NEW YORK — The adoption of self-driving vehicles by American consumers may reduce auto sales by about 40 percent over the next 25 years, according to a new study from Barclays.
The report, Disruptive Mobility, by analyst Brian Johnson, posits that self-driving cars could result in individual vehicle ownership dropping by half as more families find themselves able to share one car that's able to pick up and drop off household members from multiple locations.
Johnson envisions four types of vehicles existing in this new paradigm: traditional automobiles, which will still exist; family autonomous vehicles, shared by members of a household; shared autonomous vehicles (SAV), in which a rider summons a self-driving car with a smartphone (he calls it "Uber without the dude"); and pooled shared autonomous vehicles (PSAV), which would pick up multiple passengers from various locations.
In this scenario, any given car would necessarily travel more miles, but overall fewer cars would be needed.
Johnson writes: "While half the market is not at risk (i.e., vehicles in rural areas, or those used for 'jobs' such as work, performance or status), we see the other half — vehicles used purely as a means of transportation — at risk of being displaced by shared autonomous driving."
Needless to say, the impact on the auto industry would be momentous. Automakers focused on high-volume, mass-market vehicles "would need to shrink dramatically to survive," he writes.
As the large-scale manufacturers adapt by downsizing and reconfiguring their product mix, Johnson envisions "disrupters" emerging to take advantage of new market opportunities and fill the roles he's defined.
These could include "several start-ups (some still in stealth mode)" that are "coming at the market from the low-end, seeking to build low-cost EVs designed for the car-sharing market and eventually shared autonomous mobility."
Johnson gives the example of iStream and Riversimple, which are working on revolutionary production processes, technology and business models that could put them in a position of strength in the emerging world of autonomous vehicles.
He also notes that familiar names like Google and Apple, whether or not they actually manufacture cars, could have a major impact on the future of transportation as they develop software and other innovations and make them available to automakers and suppliers.
Another future winner, according to Johnson, is the rental-car business, which he says will "evolve into fleet managers of SAVs. Some entity needs to buy the SAVs in bulk, finance them, maintain them, clean and refuel them (gas, electricity or hydrogen), and then dispose of them."
He notes that with an SAV population of around 12 million vehicles, the market will be about six times larger than the roughly two million vehicles in rental fleets today.
Although the researcher calls his study "a thought experiment," intended "to try to get us all to think more like Steve Jobs and less like finance types," he says the economic impact on consumers would be no less dramatic than on the business side.
According to Johnson: "Perhaps more staggering about SAVs, and especially PSAVs, would be the cost. By removing the driver from the equation (the largest cost in a taxi ride), the average cost per mile to the consumer could be about 44 cents for a private ride in a standard sedan and about 8 cents for a shared ride in a two-seater."
That compares to the current rate of about $3.00-3.50 per mile for Uber's low-cost UberX and $1.00-1.50 per mile for the ride-sharing UberPool.
Johnson's "thought experiment" may seem like science fiction to many of us. After all, we're still living in a world where automakers like Audi, BMW, Ford, GM, Mercedes-Benz, Nissan, Toyota, Volkswagen and Volvo have really just begun dipping their toes into autonomous-vehicle technology.
But many of those manufacturers are predicting that self-driving cars will be on the road by 2025, within the same time frame explored by Disruptive Mobility.
And, as Johnson writes: "Before the automobile, the horse served the 'jobs to be done' the car provides today: for most, a means of transportation, for others a means to do work (e.g., pull a plow), and for some a sign of status or performance (e.g., thoroughbreds, dressage horses)."
But as automobile sales increased, he notes, the U.S. horse population peaked in 1920, and by 1930 the number of horses per capita was surpassed by that of cars per capita. As a result, the total number of horses in the U.S. eventually dropped by about 85 percent.
So, even though the picture painted in his report may seem a bit farfetched, Johnson concludes, "a historical precedent exists."
Edmunds says: Although it contains a fair amount of conjecture, the Barclays report provides interesting insight for consumers and automakers alike.