
After 38,000 layoffs, Wall Street wakes up to 'peak car' - ryan_j_naughton
https://www.businessinsider.com/peak-car-38000-layoffs-job-losses-sales-at-auto-makers-2019-5
======
mrunkel
The problem with cars is that they are great for individuals, but terrible for
society.

For individuals, they greatly increase your mobility and open new
possibilities.

For societies, they are loud, dirty, dangerous, and require expensive roads
which take up large swaths of land.

It is this dichotomy that prevents us as humans from properly understanding
the cost of the vehicles we drive. I see all over this thread people
calculating the cost of their vehicle in dollars, but this grossly
underestimates the cost to society as a whole.

In regards to the article, how much visibility do western analysts have into
the Chinese automotive market? If domestic sales aren’t accurately monitored,
this would explain why the Chinese market has dropped.

~~~
1123581321
Society also benefits from individuals having increased mobility and the
options that brings.

~~~
wutbrodo
Well obviously, as societal utility is the aggregate of individual utility.
The point was about the parts of the utility (or disutility) equations that
are hidden from individuals.

------
rdm_blackhole
I am not surprised honestly. Cars are a money pit. They cost a lot to run and
a lot to buy and depreciate in value.

Take for example our car: \- we bought a used 2007 Yaris 3 years ago for AUD$
6K. \- every year we have to pay a registration fee in Australia which is AUD$
650. \- insurance is $AUD 200 per year \- car service every 6 months is AUD$
330. \- random repairs in the last 3 years: AUD$ 700 \- Petrol cost is AUD $60
every second month on average.

We only use the car on the weekend to go to the beach 1h30 hours away, to buy
groceries and visit my wife's family 600 km from where we live twice a year.

The total cost of ownership: AUD$ 12310 The car is probably worth AUD$ 4.5k
now and we only drove 35k km in the last 3 years as we use public transports a
lot.

The only reason that we have kept it around is for the what ifs.

I am starting to think that this is probably the last car that we will own.

~~~
noobermin
Not sure about Australia but the situation of living without a car in the US
is dismal. We spent decades making sprawling suburbs and exhurbs that cannot
be lived in without a car and there is much apathy and even antagonism in the
US to change that.

~~~
Retric
I regularly go weeks without driving anywhere and don’t live in a city just
reasonably close to mass transit. So, while I do live in the US I treat a car
as an affordable luxury not a requirement

~~~
noobermin
I think generally mass transit is pretty bad in the US compared to most other
cities in the world, but it does vary quite a bit depending on where you live
since the US is such a large place and diverse place, so it always makes
talking about this stuff difficult. A better qualification of my above comment
is to say a significant enough fraction of people in the US live in situations
that require them to have a car. If anything, having access to mass transit
that enables a decent enough quality of life is the exception (which says
something given how large the US is).

~~~
Retric
While the US has an incredible amount of land, most people live on a tiny
fraction of it.

NYC for example is ~1/38th the US population on (including parks and office
space for commuters) ~1/12,000 the the land area of the US. It’s hard to do
these kind of comparisons across the US, but the car culture has a lot more to
do with how rich the US is than absolute need. Consider the school buss system
is a form of mass transit available across most of the US. It’s inexpensive
and something similar would work if most people could not afford cars.

------
mmcru
The sense of security that comes with keeping a gassed (or charged) vehicle in
my driveway doesn't seem like it will go away any time soon. If a family
member needs to go to the emergency room, or a natural disaster strikes, Uber
isn't going to cut it.

~~~
Agathos
If a material disaster strikes, my local highways will be locked up harder
than a diamond.

~~~
dkersten
Nevermind a natural disaster, rush hour traffic seems to be enough...

------
11thEarlOfMar
Another factor to watch as this plays out is that electric cars have the
potential of a 50 year useful life. The drive train of some makes is purported
to be 500,000 in the current shipping battery technology and advances are
expected to take that to 1,000,000 miles on the drive train. Compare that to
ICE cars that wear out pretty reliably in the 200,000 - 250,000 range.

For a typical US buyer who drives 12,500 miles per year, 1,000,000 means they
can drive the car for 80 years. They could skip buying the next 4 cars.

~~~
ghostcluster
The problem with this is that the most expensive component of electric cars:
the batteries, have a ridiculously short lifespan, and they become less and
less powerful with every recharge

~~~
Alex3917
The lifespan of car batteries is 15 - 20 years, and they only cost a few
thousand bucks to replace.

~~~
Gibbon1
The cost of replacing Prius batteries was a big concern ten years ago. Seems
less of a concern today. As in no one talks about ti anymore. Probably because
it takes a mechanic half an afternoon to do. And the cost of the batteries has
come down.

With the new generation of electric cars the cost of replacing the battery
isn't what it would cost today, but what it will cost in 15 years. Probably
will be reasonably cheap.

~~~
Alex3917
> The cost of replacing Prius batteries was a big concern ten years ago.

