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Car ownership may decrease in the U.S.—here's why

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It could happen even with a fossil fuel-friendly administration in the White House

The future is sharing

For the sixth year in a row, the majority of Super Bowl ad time was purchased by car companies. While this was not surprising, this year it seemed more ominous. Not only did 2016 see the most vehicle-miles driven and the most gasoline consumed in any year in history, but Americans bought more new cars last year—17.5 million—than they ever have in history—and are building more places than ever to house them.

To a group like the Rocky Mountain Institute (RMI), which works to reduce the country’s reliance on fossil fuels, these trends might signify that the U.S. is headed in the wrong direction.

But in light of current trends, RMI has released a roadmap that shows how car ownership in the U.S. can start to decrease as soon as 2020, ushering in a new era of clean, affordable transportation for the country. And RMI remains optimistic, even as President Donald Trump has declared his intentions to roll back emissions regulations for vehicles, and a Congress that, last week, introduced a bill to terminate the Environmental Protection Agency, which has spurred the development of more fuel-efficient cars.

“History has proven if a better system comes along and it’s viable, people will use it,” says the study’s author Jonathan Walker, who wrote Peak Car Ownership: The Market Opportunity of Electric Automated Mobility Services with Charlie Johnson.

Google’s Waymo partnership with Chrysler will bring more ridesharing options to the masses
Waymo

The roadmap shows “peak car” happening sometime in the next three years. At that moment, not only will the number of cars owned by Americans start to plummet, so will the demand in the market. There are a lot of factors which must converge for this to happen, including continued investment in public transit, rising costs for gas, and decreased cost for renewable fuels like solar and wind (and those costs are declining, quickly).

But RMI’s 2020 goal also relies on a technological revolution: The widespread embrace of shared, autonomous electric vehicles. When deployed in a way that complements growing transit systems and improved walking and biking infrastructure, these types of vehicles can offer an efficient transportation solution that’s more affordable than car ownership for everyone.

After years of speculation, this era also seems closer to reality than ever before, judging by the many shared, autonomous, and electric product reveals at the Consumer Electronics Show and various other auto shows this year.

The economic benefits of reducing car ownership are compelling

Although there are clearly many benefits to reducing car ownership—reducing traffic deaths, reducing planet-warming emissions, reducing time wasted sitting in cars, reducing the amount of land in cities devoted to parking—the benefit that Walker and his team like to focus on is the economic one.

“This type of tech is one of the few things that has been bipartisan,” says Walker. “If you look at our report, we don’t lead with oil or climate change, we lead with money.”

From a consumer perspective, eliminating a car payment would alleviate a hefty financial burden for most Americans. Vehicle expenses are the second-largest expense for Americans, yet most cars are parked over 90 percent of the time. RMI estimates that not having to own a car would save consumers $1 trillion per year, with the lowest-income Americans benefiting the most.

The other part of the affordability puzzle, of course, is the rise of what planners call transportation network companies (TNCs)—Uber, Lyft, on-demand minibuses, carsharing, and other services that allow people to supplement transit trips and share vehicles without owning them. While these services are already being used in place of car ownership by some Americans, they need to be made more financially accessible to a larger portion of the population.

By 2018, RMI’s report says, using TNCs for the typical American’s daily needs could cost the same as owning and operating a car. When that benefit is made clear, and the services offered are so seamless, more Americans will be able to forgo car ownership.

For the cars that must stay on roads, Walker says EVs offer substantial cost-reductions across the board. Consider that EVs are not only more efficient, energy-wise, but the vehicles themselves also cost less to make than gas-powered cars because they’re simpler machines. That means maintenance, repairs, and parts will all cost less as well. Autonomy further improves efficiency and logistical challenges. Those savings can multiply across industries very quickly.

The number of electric vehicles sold in the U.S. is going up (slowly)

Electric vehicles currently make up about one percent of all cars on U.S. streets, but that figure is going up, if a bit slowly. About half a million EVs have been sold as of last year, and experts agree that 2017 will be a big year for EV sales. As David Roberts writes at Vox, the question is how big, as estimates vary wildly.

But the auto industry seems to be betting big on EVs. Ford’s announcement at CES that it will double down on electric and autonomous vehicles with a $4.5 billion investment is indicative of the way many car manufacturers are thinking. “Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years,” said Ford CEO Mark Fields. Ford’s big Super Bowl buy last night, for example, advertised ride-sharing, bike share, and autonomous vehicles as part of its city of tomorrow vision.

There have also been plenty of recent technological advances to entice new buyers to go electric. There is a federal tax credit, and some states offer additional incentives to EV buyers. Newer EVs can go farther now, thanks to battery innovations, and in addition, the charging infrastructure is also—finally—rising up to meet potential EV buyers who are worried about “range anxiety,” the idea that there isn’t yet a density of charging stations to meet demand.

Cites are also stepping up, making charging stations part of their civic fabric by installing them in more public places, and, in some cases, incentivizing them in new residential developments. And just before he left office, former President Barack Obama proposed a vast nationwide charging network: 48 new “charging corridors” on 25,000 miles of major highways across 35 states. An “electric interstate highway system”—maybe with solar roadways—might be one Obama idea that Republicans could get behind as a way to invest in America’s roads.

