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We’re a Long Way From ‘Peak Car’

Millennials are moving to the suburbs. Guess how they’re going to be getting around?

This article originally appeared in the Wall Street Journal on Oct. 1, 2015.

By Mark Mills

Many environmentalists hope, and oil producers worry, that we’re entering a post-car era spearheaded by tech-savvy, bike-path-loving, urban-dwelling, Uber-using millennials—leaving behind generations of automobile owners whose thirst for gasoline seemed limitless.

“Millennials have been reluctant to buy items such as cars,” a Goldman Sachs analysis concludes, turning to “what’s being called a ‘sharing economy.’ ” David Metz, former chief scientist at England’s Department of Transport, claims that the growth of Uber and its competitors guarantees a decline in automobile and fuel use. Thomas Frey, the DaVinci Institute senior futurist, says that “wealthy economies have already hit peak car.”

The idea may seem plausible given recent history: tepid new-car sales, fewer miles driven per capita and shrinking gasoline use. In reality, it’s poppycock: The car habits of young adults ages 18-33 simply reflected a lack of jobs and money.

Now J.D. Power finds that millennials are the fastest growing class of car buyers. Edmunds reports that millennials lease luxury brands at a higher rate than average. Nielsen reports millennials are 40% more likely than average to buy a vehicle over the coming year. Tesla-inspired hype aside, overall electric-car sales are down 20% this year, with SUV sales up 15%.

Urban dwellers? The latest Census reveals a net migration of millennials from the city to the car-centric suburbs is already under way. And it’s just starting: A survey sponsored by the National Association of Home Builders finds 66% of those born since 1977 say they plan to live in a single-family suburban home.

Peak driving? Federal Highway Administration data show 40 billion more total miles driven in the first half of 2015, compared with the last peak set in the same period in 2007. Gasoline demand in 2015 is rising too, soon to blow past the previous record of 9.2 million barrels a day, also set in 2007. Imagine what happens when robust economic growth resumes.

Consider a related Silicon Valley trope that self-driving vehicles promise fewer cars or less driving. One Rocky Mountain Institute analyst thinks “if implemented correctly” they could be used to increase public transit use. Lawrence Berkeley Lab researchers implausibly posit self-driving cars are “potentially disruptive,” provided they’re used mainly as taxis, and involve fewer solo rides.

But whether a human or an algorithm is driving, it’s still a car. One disruptive change that could arise from self-driving cars is that the growing elderly population, and others infirm or isolated, will be able to continue owning cars and enjoying the freedom and mobility they bring. And cool tech features may, if anything, make cars more attractive, not less, to tech-savvy millennials.

For all their iconoclasm, the baby boomers eventually got married, moved to the suburbs and bought houses, SUVs and minivans for their double-car garages. Generation Y is going down the same road. The forecasts of peak car look to be about as accurate as those of peak oil.

- Mark Mills is a faculty fellow at Northwestern's McCormick School of Engineering and a Manhattan Institute senior fellow.

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