Few Aussies will own cars in 2050, predicts new study

Change is coming and by 2050 you may be in the minority if you own a car, says a new report by a global management consulting firm.

According to the LEK Consulting study, Australia is set reap billions of dollars in extra productivity via the adoption of 'new mobility' as private vehicle ownership dries up almost completely.

Electric vehicles (EVs), autonomous vehicles (AVs), self-driving robo-taxis, ride-sharing, car-sharing and a wider range of public transport options will negate the need for personal vehicles, says LEK.

The report, titled The Economic Benefits of New Mobility for Australia, states that 69 per cent of Australian household transport costs in 2017 were eaten up by private car ownership.

This figure is forecast to drop to 40 per cent by 2030 and just five per cent in 2050 – if existing legal and infrastructure barriers are overcome.

According to LEK, robo-taxis will account for around half of Australian household transport costs by 2050, with the next biggest outlay being public transport at 25 per cent.

Changes to the Australian transport landscape will be precipitated by EV/AVs and vehicle sharing and ride-hailing platforms like Uber, GoGet, etc.

LEK claims these three pillars will generate more jobs, improve labour force participation (via reduced transport barriers) while reducing road trauma, traffic congestion and pollution, thus reducing government expenditure.

The authors of the report, Mark Streeting (Partner, LEK Consulting) and Steve Brown (Managing Director, Cadence Economics), write that "New mobility is likely to have a highly disruptive influence on Australia’s transport landscape over the next few decades, with few aspects of travel unaffected."

The changes will result in a massive boost to Australia's GDP but the authors also concede that "There remain many unknowns and variables.

"The impact of disruptive technologies is notoriously difficult to forecast, and new mobility innovations such as AVs and EVs have still to overcome significant hurdles to widespread adoption, such as regulatory approval and infrastructure development."

Even so, they argue that "…businesses and governments should waste no time in beginning to plan for the future under new mobility."

The benefits from the evolution of transport systems and the significant changes to the transport playing field will generate at least $62 billion of gross domestic product (GDP) by 2050, says the LEK report.

"The introduction and adoption of new mobility options could increase Australia’s real GDP by AUD$62 billion to AUD$92 billion by 2050, a rise of 2%-3% over projected GDP without new mobility."

A significant proportion of the savings are tipped to come from reduced road trauma costs as the number of accidents and injuries are expected to decrease (by around 70%, according to LEK), as well as healthcare costs as AI-controlled autonomous vehicles become the norm in 30 years.

Road traffic and speeding fines are expected to plummet as the unpredictable human element of driving is removed, which will affect state government revenue somewhat.

However, LEK’s economic modelling forecasts massive job creation opportunities, since “… our analysis suggests that new mobility will boost employment by 200,000-274,000 full-time equivalents (FTE), or about 1%-2%," says the report.

Urban and city areas will drive the changes in transport but it remains to be seen how rural parts of Australia of will adopt EVs and AVs en masse given their remoteness.

EVs are struggling to gain a foothold in Australia, accounting for less than 1 per cent of national sales.

That compares poorly to countries like Norway, whose government provides big incentives to reduce costs to buyers, with one third of all new car sales being all-electric in 2018. The report points out that EV market penetration is challenging to predict at present.

"Published forecasts of EV penetration in Australia vary significantly, though there appears to be a broad consensus that EVs could account for a material share of the total vehicle fleet over the next 20 to 30 years."

The conclusions of the transport study were the result of a computable general equilibrium (CGE) model that works on an analysis of scenarios, which factor in low and high rates of adoption of new transport modes.

What do you think – will Aussies ditch their dream of a new car when robo-taxis become the norm? Have your say in the comments below.