By Eve Chen () - August 8, 2019
We’ve been seeing hybrids cars, on-board GPS systems and back-up cameras for years. Newer innovations, like all-electric vehicles, are on the roads but are far from mainstream. And driverless cars still appear far in the future.
It seems like it’s been a while since we’ve experienced a real “aha” moment in the car industry. There have certainly been some great improvements over recent decades, with more-durable cars laden with safety features and more-reliable cars that require far less maintenance. But what else is forecast for the auto industry?
According to a recent report by CNBC, “the once hot gas-electric vehicle is losing its appeal.” The automotive forecasting firm LMC Automotive estimated that U.S. sales of full hybrid vehicles fell six percent last year. Even Toyota, manufacturer of the best-selling Prius, reported a five percent drop in hybrid sales. What is going on?
The End of the Line for Hybrids?
With the price of gas moderating, the incentive to switch to hybrid engines may have faded somewhat, according to CNBC, but the story is different for all-electric vehicles like Tesla’s. While Toyota sold just 28,000 plug-in vehicles in the U.S. last year, Tesla hit the 245,000-vehicle mark, led by its Model 3. It seems that many customers figure that if they are trying to be more eco-friendly, they might as well go all-out with full-on electric.
Yet at just 1.2% of total U.S. sales, the all-electric slice of the market is still relatively tiny. A survey by Morning Consult found that to generate more momentum, electric car-makers still need to overcome consumer perceptions of ultra-short driving ranges and lack of adequate public charging stations. Better education about these cars—and the government incentives that support them—may be good starting points toward greater acceptance.
The State of Automation
Are self-driving cars far behind? We’ve been hearing about AVs—autonomous vehicles—for years, but are they actually on the horizon yet?
Many drivers may already be noticing an increase in automated features, such as cruise control, parking assist and lane correction. The AV category is segmented into five levels, with the ultimate goal—full automation—considered the Holy Grail. At Level 5, vehicles are considered fully automated with no human needed. Incredibly, research firm HIS Markit forecasts that 51,000 fully-automated AVs will be sold in 2021. That’s only two years away!
Following their introduction, global sales of autonomous vehicles will expand rapidly, reaching 1 million units in 2025 and more than 30 million over the following decade. Other sales forecasts vary widely, but all hold the promise of multi-million-unit sales by the early 2020s. According to Jeff Remsburg, contributing editor of InvestorPlace:
“…looking across the entire automotive sector, it’s now impossible to find a major auto company not touting autonomous-driving — and the time until a self-driving vehicle is actually in your driveway may be much sooner than you realize.”
We can promise you one thing: it will be a wild ride in the automotive industry over the next ten years!