The number of Americans living car-free is going up (slowly)

As a whole, the U.S. might be buying more cars than ever, but the patterns of who owns those cars are changing. Recently released Census data shows that from 2010 to 2015, the number of American households without a car increased.

With more people moving into cities with rapidly expanding transit systems, it’s becoming more and more possible to shrug off a car. The rise of TNCs means technology can replace the utility of some personal cars with minimal friction. And millennials just aren’t getting their drivers’ licenses like they used to (although they may be holding off instead and getting their licenses later). Those types of early adopters—urban-dwelling, tech-savvy young people—are the key to the peak car strategy, says Walker.

Automakers seem confident that a decrease in car ownership is on the horizon, as this is another trend that they’re anticipating. Reports from the 2017 car shows indicate the industry is preparing for fewer single-passenger cars and designing “shared mobility solutions” instead.

A self-driving electric Chevy Bolt will be part of GM’s new ridesharing offerings
Cruise Automation

General Motors, for example, has forged partnerships with Lyft and Cruise Automation that will use GM’s electric Chevy Bolt as a ride-sharing vehicle. Lyft’s CEO believes that by 2021 a majority of the company’s rides will take place in those autonomous vehicles. And a variety of companies have launched electric car-sharing programs that function more like bike share systems, with docking stations on highly visible streets, which will help shared EVs become part of city life, as they have in many European cities.

Walker also sees some of the biggest opportunities in converting massive fleets to shared EVs. Zipcar and Car2Go are leading the way in the startup field, but traditional rental car fleets could easily go electric. Cities like Los Angeles and New York have rolled out plans to use EVs for government vehicles (some city governments own more cars than any other entity in town). The greatest impact would be seen through the electrification of local delivery vehicles, which are the fastest-growing contributor to greenhouse gas emissions.

But one part of the equation is going to be very challenging

So say that all of this happens: The U.S. experiences a dramatic decline in car ownership and new car purchases veer towards electric vehicles. Autonomous TNCs launch in a few key cities. Now here’s the hardest part—sharing. It’s ensuring that those electric, automated vehicles are actually shared by the masses—not just continuing the one-person-per-car trend to create more congestion and more sprawl.

Although Americans have already embraced ride-hailing apps, it’s not certain how many of these rides are shared. A highly anticipated study due out this spring by the University of California Berkeley and the National Resources Defense Council will determine if Uber and Lyft do indeed reduce car ownership rates for their users (and the environmental and spatial impact of those cars). Those results may have been foreshadowed by a recent MIT study that more effective rideshare programs—on-demand, optimized-route carpooling services—could reduce the overall number of cabs and TNCs in big cities to just a few hundred vehicles.

A few shared EV models have emerged to be tested by the market (although some currently use hybrid vehicles, not EVs). The most familiar to most people are the autonomous pilot programs already being tested by current TNCs, like Uber in Pittsburgh (and now Arizona). Then there’s Tesla’s vision—your car drives you to work (as seen in the video above), then your vehicle is available to give other car-free people rides. And on the near horizon are multiple applications that will use Google’s technology (now Waymo), including a pilot program using Chrysler Pacifica minivans as summonable shuttle buses that will launch sometime this month. The key to success will be how much these services actually incentivize sharing.

There are also some pilot projects on the horizon that are hoping to roll these types of solutions out at the city scale, more like public transit solutions. Bloomberg Philanthropies and the Aspen Institute are working in five cities—Los Angeles, Austin, Buenos Aires, Paris, and Nashville—to prepare them for AV deployment. At CES, Nissan announced a partnership with the Rockefeller Foundation’s 100 Resilient Cities to “test and pilot emerging mobility technologies, such as autonomous drive, driverless cars, and electric vehicles, as well as charging and vehicle-to-grid infrastructure, to enable cities to better plan for their adoption on a large scale.”

But can this still happen under a President Trump?

The optimistic future outlined by RMI’s report seemed to dim after the election. Not only are several high-level cabinet appointees champions of the fossil fuel-industry, but Trump has also made his own promises to roll back fuel efficiency standards and eliminate the tax credits for buying EVs.

While it’s still unclear exactly how much the new administration will influence EV policy, the shift towards non-fossil fuel energy sources is already fully underway. Solar will likely be cheaper than coal by 2035, and even if there have been certain promises from the Trump administration to “revitalize” the coal industry, the industry as a whole will be very difficult to sustain due to market changes. The move towards renewable energy is actually fueling the economy in new and dynamic ways. Current standards for energy efficiency are already on track to save the country $1 trillion.

row of electric cars charging
Shared electric vehicles can be powered by solar or wind on-site
Sopotnicki/Shutterstock

At CES this year, the nonpartisan group Securing America’s Future Energy (SAFE) put out proposed best practices for AV regulations with the new administration in mind. And it turns out that shared, electric AVs are a good path to achieving energy security.

SAFE’s CEO Robbie Diamond points out that Trump campaigned on a promise to keep the U.S. from becoming dependent on foreign oil, especially oil purchased from countries with conflicting politics. “The oil market is not fair or free,” says Diamond. “The U.S. government must support increasing our domestic production while reducing our demand for oil, and most critically, enabling fuel choice for the American people so they are not hostage to oil for all our transportation needs.”

That’s one place that Trump—and other climate-change denying Republicans—might agree with EV advocates: A move towards electric vehicles is an issue of national security. It will just happen to build more healthy, livable, affordable communities at the same time.