Currently, EVs displace the need for 350,000 barrels of oil each day. But over the long term, EVs are projected to disrupt demand by as much as 58,000,000 barrels per day— a figure that will steadily rise as EV costs plummet. EVs are set to win by sheer economic advantage, becoming the foundation for autonomous ride-sharing fleets in the future. As this happens, it will become uneconomical and societally unacceptable to continue to drive a gas-guzzling car.
This year, EVs are expected to surpass a 2.73% market share in the United States. They have already reached 5.4% in China. While this might seem small, growth is accelerating at an unprecedented rate, as the American EV market share projects to double every two years until 2025 and beyond. As explained by energy expert, science fiction writer, and engineer Ramez Naam, “Their growth rate is phenomenal. It took 20 years to sell the first million electric cars. It took 18 months to sell the next million. It took 4 months to sell the fifth million. That is the pace of this change. This is growing twice as fast as solar.” Stumping forecasters again, the surge is being driven by pure economics. While personal vehicles currently cost $0.80 US per mile, autonomous electric vehicles are expected to undercut this to only $0.35 per mile.
And even though EVs have been more expensive than gas and diesel-powered cars, EVs are turning out to be far cheaper to operate and maintain. The yearly cost to operate an EV today in the U.S. stands at about $485, less than half the $1,117 cost to operate a gas-powered vehicle. As battery prices continue to plummet, the upfront costs of EVs will decline until purchasing one will be a foregone conclusion.
Investment in EVs is booming today with auto manufacturers worldwide locked in an EV race.
Volkswagen is set to spend $50 billion on EVs in the next five years. Nissan is charging ahead with a vision to integrate its EVs into a broader consumer ecosystem through the company’s Intelligent Mobility strategy. And GM has pledged to go all-electric in the near future as it strives to release 20 new electric models in the next 4 years.
Beyond the car, EVs are disrupting large-scale shipping operations.
Last year, UPS ordered 950 N-GEN electric Workhorse Group vans, which can travel up to 100 miles on a single charge. At a cost of just $6 per 100 miles traveled, this trucking alternative promises astounding economic savings. While UPS currently operates 300 electric and 700 hybrid-electric vehicles, it aims to have 25% of its vehicles operating on alternative fuel by 2020. The company’s recent pre-order of 125 Tesla electric semi-trucks demonstrates yet another step towards this ambitious goal. The Tesla Semi today is expected to be 20% cheaper on a per mile basis to operate than fossil fuel-powered trucks and points to the extraordinary scale of the EV takeover, from compact cars to large-scale transit.
Over the coming decade, market and environmental forces will lead to consumer adoption of EVs. And likely, the adoption of EVs will heavily feature autonomous fleets. And while personal EV adoption will continue to proliferate, the aggregate mileage of EVs will rise exponentially faster as autonomous electric ride-sharing fleets become commonplace.
McKinsey & Company, the global management consulting firm, predicts that one in ten cars sold could be a shared vehicle by 2030. Numerous leading car-share operators already employ EVs, such as Daimler’s Car2Go and BMW’s DriveNow programs. Meanwhile, most autonomous vehicle developers have included EV models in various of their testing phases.
A University of Texas study looked at autonomous taxis and determined at a cost of $0.75 per mile, over 39% of miles would be covered by these vehicles. And at half that price, $0.375 per mile, autonomous taxis would see coverage grow to 75% of total miles. Explains Ramez Naam, “the way that most people will first encounter an electric vehicle [won’t be a result of] buying one for themselves. These vehicles are [going to be] rapidly deployed mostly as electric taxis.”
Apple recently hired Tesla’s VP of Engineering, Michael Schwekutsch, indicating Apple’s intentions to wholly integrate EVs into its plans to develop autonomous vehicle technology. Just last year, Apple cars drove in autonomous mode for 80,000 miles, while drivers took back control of the vehicle for 1.1 miles driven on average. Increasingly competitive, driver intervention rates now stand nearly neck and neck with Mercedes-Benz’s human intervention rate of 1.5 miles, and Toyota’s somewhat higher reported average of 2.5 miles.
