The latest update from S&P Global Mobility on the U.S. car parc contains sobering numbers for an industry transitioning from internal combustion to battery-electric propulsion. No matter how quickly automakers transform their products, it will take a long time to reap the full ecological benefit that makes the costly switch necessary.
S&P said the average age of light vehicles in the U.S. reached a record 12.5 years, adding more than three months to the 12.2-year record average reported a year ago. Unsurprisingly, a key driver of the increase was the supply constraints lingering from the COVID-19 pandemic, which curtailed production and helped keep consumers in their existing vehicles or sent would-be new-vehicle buyers into the used-vehicle market, S&P said. Economics almost certainly played a part, as the rise in new-vehicle prices and higher interest rates also kept some new-vehicle purchasers on the sidelines.
The jump marks the largest yearly increase in the average age of the U.S. fleet since 2008, S&P said, and continues a longer-term trend: In 2003, the average fleet age stood at 9.7 years, while a decade ago, it had grown to about 11 years.
An aging fleet certainly carries broad implications for the industry. First, it is singular validation that long-term efforts to improve quality and durability have been roundly successful. The report also should help assuage the concerns of loan underwriters about the depreciating assets they are lending against, making the growing use of longer-term 72- and 84-month loans at least defensible from an underwriting standpoint — even if they are financially unwise for consumers who must use them.
But perhaps the most sobering implication of the aging U.S. fleet is that, even if automakers were to cease manufacturing internal combustion-powered vehicles today, it could be decades before the vast majority of gasoline-fueled light vehicles are retired. That long tail must be taken into consideration by regulators and political allies who might otherwise expect to see quicker environmental results from implementing an ever more restrictive emissions regimen.
At some point — and that point is not today — those who want to speed the reduction of light-vehicle emissions in the U.S. will have to address the aging of the fleet, not only by promoting new electric vehicles, but also by removing the oldest, least-efficient vehicles from the roads.
