely reliable, such claptrap would be worth listening to.”

    OS, you didn’t see me say “will” did you? I said “may not” You and neder tend to say “will” like it is already so. There are too much uncertainty yet to be making predictions out that far. Driverless tech is not even proven yet. It is being developed.

  7. george on Mon, 3rd Dec 2018 1:47 pm 

    This article is absolute nonsense .

  8. I AM THE MOB on Mon, 3rd Dec 2018 2:10 pm 

    You won’t own a car in 2030 because you will be dead!

    There I fixed it for ya!

    Outcast remember when they said there would be flying cars in the future?

    That’s called putting the cart in front of the horse.

  9. Antius on Mon, 3rd Dec 2018 3:01 pm 

    We have reached peak prosperity, which is to say, peak disposable income on an aggregate global basis. Gains by the third world are now roughly balanced by declining prosperity in the western world.

    Given that a car is the most expensive thing most people own after their house, peak cars will coincide with peak prosperity; so yes, we have reached peak car. Look at tye statistics for any western country and you will see steep declines in the number of miles driven since 2008, as well as declines in car ownership, especially amongst the young. The crap going down in France right now is indicative of how desperate and angry most people are getting.

    As Cloggie points out, there is one option that would allow people to retain the benefits of the car without its full cost. Given the importance of transportation to mobility of labour and the increasing unaffordability of cars to a growing percentage of the population; I think it highly likely that an attempt will be made to roll out autonomous cars on a large scale relatively soon. There will be a huge amount of money to be made by anyone that can make this work.

    It isn’t really a choice between autonomous and private cars. The number of people able to afford private cars is going to shrink progressively in future decades. And they will be viewed more and more as luxury items owned by a wealthy and increasingly hated minority; taxed more and more in the future. For most people, using autonomous vehicles, which share the cost of ownership across a large base, will be the only way they can afford car travel.

    As I have said before on numerous occasions, this does make it easier to convert road transport to non-fossil energy. Most of the autonomous vehicles will only need short range and can be powered by compressed air, hydrogen, batteries, hot water, etc.

  10. bob on Mon, 3rd Dec 2018 3:05 pm 

    This article has a car that is driving twice as far to do all the drop-off pick-up routines so it is hardly efficient. Also there is a lot of scheduling involved. What if 2 people want to go at the same time? I guess 1 flags a car that a drunk just vomited into. Or maybe someone dumps a keg of roofing nails onto the road and hundreds of autocars run on flats, grinding to a stop on the roadway and they all get to walk home. Better yet, the roads and bridges are in such disrepair that the government will never be able to pay to fix them so all the smart cars can get you there safely. And how do you pay for all this while you work at Burger King? My guess: The autocar will not save America but the electric bike will.

  11. Davy on Mon, 3rd Dec 2018 3:14 pm 

    “it highly likely that an attempt will be made to roll out autonomous cars on a large scale relatively soon. There will be a huge amount of money to be made by anyone that can make this work. It isn’t really a choice between autonomous and private cars. The number of people able to afford private cars is going to shrink progressively in future decades.”

    OH, there may be an attempt to roll out these driverless cars but then there will be the reality of the cost and the likely unreliability of something this new that will require years to prefect. There will likely be a squeeze on any efforts to make them work plus the firm will of the people to have private discretionary transport resisting efforts. I see something that is not going very far and will be restricted to areas already highly receptive to these systems. These areas will be the guinea pigs for an economic test that may not turn out so well.

  12. Davy on Mon, 3rd Dec 2018 3:59 pm 

    “Ford To Announce 25,000 Job Cuts: Morgan Stanley”
    https://tinyurl.com/ycvsr4lx

    “MS analyst Adam Jonas said that as part of Ford’s $11 billion ‘restructuring’, Morgan Stanley expects the car maker could cut as many as 25,000 jobs (though the bulk of the cuts would likely focus on its profit-draining European operations). “We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.” Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman. “These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”

  13. I AM THE MOB on Mon, 3rd Dec 2018 4:42 pm 

    Davy

    Those layoffs really contradict the media’s narrative that the economy is booming..

  14. Davy on Mon, 3rd Dec 2018 5:20 pm 

    “GM to lay off up to 14K workers, close as many as 5 plants”

    https://tinyurl.com/y7haayrj

    “The restructuring reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago.”