It was never really an issue in practice, because (iirc) they had a 10 year
warranty but if they failed on year 11 or 12 then Toyota would still usually
just replace them for free anyway. And for the last several years you've been
able to just get individual cells replaced rather than the entire battery, so
it's no longer expensive to begin with.

~~~
Gibbon1
I think Hyundai warrants hybrid batteries for the life of the car. California
considers batteries to be part of the emissions control system. So has a
longer warranty.

Actual experience seems to show that hybrid and electric car batteries are
lasting longer than expected. Except for the Leaf with it's crummy thermal
management.

------
Animats
Well, yes. Most of the developed world hit "peak baby" a while back. We're
going to see a lot of "peak ..." over the next decade or so.

~~~
noobermin
If you're assuming it is a global maximum sure your sentiment is right. The
key is in the word global, where the domain is the history of mankind and its
entire future.

------
rossdavidh
I totally believe that many people no longer are enamored of owning a car. I
do not believe Uber/Lyft/etc. will be the cause of "peak car". For one thing,
given their cash burn rate, I don't believe that Uber/Lyft/etc. will be around
in 5 years, at least in their current form. They will either merge with a
conventional cab company, fold entirely, or massively downsize.

~~~
Alex3917
I think Uber / Lyft can mostly replace cars for people who don't have unusual
hobbies. It's relatively easy to find a place to live where you can use public
transportation to get to work, and it's relatively easy to use public
transportation or car sharing / rental to visit friends and family or go away
for the weekend. But if you live in NYC and your hobby is gold prospecting or
something then that model breaks down really fast.

------
newnewpdro
> Why would you, when it's cheaper to ride around in someone else's?

As if there's zero risk associated in getting into someone else's car...

Not to mention any vehicle I willfully own will never barrage me with
advertisements or surveil my movements.

Uber is burning billions of dollars in an attempt to corner the market.
When/If they succeed, do you really think they won't put the screws to the
customers living in circumstances where car ownership has likely become all
but impossible?

The prices will shoot up, the monetization of the personal data will increase,
the in-vehicle advertising will increase, the whole experience will become
worse than what the end-game of yellow cabs looked like.

I fully expect the self-driving Ubers of the future to partner with the police
in arresting people. You get in the car you ordered, it knows your identity,
it reports all rides to the police system, if a boolean comes back true, the
doors lock and it drives you to the jail entrance for processing. It's just
another revenue stream.

~~~
clintonb
> I fully expect the self-driving Ubers of the future to partner with the
> police in arresting people.

What!? I'm not following your logic. If there is a warrant for your arrest,
and law enforcement is tracking your phone, law enforcement can simply come
pick you up in a squad car.

~~~
newnewpdro
What do you think is more cost effective?

Do you actually think there are sufficient LEOs to run around chasing phones
for every petty outstanding warrant? Why bother even trying when they can just
be delivered by a robot.

~~~
dsfyu404ed
>Do you actually think there are sufficient LEOs to run around chasing phones
for every petty outstanding warrant.

Cities are ringed with rich suburbs with overstaffed police departments full
of bored cops. I can see them being very interested in a product that scrapes
cell subscriber and location data to ID people with outstanding warrants.

I fully agree with you that there's aren't sufficient resources to track down
every deadbeat that failed to show up in court, or accumulated too many
parking tickets or whatever. However, things that make it easier and cheaper
to find people do not bode well for free society. Think about the kind of
sigint that went into catching Bin Laden. Now imagine a world where 99% of
that is automated and the police feel it's reasonable to use it to catch petty
thieves.

------
chank
RE: As on-demand services like Uber and Lyft grow their customer bases, more
people will decide they no longer need to own a car of their own.

Is it really more expensive to own than use a ride share service? Seems to
only be reasonable when you have a monthly payment and even then depending on
how much that payment is and how much you go out; it still may be less
expensive to have your own.

I own my car outright. Calculated, it costs me roughly ~2500 a year to keep
it, baring any catastrophe. Thats Insurance, gas, maintenance, inspection,
registration, and a few hundred on top for surprise road trips. On the other
hand to take an uber/lyft "only" to-and-from work each weekday would cost me
~6000 per year (ride + tip using the cheapest option). Add on for any
additional activities and it goes up considerably from there.

Don't get me wrong, I would love to not have to own a car, but it really is
cheaper and more convenient for me to do so. I live in a major US city.

~~~
microtherion
> I own my car outright. Calculated, it costs me roughly ~2500 a year to keep
> it,

Does that include depreciation? Even if you own the car outright, it seems to
me that a proper cost accounting should include the cost of eventual
replacement of the car.

> On the other hand to take an uber/lyft "only" to-and-from work each weekday

Yes, I think if your daily commute depends on a car, ownership is the most
cost effective model. But an increasing number of people are finding ways to
commute in other ways.

~~~
chank
> But an increasing number of people are finding ways to commute in other
> ways.

