Due to a variety of reasons, including the Covid-19 pandemic, higher prices, increases in inflation, and changing consumer habits, global demand for cars has declined in the short term and it is possible that demand will decrease dramatically in the future as people seek alternatives to the traditional automobile. It is evident that certain components of cars — including the internal combustion engine — will go the way of the dodo bird in just a few years. Why are experts saying this? Because of the trends they’ve been witnessing in the automotive market, particularly as it relates to smart car technology.
What are some of the major changes that smart car technology will bring? First and foremost, the way cars are used is rapidly evolving, as is the way automobiles are being built. So while the cars that we see on the road today are bound to disappear, it doesn’t mean people are ditching them in favor of alternatives, it’s more than the concept of the car will change in major ways. Let’s delve deeper and take a look at this exciting new reality.
SMART CARS: THE WAVE OF THE FUTURE?
Folks who are looking at smart car trends have observed two things. First, although the demand for cars is expected to decline, people are still going to rely on technology to meet their transportation needs. After all, people want to be able to get from Point A to Point B in the quickest, most convenient ways. And as it relates to the developed world, roughly 75% of households own at least one car, if not multiple cars for each member who is of legal driving age. What will ultimately happen is that the cars that the consumer of the future prefers will look different in many ways from what we’re accustomed to today. Gradually, the smart car will completely replace the existing fleet, first in the most economically developed countries and eventually everywhere, much like widescreen HD TVs have completely replaced those boxy televisions that were the standard for several decades. The companies that will benefit the most from changes in car technology are the ones who are leading in terms of innovation since it is their products that will increase in demand.
The second reason why smart cars are the future is because of changes that both consumers and regulators are forcing on automakers. For instance, as people become more environmentally conscious, they expect their vehicles to likewise be eco-friendly. This means manufacturing cars that pollute less, if not completely carbon-neutral altogether. Safety is also a major concern. The materials used to design cars and the computer technologies that help avoid accidents are high priority. In addition, as we grow more connected in terms of Internet technologies, there is a demand for new automobiles that take advantage of this. All of these factors have an effect on how cars are being designed and built.
Some of the changes we are already witnessing are components that are far more sophisticated than anything we’ve seen before. These technologies are also more integrated. In addition, materials are becoming lighter in weight, which has a positive impact on safety, and allows cars to run more efficiently. Each manufacturer creates their own unique technologies and is sure to fiercely guard these patents, especially since the cost of research and development is so high. As a result, it is possible that one company’s vision of the car of the future will differ from another, resulting in a variety of consumer choices. Naturally, investors are extremely interested in putting their money into these exciting new technologies.
WHERE DO WE GO FROM HERE?
As noted, the pandemic has had a big impact on demand for vehicles, which adds a layer of complexity in the automotive industry. As we go forward without knowing what the future holds, it is important that all of the players — whether it is investors, the major car companies, and tech giants — stay attuned to the changing dynamics of the market.
How can this be achieved? By closely examining and evaluating how technologies are changing and how much is being invested in these changes financially. In other words, follow the money trail. Look and see where the money is being invested and keep up with new, innovative technologies.