China’s success as the biggest producer of cars – mainly electric cars – the world has ever seen, has led to a problem of massive over capacity. There are not enough adults in the world, with driving skills, to drive all the cars produced every year.
Admittedly many of the latest vehicles are self-driving, but at the budget end of the scale, devoid of radar and autonomous software, basic cars are just dumb machines, even if they run on batteries rather than gasoline, and can be upgraded over the internet.
The shift to autonomous cars has also reduced demand. Who needs a car when you can hail a ride with the click of a button? On the other hand, owning a car is still a status symbol for many people entering the middle class in developing economies, which fueled production of cheap cars, until capacity exceeded the market’s – and city streets’ – ability to absorb new units.
Now millions of unsold cars stand gathering dust as buyers evaporate. Having more than one car per family these days is not a luxury – it’s just a waste, and an inconvenience. Since Tesla developed the ‘million mile’ battery in 2020, privately owned cars can last a lifetime, further reducing demand for new models. Buying a new electric car, more than once, makes no sense!
Many cities have banned private cars, even electric ones. There are better uses for city spaces than parking lots. With urban mobility reduced to an app, there’s no justification for clogging up streets and buildings with largely idle, parked cars.
“I remember when Hurricane Harvey destroyed a million cars in Houston,” reminisces Texan auto dealer ‘Honest Jake’ Jackson. “Those were good times!”
But now no-one wants a good-as-new pre-owned vehicle, or even a brand new one. Especially if it’s made in China. It’s not fair; they’re practically giving them away!
This article, originally published on MindBullets in September 2017, has been updated with new data.