Electric vehicles went mainstream and, in the process, became nearly impossible to buy. As a result, they were vastly outsold by e-bikes, which continued their march toward popular acceptance. Gas prices did their rollercoaster thing. So did interest rates. AV companies expanded, retracted, and basically befuddled our expectations. Transit agencies struggled to get back to pre-pandemic levels, but maybe buses will soon be free? Tesla showed us a robot, shed billions in dollars of value, and watched enviously as its CEO found a new toy to play with.
A lot more stuff happened, but honestly, who wants to dwell on the past?
A lot more stuff happened, but honestly, who wants to dwell on the past? Here at The Verge, we keep our unwavering eyes always on the future, which is why I thought it could be cool to reach out to a bunch of my favorite smart people in transportation to get their predictions for 2023.
Will car prices stabilize? Will China surpass the US in autonomous vehicle technology? Will more people ditch their boring SUVs and minivans for the unmitigated joys of an electric cargo bike? Enough of my blathering; let’s let our experts tell us what they see in their crystal balls.
Table of Contents
Doug DeMuro, YouTuber, car reviewer, quirks and features expert
My biggest prediction is that car prices finally start to fall — new and used — in a measurable and noticeable way. It’s been a long couple of years with inflated prices due to demand, low borrowing costs, and covid supply shortages, but I think things will finally equalize in 2023.
Mike Radenbaugh, Rad Power Bikes founder and chairman
- Innovation will be rooted in increasing accessibility: Current micromobility options are inaccessible to certain groups, including those with mobility challenges, conditions that impact balance, or can’t afford to spend several thousands on a mode of transportation. In 2023, we’ll see innovation that adds value to mobility solutions, thus boosting accessibility — think three-plus wheel options for better stability, optimized personalization, and options that address the needs of certain people. Plus, networks of service partners will expand so people can easily secure maintenance support.
“My biggest prediction is that car prices finally start to fall — new and used — in a measurable and noticeable way.”
- Incentive programs will multiply: Cities like Denver have recently rolled out successful e-bike incentive and rebate programs, and we expect 10-plus states to offer them next year as local officials recognize their popularity and general awareness around e-bikes as viable transportation solutions builds. Beyond reducing carbon emissions, incentive programs are enabling people with ways to get to work, pick their kids up from school, and more easily run errands.
- Fewer households will have second cars: According to the DOT, the number of households with two or more cars has increased from 22 percent in 1960 to 59 percent in 2020. However, the average used car costs $34,617, according to data from iSeeCars, while cargo e-bikes can cost less than $2,000. With budgets tightening as interest rates rise, we expect more households to opt for a cargo e-bike instead of a second gas-powered vehicle, thus leading to a decrease in the number of households with a second car.
- Rural e-bike usage will expand: While city dwellers and suburbans both make up one-third of Rad riders, one-third live in rural areas — and we expect adoption in that grouping to increase in 2023. Currently, many consumers who reside in rural areas use ATVs and golf carts to get around their properties and drive bikeable distances to get to town, but many are replacing those miles with e-bikes. They’re also experiencing benefits beyond utilitarian ones; e-bikes enable them to enjoy nearby trails and parks, get outdoor exercise and explore their surrounding areas. Plus, ongoing technological improvement and battery and motor innovation will lead to increased ranges, making e-bikes an even more viable option for those riding longer distances.
- City planners will collaborate with private companies: We expect to see public-private partnerships evolve significantly in 2023 with strengthened relationships and closer collaboration. One of the biggest challenges facing e-bike adoption is the lack of infrastructure in place to support safe bike travel. However, by leveraging the research, deep product knowledge and consumer insights from private companies, government entities and community groups will be better equipped to build effective biking infrastructure from the start. Because if you build it properly, they (e-bike riders) will come.
“We expect more households to opt for a cargo e-bike instead of a second gas-powered vehicle.”
Janette Sadik-Khan, former commissioner of the New York City Department of Transportation, chair of the National Association of Transportation Officials
Electric cars aren’t sexy. You know what is sexy? Electric bikes. In 2023, cities will realize that they’ve been too busy reading Elon Musk’s Tweets to notice that the transportation revolution of the last decade hasn’t been in Uber, Lyft or in electric, driverless or flying cars but in the half-billion bike share and e-scooter trips taken since 2010 with scant public investment. Electric bike sales now outnumber electric cars in the US, and if the nation’s cities invested half as much money and road space in supporting this trend, it could just as quickly outpace car trips.
Jessica Caldwell, director of insight at Edmunds
The interest rates piece is probably most interesting — how much higher can these rates go? Folks getting a used car loan right now are paying over $10,000 in interest alone on average!! It seemed like not that long ago you could buy a car for $10,000!
