Driverless Cars Might Reduce New Car Sales in the U.S. by 40%, Analyst Says

Driverless Cars Might Reduce New Car Sales in the U.S. by 40%, Analyst Says

driverless_carDriverless cars will certainly help reduce traffic congestion and improve traffic safety, but they are also set to have a huge impact on the entire auto industry, with many industry observers expecting them to redefine car ownership as we know it. One of the effects autonomous driving technology is expected to have is drastically reducing the number of vehicles sold, due to the fact that they will further popularize alternative transportation options like car sharing and ride sharing, which are seen as the future of urban mobility.

Brian Johnson, analyst with Barclays PLC, says that driverless cars could lead to a 40-percent drop in new car sales in the United States in the next 25 years, arguing that they will eliminate households that own more than one car, since only one such vehicle would be able to meet transportation needs of all household members without leading to overlapping or conflicting trips.

Johnson predicts that annual sales in the U.S. will see a huge decline, dropping to 9.5 million, drastically less than the 16.4 million units sold in 2014. The annual sales drop will be followed by a reduction in the number of cars on U.S. roadways, falling from 250 million to less than 100 million.

If these forecasts come true, it would mean that the auto industry is bound to undergo some major changes. Bloomberg quoted Johnson as saying that the largest automakers “would need to shrink dramatically to survive”, referring specifically to the U.S. manufacturers. “GM and Ford would need to reduce North American production by up to 68 percent and 58 percent, respectively,” he said. This suggests that automakers will have to adjust and probably change their business model in order to be able to remain profitable.

While Johnson is confident that new car sales will decrease in the future as driverless cars become more widely adopted, he is not claiming that autonomous vehicles will be the end of car ownership. He says that people will still buy cars, dividing future vehicles into four categories: family autonomy vehicles; shared autonomous vehicles; traditional cars and light trucks; and pooled shared autonomous vehicles (similar to buses).

On the other hand, Johnson says that driverless cars will bring a major benefit to consumers, arguing that they will reduce transportation costs significantly. He says that the average cost per mile in a private self-driving car will be 44 cents, whereas a mile in a shared ride in a two-seater will cost as low as 8 cents, which is far cheaper than the $3 per mile fee charged by Uber, the most popular ride-sharing service today. Uber, along with one of its biggest competitors, Lyft, have already announced plans for embracing autonomous driving technology as they look to start offering driverless taxi services, which would further disrupt the taxi industry.

The most recent study on the future driverless car market, conducted by the Boston Consulting Group, suggests that it will be worth $42 billion by 2025, with autonomous vehicles representing 25 percent of all new vehicle sales by 2035.

Author Bio: Jordan Perch is an automotive blogger writing for, a website that aims to help drivers handle all DMV­ related tasks without the stress and hassle that they usually involve. A devoted car enthusiast, he likes to write about the latest in the auto industry, focusing on vehicle safety technologies, green vehicles and driverless cars. Car reviews, car prices and auto shows are also among the things being discussed in his blog posts. Drivers looking to save on auto insurance, or car buyers trying to determine what car fits their needs the most, might find his blog posts pretty helpful.

Leave a Reply

Your email address will not be published. Required fields are marked *

Animated Social Media Icons by Acurax Wordpress Development Company