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Page added on October 2, 2015
We’re a Long Way From ‘Peak Car’
Many environmentalists hope, and oil producers worry, that we’re entering a post-car era spearheaded by tech-savvy, bike-path-loving, urban-dwelling, Uber-using millennials—leaving behind generations of automobile owners whose thirst for gasoline seemed limitless.
“Millennials have been reluctant to buy items such as cars,” a Goldman Sachs analysis concludes, turning to “what’s being called a ‘sharing economy.’ ” David Metz, former chief scientist at England’s Department of Transport, claims that the growth of Uber and its competitors guarantees a decline in automobile and fuel use. Thomas Frey, the DaVinci Institute senior futurist, says that “wealthy economies have already hit peak car.”
The idea may seem plausible given recent history: tepid new-car sales, fewer miles driven per capita and shrinking gasoline use. In reality, it’s poppycock: The car habits of young adults ages 18-33 simply reflected a lack of jobs and money.
Now J.D. Power finds that millennials are the fastest growing class of car buyers. Edmunds reports that millennials lease luxury brands at a higher rate than average. Nielsen reports millennials are 40% more likely than average to buy a vehicle over the coming year. Tesla-inspired hype aside, overall electric-car sales are down 20% this year, with SUV sales up 15%.
Urban dwellers? The latest Census reveals a net migration of millennials from the city to the car-centric suburbs is already under way. And it’s just starting: A survey sponsored by the National Association of Home Builders finds 66% of those born since 1977 say they plan to live in a single-family suburban home.
Peak driving? Federal Highway Administration data show 40 billion more total miles driven in the first half of 2015, compared with the last peak set in the same period in 2007. Gasoline demand in 2015 is rising too, soon to blow past the previous record of 9.2 million barrels a day, also set in 2007. Imagine what happens when robust economic growth resumes.
Consider a related Silicon Valley trope that self-driving vehicles promise fewer cars or less driving. One Rocky Mountain Institute analyst thinks “if implemented correctly” they could be used to increase public transit use. Lawrence Berkeley Lab researchers implausibly posit self-driving cars are “potentially disruptive,” provided they’re used mainly as taxis, and involve fewer solo rides.
But whether a human or an algorithm is driving, it’s still a car. One disruptive change that could arise from self-driving cars is that the growing elderly population, and others infirm or isolated, will be able to continue owning cars and enjoying the freedom and mobility they bring. And cool tech features may, if anything, make cars more attractive, not less, to tech-savvy millennials.
For all their iconoclasm, the baby boomers eventually got married, moved to the suburbs and bought houses, SUVs and minivans for their double-car garages. Generation Y is going down the same road. The forecasts of peak car look to be about as accurate as those of peak oil.
32 Comments on "We’re a Long Way From ‘Peak Car’"
Beery on Fri, 2nd Oct 2015 3:00 pm
Newsflash: WSJ says peak car is nonsense. In other news, millionaires have lots of money and the weather report suggests that rain is wet.
Davy on Fri, 2nd Oct 2015 3:06 pm
Same old song and dance of unrealistic expectations. Just because people want does not mean they will get. We are in the middle of an eonomic storm. Anyone who denies that is blind.
Car ownership these days requires two things a steady job and financing. Increasingly the finance is playing a larger role to compensate for those who are credit risk. Tell me how car ownership will be with dropping employment? What about higher rates and higher lending standards? Exactly, so you get the picture.
Miles driven is not an indication of economic health like electricity production as an indicator. Car mile driven is a product of high or low gas prices mainly these days. What kind of metric is that?
The biggest drop in growth of the global car fleet is China. There it is a significant fall. That will affect all car makers profitability and make these companies less able to do creative financing and marketing. I see a ship slowly sinking and WSJ a speed boat. What sounds more realistic? Right!
onlooker on Fri, 2nd Oct 2015 3:45 pm
Another of the fantasy-technotopian garble coming out increasingly from mainstream media and henchman of the Corporate world. Seems they are becoming more desperate so they have to communicate their “feel good” message with more exaggeration and more often. We do not want the sheeple to wake up and realize the balloon has already burst.
noobtube on Fri, 2nd Oct 2015 4:03 pm
Americans haven’t learned shit since 2008.
ennui2 on Fri, 2nd Oct 2015 4:43 pm
Neither have peakers. Oil is cheap right now and nobody here wants to accept that.
