Aging American Cars: Economic Strain and the EV Paradox 2024

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Aging American Cars

For some reason, American cars are getting older and older and older. This is actually incredible because American vehicles have surged to a record.

Record Age of American Vehicles

The average US vehicle is now 12.6 years old. I don’t really understand this, there’s EV incentives, EV prices have come down to the lowest point in history now.

There’s just no reason that you would want to hang on to some old bucket of bolts. But There is incredibly the highest number of basically defaults on car loans ever as well.

I mean, does this mean that the American economy is in a bit of a crisis and no one’s talking about it.

The average age of US cars on the road have achieved a record of 12.6 years. It doesn’t mean that cars are more reliable well, not if they’re a Ford.

I mean, Ford is winning the title every year for the most recalls, the most actual warranty problems, the most expenditure per car worldwide ford generally wins that.

Volkswagen did win it for a couple of years because of Dieselgate.

Generally, it’s Ford. The number of cars aged 1-5 years is while it has decreased. The number of total vehicles has risen by 2 million.

Ev adoption, though, topped 1 million in 2023. In fact, last month, EV sales grew by 3% versus the month before.

If you were to believe the American media, EV sales have collapsed. The average age of new cars on American roads has risen.

Yet again, it’s now 12.6 years. This increase is attributed to a number of factors, including the continued impact of the pandemic, higher new car prices, and consumer reluctance to switch to EVs.

Economic Implications

Now, speaking of higher new car prices, inflation has clearly impacted the average price of cars in America, but not the average price of EVs.

The average price of EVs has come down while inflation has gone up.

Now, clearly, that’s directly the reason for this is because, number one, battery prices have come down.

Number two, Tesla’s prices of their cars, they’ve pushed prices down, and their competition has been forced to do the same.

I’ve been saying this is great for consumers.

Now, Tony Sieba who made these kinds of predictions many years ago that EV prices would hit parity with internal combustion, you’ve got him clearly being proven to be correct.

But he’s also saying that EV prices will come down even more and that by 2030, it’ll be much, much cheaper for car manufacturers to sell an EV, to manufacture an EV, than to sell a gasoline-powered vehicle.

It’s the seventh straight year that the age of the average car in America has risen seven years in a row.

Shifts in Vehicle Demographics

In addition to the average age of vehicles getting older, only 35% of cars in operation fall between the one to five-year-old category.

So 88 million vehicles are currently in operation in America, which is a staggering number, but it’s actually a drop of about 2 million from the year before.

So America’s car fleet has actually shrunk.

This could change drastically, though, because a lot of experts are now saying that as soon as we do of robo-taxis as soon as there’s hundreds of thousands of them, potentially millions, which could happen within the next few years, the car fleet in America is going to shrink immensely.

A lot of the young people, they don’t necessarily want to own a car. Meanwhile, the total number of vehicles on American roads is now 286 million, an increase of 2 million.

What this means is there’s actually nearly a car for every person in existence, including babies and children in America.

A lot of people must own quite a few cars. This study by S&P Global Mobility, predicts that vehicles in an aftermarket sweet spot between six and 14 years of age will continue to drive up the average age of cars.

Vehicle Longevity and Maintenance

Now, here’s the thing, S&P Global Mobility said this, the number of repairs people are having to do on their cars is increasing the older the cars get, i mean, that’s pretty obvious.

Other than just changing the tires, maybe changing the brake pads once, doing things like changing the break fluid.

Other than these very, very minimal things. Evs require very minimal servicing, even after you’ve done hundreds of thousands of miles.

But internal combustion, it’s not the case at all.

Light Trucks and Market Preferences

With internal combustion, the amount of money you’ve got to spend to maintain that vehicle, to keep it on the road, to keep it from becoming basically trash, increases.

Often, you got to replace the engine, recondition the engine, do major things like changing the timing belt, changing the spark plugs, all this stuff It becomes very costly to keep most of these aging cars on the road.

27 million light trucks have been scrapped. Compare that with 13 million new passenger cars registered versus a much larger number of 45 million new light truck registrations, and there’s a clear trend.

Future of American Car Fleet

Consumers have continued to demonstrate a preference for Utes and pickup trucks in America.

Manufacturers have adjusted their portfolios, and this is reshaping the composition of vehicles in operation in the market.

This is why Tesla is focusing so hard on ramping production of a cyber truck, which they apparently have doubled the number of output, the number of cyber trucks they’re building per week in the last five weeks.

They’ve doubled that because of these numbers. Americans want pickup trucks, it’s the same in Thailand.

EV Adoption and Market Trends

Ev adoption continues to rise, though, said S&P, with 3.2 million EVs recorded in the US. 2023’s EV registrations rose to over 1 million for the first time in history. Here’s the thing, the current age of EVs is 3.5 years.

But the great thing here is this if you buy an EV now, whether it’s used or new, it’s going to last longer than the average internal combustion engine vehicle.

There’s far less parts that go wrong. There’s far less parts that you need to go, has this been replaced? Has that been changed? Have they done that? Did they do the timing belt? Did they do this service? Did they do their oil changes? All those things you don’t have to think about when you buy a used electric car.

When you’re recommending something for, say, a friend to purchase, maybe they’re going to tell you, I don’t have enough money to buy a new car.

Well, tell them, get a used one. But if you’re going to get a used car, don’t get a used internal combustion engine vehicle.

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