Another competitor, GM, covered 450,000 miles in the U.S. last year with its cutting-edge fleet of third-generation all-electric Chevrolet Bolt vehicles. The company currently operates Cruise Anywhere, an employee-only ride-hailing service in San Francisco, and has even partnered with DoorDash to leverage its vehicles for food delivery in the future.
One of the more salient figures in today’s EV surge, Tesla’s Elon Musk recently announced the company’s aspiration to release a fully autonomous robo-taxi fleet next year.
And one of the earliest players, Alphabet subsidiary Waymo, has risen far above any competitors in terms of miles driven and low human intervention rates. With 600 Waymo vehicles on the road, the company has driven over 16 million kilometers (10 million miles) in the U.S., not to mention an additional 12.8 million simulated kilometers (8 million miles) driven each day. Waymo vehicles at current rates require manual intervention only once every 17,700 kilometers (11,000 miles), vastly superior to the competition.
In December 2018, the company launched its Waymo One service, transporting more than 1,000 pre-vetted riders in the Phoenix area. Earlier this year, Waymo announced a strategic partnership with Jaguar Land Rover to release the I-Pace, a fully electric autonomous SUV. The plan is to release 20,000 vehicles by 2020.
As electric vehicles improve in performance and witness a drop in overall operating costs, forward-thinking individuals, companies, and investors are rapidly transitioning to all-electric transport. With the help of increased battery technology efficiency, tomorrow’s EVs will see a unit price drop that will make these vehicles more affordable while providing huge environmental benefits.
As 5G and next-generation cellular networks make autonomous vehicles a reality, it will lead to a growth in driverless EV fleets, with partnerships between EV manufacturers, autonomous driving companies, and ride-sharing services becoming increasingly vital.
The disruption to our existing car world will be significant as plummeting prices, and increasing convenience will tip in favor of EVs and cars-as-a-service. Private ownership of internal combustion engine cars will become a thing of the past.
The lack of mention of hydrogen as a fuel, and hydrogen-fuel-cell technology and their use to power vehicles seems to be an oversight on the part of Diamandis. Particularly in rural areas, where a minimal charging infrastructure and long-distance commutes will require alternatives to EVs, there will remain a need for hydrogen zero-emission technology or even a few diesel and gasoline-powered vehicles.
This quote comes from Ramez Naam‘s book, The Infinite Resource: The Power of Ideas on a Finite Planet. I thought of this as I read the latest findings by Earth scientists as reported in today’s New York Times.
Our ancestors experienced a more predictable world when it comes to global temperatures. Our children who will inherit the world we create will live on a changing planet with an uncertain future. Based on the latest global warming data Earth has recorded higher temperatures, each a record, for the last three years. As the Times states, “The data show that politicians cannot wish the problem away. The Earth is heating up, a point long beyond serious scientific dispute, but one becoming more evident as the records keep falling. Temperatures are heading toward levels that many experts believe will pose a profound threat to both the natural world and to human civilization.”
In 2015 those who questioned the data ascribed the warming to an El Nino event in the Pacific Ocean. But in 2016 there was no El Nino. Temperatures just continued to inch upward over most of the planet. In the Arctic, however, temperatures soared. Sea ice reached the lowest level observed since records have been kept. The American east coast experienced increased incidents of tidal flooding caused by ocean thermal expansion and the melting of Arctic sea ice and glaciers. And in one city in India, on one summer day the thermometer rose to 51 Celsius (123.8 Fahrenheit), a temperature never seen before.
The data on 2016 temperature records was issued by two United States organizations, NOAA, the National Oceanic and Atmospheric Administration, and NASA. The findings represent global data collection, that for the former, goes back to 1880, and for the latter, the 1970s, with the launch of the first generation of geostationary weather satellites.
