Implications of electric and autonomous cars

Implications of electric and autonomous cars, by Alex Pollak. Let’s start with autonomous cars, already being seriously tested on public roads in Silicon Valley:

The conversation has been about robots taking over people’s jobs, but that doesn’t hit the right note. It won’t be a robot at the wheel of the car, just a piece of artificial intelligence, with no driver seat at all. And no steering wheel. …

A major reason for owning a car is that taxi services have been unreliable and slow, so that even though cars are expensive, they are worth it. But we are at a unique point in the evolution of transport, with ubiquitous and powerful mapping tools, billing and communication systems. Uber and others have shown us that we can order a car pretty much in the time it would have taken to get ours out of the garage and in many cases much less than the time taken to park at the other end. …

[O]ther variables – such as the cost of ownership including depreciation, insurance,and parking  – are an argument in favour of Uber and taxis, but not really necessarily an argument with enough weight to swing the deal away from car ownership, especially when intangibles are included (like the status of owning a car.) …

But what is not considered is that a shared driverless car is not just a bit cheaper than owning a car – it will be dramatically cheaper.

Remember, a big part of the cost of a taxi is the driver. Without the need for a driver, the ride virtually halves. And because it goes from being a private car to a ride share, the car goes from being used 10% of the time (which is how much people actually use their car) to 100% of the time, with each ride priced accordingly. Once “our” car has driven us home, it has served its purpose where we are concerned, so the value of our ride forms a smaller and smaller portion of the overall car cost as it goes from passenger to passenger.

Thus, self-driving cars can spend a lot more time on the road, with each user’s ride a lesser amount relative to the cost of owning a car for the 10% of the time you use it. …

[S]ince there is no driver, there is no need to park the car. And if there is no need to park, there is no need to own a parking space – at home, in the shopping centre or in town

Electric cars are only competitive with petrol cars if carbon emissions are thought to be harmful, but the theory that carbon dioxide causes significant global warming will soon be seen to be wrong (see here and here).

[Electric cars are going to cause] the write-off of huge chunks of the world’s car and oil economy tied up with a fundamental change in the way that cars are made because of the move out of fossil fuel power. This is the essence of disruption. …

Traditional carmakers are in a bind – they must field an electric car, but every electric car they sell calls into the question the value of the remaining fossil fuel plant and the huge sales which keep them in business. In a sense, then, the better they do, the worse they do. …

Robin Li, CEO of Baidu, China’s version of Google, said last week on the company’s earnings call that the Chinese search giant will release a self-driving car by 2020. He noted that the competitive edge in car engineering had lived in the west and Japan for 100 years, but in future the car would be more of a mobile computer and less of an engine and gearbox affair, so the playing field will be levelled. China is targeting 5 million electric cars by 2020.