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In time, all cars will be electric, driverless and running on renewables

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EEnergy Informa

Speculation about the future of transportation, like common flu, appears to becontagious. Not a week goes by without another celebrity, business guru or executive predicting that future of transportation is electric.

That, you may say, is probable and not newsworthy. What is newsworthy is that many of the same people are predicting that the transition is likely to be at a pace much faster than many had expected.
tesla 5
In July 2016, for example, Virgin Group founder Richard Branson was quoted as saying that he suspected that 15 years from now every car on the road would be electric. Chances are that he made up the number – 15 years – without giving it much thought. One can also assume that he was talking about new cars sold in 15 years, not all cars on the road.

That, of course, is what makes Branson Branson. He was talking to CNN at a Formula E race, which he was attending to support the Virgin Racing team. He said, “Formula E is pushing the boundaries forward into what will be the future.

Fifteen years from now, I suspect every car on the road will be electric.” He went on to elaborate: “If governments set the ground rules — and they sometimes have to be brave and set positive ground rules — and for instance said, ‘more than 50% of cars must be battery-driven in 10 years and 100% in 15 years,’ we could make that happen.

It will be great fun and really challenging to do. The cars would be much more efficient… and battery technology will get better and better.” But even if governments were brave – or foolish depending on your point of view – and set ambitious targets for electric vehicles (EVs), it would take a while for EVs to make a dent in the overall numbers.

Currently, roughly 1 million EVs represent a mere 0.1% of the total number of passenger cars in the world. Oil majors need not panic yet. Nor can they afford to be complacent. That, however, does not prevent people from making bold projections. A report released by Lux Research in July 2016 (graph below) says 30% of the world’s – we assume new vehicles sold – will be EVs by 2030, powered by renewable energy.

EV
Writing in the Dealing with threats to the transportation fuel oil industry, lead author Brent Giles said, “Oil’s dominant position in transportation fuels has proved impregnable for more than a century, but real threats abound now,” adding “Transportation fuels, which account for some 80% of global crude oil demand, is the lifeblood of the industry. As an extremely dense but affordable energy source, oil powers 1.2 billion vehicles globally that use 800 billion gallons of fuel per year.”

Not the sort of message oil company executives like to hear or talk about. Tony Seba, a Silicon Valley guru on emerging technologies is equally certain about the rapid disruption about to hit the $12 Trillion energy and transportation sectors. He claims the disruption is happening as we speak, yet dismissed by many insiders in both the oil and auto industry.

Seba says the tipping point may come as early as 2020 when new EVs will be cheaper than comparable internal combustion engine (ICE) cars. By 2025, he says all new cars will be electric and not just in Silicon Valley, or California, or the US but globally.

Pointing to Elon Musk’s recent announcements, Seba believes Tesla is already on its way to deliver affordable EVs with decent range and superior More EVs and running on renewable energy by 2030 5 September 2016 EEnergy Informer Page 5 performance, to be charged with solar energy from customers’ rooftops.

Musk spelled out his vision of the future of Tesla and it is decidedly disruptive. Describing his master plan for merging Tesla and SolarCity – reported in Aug 2016 issue of this newsletter – he seems intent to dominate the autonomous vehicle and car-sharing business. In a blog post, Musk described his business plan as follows:

“Create stunning solar roofs with seamlessly integrated battery storage; Expand the electric vehicle product line to address all major segments; Develop a self-driving capability that is 10X safer than manual via massive fleet learning; Enable your car to make money for you when you aren’t using it.”

“The point of all this was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good. That’s what “sustainable” means. It’s not some silly, hippy thing – it matters for everyone.”

“By definition, we must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse. Given that we must get off fossil fuels anyway and that virtually all scientists agree that dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve sustainability, the better.”

That is how people in Silicon Valley think and talk. Many fail, but few succeed and become the next Google, Facebook or Uber. His car sharing plan is indeed Uberish. Just add Teslas on autopilot. Who needs drivers. Since Tesla owners are not necessarily the kind that need extra income – thank you – by sharing their cars when not in use, “Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.”

solar rooftop If Musk has his way, anyone can hail a Tesla from “pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else on route to your destination.”

And he is not going to stop with passenger cars. Musk plans to expand to heavy-duty trucks and public transport vehicles.

When it comes to charging all these EVs, Musk plans to “create a smoothly integrated and beautiful solar-roof-withbattery product that just works, empowering the individual as their own utility, and then scale that throughout the world.”

Whether Tesla can deliver any or all of this, of course, remains to be seen. Every automaker in the world is now working on self-driving EVs, hence Tesla is likely to face stiff competition from many directions.

As for Musk’s vision of charging the EVs with rooftop solar panels augmented with batteries in the garage, Tesla will face competition from others, including the utility companies who see electric Lot more energy on the rooftops Source: John Farrell, Institute for Local Self-Reliance 6 September 2016 EEnergy Informer Page 6 transportation as one of few bright spots in their otherwise gloomy future.