CarDealershipGuy, independent dealership owner, pseudonymous Twitter user
- Independent dealers will consolidate and/or shut down at the fastest pace since 2009. Why? Because independent dealers (also known as non-franchise dealers) primarily rely on a single profit center that is selling used cars. Selling used cars at scale works very well when rates are coming down, but it gets a lot tougher when rates are rising. And even if you aren’t aiming for scale, the small operators in the industry are facing unprecedented inventory carrying costs and massive challenges when it comes to consumer vehicle affordability and financeability.
“The interest rates piece is probably most interesting — how much higher can these rates go?”
- Traditional dealerships will gain market share versus e-commerce players: We’re entering an era of sustainable businesses, and that includes healthy balance sheets with lots of operating leverage and profitability. I think 2023 will be the first time in the last decade where traditional dealers will gain more market share on an annual basis versus the online-only e-commerce auto dealers. I still think many people love and prefer an online-only car buying experience, but the macro environment will benefit traditional dealers who carry leaner operations and rely heavily on variable expense structures (as opposed to heavily fixed expense structures).
- Vehicle subscription companies will scale at the fastest pace in a decade as vehicle affordability reaches new lows: big caveat here – I’m not saying they will do it profitably. But I do believe they will gain significant market share as their value proposition will become a lot more compelling in a recessionary environment. People will look for ways to save and become more efficient.
Beth Osborne, director of Transportation for America
I think that pedestrian fatalities will hit an all-time high, around 8,000, for 2022; but overall roadway fatalities will level off from the historic high of 2021 and provide too much comfort, reducing the focus on roadway safety.
Raj Rajkumar, professor of electrical and computer engineering at Carnegie Mellon University
- There will be an ongoing retrenchment of the AV industry. Expect more layoffs in the large AV companies and at least one more high-profile flameout like Argo AI. Emphasis will dramatically shift from full autonomy and robotaxis to ADAS++ and high automation features. I, for one, am very bullish on the viability and appeal of advanced autonomy (as opposed to full autonomy, which will still take time).
“Vehicle subscription companies will scale at the fastest pace in a decade as vehicle affordability reaches new lows.”
- Some existing partnerships between OEMs and high-profile AV startups will f(l)ail since the latter are unable to deliver. This will be particularly true for startups that only depend on cameras as their AV sensors. When you don’t meet promised milestones, at some point, financial realities catch up.
- The need for technology to compensate for the distractions of human drivers and replace them where possible has not gone away. Ergo, the market potential continues to be massive. With fewer AV companies around and expenses being scaled back significantly, remaining companies with a narrow focus on technology breakthroughs, deployment and revenue generation will become stronger and much better bets.
- There will be a significant decline in the number of sensor companies, particularly in the lidar space. Too many companies are chasing too small a market. Again, the remaining ones with the most promising technologies (like FMCW) will end up being stronger but could be absorbed into Tier-1s or OEMs.
- The micromobility space will continue to shrink due to a multitude of logistical and financial problems.
- Companies trying to build flying cars and person-carrying drones, etc., will continue to flounder.
- As an avalanche of EVs spanning the entire cost spectrum begin to flood the market from all around the globe, the market cap of hyped companies like Tesla and Nio will come back to earth and stay there, with P-E ratios becoming largely homogeneous.
David Zipper, visiting fellow at the Harvard Kennedy School’s Taubman Center for State and Local Government
E-bike fans were rightly furious when the Senate killed the proposed e-bike tax credit in the Inflation Reduction Act. With Republicans now in control of the House, its resuscitation seems unlikely. But fear not — states are ready to lead the charge for e-bike adoption, even if Congress isn’t. Rhode Island already has a statewide e-bike subsidy program, and states like California, Connecticut, and Colorado are preparing theirs too. Expect more to follow in 2023, especially in blue states where leaders recognize the urgency of climate change.
“Expect more layoffs in the large AV companies and at least one more high-profile flameout like Argo AI”
Michael Dunne, CEO of ZoZoGo
GM will surrender on Cruise, citing astronomical costs and this uncertain path to profitability.
Doug Gordon, Aaron Naparstek, and Sarah Goodyear, hosts of The War on Cars podcast
We see direct action and tactical urbanism hitting the mainstream in 2023. As Americans wake up to the fact that government is failing to provide basic services and move with necessary urgency on a variety of pressing issues, we expect to see more and more groups like L.A.’s Crosswalk Collective, Slow Streets San Francisco, Just Stop Oil, and the Tyre Extinguishers taking matters into their own hands. Call it the Year of the Lentil Bean.
Angie Schmitt, author of Right of Way: Race, Class, and the Silent Epidemic of Pedestrian Deaths in America
I think traffic deaths will start to decline compared to pandemic years and settle into a more normal pre-pandemic pattern or perhaps remain slightly elevated but stop increasing. Infrastructure Bill spending will start to hit the ground, and we’ll see more construction and orange barrels. I am hopeful the Pete Buttigieg US DOT is going to unveil a really important policy change. It has been revising the Manual on Uniform Traffic Control Devices, which is a sort of recipe book that tells engineers how to design streets. Big opportunity to reform traffic engineering and implement greater safety nationwide. I hope EV sales will sort of explode. I expect the charging infrastructure that has been lacking will come online quickly thanks to federal investments in part. I also think major automakers are retooling to expand inventory and the new IRA law makes the price about the same as for a new internal combustion engine car.
