Down with Peak Oil! Up with Peak Cars!

Not long ago, a lot of smart people believed in “peak oil,” the notion that dwindling petroleum reserves would force massive disruption of transportation and the world economy. New oil wells in the U.S. and the Canadian oil sands killed—or at least significantly forestalled—that particular peak.

Could “peak cars” now become the game-changer that peak oil never was? In a presentation this week of new data and statistical models led by Navigant Research, some other smart people explained the case for just such a future, and gamed out who the winners and losers of such a massive shift may be.

The idea is simple. Sixty-seven years after the start of the post-war car boom, perhaps Western consumers are running out of space, money and time to continue buying new cars at historic rates. As congestion and fuel prices continue to rise, and young adults grow less enchanted with cars, “peak cars” posits that we stand on the precipice of a massive shift away from people driving cars alone, and toward all sorts of sharing.

“Essentially it’s a saturation of cars and light trucks in a given population,” says Dave Hurst, research analyst at Navigant.

Whether or not that’s actually happening, some big changes are afoot. Car sales in Europe have slumped from over 15 million a year in 2007 to 2012 today, Hurst said, as sales of traditional and electric bicycles rise.

“I would argue that in Western Europe, we’re likely there,” having reached a maximum number of cars, Hurst said. But “we probably have not hit peak cars n North America.”

The number of bike commuters in the U.S. grew 47 percent in the last decade, Hurst said. Meanwhile, average vehicle miles traveled in the U.S. has dropped for eight years in a row (the trend started well before the Great Recession), and the average American now drives as much as she did during the first Clinton administration, said Phineas Baxandall, a policy analyst at U.S. Public Interest Research Group.

The drop is particularly steep among the youngest drivers. People in their 20s are taking 15 percent fewer car trips, while bike trips are up 24 percent and walking is up 14 percent.

Young people inevitably will drive more as they buy homes and raise families, Baxandall said. The question is whether they will drive less than their parents did at the same age. Between their increased desire to live in cities and emphasis on spending discretionary income on gadgets instead of cars, U.S. PIRG predicts that less driving is basically inevitable.

“Postwar driving increases appear to have come to an end,” Baxandall said.

Some companies will lose in the exchange. Car companies will sell fewer large, high-volume SUV’s, even though the car business will remain profitable, Hurst says. Plans to auction public toll roads to the highest private bidder may be in jeopardy, says Baxandall. The capped federal gas tax, already hammered by years of inflation, will continue to erode in value, U.S. PIRG predicts, possibly exacerbating current infrastructure nightmares.

Others stand to gain. Those include:

–        Smart car technology. In crowded cities, demand will rise for cars engineered to stay in their lanes, brake in gridlock and warn drivers of approaching disaster, Hurts says.

–        Communication between vehicles and infrastructure. In one 15-block area of Los Angeles, drivers drove nearly a million unnecessary miles and burned 47,000 gallons of extra fuel just to find parking, according to data presented by Eric Woods, research director at Navigant.

Technologies to monitor parking availability and communicate that information to motorists are about to get very popular. According to a recent Navigant report, the number of smart parking spaces worldwide will grow by 1 million by 2020. Such systems also create the first layer of wireless infrastructure that can turn a profit for cities, providing both the platform and the revenue to support additional traffic management technologies.

“The parking industry is going through its biggest evolution since the introduction of the first parking meters in Oklahoma City in 1935,” Woods said.

–        Bikes and scooters. Makers of lightweight, two-wheeled transportation are already seeing significant sales growth, Hurst says, and that’s likely to continue.

–        Car-sharing. Most seats in most cars on most roads currently sit empty. Cleanweb and collaborative consumption companies are finding new, capital-light ways to fill those seats, including selling shares of taxi rides, cross-country trips and car ownership.

Caught in the middle could be makers of electric vehicles. As this week’s bankruptcy of EV maker Miles shows, the electric vehicle market remains highly volatile. The peak cars phenomenon may eventually hurt the EV business too, but not before the segment expands dramatically, Hurst says.

“It’s a mixed bag. Immediately I’d say EV sales are replacing other vehicle sales,” says Hurst. But in the long term, “these are vehicles. And if an area cant fit any more cars, it really doesn’t matter what kind of fuel that vehicle runs on.”

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