In July 2016, the US Department of Energy (DOE) announced $4.5 billion in loan guarantees to support commercial-scale development of an EV charging station infrastructure.
rooftop solar

The Obama administration intends to develop a national network of fast EV charging stations by 2020 – a highly ambitious deadline – to accelerate faster adoption of zero emissions travel coast to coast.

While many such projections and plans may prove overly ambitious and/or fantastic, all indications are that the century long dominance of oil over transportation is going to be challenged.

Whether the EVs will be charged from rooftop panels – as Tesla/SolarCity would like it – or from a network of charging stations – as DOE and utilities would like it – it is only a matter of time.

This, plus the looming reality of a carbon price  does not bode well for oil companies that do not have a plan B, nor particularly keen to develop one.

Source: EEnergy Informa. Reproduced with permission.  

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  • Carl Raymond S

    Lots of reports of carmakers working on self-driving, but they rarely mention ‘electric’. Not everybody has worked this out: they have to be electric. Why? Because once you extract the labour cost, profitability of an autonomous fleet hangs purely on $/km, and on that score EVs easily win. An autonomous ICEV fleet cannot compete and is a pointless exercise.

  • solarguy

    I imagine those who have enough roof space will charge their EV’s from home, perhaps from storage after dark. But there certainly will be big bucks for the utilities, building that scale solar and wind to supply enough for charging where ever you go.

    • Carl Raymond S

      Economically, it’s cheaper to put a charge point where the car is parked during the day, than to put a battery at home. Savvy businesses will offer charge points as package incentives. As solar ramps up, daytime energy gets cheaper and evening energy more valuable. If the home owner does have a battery – he/she would rather sell that energy to the grid each evening for a nice profit than put it in the car.

      • Dan

        Not in Australia. Self consumption rules in Australia…not Feed In unless you are on the old generous state schemes which finish on 31st December 2016…

        • Carl Raymond S

          Yes, self-consume first, and feed the rest to the grid before the sun comes up and energy is essentially free again. A home should pretty accurately know what it consumes each evening/night. I’m assuming that batteries will get bigger and that metering that reflects the value of energy at the time of use/sale will become standard.

      • solarguy

        I suppose it depends how much the grid pays for the stored power, if not enough then they would choose the car, unless they don’t need to.

      • Slow(ish) charge points at work require car shifting or one point per car. Hang about…., with autonomous cars there are no cars “at work”.

        • Mike Dill

          My guess is that most people that currently own cars will still have cars in ten years. Yes, sharing will take off, but not as quickly. I am not yet trusting that the ‘share rider’ will respect my car in the same way that I do.

          • Agreed. Those that own cars (because they want to, even though it costs more) won’t want to share. There will not be “ride-share” services after autonomous as there is no driver. It will be a new definition “taxi” service.

            After autonomous is so much safer that human-in-the-loop, it will no longer be lawful for humans to be in control.

            If you still own a car, you will be supplying your own “taxi” service.

        • Carl Raymond S

          Good point. Pls disregard my comment above.

        • Carl Raymond S

          If charging of autonomous cars becomes a new service industry, you have raised a good question – what is the best time of day to charge?
          The costs are land (charge bays), energy and hardware. I imagine they will offer cheaper rates when the sun is high, but be open 24/7. Every existing parking station/lot is a potential site, given that such autonomous cars will appear at the same time as central parking stations lose custom.

          • Charging will only be an issue for car owners. Autonomous “taxi” fleets will look after their own.

            Currently (guessing) 95% of 25 year olds own their cars. In ten year’s time, 25 year olds (today’s 15yo) will not be car owners. My prediction is 5% will own cars.

            When your/my car is autonomous and we leave for work of a morning, either our car or a “taxi” will be waiting for us. Ownership will not have the same appeal.

            And it will definitely be cost effective for most to not privately own a car.

          • Carl Raymond S

            The line between taxi and private car blurs if you can put your own car into taxi mode with a tap on your phone.

  • Mortgage Mutilator

    Yup, Tesla is absolutely killing it so far and the real destruction the other car companies hasn’t even started yet! I’ve gone and done a full analysis of their upcoming Model 3 and let’s just say… it doesn’t look good for any other car manufacturer…

    https://www.mutilatethemortgage.com/2016/06/06/what-everyone-misses-about-the-tesla-model-3/

    • Carl Raymond S

      Just read your article and I agree, the ICEV manufacturers need to get busy now if they hope to compete. They can still actually win this game if they combine to immediately roll out a supercharger network that has more stations and faster charging than Tesla.
      One nitpick – tyres. It’s the one area where EVs actually cost more to run. Tyre wear goes up due to the extra mass of the battery. In fact, that’s the safest play – buy shares in tyre companies. Sell them if battery energy density goes up suddenly.

