May 15, 2023 - Economy

Gas-powered cars won't die off any time soon

Average age of U.S. vehicles, by type
Reproduced from S&P Global Mobility; Chart: Axios Visuals

Americans are keeping their vehicles longer than ever — good news for repair shops, but bad news for anyone expecting a rapid phase-out of gas-powered cars.

Why it matters: The longer people hold onto their internal-combustion cars, the longer it will take to replace those vehicles with newer, more environmentally sustainable technology.

Driving the news: The average age of light vehicles on the road in the U.S. is now at an all-time high of 12.5 years, up three months from 2022, according to S&P Global Mobility.

  • Two decades ago, their average age was 9.7 years.

The big picture: Sticker prices for new cars are rising, and existing vehicles are lasting longer, giving owners reason to hold onto their current ride.

  • Long gone are the days when your car was toast when the odometer hit 100,000 miles.
  • But vehicles still need regular maintenance and replacement parts as they age.
  • Aftermarket industry revenue is expected to grow at least 5% in 2023 after jumping 8.5% in 2022, according to a forecast by S&P, the Auto Care Association and MEMA Aftermarket Suppliers.

Zoom in: April's average new vehicle transaction price was $48,275, up 3.7% from a year earlier, partly because of the popularity of more expensive trucks and SUVs, according to Kelley Blue Book.

  • "The prices are astronomical," Todd Campau, associate director of aftermarket solutions for S&P Global Mobility, tells Axios.
  • If current owners don't need a new car, they're simply not buying one, Campau says.

The impact: The transition from gas to electric cars will take decades.

  • It'll likely take until at least 2050 — and possibly longer — before most gas-powered cars are off the road, Campau says.

Of note: EV longevity is going in the opposite direction.

  • Their average age fell from 3.7 years in 2022 to 3.6 years in 2023, in part due to an upswing in new purchases.

By the numbers: About 6.6% of battery-powered EVs bought between 2013-2022 have left the passenger fleet, compared with 5.2% of non-EVs — but Campau says it's too early to know why.

  • Carmakers say electric cars should last 15 to 20 years, but modern EVs haven't been around long enough to validate that claim.

The other side: While EVs run cleaner than their gas-powered predecessors, there's an environmental toll attached to mining the requisite materials and building new cars — so there's a decent argument that, all things being equal, it's better for people to squeeze as much life as possible from their old vehicles before making the switch.

Meanwhile: America's obsession with pickups and SUVs is driving passenger cars off the road.

  • S&P Global Mobility projects that within the next 18 to 24 months, there will be fewer than 100 million passenger cars on the road — a low not seen since 1978.
  • By 2028, at least 7 in 10 vehicles on the road will be pickups, SUVs or crossovers.

The bottom line: The future is electric, but the gas-powered past isn't fading away quickly.

(Disclosure: Kelley Blue Book owner Cox Enterprises also owns Axios.)

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