    “GM is shedding cars largely because it doesn’t make money on them, Citi analyst Itay Michaeli wrote in a note to investors.”

    “We estimate sedans operate at a significant loss, hence the need for classic restructuring,” he wrote.”

    “General Motors Co.’s pre-emptive strike to get leaner before the next downturn likely will be followed by Ford Motor Co., which has said it is restructuring and will lay off an unspecified number of white-collar workers. Toyota Motor Corp. also has discussed cutting costs, even though it’s building a new assembly plant in Alabama.”

    “GM isn’t the first to abandon much of the car market. Fiat Chrysler Automobiles got out of small and midsize cars two years ago, while Ford announced plans to shed all cars but the Mustang sports car in the U.S. in the coming years.”

  15. Dirty Juan on Mon, 3rd Dec 2018 5:32 pm 

    I posted this article for Davy because I like stealing identities and playing games:

    “GM to lay off up to 14K workers, close as many as 5 plants”

  16. Davy on Mon, 3rd Dec 2018 5:34 pm 

    “Those layoffs really contradict the media’s narrative that the economy is booming..”

    Exactly MOB but the auto industry is in even more trouble after years of subprime driven car sales. This is happening in China also.

  17. Jim-el on Mon, 3rd Dec 2018 5:42 pm 

    There ain’t no way! I applaud the safety innovations of recent years, and the coming option of non-drivers to relax and enjoy the ride (and save lives!).

    But I’m a driver. My 1-person household relies on three vehicles. My 27-year-old Toyota MR2 was originally capable of 0-60 mph in 5.9 seconds, and its speedometer promises a top speed of 160. I rarely test its current capabilities, but 140 is my lifetime max, so far. Uber would not be the same ….

    I have a 3-wheeled motorcycle that I bought when it had 10,000 miles on it. It crosses an intersection far faster than the MR2 ever did.

    When I want to pull a trailer or haul a load or journey along the logging roads in unpaved country, I take my 4×4 pickup. My life has brought me to the level of affluence to afford the licenses, fuel and insurance on all three rigs, and if I had to make a choice, to give up one or another of them, I would have no ready answer. I would feel oppressed.

    Autonomous vehicles are not for me, or for anybody like me. Uber/Lyft will never take me for an exploratory Sunday drive, or take me on a wild weekend adventure in the wilderness.

    I probably don’t rack up more than 3000 or so miles per year any more, mostly out of consideration for air quality, depleting fossil fuel resources, and global warming, but I look forward to $10 per gallon fuels, to reduce the traffic and environmental impacts.

    I’ve probably reached “peak car” in my life, and will likely give up my lane-space and parking places over the next quarter century, but in the meantime I’ll be resisting any restrictions or limits on my manual driving.

  18. I AM THE MOB on Mon, 3rd Dec 2018 6:18 pm 

    Davy

    Tesla Is ‘Structurally Bankrupt’ But So Are GM And Ford

    https://www.forbes.com/sites/erikkobayashisolomon/2018/02/22/tesla-is-structurally-bankrupt-but-so-are-gm-and-ford/#41642186203c

  19. Davy on Mon, 3rd Dec 2018 6:27 pm 

    Slob,

    What do you expect? American motor vehicles are garbage. I even prefer Japanese and European automobiles.

  20. Dirty Juan on Mon, 3rd Dec 2018 6:42 pm 

    I took Davy’s name again (above) because I have rodent instincts.

  21. Davy on Mon, 3rd Dec 2018 7:10 pm 

    I made up Dirty Juan (above) all by myself, because I needed someone else to blame.

  22. I AM THE MOB on Mon, 3rd Dec 2018 7:28 pm 

    Here’s Tommy Robinson falling for a ridiculous fake news story … twice

    https://uokhun.uk/2018/10/12/heres-tommy-robinson-falling-for-a-ridiculous-fake-news-story-twice2/

  23. I AM THE MOB on Mon, 3rd Dec 2018 7:47 pm 

    Vladimir Putin Planning To Create Fake Videos To Throw 2020 Election Into Chaos, Intelligence Experts Warn

    https://www.inquisitr.com/5192575/vladimir-putin-fake-videos-2020-election/

  24. Davy on Mon, 3rd Dec 2018 8:07 pm 

    Extremist like you and me are doing a good enough job of tearing our country apart ourselves SLOB. All the Russians need to do is sit back and enjoy the show.

