Nissan-Autonomous-Electric-Car May 17th, 2017

Electrification of the automobile has been on an upward trend for the last 5 years and according to a report by Stanford University economist Tony Seba, entitled, “Rethinking Transportation 2020-2030“, technology, not climate policies will drive the seismic shift in the transportation and oil industries, destroying value chains and cause oil prices and demand to plummet. But when one industry dies, another is born, and this shift will move trillions of dollars of investor value into this new industry.

Technology, not climate policies will drive the move to autonomous electric cars. Market forces are bringing it about with a speed and ferocity that governments could never hope to achieve. – Professor Tony Seba

In the executive summary of this bold and forward thinking report, it states that we are on the cusp of one of the “fastest, deepest, most consequential disruptions of transportation in history”.

On demand autonomous vehicles, owned by fleets, not individuals in a new business model the report authors call “Transportation-as-a-service” (TaaS).

So what are the potential ramifications of this ground breaking shift?

Lower Cost Transport Alternatives

TaaS businesses will offer high levels of service trending towards a price near cost, as the market will be competitive. This will result in fleets such as Uber and Lyft quickly switching from human drivers, gasoline and diesel powered vehicles to autonomous electric vehicles. The reasons for this shift will be due to cost factors including “ten times higher vehicle-utilization rates, 500,000-mile vehicle lifetime…far lower maintenance, energy, finance and insurance costs.”

As a result, transport-as-a-service (TaaS) will offer vastly lower-cost transport alternatives — four to ten times cheaper per mile than buying a new car and two to four times cheaper than operating an existing vehicle in 2021. – Rethinking Transportation 2020-2030

The report forecasts that TaaS “will provide 95% of the passenger miles travelled within 10 years of autonomous vehicles being approved by regulatory bodies worldwide.

Impacts of TaaS

Taken from Report – Rethinking Transportation 2020-2030

Economic

  • Savings on transportation costs will result in a permanent boost in annual disposable income for U.S. households, totaling $1 trillion by 2030
  • The cost per mile for EVs will be 6.8 cents, rendering petrol cars obsolete.
  • Insurance costs will fall by 90 per cent. The average American household will save $5,600 per year by making the switch.
  • Productivity gains as a result of reclaimed driving hours will boost GDP by an additional $1 trillion.
  • Demand for new vehicles will plummet: 70% fewer passenger cars and trucks will be manufactured each year.
  • The transportation value chain will deliver 6 trillion passenger miles in 2030 (an increase of 50% over 2021) at a quarter of the cost ($393 billion versus $1,481 billion).

Environmental

  • The TaaS disruption will bring dramatic reductions or elimination of air pollution and greenhouse gases from the transport sector, and improved public health. The TaaS transport system will reduce energy demand by 80% and tailpipe emissions by over 90%

Geopolitical

  • The geopolitical importance of oil will vastly diminish. However, the speed and scale of the collapse in oil revenues may lead to the destabilization of oil-producing countries and regions with high dependence on oil “rents.”

Social

  • TaaS will dramatically lower transportation costs; increase mobility and access to jobs, education and health care (especially for those restricted in today’s model, like the elderly and disabled); create trillions of dollars in consumer surplus; and contribute to cleaner, safer and more walkable communities.
  • Merging of public and private transportation and a pathway to free transportation in the TaaS Pool model (a subset of TaaS that entails sharing a ride with other people who are not in the passenger’s family or social group — the equivalent of today’s Uber Pool or Lyft Line).
  • The role of public transportation authorities (PTA) will change dramatically from owning and managing transportation assets, to managing TaaS providers to ensure equitable, universal access to lowcost transportation. Many municipalities will see free TaaS as a means to improve citizens’ access to jobs, shopping, entertainment, education, health and other services within their communities.

So what are some barriers to this seismic shift in transportation?

The report states that there will be initial barriers to consumer uptake such as fear of technology, love of driving and habit. But a lot of these issues are already being dealt with by ride share companies.

Pre-TaaS companies drove 500,000 passengers per day in New York City alone. That was triple the number of passengers driven the previous year. The combination of TaaS’s dramatically lower costs compared with car ownership and exposure to successful peer experience will drive more widespread usage of the service. – Rethinking Transportation 2020-2030

The perfect storm of multiple technological trends

Electric vehicles have 18 moving parts, one hundred times fewer than an internal combustion engine. There is almost no maintenance and that is why you see Tesla offering 8 year infinite-mile warranties. As well as low maintenance, they are 4 times more efficient than ICE automobiles, which lose 80% of their power in heat.

With costs for EV’s declining and their range increasing, the “tipping point” will arrive in the next 2-3 years, with the massive shift happening all over the globe, especially in urban areas.

Solar Charging of Electric Cars

Novo Solar Solutions has installed solar panels in Vancouver for owners of electric cars. Plugin your car at night and use the power of the sun you collected during the day to charge your car. But with this shift in TaaS, will solar still play a part? We believe it will.

Large solar charging stations for fleet vehicles and charging stations for people in rural areas where TaaS may not be an option. Having a home charging station powered by the sun will be the norm.

The Shift is Happening

The global disruption of the transportation industry may not happen in exactly the time frame stated by this report, but there is no doubt the shift is happening. What will the roads look like in 20 years? Much different than today, that is assured.


Read the Complete Report – Rethinking Transportation 2020-2030