The automotive industry has changed drastically in the year 2021. The shortage of cars has led to a major decline in the auto industry as you know it, and for some automakers, an end to production altogether. There are many reasons why this happened, but most people agree that the main cause is extreme oil shortages and skyrocketing prices. Here are ways the 2021 car shortage has changed the auto industry.
1. Sales Decline and Manufacturing Shutdown
As previously stated, the overabundance of oil in 2015 led to a decline in gasoline prices which drove demand for vehicles. However, as 2021 rolled around, and oil became scarce and expensive, people realized they didn’t need as many cars as they once thought. Additionally, with gas prices reaching upwards of $10 per gallon, people were forced to find alternatives to driving, such as using ride-sharing services or public transportation. This all led to a decline in sales for automakers, and some even had to shut down manufacturing plants.
2. Rise in Electric Cars
With gas prices being so high, consumers were forced to rethink their options. Many people realized that they could save money by using an electric car over a gas-powered one. Additionally, due to the high cost of fuel and lack thereof, oil companies had to resort to dangerous drilling methods to extract enough oil for us to use. This led to hundreds of spills across the country. This combined led to a rise in electric cars, as people were looking for more environmentally-friendly options.
3. New Car Technology
As the auto industry has declined, automakers have been forced to develop new ways to entice consumers to buy their cars. This has led to new car technologies, such as self-driving cars and electric vehicles. Additionally, many automakers have been forced to reduce the cost of their vehicles to stay competitive in the market. This can be seen with Tesla’s Model 3, which is a more affordable electric car.
With the costs of manufacturing going up, oil prices climbing higher, and automakers being forced to reduce the retail costs of their vehicles, there are yet more factors impacting the auto industry.
For example, the rising cost of oil is impacting shipping costs as well. The costs of shipping necessary parts for the manufacturing process is hindering many auto companies. They are also forced to look into the cost of shipping their cars to Hawaii and other locations worldwide. Designing new car technology will require shipping new parts in and exporting their new car technology out.
4. Rise in Ride-Sharing
With gas prices high and new car technology, such as self-driving cars, on the rise, there has been a major increase in ride-sharing services. This can be seen with companies like Uber and Lyft thriving and expanding to more cities across the country. Only about 15% of the population uses ride-sharing services, but this is expected to grow as the cost of owning a car continues to increase.
5. Decline in Car Culture
One of the biggest impacts of the 2021 car shortage has been the decline in car culture. With so few cars available, people no longer consider them a necessity; instead, they are seen as a luxury. With the high prices of gas and lack thereof, no one can afford to drive everywhere like they used to. Many people have found that ride-sharing services are more economical than owning their cars due to how expensive they are.
6. Rise of Telecommuting
Telecommuting became increasingly popular after the 2021 car shortage began. Many people have found that telecommuting is more economical than driving to work every day with gas prices so high. Additionally, with self-driving cars becoming more prevalent, many companies encourage their employees to telecommute instead of driving to work. This has led to a rise in telecommuting, and it is expected to continue growing in the future.
7. Increase in Licensing
Another change due to the shortage of cars is with licensing. Many states have begun canceling driver’s licenses for people under 18 years. This is because they do not need teenagers when it comes to driving since there are so few vehicles on the road. This is also seen with the rise of autonomous cars, as there will be no need for a driver’s license when self-driving cars become more common.
The 2021 car shortage has had a major impact on the automotive industry and society. With gas prices reaching record highs, people have been forced to find new ways to get around. This has led to a decline in sales for automakers, a rise in electric cars, and a rise in ride-sharing services. Additionally, the car culture has changed, as people now see cars as a luxury instead of a necessity. Telecommuting has also become more popular in light of the high gas prices. Finally, the age for getting a driver’s license has increased in many states. These changes are expected to continue as the 2021 car shortage continues into years to come.