A recent study conducted by S&P Global Mobility reveals that Americans, in the final stages of the COVID pandemic, are holding onto their combustion-engine vehicles for longer periods.
The study highlights that the average age of cars and light trucks in the United States has reached a record high of 12.5 years. This trend can be attributed to several factors:
- Supply constraints on new vehicle inventories because of pandemic impacts on manufacturing
- Decreased consumer demand from inflation and higher interest rates.
However, the study also predicts the average vehicle age is expected to decrease in the coming year, despite six consecutive years of vehicle age increases. As supply chains stabilize and demand for new vehicles rebounds, with projected sales exceeding 14.5 million in 2023, the average age of vehicles is likely to decline, according to the report.
Interestingly, electric vehicles (EVs) defy this aging trend, finds the S&P research. The average age of battery electric vehicles (BEVs) in the United States has actually decreased slightly from 3.7 years in 2022 to 3.6 years. This age range has remained relatively consistent, hovering between 3 and 4 years since 2017.
The study attributes this phenomenon to the rapid growth in BEV sales, which increased by 58% in 2022. The higher influx of new EVs helps maintain a younger average age within the EV sector, even though a larger proportion of EVs are exiting the overall vehicle population when compared to combustion-engine vehicles.
From 2013 to 2022, the study notes that 6.6% of BEVs in operation were taken out of commission, while only 5.2% of combustion vehicles were removed from the fleet. This data indicates EVs experience a slightly higher turnover rate, potentially because of advancements in technology and consumer preferences for newer EV models.
The study by S&P Global Mobility shows Americans extended the lifespan of their combustion-engine vehicles during the COVID pandemic, leading to a record average vehicle age. However, the average age is expected to decrease soon with the recovery of new vehicle availability and renewed consumer demand.
In contrast, EVs maintain a younger average age, owing to the surge in BEV sales despite a larger percentage of EVs leaving the overall vehicle population compared to traditional combustion-engine vehicles.
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