GregT on Fri, 2nd Oct 2015 4:49 pm
Oil is not cheap right now ennui2. It is still almost twice historical non-recessionary prices. YOU don’t want to accept THAT.
apneaman on Fri, 2nd Oct 2015 5:12 pm
It’s always a sign of a strong economy when you need to stoop to subprime auto loans at up to 84 months financing (7 fucking years!!!) to pretend everything is awesome. And remember young millennials to avoid being late on your car payment we also have handy payday loans for you too. Or you could borrow it from mom or grandma since she has extra cash from her reverse mortgage. Mine as well get some from them now because there ain’t going to be any inheritance, just like there ain’t going to be many resources left – none that you can afford anyway. Not as a debt slave paying off your payday loans and ridiculous car loan and even more ridiculous student loan. Now go make my mochaccino latte using all those skills you acquired getting your useless HR degree with a minor in gender studies.
This article below is from the same Rupert Murdoch corny go to rag from two weeks ago. They know their faithful corny readers have a 10 second attention span and will not concede the implications of all this debt. That would fuck up the narrative.
Auto Market Reflects Fed’s Dilemma
Federal Reserve’s near-zero rate policies supported U.S. car sales; decision to tighten could chill market
“Auto debt owed by U.S. households in the second quarter this year rose above $1 trillion for the first time, fueling car purchases and a Lazarus-like revival for an industry brought down by the 2007-2009 financial crisis.”
http://www.wsj.com/articles/after-speedy-recovery-will-fed-tap-the-brakes-on-u-s-auto-sales-1442314801
jjhman on Fri, 2nd Oct 2015 5:32 pm
Staring dimly at the screen it’s easy to think both that this can’t go and that this mad economic system is so resilient that it simply can’t be broken for long.
So today, once again, it looks like the bottom is falling out of it all. Ever since 2008 it’s been propped up by crazy low interest rates and other banker smoke and mirrors. Economic indicators are starting to fall and there aren’t many tricks left in the banker book with interest rates at rock bottom and “easing” past credibility.
And yet. Nobody in any position of power has a thought of doing anything except promoting growth AT ANY COST. Are there yet another mystical set of levers left to be pulled just one more time.
When you’ve been wrong so many times it’s hard to be cock-sure that the can can’t be kicked down the road just one more mile. SUV sales are up and EV sales are down in the US. We might just be dumb enough keep spending money on useless, earth-destroying crap to keep another decade of TEOTWAWKI.
onlooker on Fri, 2nd Oct 2015 5:32 pm
Isn’t this whole debt thing really just a play now pay later scheme. Well later is getting close to being now when people lose their jobs, they will lose their shirt off their back if banks have anything to say about it.
Davy on Fri, 2nd Oct 2015 6:12 pm
Debt and assets are meaningless today in regards to the physical realities of earth. These realities are most assets are an illusion. A huge amount of assets are digital. Most debt is just a promise that may not be satisfied per these physical realities.
Most debt is in fact just a modern form a servitude. You take on debt and you are sucked into a racket. The reality of debt and assets are human not natural. In the world of descent natural takes on new meaning and the human world of assets and liabilities diminish as society decays.
My bee hive full of honey is increasingly a real asset with a money market account losing its meaning when the economy is imploding. We may be there soon. Stay tuned.
BC on Fri, 2nd Oct 2015 6:23 pm
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=200n
US auto sales per capita are at the level of 1980.
Vehicle miles traveled per capita are at the level of 1999-2000.
Air passenger miles per capita have returned to the level of 2007.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=20Tq
Real YoY growth of US consumer credit per capita less student loans finally peaked above 0% in early 2014 but has leveled off at below 2% since late 2014.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=20Tv
Auto loans have led the growth of consumer credit, of course.
Lookin’ up! But don’t look down. 😀
onlooker on Fri, 2nd Oct 2015 6:32 pm
Sorry to sound a bit in awe but that was really well stated Davy as regards real and not real.
Davy on Fri, 2nd Oct 2015 6:47 pm
Thanks Onlooker but Marmi would call that world salad prattle
BC on Fri, 2nd Oct 2015 7:42 pm
noobtube, Americans learned that they don’t have to learn anything but what they already “know” or “believe”.
Ya gotta believe!
It’s all good!
MrNoItAll on Fri, 2nd Oct 2015 8:01 pm
BC — How about that stock market action today? Pure, unadulterated, in your face manipulation. Terrible financial news across the board, a bam! The stock market takes off! Gotta love that PPT. The stock market these days serves basically the same function as that shiny gold trinket on a chain that the psychiatrist slowly swings back and forth to hypnotize his subject — the goal is to calm, to mesmerize, to induce sleepiness. Works like charm every time! I’ve said it before and I’ll say it again. One day in the not too distant future their will be riots in the streets and vehicles stranded on the side of the road. But on the last flickering television sets across America, Fox News and CNBC will be running segments on the soaring stock market! And then the lights go out…
onlooker on Fri, 2nd Oct 2015 8:12 pm
haha, “But on the last flickering television sets across America, Fox News and CNBC will be running segments on the soaring stock market! And then the lights go out…” good metaphor or should I say prediction.
makati1 on Fri, 2nd Oct 2015 8:35 pm
MRNO, I laughed when I saw where the Market ended today. Those PPT guys are good at getting the blood off the floor and out of sight for the weekend. They should rename it Casino Royal or something more appropriate.