  25. Free Speech Forum on Tue, 4th Dec 2018 1:47 am 

    What would you do if you married a young and thin virgin, but she insisted on living in an impoverished village in Siberia near her friends and family?

  26. Davy on Tue, 4th Dec 2018 5:07 am 

    “Water-stabilized hydrogen fuel promises twice the range of gasoline at half the price, with zero tailpipe emissions”
    https://tinyurl.com/y7ozl6d2

    “Israeli-Australian company Electriq Global’s new technology stabilizes hydrogen in a recyclable liquid that can be pumped and transported just like gasoline. That’s huge news, because it enables long-range electric driving with fast refueling – and it plugs right into the existing fuel logistics model.”

    “Electriq says it has worked out a way to stabilize hydrogen in a liquid form that’s around 60 percent water. This makes it simple to transport and store, eliminating the single biggest reason why hydrogen hasn’t taken off at this point. Using a standard sized fuel tank, the Electriq system would, according to modeling, cost less than half the equivalent gasoline price to fill up, and it would deliver around twice the range, while being completely emissions-free – at least, back to the fuel production plant.”

    “Here’s how it works. Electriq produces the fuel at a production/recycling center. According to Electriq spokesman Michael Simonetti, the recipe is “surprisingly simple,” and doesn’t require any rare or expensive elements. When it’s fully loaded, the fuel contains about three percent hydrogen and 97 percent supporting material. The fuel is moved via tanker to gas stations, much the same as happens with gasoline, and drivers fill up their cars at a pump.”

    “The Electriq system replaces a troublesome compressed hydrogen tank with a simple liquid fuel tank and…The fuel tank in the car, which is about the same size as a regular fuel tank, has a separate module called the “Switch,” which releases small amounts of a catalyzing chemical into the fuel tank to release the hydrogen from the fuel. Once the hydrogen is released, it’s sent directly to a fuel cell to be converted into electric energy, which is then used to power an electric drivetrain. Everything from the fuel cell onwards is standard and already on the road in existing fuel cell vehicles.”

  27. Mark Ziegler on Tue, 4th Dec 2018 8:14 am 

    If there were a politician that was concerned about our energy supply they would look at a comprehensive rail system

    https://www.youtube.com/watch?v=TOORJa5GUCI

  28. Davy on Wed, 5th Dec 2018 6:17 am 

    Diminishing returns at work of price and performance.

    “2019 Nissan LEAF — Still No Liquid-Cooled Battery?”
    https://tinyurl.com/y7mmtnrp

    “A report on the upcoming 60 kWh Nissan LEAF from respected German news site Electrive.net suggests that it will still lack liquid cooling of the battery. This is despite increased charging rates of 100 kW and increase power output of 149 kW. Notably, with higher power comes higher heat generation. Are we going to see #Rapidgate all over again? Anyone following EVs for a while is aware of the thermal management issues that have beset the 40 kWh Nissan LEAF as well as previous generations of the car, and that have disappointed a great many owners of the vehicle as a result.”

    “Despite these hopes, according to the news, the 60 kWh Leaf will stick with air cooling, albeit this time with some active fans (not present in the current LEAF) and, I would speculate, a cold-air-redirect from the passenger compartment’s air conditioning cooler. This is the type of battery cooling system employed in the current 40 kWh Nissan e-NV200 light commercial van. Even with this, some charge power throttling does still occur to avoid excessive battery pack heating. The current LEAF and e-NV200 both have the 40 kWh pack, typically charging at between 35 and 45 kW. The 60 kWh pack on the new LEAF is 50% larger and will charge at 2× the kW power.”

    “Given that a 70% top-up on the current LEAF, even limited to 46 kW, adds 20° Celsius worth of heat to the pack, it seems unavoidable that a 50% greater amount of energy added via 92 kW charging will — other things being equal — add at least twice the heat (yes, that’s 40° Celsius of added heat from a single DC charge). This is the challenge that a battery cooling system must overcome. With all current battery cell chemistries, it is simply not possible to charge a battery pack at around 100 kW for 20–30 minutes (adding 33 to 50 kWh of energy) without generating a huge and potentially damaging amount of heat in the cells. The only solution is for this heat to be rapidly transferred away from the cells — typically by actively circulating cooling liquid through the battery pack and out through a radiator, as almost all recent EVs are designed to do. The only conceivable ways around having a well designed active liquid cooling system are either:”

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