The new American administration under President-elect Donald Trump, has appointed cabinet secretaries who, like their boss, is a climate change denier. I suspect that NOAA and NASA will be redirected in focus to not report global warming statistics. After all, the ostrich with its head buried in the sand never sees what is going on in its immediate surroundings, not until a predator comes and bites its tail or kills it.
Our children deserve better than this.
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And speaking of technologies about to further disrupt our world, Peter Diamandis shares with us the observations of Ramez Naam, Chair of Energy & Environmental Systems, Singularity University. Naam is the author of the Nexus series, a science fiction trilogy about our future world in a post-human age. He has also written The Infinite Resource: The Power of Ideas on a Finite Planet. Diamandis interviewed Naam to get his perspective on three major disruptive innovative forces: solar power, batteries and electric vehicles (EVs). Hope you enjoy.
Creating an Abundant Solar Economy
In 88 minutes, 470 exajoules of energy from the sun hits the Earth’s surface, as much energy as humanity consumes in a year. In 112 hours – less than five days – it provides 36 zettajoules of energy. That’s as much energy as is contained in all proven reserves of oil, coal and natural gas on the planet. If humanity could capture 1 part in 1,000 (one-tenth of one percent) of the solar energy striking the Earth – just one part in one thousand – we could have access to six times as much energy as we consume in all forms today.
These staggering numbers, in combination with an exponential decline in photovoltaic solar energy costs ($ per watt price of solar cells), put us on track to meet between 50 percent and 100 percent of the world’s energy production from solar (and other renewables) in the next 20 years. Solar is already undercutting coal and natural gas in sunny geographies. Take a look at the plummeting costs.
Over the last 30 years, solar module prices have dropped by a factor of 100. Critically — a new solar price record was set in Chile just a few weeks ago at $0.0291 per Kilowatt hour – 58% less than the price of natural gas from a new plant!
And this is just the beginning. How cheap can it get?
The graph below shows that, if solar electricity continues on its current demonetization trajectory, by the time solar capacity triples to 600GW (by 2020 or 2021, as a rough estimate), we could see global unsubsidized solar prices that are roughly half the cost of coal and natural gas.
This is without factoring in the cost of air pollution and carbon pollution emitted by fossil fuel power plants.
Battery Technology Reaching an Inflection Point
Of course, one limitation of solar is that it’s only available during the day. We’ll need breakthroughs in battery technology to transition fully into a solar economy. The good news is that battery technology and energy storage are also hitting an inflection point.
Here are five trends shaping the future of battery technology and energy storage:
The real key here is that we are going to see a mindset shift in the near future. It will just be accepted that every home will be powered by a combination of batteries, rooftop solar and EVs (i.e. Tesla’s vision)… and we’ll gawk disapprovingly at the idea of driving an explosive, expensive and environmentally damaging gas vehicle.
EVs Gaining Speed
EVs are taking the transportation industry by storm. Within the next two decades, EVs will undoubtedly be the cheapest and most widely used vehicles on the market.
Take a look at the chart below. By roughly 2030, EVs with a 200+ mile range are going to be cheaper than the cheapest car sold in the U.S. in 2015.
The primary factor driving this decreasing cost is that EVs are inherently simpler devices only possessing 10% of the moving parts of gasoline-powered vehicles (cheaper to build, cheaper to maintain). Every major car manufacturer is working on EVs. The number of models has grown from 2 in 2010 to over 25 today. Just four months ago, Tesla Motors shattered expectations with the biggest one-week launch of any product ever by taking 400,000 advanced orders for its $35,000 Model 3 (implying $14 billion in future sales). Ford has followed suit, investing $4.5 billion in EVs with plans to add 13 EVs and hybrids by 2020, making more than 40% of its lines electrified.
Naam describes these three technologies as the trifecta of disruptive forces hitting the energy industry today and over the next twenty years. And it all starts with the enormous energy resource represented by the sun and the technological advancements to make harvesting this energy economically feasible. It means a paradigm shift to abundant, cheap energy for everyone on the planet. Now how will that impact labour? That’s a subject for another day.
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