    • Neo Lib Yes

      MM your linked article summarises the economics well. Plus this is what we know right now, which will only improve as time marches and there are more EV companies competing in the market, together with technological advances. I think Branson made a guess at 15 years, however unlike Branson it is a conservative guess. The reality will be that the luxury end of fossil fuel cars will be be dead in less than 10 years. Sure the budget end arguably might take longer, however if you could buy a second hand Tesla 3 in 5 years time, with a new battery pack for less than $15k, why would you buy a Hyundai?! Every year, there will be a new upgraded version and, just like IPhones, it will be passé for the wealthier to not get the upgrade. Ford, GM, BMW etc will be falling over themselves to ditch the old technology to stay relevant.

  • Norman Koslowski

    Tesla, Tesla, Tesla. Very good PR and show jumping from this gen’s Steve Jobs. But there’s a dark horse galloping in the shadows.

    LG, in partnership with General Motors, will have a mass market EV on the road in just a few months, one year before the Tesla 3 and US$5,000 cheaper: http://www.digitaltrends.com/cars/lg-bolt-ev-parts/

    LG car batteries are also under the bonnet of 14 EVs, including the Tesla Roadster.

    LG released a residential solar storage battery, the RESU, one year before the Tesla PowerWall, at a cheaper price and smaller size. It has 50% of the solar storage battery market in Australia and has now just released a 2nd gen battery range, slashing the cost per kW and adding 50% more storage capacity – up to 20kW.

    While Tesla is talking about buying its way into becoming a solar panel producer, LG already makes an award winning, high performance solar panel. With over 25% more power per sqm than the standard 260W offering, it’s designed to generate enough energy from limited roof spaces to both power up homes and charge up the EV that will soon be in everyone’s garage.

    In the Great Disruption being driven by solar power generation and storage, when we talk about horsepower, let’s not lose sight that it’s shaping up to be a TWO horse race.

    • Mike Dill

      I really think that BYD will have also have a horse in this race, if only on the vehicle side.

    • Jonathan Prendergast

      I didn’t know about the GM Bolt with LG battery coming so soon. It looks compelling. I wonder when it will be available in Australia?

      A couple of points:
      – PR is important. Particularly if it provides free widespread advertising and 3rd party endorsements
      – While LG manufacture panels (and batteries), in Tesla buying Solar City, they are buying a manufacturer and customer facing solar company.

  • RobSez

    I think your numbers are far too optimistic. The average American keeps a car 11 years. 11 years from now the vehicle technology and infrastructure at it’s current snail pace should be sufficient to have maybe 1/3 of us driving EVs or hybrids. But that’s not going to happen without a lot of education and social maturity. I believe a more realistic time frame for near 100% conversion to electric is probably closer to 50-60 years.

    • Zach

      Not sure. It’s reasonable that non-autonomous cars might be retired early as a safety measure, or due to new pollution requirements or due to increased insurance costs.

    • john

      With out a doubt it will not be 50 to 60 years.
      A model 3 once bedded down will cause such an influx of knowledge and interest that this change is going to happen quickly in the mid 20s.

      • RobSez

        I sincerely hope you are right and I am wrong. I’ve been driving electric since the very first batch of Leafs arrived.

        What concerns me is an article I read about a year ago based on a survey of the general public about EVs. The survey was supposedly done ‘man on the street’ style. They asked 100 people in each major US city about BEVs. Overall, 1/2 of people interviewed either didn’t know pure BEVs existed, or they knew there were BEVs on the road, but couldn’t name one. Not even Tesla. I follow EV development and news every day because I’ve never legally had more fun on 4 wheels and I’m excited about future possibilities. You probably also at least loosely follow a lot of the information I do. You are interested in and informed about EVs. We have to learn to accept the vast majority of people couldn’t care less about EVs.

        As proof, I saw a news story this week about a recent survey that found 80% of Americans have zero interest in buying an EV.

        To you and me this says 80% of Americans are uneducated about the benefits of driving an EV and what a great experience they are missing. To the anti-EV crowd this is proof EVs are a waste of time.

        I hope the information gap closes soon and you prove me wrong. But, these things almost always take longer than expected.

        • john

          Yes Rob I have followed the EV story.
          When the First Leaf was manufactured I rang the National Sales Manager of this country and asked to be put down to purchase the first one Imported.
          His question to me was ” What is a Leaf ? I have never heard of it”
          So I did explain who the joint company were making it and yes he would have it upcoming as a product.
          So I would agree there is not much awareness of BEVs, however i have noticed that more and more people actually are becoming aware of the vehicles.
          The under 40 age group are perhaps those who will benefit most and will be the adopters.