Put on your seat belts -the biggest disruptive event in your lifetime has already started and you need to pay attention to it as this will affect every single aspect of your life and the future of your business, you, your family and your finances. It will also offer numerous opportunities for those who are in position to see them and to capitalise on them . Tthis week we will consider Transport
TRANSPORT
Blog 1 showed that major elements were coming together to make this disruption the biggest in Earths’ history . From Blog 2 it was seen that technological advances in Solar, Wind and Battery (SWB) coupled with massive reductions in costs have made renewable energy a major factor. The consumer costs of electric vehicles is expected to reduce drastically by 2030 because of reduced costs of batteries and reduced manufacturing costs ( due to very low cost of energy and extensive deployment of robotic workforces ). Already in China you can order a 5-seater SUV electric car for about $9200 and just last week Tesla have announced they expect to have a $7000 electric Tesla available next year and $5000 Tesla with a hydrogen engine soon thereafter ) These are not some substandard vehicles but will have similar features and even additional features than in a current normal mid-range family cars
In addition, the much lower fuel and maintenance cost ( 20 moving parts in EVs instead of 2000 parts in the ICE vehicle) and much longer lifespan of 400,000+ miles- which can be extended to 1 million miles for EVs rather than just the 150,000 or so miles for an ICE vehicle) will make EVs much more attractive than ICE vehicles for consumers. This will lead to the effective total demise of new ICE vehicle purchases as a mode of private transport in the high-income countries within about 7 years. The value of new ICE vehicles will drop drastically because of massive oversupply which in turn will make 2nd hand ICE cars worthless
Autonomous vehicles ( self- driving vehicles) are now already operating in some USA cities and over the next few years (once regulatory approvals are received ) Autonomous Electric Vehicles ( AEVs) will come into widespread use in all the richer countries and eventually (within 15 years around the world. This will further stimulate the rapid demise of ICE vehicles and lead to further expansion of EVs. This will also make it less likely that people buy several cars for a multi person household as the same car can drop off someone at work and then return home by itself to be used repeatedly for different journeys by other family members rather than being parked all day at work.
A further devastating blow to ICE vehicle manufacturers will be that that a new type of services will develop offering “Transport as a Service” ( TaaS ) where some large car rental or taxi companies ( maybe with Tesla joining them ) will buy an EV with a useable lifetime of 1 million miles (now already available ) instead of the 7x ICE vehicles , each with a useable lifetime of only 150,000 miles. This will allow them to reduce their fleet sizes by 80% . It will also cut their operating costs to about 1/7th because of the significantly reduced running and maintenance costs of EVs. This will enable them to offer Transport as a Service ( TaaS) at very low competitive prices. It has been estimated that using TaaS services , especially when autonomous Robot axis emerge will make making them even lower cost . This is expected to replace most private vehicle ownership within the next 5-7 years since the annual costs of using TaaS for all family journeys and transport needs will work out cheaper, not just compared to buying and running a new private car but will be even cheaper than just the running costs alone of an existing privately owned vehicle. There will be no reason in future to buy or operate your own private vehicle if you can just order any trip on any kind of vehicle to anywhere at any time you may want. It will be like ordering a pizza and a having the specified type of vehicle delivering itself to your door 24/7 at a very low cost. This is expected to be happening in many USA cities in by 2030 and will then extend to other developed countries and eventually to the Low- and Middle-Income countries (LMICs) .
What does this mean and why is this important ?
Electric vehicles, because they can have a lifetime use of 1 million miles, are already becoming the preferred option for commercial operators for their trucks and delivery vans . This along with consumer switch to EVs will have a profound negative effect on Global demand for oil / petrol. This , in turn, will heavily impact the oil extractive industries, oil companies and the countries that depend on oil exports as a major part of their economies. For example, oil forms around 40 % of GDP in Saudi Arabia , Kuwait and Russia so replacement of ICE by EVs will have serious geopolitical impact on some countries and the relationships / dependencies between countries. Those heavily invested in oil or petrol related industries where extraction is difficult ( North Sea etc) need to consider moving assets to safer industries as oil/ petrol related industries are likely to experience dramatic decline over the next 5-7 years.
For the last 50 years urban planners and engineers around the World have struggled to cope with the ever-increasing deluge of cars in urban areas. Roads and parking in Europe currently consume around 30- 50 % of urban space and in USA because of the way urban areas have developed, they take up even more space. Cars just sit parked on street or in off street carparks for over 90% of the time blocking valuable city centre space unnecessarily. The rapid increase in autonomous electric vehicles will change the nature and use of space in cities . AEVs are expected to reduce city centre traffic by as much as a 90% and will significantly reduce the demand for road space and parking in city centres The value of city centre car parks will plummet and alternative uses will need to be found for the redundant space . Some could be re purposed as urban farms and others could perhaps become all day or nighttime markets / restaurants etc.
All of the above factors ,especially the expected rapid move towards AEVs and TaaS will lead to lead to a massive disruptions that will destroy most of the current motor vehicle industry and only a few will survive. It has been estimated that private car ownership in USA will shrink by 80% by the early 2030s – in just 5 or 6 years’ time!. Those with investments in legacy car manufacturers , petrol stations , parking , repair garages or other activities related to servicing or supplying vehicle related services to private vehicle owners need to consider the likely serious impact on their investments , businesses or jobs.
There is however one very important advantage that will come from AEVs and TaaS . Evidence from the Tesla Autopilot system with over 1 billion miles driven, shows only 1 crash per 4.19 million miles compared to the USA average of 1 crash per 484,000 miles for humans . This means autonomous driving is 8.7 times safer than human driving. If the Tesla auto pilot or similar system were applied to all cars around the world ( which is what will happen in due course ), this will save around 900,000 lives out of the 1.25 million lives lost annually in crashes
This background paper is not provided as financial advice but just to inform , give early warning and to explain to those in my network who may be interested , that we are now entering a period of extreme disruption where much of what we have known and assumed for Decades is about to change. This will happen suddenly and most of it may occur by 2030 or shortly thereafter. It is important that readers consider how these changes will impact them, their families , their jobs and their finances so that they can take appropriate measures to protect themselves.
Request from Alan
As some of you know from my earlier posts on LinkedIn , there are millions of businesses in low- and middle-income countries (LMICs ) who will not have easy affordable access or knowledge to be able to use AI or to harness its benefits to improve their productivity and profitability. At the same time there are typically around 20% or more unemployed graduates in each country who are unable to find a job or to earn any income. In addition around 20% and of knowledge workers and 30% of manual workers will lose their jobs due to AI. Because of no code platforms it is no longer necessary to be a programmer to develop useful AI related products so if any of these individuals can retrain to use AI tools, they may be able to earn an income for themselves as well as helping local businesses to implement AI tools to improve profitability. Both parties would benefit
The free downloadable books available on this website for each group give examples how others around the world are harnessing the capabilities of AI to equip their businesses or themselves for the AI Tsunami that is already starting to hit us. Please let others know and encourage them to downloqd books to help them thrive in the AI era
Alan
Dr Alan Ross
