Havana effect harms the environment

When people talk about Cuba, colourful streets and vintage American cars often come to mind. Although perhaps positive for tourism, the old used cars on the roads are a sign of the embargo and the inability to adapt to the new car industry, he said. After years of global pandemic and in view of changes in the transport policies of many countries, something similar could now happen in Europe. According to analysts, this could trigger a so-called "Havana effect" in which people will start buying second-hand cars en masse instead of new and expensive cars. 

Car owners are so used to their petrol and diesel vehicles that they do not want to give them up. Also in terms of price, many drivers are still of the opinion that their old cars or a "new" used car are much cheaper than buying an e-car. If these do not become more attractive and, above all, cheaper, people will try to use their cars to the last. Together with other factors, this trend could lead to a used car boom in the EU.   

This would not only mean that the number of used cars on the road would increase, but also that the demand for used cars would increase. The Havana effect would also signal that the old combustion cars - despite decreasing mileage - will last longer and longer. Although usually thought to be cheaper than e-cars, the increasing demand for used cars will lead to price increases in the market. Already, prices are rising faster than those for new cars. Data from the used car platform Cavago show that prices for used cars in Germany have risen by 18.5 percent year-on-year for cars with a maximum minimum age of five years. Prices for cars with a maximum age of ten years have also become 21 percent more expensive.  

Jakub Šulta, CEO of Carvago, explains the price increase for used cars equally on the basis of a lack of market weight. "What we are currently experiencing still suggests that manufacturing companies are not able to meet the existing demand," Šulta says. In the eyes of the CEO, the lack of materials used in car manufacturing, as well as interruptions in the international supply chain, are also reasons for the rising acquisition rate of used cars. The fact that many companies are increasingly focusing only on more profitable car segments further strengthens the preference to keep the old car as long as possible or to look for young used cars. 

However, other factors also play an important role in increasing the average age of cars on German roads. Since the beginning of the pandemic, more and more people have been working from home so that they no longer have to drive to the office. At the same time, this trend has been reinforced by exorbitantly rising fuel prices. Germans are therefore using their cars less and less, which leads to price increases when they are sold.  

The phasing out of combustion cars from 2035 could also trigger the "Havana effect". Those who cannot or do not want to decide to buy an electric car will continue to use their combustion cars. Although it is the cheapest option for them, the environment could pay the price. Used cars are, after all, more polluting than new purchases. They lose energy efficiency and in the process emit more emissions for fewer kilometres driven. Keeping the current number of combustion cars on the roads, despite the regulation coming into force, could consequently make the hoped-for effects only marginal. 

If the "Havana effect" is to materialise and should more and more older used cars be on the road, the future introduction of new environmental zones, as well as tightening of the already existing ones, could mean restricted access to many areas for car drivers. Those who will still drive an old used car could soon no longer be allowed to drive in many European cities because of their pollutant emissions.