- Mar 13
- 4 min read

Crashing Car Sales: A Shocking Reality in the US and Europe!

Crashing Car Sales: An Alarming Reality in the United States and Europe, with Declining New Vehicle Sales Posing Challenges for the Automotive Industry and Opportunities for Innovation in the Transition to Electric Vehicles in Ride-Hailing Companies.

Questions to inspire discussion:

❓ Why are automakers trying to sell subscriptions according to the transcript?

Automakers are trying to sell subscriptions to boost margins because new car sales have hit their peak in the US, Europe, and Japan, despite strong population growth.

❓ Who is mentioned as likely to survive the new reality in the auto industry?

Tesla and a select few others with their disruptive business model

❓ What is the key factor that can help an auto company navigate through the growth of EVs?

Having an industry-leading cost structure in EVs can help an auto company navigate through the growth of EVs.

❓ How have smartphones impacted the auto industry?

Smartphones have impacted the auto industry by increasing the price of vehicles over time, similar to how smartphone prices have doubled. This has led to people holding onto their vehicles for longer periods, reaching a local maximum in vehicle sales. The growth in pricing of vehicles could be following a similar trend as smartphones.

❓ Why are automakers focusing on generating new revenue from subscription services?

Automakers are focusing on generating new revenue from subscription services because they are struggling to find new sources of revenue, especially with the challenges in the auto industry such as slashing costs dramatically. Subscription services like hands-free driving systems have shown more success in charging customers compared to other services like charging for heated seats. These services need to be compelling to customers in order to be successful.

❓ What mistake did automakers make in the mid-1980s with regards to cell phones?

Automakers thought they could integrate cell phones into their cars and make money on them, but customers were not willing to pay for a phone that was parked in their garage every night.

❓ How does the speaker believe Tesla is underestimating the power of the project?

The speaker believes Tesla is underestimating the power of the project by not realizing the significant impact it will have once the combination of design elements and features is perfected. They mention that when Tesla gets this combination right, it will be highly powerful and will outperform other vehicles in its price tier, like the $25,000 Corolla.

Key Highlights:

Challenges Ahead: Auto Industry Struggles with Declining New Car Sales
EVS show significant growth trajectory, while traditional auto industry is in decline. Industry needs to focus on improving EV cost structure for sustainable success.
Decline in vehicle sales in the US and Europe due to increasing prices and longer ownership periods.
Challenges automakers face in monetizing subscription services for car features.
Revolutionizing vehicle design to maximize features while reducing costs for a game-changing product.
Challenges in vehicle manufacturing efficiency amid shifting industry dynamics.
Excessive vehicle purchases led to financial strain for companies like Uber and Lyft.

Clips:

00:05 🚗 Decline in new car sales poses a significant challenge for the automotive industry in the US and Europe.

Peak Auto reached in the US, Europe, and Japan, with stagnant new car sales despite population growth.
Automakers resorting to subscription models to boost margins as traditional sales decline.
Tesla and select disruptors likely to survive the industry shift, while legacy automakers face a crisis.
Long-term decline in new car buyers in the US highlighted, indicating a structural shift in the market.
Global new car sales lower than a decade ago, with Western regions facing the brunt of the decline.
Shift towards EVs crucial for the industry's future growth amidst the declining traditional auto market.

03:30 🚗 Decline in new car sales due to rising prices and longer-lasting vehicles, posing challenges for the auto industry.

EVS showing growth trajectory, potential for industry-leading cost structure.
Historical decline in new car sales, with fewer households able to afford new vehicles.
Average new car cost exceeding affordability for many households.
Auto industry facing choices of income growth or cost reduction to make cars more affordable.
Comparison to smartphone market evolution in terms of pricing and longevity.
Smartphone prices doubling over time while focusing on software improvements.
Shift towards holding onto vehicles longer due to cost considerations and technological advancements.

07:11 🚗 Challenges in the automotive industry due to declining sales and need for cost efficiency.

Automotive industry facing declining sales and cost challenges.
Tesla leading in EV innovation and cost-cutting strategies.
Focus on slashing costs through new assembly processes and EV programs.
Automakers exploring subscription services for new revenue streams.
Challenges in implementing new revenue models like BMW's heated seats subscription.

10:48 🚗 Challenges and opportunities in the automotive industry amidst declining sales.

Automakers can charge for compelling in-car services to boost revenue.
Automakers need to innovate and explore new business areas like energy storage and autonomous ride sharing.
Pressure to cut costs and find new revenue streams intensifies with stagnant car volume.
Tesla's disruptive approach to vehicle design and cost reduction could reshape the market.
Underestimation of the impact of Tesla's $25,000 vehicle on the market share.
Model 3 and Model Y have already outperformed competitors in their price tiers.

14:29⚡️ Challenges and opportunities in the automotive industry, focusing on Tesla's innovation and competition.

Tesla's focus on unseen aspects like cost reduction and assembly process changes.
Potential for Tesla to offer compelling subscription services, including FSD charging models.
Industry shift towards high-speed, efficient vehicle manufacturing.
Toyota and Chinese automakers may thrive with strong supply base and process efficiency.
Ford facing challenges in vehicle design and innovation compared to competitors.

18:38 🚗 Transition to electric vehicles in ride-hailing companies is happening faster than expected, driven by lower cost per mile.

Legacy auto companies are delaying electric vehicle production despite the cost-effectiveness of EVs.
Uber and Lyft in NYC have 12% of their fleet as electric cars, showing the shift towards EVs.
Herz CEO admitted they bought too many electric vehicles at a high cost, leading to scaling back.
Cost per mile is a crucial factor for ride-hailing companies like Uber and Lyft in vehicle selection.

21:17⚡️ Impact of Electric Vehicles on Ride-Hailing Market and Future of RoboTaxi