Last year was a big one for the auto industry. Regardless of the pandemic continuing to put a damper on the economy, automakers were able to move forward with new technology and a shift in consumer demand. With many consumers now willing to spend more money on an electric vehicle (EV), microchip shortage and supply chain issues have started to ease up, the industry is poised to see even more growth in the coming year.
Here are the biggest stories of the year in the auto industry:
Up until recently, the market growth of EVs has been somewhat modest, but with the continued shift toward EVs and the slow but steady improvements in battery technology, EVs are quickly becoming a viable option for consumers – which we saw in the last year. EV sales grew by 43% between 2019 and 2020, per Virta Global, and ownership doubled from 2021 to 2022. With more consumers looking to EVs, automakers will have to continue to make them affordable for consumers to take the leap.
Earlier in the decade, the microchip shortage caused automakers to build fewer cars and delay their production plans. Car lots sat empty as dealerships had to wait for their orders to be filled. By the end of 2021, the industry had started to recover, with production somewhat back to pre-pandemic levels. Vehicle prices began to decrease again while the demand for used, more affordable vehicles grew. The chip shortage could continue to be a problem for the industry, however, we may see even more improvement in 2023.
With sale prices of new vehicles being so high since the pandemic, 2022 saw a new focus on used cars. In fact, more consumers than ever are opting for used vehicles over new ones. Although this may change in 2023. And, as interest rates on new vehicle loans increased in the past year, cash sales have also risen – and will likely continue to go up in the coming months. This doesn't mean that new cars won't regain their popularity, especially as new models with more features become available.
2022 was the year that many automakers announced that they would be releasing more autonomous vehicles in the following years. With Google and Tesla, among others, already making waves in the industry, automakers are jumping on the bandwagon. More cars with self-driving features could lead to safer and more efficient rides for drivers. Much of the recent innovations in autonomous vehicles are level 3 vehicles, which include partial self-driving features such as automated parking and adaptive cruise control, according to Research And Markets. With incredible advancements in technology and innovation, the future of autonomous vehicles looks bright. As more drivers become comfortable with autonomous vehicles, we'll likely see a rise in the number of level 4 and 5 vehicles on the road.
We're in the midst of an exceptional time to witness a global revolution in technology, including its role in the future of transportation. The emergence of new mobility solutions, including car sharing, autonomous vehicles, and the growing focus on electrification, are already impacting the way people move around. This is creating a variety of new opportunities for cities to improve their transportation systems. However, cities must also grapple with the challenges that come with this new technology, including how to ensure that the roads are safe, how to manage traffic, and how to ensure that the mobility options that emerge are equitable. We look forward to seeing more industry leaders taking advantage of new opportunities to address these challenges in the coming year.
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