7.5 Million Shared Cars on European Roads
Car sharing in Europe is on the rise, up to 7.5 million shared cars by 2035, according to recent research by ING. Nevertheless, some significant barriers temper the growth.
7.5 Million Shared Cars
ING calculated that car sharing will grow to 7.5 million shared cars in Europe by 2035, up from the estimated 370,000 at the moment. In Car Sharing Unlocked ING claims that 30% of Europeans with a driver licence show an interest in car sharing, 60% is even prepared to share their own car, if they would get paid. Moreover, Southern European countries show more interest.
KPMG made a similar conclusion in its Global Automotive Executive Survey 2018, claiming that shared cars will have a 50% market share by 2040. In particular due to increasing urbanisation, 43% of their interviewees admits no longer being interested in owning their own car by 2025.
Nevertheless, only 0.1% of all cars in Europe are shared today. Car sharing faces competition of other mobility services, such as ride hailing but there are other barriers as well.
40% of the interviewed Europeans would like to see improvements in the field of user experience, such as more reliable, faster, easy-to-use service and an increased supply of cars. Moreover, 20% would like to decrease the rates.
This evolution can be enhanced on the supply side as well. Several car manufacturers already offer car sharing, but expanding this fleet is expensive, slow and inflexible. Enhancing platforms and technology will facilitate expanding the offer and generating trust among car owners to share.
Technology, for instance, could overcome the physical barrier of handing over the key, whereas an application and start-stop button could avoid this current necessary, but cumbersome transaction.
All these barriers have to be addresses to exploit the full potential of car sharing, which ING estimates to be at 80% of all passenger travelled miles in the EU in a fleet of around 270 million cars.
New technology cannot only overcome the ‘key issue’ but can help gaining trust among car owners by monitoring driver behaviour. Eventually, when autonomous comes in, this problem would be solved by the autonomous driver. ING estimates Level 4 autonomous cars to increase on the roads by 2025.
Moreover, government regulation and incentives can increase the cost competitiveness of car sharing versus car ownership. Dedicated taxation schemes, or traffic restrictions, and/or parking space limitations can encourage the shared use of a car versus car ownership.
The rising demand for shared cars will eventually result in a peak car moment, when the total number of cars in Europe will fall and new car sales will decline. As from 2035, 1 million fewer cars will be sold in Europe each year, according to ING.
Nevertheless, that does not necessarily mean car manufacturers will drop out of the market. ING suggests them to take a leading role in car sharing by creating their own peer-to-peer platforms, such as BMW’s DriveNow service, and the same can be said for fleet owners, who are in a strong position in the car sharing evolution.