“We see direct action and tactical urbanism hitting the mainstream in 2023”
Ali Griswold, journalist and author of Oversharing newsletter
I’d love to see e-cargo bikes catch on more. They’re still expensive, even with various state subsidies, but I think they’re a really smart answer to how we can make micromobility work not just for the guy commuting to work (or the pub) but for women and families, people who need to carry things and run errands, and so on. If we want people to stop driving to the grocery store, we need to give them an easy alternative for getting their groceries home. Elsewhere in micromobility, I think 2023 will be a year of reckoning for e-scooters. Investors are sick of propping up money-losing firms, so you either figure out a way to turn a profit or you run out of cash. Lastly, it’s important to remember that a lot of how we get around develops in response to our built environment and urban policies, so I hope to see more people- and environment-centric planning moves like constructing bike lanes, reducing vehicle speed limits, introducing congestion charges, funding public transit, and— maybe! the dream! — putting a price on all that free parking.
Yonah Freemark, senior research associate at Urban Institute
This coming year, I expect to see the rise of the home-office apartment complex. We’ll see developers in cities nationwide planning new apartments with larger floorplates and special features made for the large number of Americans who now work from home some or all of the time. These apartments may feature soundproofed rooms and customizable wall displays fit for a zoom background. The buildings themselves may include rentable meeting rooms for occasional in-person get-togethers. And developers will work with major companies to try to subsidize a portion of these new, larger units’ higher rents.
“I think 2023 will be a year of reckoning for e-scooters”
Paris Marx, author of Road to Nowhere: What Silicon Valley Gets Wrong about the Future of Transportation, host of the Tech Won’t Save Us podcast
In 2023, I think we’re going to see a continuation of many of the trends we’ve already been experiencing. Tech’s big ideas will keep failing to deliver, whether that’s micromobility, eVTOLs, or the Boring Company. Autonomous vehicles will roll out to a few more places, accompanied by a narrative that the promise is finally starting to be realized, even as companies try to cover up the flaws that persist (and how far the reality is from the future they once promised). Uber will keep fighting to carve its drivers out of employment protections, but workers will continue to make progress globally at defending their rights. I would love to see Uber become a victim to the end of cheap money, but sadly I don’t think we’ll be so lucky. Finally, we’ll see continued (though unevenly distributed) progress on the things that actually make transport better: redesigning streets, investing in transit, expanding cycling infrastructure, and the like. In short, tech’s big ideas are sidelined in favor of the fundamentals they tried to distract us from.
Bryant Walker Smith, associate professor of law, University of South Carolina
- “The Year of Fear”: After 2022 saw AV hype turn into AV derision, 2023 sees that scorn become fear. Sure, automation isn’t anywhere close to everywhere all the time, but it does get a bit too real for comfort — especially for the professional class. We see an explosion in the amount of collective output — apps, policy papers, web content — in a way that just feels overwhelming and disempowering, especially in transport policy. Meanwhile, human customer support all but disappears. It’s truly us versus the machines, at least if we want to rebook a ticket. Automated driving news from China, part real and part suspect, catches us by surprise. That includes Congress, which ends up passing a hasty automated driving bill that gives companies a bit much. We think the big story is about automation, but it’s actually about the centralization that results from specific policy choices about this automation. At the same time, and without realizing the irony, we decry big companies and new technologies, so much so that an increasing number of people at least try to reject the automated world.
“Uber will keep fighting to carve its drivers out of employment protections, but workers will continue to make progress globally at defending their rights”
- “That BS was so 2022”: 2023 becomes a year of just calling out all the nonsense that is inundating us. And yet there’s also a backlash to the backlash to the hype about automated driving and automation generally. We notice that there are true AVs, and they’re actually pretty decent. The bill finally comes due for companies that have long overhyped, overpromised, or just outright lied. Professionals stop insisting that, sure, trucks can be automated, but their soft skills surely cannot. We start noticing that, somehow, air travel seems to be working a bit better.
- “The Start of the Human Century”: As professionals start pondering job losses, we all gain a new appreciation for values, like human-to-human interaction, that are often left out of cost-benefit analyses and policy discussions. We also start asking not what we can do for technology but what technology can do for us. The USDOT, in an effort to create structures that can outlast the current administration, announces an Office for People-Centered Transport that coordinates across the agency’s modal divisions to put people and communities first in transport policy. While they’re at it, everyone finally agrees on a compelling alternative to terms like “pedestrian” and “vulnerable road user.” NHTSA starts its rule-making for intoxicated driver detection, and it attracts a surprising amount of support. There’s a good walking-assistance robot to help some people who have mobility impairments. And we start seeing ground or aerial drones that follow behind, ahead, or above bicyclists to help protect them from dangerous drivers.