Outside of LA/SF & NYC and maybe Chicago are I wonder what other ways people
are looking to commute. Mass transportation even in my own city doesn't
service enough areas to be in any way convenient. Biking in most cities (there
are a few good ones for it) is just right out in most places due other
traffic. I just feel that the people who write these kind of articles can't
see beyond where they are, which is probably in one of the aforementioned
cities and think the rest of the US is similar.

------
throwayEngineer
Seeing Tesla hit 50B but GM be around 60B makes me wonder if auto is under
valued.

Transportation is boring but necessary. These companies also have plenty of
experience and infrastructure.

Sales are marketing based.

~~~
Edmond
I think it is more likely that Telsa is simply grossly over valued, even with
the recent collapse of its market value.

I used to be quite bullish on Telsa...until I bought a 2019 Mazda 3 this past
weekend. It is basically a Telsa that cost me $25K...Prior to this weekend I
drove a Mazda 6 that I bought in 2006. While car shopping I came to realize
that most of the things that made Telsa exciting are rapidly being integrated
into standard consumer vehicles.

With Elon's seeming unsuitability for the role of car company CEO and if it is
the case that Telsa doesn't have much of an edge over the competition, it is
hard to see Telsa pulling through in the long haul.

~~~
bainsfather
Is your Mazda 3 electric?

~~~
Edmond
Not yet but it wouldn't surprise me if Mazda is cooking up a hybrid
version...point still remains, Telsa doesn't have much of moat left vis-a-vis
other auto makers.

------
analog31
>>>> But that's not all. As on-demand services like Uber and Lyft grow their
customer bases, more people will decide they no longer need to own a car of
their own. Why would you, when it's cheaper to ride around in someone else's?

Hopefully Lyft and Uber are stepping stones, but at the present moment, both
of them depend on someone having bought a personal car at some point. I
haven't used them very much yet (my bike is one reason, being a double bassist
is another) but from what I can tell, nobody buys a new car to drive
Lyft/Uber, and it wouldn't make financial sense.

I've noticed a definite culture shift regarding our relationship with cars. My
generation: Every kid arranged their affairs so they could get their drivers
license on their 16th birthday, and worked a job so they could have a car. My
kids and their friends are ambivalent about cars and driving. When they finish
college, taking on a car payment will be the last thing on their minds.

~~~
cududa
The funniest thing I heard, which totally makes sense, was from my 16 year old
cousin. Apparently it’s common to sneak out, walk a few blocks and take an
Uber to a house party!

------
triplee
I think this is another one of those massive divergences in culture coming to
a head.

In SOME places, people are driving less and need to drive less. In other
places, both farther suburbs and smaller areas, cars are no less essential
than they've always been. In some cases of aging infrastructure in terms of
public transit for cities that have it, suburbs are getting even more car
dependent in places where you could have once been fine on transit (looking at
you crappy DC metro system combined with extra development in housing).

Now, many of these places aren't dense enough for rideshare, scooters, or
whatever else have you to be worth a damn. Alternately, in places like
Phoenix, and loose cities with little transit, plenty of people still need
cars, and rideshare just craps up the roads even more.

Curious to see how this ends, because I don't think it will go well.

------
RickJWagner
"Honda said it would close its factory in Swindon, England"

Exceptionally sad news for car nuts like myself. Swindon is the birthplace of
the magnificent Honda 2.0 turbo powering the Civic Type R.

BTW, I love the pics that accompany the article. Starsky and Hutch's Torino,
the Duke's Charger are car show staples.

------
purplezooey
This is like predicting peak real estate. Often predicted, never comes true.
Nothing has changed that would affect US demand for cars. Public transit is
even more underfunded. Commutes are lengthening, not shortening.

------
aiyodev
> The most dramatic example of just how vulnerable automakers are came from
> Britain last week. The country prides itself on being the Detroit of Europe.

Now I understand Brexit. Good job, Britain. You’ll soon look just like
Detroit.

------
lawrenceg
I believe it is more a matter of affordability than anything else and it only
applies to people living in or around the downtown core of major cities in NA.
Unless one of the on-demand ride sharing services, gets some kind of
membership going, that would be cheaper monthly than owning a car outright, I
don't see it. Most people need the convenience of owning a vehicle and having
it available 24/7\. I do see more services like Turo helping with reducing the
financial burden of car ownership though.

~~~
hossbeast
Then how else do you explain the data presented in the piece?

------
thatfrenchguy
Finally. Let's start building again things designed for humans ?

~~~
clintonb
Cars are designed for humans.

~~~
NeedMoreTea
Trouble is everything around them is designed for cars. Shopping and other
amenities get spaced out too far, residential areas are bisected and cut off
by unfriendly, loud and smelly tarmac rivers. Acres of space are given to
resting, care and feeding of cars. They get special places to gather: the out
of town shopping centre. They get priority over other forms of transport in
most places. The humans come next.

We should design residential areas, cities, shopping and communities for
people first once again. Then we wouldn't _need_ to think about a car as
often.

