RethinkX, an independent think tank that analyzes and forecasts disruptive technologies, has predicted that in 13 years, 95% of all passenger cars in U.S will be electric vehicles. Such prognosis is significantly shorter than other current analysis which estimate that transition will last several decades.
The Techxplore website published an article which is predicting that autonomous electric vehicles will quickly replace cars with fossil fueled engines. RethinkX says that their analysis is based on previous rapid adoption of disruptive technologies like smartphones and the internet.
The main cause for perspective short transition is economic one: it is estimated that average American household would save USD 5,600 annually by using transport-as-a-service (TaaS). Consumers will abandon individually owned vehicles, to replace them with on-demand autonomous electric vehicles. New system will produce consequences for all other sectors of the economy: huge savings (equivalent of a 10% raise in salary) will lead to the biggest increase in purchase power and consumer spending in history.
The report states that consumers are already getting use to TaaS, because car-sharing services are more available than ever. Uber, Lyft and Didi are investing billions of dollars in developing technologies and services to help consumers overcome psychological and behavioral barriers to shared transportation such as habit, fear of strangers and affinity for driving. In 2016 alone, 550,000 passengers chose TaaS services in New York City alone.
Analysis indicates that 2021 is critical, because it is expected that TaaS will be legalized that year. As soon as the new system is available, it will outcompete all other existing market models. 10 years from that point, it is expected that 95 percent of U.S. passenger miles will be traveled by TaaS. In part, the analysis finds that the greater the improvement in cost or utility, the more likely it is that people will adopt it.
Serious threat to petroleum industry
The TaaS disruption will decrease the value of the oil industry as demand plummets. By 2030, the report predicts that oil demand will drop to 70 million barrels per day. The resulting collapse in prices will be catastrophic for the industry, and these effects are likely to be felt as early as 2021. The report suggests that oil demand from passenger road transport will drop by 90 percent by 2030. Current share prices and projections are based on the presumption of a system of individually owned vehicles.
Similar consequences will be felt in car production. Around 97 million cars will be abandoned, which will increase supply and lower demand up to 70%. Production of internal combustion cars will practically cease to exist, and value of used vehicles will plunge to zero, or even become negative.
RethinkX’s report is a warning for legislators and shareholders that changes in transport technologies and their subsequent consequences for the economy are much closer than anyone thought before.