There are a lot of trends to watch in the auto industry every year, but these five intrigue me the most heading into 2020.
5. Affordability
Maybe this is just my pet peeve as a guy who only buys used cars, but automobiles have gotten very expensive. Kelley Blue Book says the average new one cost over 37 grand last year. That's a ton of money. The growth of leasing and ultralong car loans have masked that expense, but at some point buyers will hit a wall (even though the current record number of delinquent car loans is actually at a healthy ratio compared to the growing pie of car loans). I don't know what the answer is, but I hope it's not staying in more debt for longer.
4. 5G powers V2X
I place this fairly low on my list because it's inside baseball and won't bear fruit for a couple more years, but it looks like the automotive, wireless and regulatory players have finally settled on 5G as the way cars will talk to each other and the world around them. The US FCC commissioner made it clear at the end of 2019 that he wants to move ahead with 5G spectrum for cars, which should speed design and investment to finally get cars truly connected. I'll be looking for concrete announcements of standards and partnerships.
3. Tesla Model Y
Everything Tesla has done so far has been done with one hand tied behind its back simply because it hasn't had a compact crossover, the kind of car America loves most in its overall passion for utility vehicles. The Model X SUV doesn't count because it's too big, too expensive and too unloved.
Comparing the first 11 months of sales in 2018 to the same period in 2019 shows that the Model 3 has brought Tesla a long way, but something's missing: a compact crossover.
CNETThe Model Y is on track for arrival in 2020 and will put Tesla in the main arena of the auto industry for the first time.
2. Lower electric incentives
As we round the corner into 2020, Tesla buyers no longer have IRS tax credits available, and GM is approaching that situation as well. California just reduced its plug-in incentives across the board, lowering rebate amounts, limiting them to cars that cost no more than $60,000, and excluding plug-in hybrids that can't do at least 35 miles on a charge. 2020 will put car buyers in the awkward position of finding one electric car much more attractive than its competitor due to regulation timing rather than just the vehicles' attributes and MSRP.
Over 100 new plug-in vehicles are coming in the next three years. Along with a couple of established trailblazers, we're about to enter an era of vast voice in electrified cars.
Tesla, Porsche, Ford Motor Company, Volvo, Audi, Jaguar, FCA1. EV-palooza
Without much doubt, the automotive story of 2020 will be the avalanche of new full electric and plug-in hybrid vehicles coming to showrooms. Porsche Taycan, BMW 3 and X3 plug-ins, Ford Mach E, Jeep Wrangler plug-in, Mercedes EQ models, Polestar 2 and VW ID4 join Audi's E-Tron and Jaguar I-Pace.
Electrics still won't reach anything close to a tipping point in 2020, but for the first time we'll at least see them populate almost all sectors of the new car market. We'll also get a better handle on when, and if, the bottom is going to fall out of combustion engine cars' residual values.