The classic tradition of driving a shiny new car right off the lot may be a thing of the past a decade from now, according to a new economic report that paints a bleak future for auto dealerships in North America.
According to a study from RethinkX, 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, Stanford University economist Tony Seba and technology investor James Arbib, argue that while electric cars may be comparatively expensive right now, in the long run they will be cheaper to operate than their gas-powered equivalents.
Arbib and Seba believe that due to the composition of an electric engine, people will spend less time bringing in their cars to dealerships for repairs and servicing.
"You only have 20 moving parts in the power train of an electric vehicle, but 2,000 in the power train of a gasoline vehicle, so there is far less to go wrong," said Arbib in the report.
Will self-driving cars mean the end of car ownership? https://t.co/mkTIpQwSuI— RethinkX (@rethink_x) June 13, 2017
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.
Click here to read the full report.