Looking Ahead to the Risks and Opportunities in 2025

The coming year will present the GCT vehicle industry with certain risks and also opportunities for expansion.  This is a truism for every year, so what is different this year, if anything?  Several possible events and developments could bring major changes to the industry and its market:

• Market expansion into the short-distance driving segment;
• On the government policy front, possible tariffs levied against Chinese golf cars;
• In technologies, the application of AI in new, powerful product upgrades;
• Development and launch of a formidable dealers’ association.

While there may well be other developments in the offing, these appear to be the most important from the current perspective of the new year.

Expansion opportunity in short distance driving (SDD) market

Readers of this monthly column know what the SDD market is, but for first time readers an overview will be in order.  Short distance driving predominates vehicular movement from point A to point B; i.e., a distance of five-to-seven miles.  The vast majority of all trips by motor vehicles fall within this range, to the point, according to Federal Transportation Agency estimates, short distance driving comprises over 70% of all driven mileage.

Other things equal, short distance driving can be easily accommodated by golfcar-type vehicles.  Because they are mostly electric-powered, GCT vehicles displacing conventional automobiles would effectively address issues of climate change in the transportation sector.  Of course, things are not equal.  The infrastructure for vehicular mobility is geared to the conventional, large-sized automobile.  This is the result of the historical evolution of the automotive market in accordance with, and responsive to, consumer tastes and preferences.

Historical patterns are difficult to change, but change is coming

The transportation infrastructure adapted to large, fast-moving vehicles does not readily accommodate  smaller, slower-moving e-mobility devices, whether they be scooters, ebikes, skateboards, or GCTs. Despite this we see the proliferation of e-mobility machines on public roads, streets and sidewalks. Most of this is occurring because of private preferences and selection, rather than government regulation.

Government regulations, however, have been brought to bear, especially at the local, municipal level.  For the most part local policies have been focused on the two-wheeled segment of the market, addressing the issues of  sidewalk clutter and pedestrian safety.  In certain areas, particularly the South, the focus broadens to include GCT vehicles.  So far, these GCT vehicle-friendly areas are typically those areas that are fair weather geographies where golf carts have had long term historical roots.

While somewhat isolated these GCT vehicle-friendly areas have been sufficient to support a whole new market segment, that of elect-powered, low-speed personal transportation vehicles (LSPTVs).  This segment has surpassed the traditional fleet golf cart market in unit numbers and clearly in market value at retail.

Outlook for the broader GCT vehicle market in 2025

The question for 2025 is whether the LSPTV segment can reach a broader market of the short distance market and undergo a major expansion.  The likely answer is that the piecemeal growth will continue, with increasing pressure on more local municipalities and urban centers to better accommodate GCT vehicles.  The industry needs a more coordinated effort at both the local and national level to accelerate the process of change.  There is clearly a need for an advocacy group or association to implement the process.  See below where a dealers association is discussed.

National policy a questionable benefit

While local governments are in the throes of adapting to the e-mobility movement, national policy at the federal level  may be problematic.  There is much talk about higher tariffs on Chinese imports, which in the broader picture has two goals:  1) Reduce the negative balance of trade with China; and 2) Bring in additional tax revenues to get closer to a balance Federal budget.

As concerns the GCT vehicle market, the U.S. International Trade Commission and the Department of Commerce are in the process of determining whether countervailing duties and/or punitive tariffs should be levied on Chinese LSPTVs and certain categories of parts.  As concerns this particular initiative, there are some possible benefits, but also some clear risks:

• Higher tariffs will protect domestic manufacturers against alleged government subsidies to Chinese manufacturers—thereby giving U.S. producers a stable market to work with;
• Higher tariffs could well induce Chinese’s manufacturers bring full scale assembly plants to the U.S., following the Japanese model of the 1980s;
• On the risk side, there is significant evidence that consumers in the GCT vehicle market are price sensitive, so that, if higher tariffs result in higher prices, market growth will be curtailed and development of the short distance driving market more difficult.

Reform of the NHTSA standards for low speed vehicles need updating and reform

The National Highway Traffic Safety Administration (NHTSA) has set out guidelines with respect to the attributes of a GCT vehicle that can be operated on public roads.  While these guidelines are legally binding in the sense of legislated law, nonetheless most local governments have adopted them for their jurisdictions.

With significant upgrades of LSPTVs that have taken place over the years, conforming to NHTSA guidelines, perhaps the most significant barrier to market development is the low speed limit assigned to these vehicles.  Raising the speed limit attribute to 45 m.p.h. would dramatically change the market perspective, and at the same time greatly diminish the complaint that they are slow-moving and would clog traffic.

A further boon to the SDD market is the fact that a majority of local roads and streets would be encompassed in a 45 m.p.h. speed limit.

Technologies and product development  that could drive the market

At the base of community reluctance to adopt a GCT vehicle infrastructure are safety concerns–not only for on-road driving, but for pedestrians, as well.  Some of these concerns may be met via emerging technologies, such as those pertaining to autonomous driving.

These technologies are rapidly developing for conventional vehicles, pioneered by Tesla and Whamo.  There is a clear opportunity for adapting these technologies to GCT vehicles and the LSPTV segment in particular.

In so far as product development is concerned there is a clear need to completely weatherize the GCT vehicle—not with the canvas wrap-arounds commonly seen, but a hard shell enclosure that can be opened up for fair weather driving.  A move in this direction is the Club Car Urban utility vehicle seen here.

Critical  need for a broad-based dealers association

Because so much  of the opportunities for market expansion depend on government action—particularly vehicle attributes and infrastructure adaptation—a coordinated effort  to advocate for the needed changes will be needed.  This is what trade organizations and associations are  all about.  Such organizations advocate for the collective benefit of their members, where individual members, acting on their own are limited in what they can effectively do.

This year at the annual PGA Show in Orlando  the case will be made for forming a dealers association at special conference on the afternoon of Thursday, January 23 in room 310A.  For further information contact John C. Triolo at john.triolo@gmail.com or Brian Rott, CEO Cart Mart, Inc. brian@cartmart.com.   If you have an interest in expanding the market for low-speed vehicles and influencing the direction of public policy, be sure to attend.

 

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Contact the Author: Steve Metzger at smetzger@smallvehicleresource.com.  Or check out our website at www.smallvehicleresource.com, where you will find an extensive database of vehicle models and can make side-by-side comparisons of vehicles based on a full set of specifications.