All Automotive

The Future of Car Ownership

There are a myriad of articles plastering the internet that are prophesying about the imminent end of car ownership. There are three main ‘drivers’ that are cited – legislative change, alternative mobility solutions and the rise of automated vehicles. Legislative change centres around countries and select urban environments discouraging and in some cases promising to ban the sale of automobiles. The UK as an example has announced that it will be banning the sale of all petrol and diesel cars by 2040. The city of Oxford’s said that they’ll be banning all non electric cars and vans from the entire city centre by 2030 with the ban coming into play on certain streets as early as this year.  Oxford is not alone in this with Paris also promising a non electric car ban by 2030. They’ve also started preparing the Paris population with periodical car free days forcing drivers away from the historic centre. Alternative vehicular mobility solutions such as Zipcar, an early pioneer in car sharing and Uber, the ubiquitous ride hailing service, have driven down costs and enhanced their convenience factor to such an extent that car ownership could be viewed as both more expensive and also less convenient for city dwellers who do occasional long distance journeys and sub 1000 miles total of short journeys*. However the main driver for this prophecy seems to be the rise of automated vehicles, which will eventually create a fusion of car sharing and ride hailing for both long and short journeys at a cost per mile and convenience level that will indeed accelerate the decline of car ownership.

However we are so far from the end of car ownership or even a global decline in car ownership. 


Firstly one has to look at the global disparities in car ownership as ownership increases in emerging markets. India’s car ownership is predicted to increase by 775% over the coming 2 decades from a 22 to 175 per 1000 population* and even China,the world’s largest automotive market, where car sales declined last year for the first time since 1990, is still predicted to increase car numbers although the amount of journeys in shared cars is predicted to increase considerably (from 1% currently to 26%) and an estimated 46% of new car sales will be electric.*


Secondly automated vehicles, seen as the key driver behind the end of car ownership prophecy, are currently very tightly geofenced and unlikely to break these geographic shackles for many years to come. Toyota is going to be testing vehicles in their planned Woven City near mount Fuji Japan and Waymo, Google’s autonomous vehicle division is testing vehicles in a suburb of Phoenix, Arizona. These locations are a far cry away from the traffic chaos of a city like New Delhi. If autonomous vehicles can be tested successfully in environments such as India’s capital city then we are near to creating an automated vehicle that can handle any urban environment. However there still remains the issue of countryside dwelling, autonomous vehicles and shared ownership. Autonomous vehicles work best in flat, urban grid environments with relatively placid weather conditions. The highlands of Scotland, as an example, would cause major issues for an autonomous vehicle and car ownership in such rural regions is at such a high level due to the necessity of access to a vehicle for work and sustenance that I would doubt that any autonomous car share schemes could establish themselves in such an environment, given current innovation thinking. However as with all great innovation, such possibilities could be achieved quicker than we might think.


Thirdly autonomous vehicles may have scaling issues from a development and production perspective. This is down to a shortage of engineers with the right qualifications. The car engineers of the future, dealing with autonomous vehicles, won’t just require knowledge of car mechanics and production but they’ll also require the ability to code in the languages used to create the autonomous functionality and diverse range of digital parts intrinsic to each vehicle. Right now, we only have several thousand engineers with this skill set available for work on autonomous vehicles. It’s going to take well over a hundred times that amount to create the cars of the future if automated cars are going to be ubiquitous and eventually shift the balance towards shared ownership.


Fourthly, safety is a major concern with autonomous vehicles. Right now all the autonomous vehicles being tested have a driver at the wheel and as such all autonomous vehicles require supervision. Looking into the future, it’s impossible to predict what the transition from manned to unmanned will look like from an autonomous vehicle perspective. The reason is that we don’t have any other mode of transport which has gone from being fully manned to completely unmanned ever and certainly not as ubiquitous as the motor vehicle. Technologies are being used in logistics around robotic and drone deliveries but this isn’t carrying people and thus the safety side of things is less of a concern. I would have thought there would be a period where both manned and unmanned vehicles appear in urban environments but that this could present issues from a liability and insurance perspective, on top of the safety concerns. What happens when the first car gets hacked? What if a bug develops that causes the car to veer off in a particular wrong direction? Safety mechanisms will need to be built in to enable these potential issues to be mitigated. 


In conclusion, whilst there is evidence that the balance of car ownership will shift towards a shared model and eventually go to an autonomous mode over the coming decades, this is going to be a gradual change and probably not on the timelines that many publications are foretelling. There are just too many challenges in the way, which current ideas and innovation are not holding the ability to overcome. We at Haig Partners are watching the technology closely and are looking forward to updating on new innovations as and when they appear.