The Unreachable Car: A Challenge to American History and Automotive History
For more than a century, America has had a deep connection to the automobile. Cars have long been a symbol of freedom, independence, and the American spirit. But this long-standing relationship will face major challenges in 2024 as car ownership becomes increasingly unaffordable for millions of Americans. This shift in affordability marks an important turning point in the nation’s historical adoration of the automobile, potentially signaling changes in transportation habits and social norms.
Rising costs and shrinking affordability
The cost of car ownership is rising due to the impact of the coronavirus pandemic on global supply chains. The average sticker price of a new car reached $48,759 in December, about 30% higher than in January 2019, due to assembly line shutdowns and semiconductor shortages. As a result, the average monthly payment for a new car is now a record $788. The total cost of owning and operating a new vehicle in 2023 was $12,182, an increase of approximately 14% compared to 2022. Supply chain strains and high loan interest rates are making car ownership increasingly burdensome for many Americans.
Gradual recovery and the advent of electric cars
Automakers have been slow to replenish inventory, even as the supply chain problems and semiconductor shortages that hampered auto manufacturing have subsided. However, the Federal Reserve is expected to lower interest rates in 2024, which could ease the economic pressure of car ownership. Amid these financial conditions, electric vehicles (EVs) are gaining a foothold in the U.S. market. Despite their high initial costs, proponents argue that EVs are more affordable in the long run because of lower fuel and maintenance costs. However, a study by the University of Michigan’s Center for Sustainable Systems found that EV affordability depends on size, range, and break-even time.
Possible setback for electric vehicles
Despite the growing popularity of EVs, consumer demand for these vehicles is declining in the United States, with only 6% of consumers expressing a preference for an EV as their next vehicle. Hertz’s ambitious plan to buy 100,000 Tesla and other EVs didn’t go as expected, and the company has now sold 20,000 EVs due to a lack of customer demand. This highlights the risks of corporate groupthink and highlights the challenges of changing social norms and habits.
The United States is at a crossroads as car ownership becomes increasingly difficult. The effects of this change could affect the auto industry, urban planning, environmental policy, and the very fabric of American life. The story of America’s love affair with cars is entering a new chapter, and only time will tell how this relationship will develop.