According to a study from RethinkX, an independent think-tank in San Francisco, greater demand for electric cars, coupled with increased demand for ride sharing, will eventually eliminate the need for dealerships altogether.
The authors of the report — technology investor James Arbib and Stanford University economist Tony Seba — aren’t the first to prognosticate the death of dealerships, but it is the speed with which they think it will happen that is notable.
They believe it will occur in the next seven years….
They estimate the tipping point will occur once the electric vehicle battery range surpasses 320 kilometres and electric car prices drop to the $20,000-dollar range. Currently, a low-end electric vehicle costs somewhere in the $30,000 range. …
Automotive experts agree that all roads lead to electric, but the road there could be long and winding.
“There are some serious question marks and a lot of assumptions in the report,” said Dennis DesRosiers, an Ontario-based auto industry analyst. … DesRosiers likens this report to the mass optimism around hybrid vehicles. When they were introduced 17 years ago, the thinking was they would account for half of the cars sold by 2020.
“The reality is, after 17 years, they account for less than one per cent, with sales in the last four years going down,” DesRosiers said.
That’s why he doesn’t think dealerships will soon join the list of businesses lost to advancing technology, like video rental stores. …
Arbib and Seba are nonetheless confident of their forecast, and believe that changing attitudes to car ownership will ultimately imperil dealerships.
Again, it all comes down to economics. According to their report, “Using transport as a service will be four to 10 times cheaper per mile than buying a new car, and two to four times cheaper than operating an existing paid-off vehicle by 2020.”
It will basically be cheaper to ride-share than keep a car (or two) in your garage.