Didn’t waste my time on this piece of shit article. Headline said it all. Pure BS from the Wall Street pimps.
BC on Fri, 2nd Oct 2015 9:31 pm
MrNo and Mak, yes, Tom DeMark (TD) and Elliott Wave (EW) setups occurred technically at an oversold condition (yes, this stuff “works”), which is the optimal point at which the TBTE banks’ hopelessly levered (50-80:1 vs 25-30:1 in 2006-08) shadow banks’ offshore pass-through entities get busy and the fat-fingered HFT bots collectively repeatedly hit the ctrl-B button.
A test of the 50-, 150-, or 200-day moving averages as resistance next week would be typical before distribution resumes and there is a setup for the SPX 1700s; that is, IF it is, in fact, the early stage of a cyclical bear market as in early 2008 and early 2001.
Time will tell . . .
BC on Fri, 2nd Oct 2015 10:43 pm
http://www.cnbc.com/2015/10/02/us-fuel-economy-data-on-cars-inaccurate-and-getting-worse-study-finds.html
MrNoItAll on Fri, 2nd Oct 2015 11:30 pm
mak — You have to laugh or cry when you see something like that. Like you, I choose to laugh. Funny thing is, the vast majority of the population don’t pay any attention to what’s going on in the financial world at all — that’s worldwide. And of those who DO pay attention, the vast majority of those are muppets/fish invested in 401Ks at work who can’t take their money out of the casino, not without quitting the job — they’re stuck. But most of them are probably true believers in the historical upward trend of the stock market, not realizing that the energy that powered that long term upward trend is running out fast. It really is all so laughable, in a demented kind of way.
makati1 on Fri, 2nd Oct 2015 11:59 pm
MRNO, the Stock Market ran up and up for about 5 years before it crashed in 1929. That it could happen shocked the world, except for a few who got out the summer before because they saw the overheated numbers.
I just watched two YouTube vids that are worth your time, if you are interested. The first is about 2008. The second 1929.
“Global Financial Meltdown – One Of The Best Financial Crisis Documentary Films”
~ 3 hours.
https://www.youtube.com/watch?v=VQzEWeGJLP0
BBC2 Documentary “1929 The Great Crash 1929” ~ 1 hour
https://www.youtube.com/watch?v=FXNziew6C9A
This is also worth a watch: 7 parts.
“The Great Depression 1 – A job at Ford’s” to “The Great Depression 7 – Arsenal of democracy” when WW2 pulled the US out of the Depression.
https://www.youtube.com/watch?v=VjH4pCatx0I
Have a great weekend!
MrNoItAll on Sat, 3rd Oct 2015 1:00 am
mak — They didn’t have a PPT back then, or automated traders with unlimited digital FED bucks backing them, hitting the buy button repeatedly as BC pointed out. I doubt we’ll actually see a stock market crash this time around — unless THEY decide to let it happen. More likely, IMO, it will be like I mentioned above, soaring stock market as the world burns — kind of what we see already only more pronounced, much more.
makati1 on Sat, 3rd Oct 2015 4:09 am
MRNO, I think the rest of the world will just see the direction it is going and pull out at some point. It will exceed the ability of the PPT to counter. After all, if just 20% goes in one day, that is about $4 Trillion to prop up. Best info I could find states that the total value of the US stock market today is north of $20 Trillion dollars. Then they close the Exchange and panic sets in and they cannot reopen or it will collapse again and again until it hits bottom. Not to mention the sell off of US Bonds and Treasuries as other countries panic and need to prop up their own casinos.
Or so it seems to me. Logic has no place in this game. It is all emotions and greed. I guess we shall have to wait and see. Exciting, NO?
Davy on Sat, 3rd Oct 2015 6:36 am
OK and where is all that panicked money going? into the Chinese market? That is a joke. The fact is where can money go these days? There are limits to money movements when there is a global system so tightly wound and risk integrated. Even going cash is risky these days besides the negative real return.
One thing that is happening with money movement is people are getting out of the imploding Chinese economy. Rich Chinese and increasingly western investors are on the run from China. EM markets are seeing money on the run. These examples are Brazil and other commodity driven economies. The US is playing its traditional role as a place of monetary safety. This is a danger not a plus for the US. All that money is flooding back and we see an unstable dollar.
