Owning a car can seem like a requirement in many regions. The necessity may be true at this moment, but several forces are reducing the need for, and cost of, car ownership. Even if you decide to buy a car, the following factors encourage spending less. The uses of owning a car are challenged by new alternatives, while the cost of future production faces downward pressure.
Elon Musk has taken several opportunities to explain how much production efficiency can improve, and how many robots are already capable of moving faster than the eye can perceive. More importantly, machines need only stop for maintenance. As production becomes more automated, 24/7 operations will become the default, requiring less equipment to satisfy old production requirements. This all but guarantees downward pressure on car values.
Self driving ride-sharing
Everyone is in a race to master self driving cars, and take over transportation of people and goods. Waymo is already offering rides in select cities. Current vehicles aren’t designed to safely or efficiently accommodate several passengers on similar routes, but many concepts are being tested to address the opportunity. Even without radical changes to vehicle design, taking drivers out of transportation will significantly cut costs, while also increasing availability.
The reasons to leave your home continue to diminish. Amazon started with books, growing to include fresh produce in select regions. Virtually anything can, and will, be delivered. Uber has been testing long haul trucking, and several startups have begun testing drones for last mile delivery. As the logistical costs continue to drop, it will become a novelty to leave your home for physical goods.
Cars have many moving parts and electronics, subject to uniquely stressful operating conditions. Any flaw in manufacturing can lead to a cascade of problems, and repairs. Even if covered under warranty, such problems can ruin your day, consuming several hours to address each issue. Unlike the other factors mentioned, this is not a new issue, but people continue to underestimate the burden.
Virtual Reality (VR)
While still in its infancy, the progress is rapid, and tech demos continue to stretch our imaginations. It won’t be long before virtual meetings include most of the experience of sharing a room. Considering many of us are fine to lose the touch, taste, and smell of meetings, many work situations could easily transition to current VR solutions. Many of us already prefer to learn from our laptops and other low immersion options, but 360 and/or 3D content will help others transition from lecture halls and auditoriums. While we will never live our entire lives in VR, even proportionally small adoptions will greatly alter the transportation landscape.
The amount you are willing to spend on a car is essentially a bet on how much you think it will be the best solution for your needs, and for how many years. As the pace of technological change continues to accelerate, I suggest placing smaller wagers.