The US markets are going down but it may not be for the reasons we think. The time frame should not necessarily be compared to the historical numbers. This market has underlying repression and centralized control. It is pretty obvious the market can be manipulated by this centralized control. How much is the question and that test will come eventually when we have a real panic selloff. How much mojo can these centralized control mechanisms muster with a loss of confidence and trust? On the one hand you have a situation of where can that money go? On the other hand when confidence and trust is gone people run for the door irrationally.
We are entering the bumpy descent where anything is possible because this is uncharted waters. We have never been in a situation of systematic disequilibrium at all levels, limiting factors with resources, population overshoot, and ecological decline. The list is long and all these factors are converging negatively. There is nothing not even technology that is a bright beacon of hope. Nothing revolutionary is happening with technology. All these factors are mixing like a stew in a big black pot descent.
Those running the controls are in a corner with few options. Bubbles deflation cannot be controlled proactively. It can be reacted to and even then if the reaction is attempting to prevent the deflation the resulting responses may make the situation worse. China is a prime example of a failed bubble deflation management. I might add China used its markets as a tool of reflation and look what that resulted in.
The Fed is an example of being stuck in the hole they dug. The Fed will likely never normalize again. That is a profound statement but it hints at the end of the Fed. What good is a central bank that can’t manage a monetary system?
We are in profoundly interesting times and dangerous ones. These markets are the last mechanisms for maintaining “growing” growth. We need at least 3% growing growth on average long term. That is not happening. Don’t believe the manipulated and messaged numbers. Growth today is not only number manipulated the actual growth is not healthy growth.
Expect tensions and control mechanism failures to increase in intensity. You cannot fight a descent at any level. It is an energy gradient of earth size. How can mere mortals stop that process? They can’t. The most they can do is their current extend and pretend. That my friends is the moto of the times.
Kenz300 on Sat, 3rd Oct 2015 10:30 am
Electric vehicles and bicycles are the future………..
MrNoItAll on Sat, 3rd Oct 2015 1:06 pm
Davy — Excellent summarization of exactly how screwed we are. Cheerful morning reading with a cup of coffee — oh yeah… You know, getting back to my prediction that the stock markets will be soaring while the global economy burns — to a certain extent, that is already happening. But I agree with both you and Mak — sooner or later the weight of all the converging negative factors will result in a sudden and catastrophic “cave-in” of confidence, with resulting panic and ensuing chaos and mayhem on an epic scale. That could happen at just about any time, IMO, but in the absence of decisive black swan event(s), my guess is that “they” can keep the bubbles inflated for a little while longer — a few months, a year or less, maybe a little longer but that is a big maybe. We’re at the end of the road. This fourth quarter is going to be an epic sight to behold, that’s for sure. Merry Christmas and Happy New Year, HO! HO! HO!
makati1 on Sat, 3rd Oct 2015 8:33 pm
MrNo, I suspect that the US election is going to be the nucleus of a lot of black swans landing. The possibilities are endless. From Marshal Law and no US elections to a crash of the economy and the end of globalization and perhaps Capitalism to world war 3. We shall see. Consider the collection of loonies* running (Bernie excepted) and you can see why.
*Looney:
1.lunatic; insane.
2.extremely or senselessly foolish.
penury on Sun, 4th Oct 2015 9:54 am
“OK and where is all that panicked money going?” Davy, you know as well as I do, there is no money. All these debts, loans, bonds that people own, I believe the figure is that the amount of debt in the U.S. exceeds the amount of cash available by several trillion dollars. Where will all the panicked money go? Where does the light go, when you turn off the switch? When this sucker goes down, there is no bottom until you hit zero.
Davy on Sun, 4th Oct 2015 11:02 am
Pen, I agree when we are pushed off the cliff into the abyss that will be lights out. Yet, “Now” we are not there and soon we will see how all this unfolds. It may be brief but we are going to see one hell of a running for the door in a burning theater. If you have paper and digital wealth I would be thinking about physical assets while they are still available. If you have a business with no future sell it and buy one with a future. That’s what I am talking about Pen.
Kenz300 on Sun, 4th Oct 2015 10:15 pm
We’re a long way from Peak Bicycle…….
onlooker on Mon, 5th Oct 2015 2:02 am
Anybody ever heard of accounts receivable well that is part of balance sheet. Guess what all those accounts receivable will never be received!
seen from sirius on Mon, 5th Oct 2015 3:34 am
The OP is completely right ; hence France , formerly “home of the small car” has seen an exponential increase in the sale of SUVs since a decade. There are now as many diesel powered SUVs as gasoline powered small cars.
E – cars or hybrids don’t take off. And not unsurprinsingly , because who can afford a 100 000 $ Tesla car in France ?