By Alysha Webb, Editor and Publisher
I love the feel of driving an electric vehicle. It is hard to beat all torque, all the time. But I don’t own one because there is no place to recharge at night in my condominium complex. I’ve been a bit of a skeptic regarding the speed of electric vehicles adoption.
A talk I heard a few weeks ago at the Fleet Conference during the Alt Car Expo in Santa Monica, Calif. gave me pause for thought, however. And it made me think that car dealers, and automakers, should be preparing for a sea change in their worlds, probably sooner than some may think.
“There will be no new gasoline cars made” by 2025 or 2026, Tony Seba, a futurist who lectures on entrepreneurship, clean energy, and disruption at Stanford University, told the Fleet Conference.
That is a sweeping statement, and it is unlikely to be true in full. But Seba made compelling arguments for why electric vehicles will rule the roads one day.
Let’s start with the definition of disruption. A disruption is creation of a new product that significantly weakens existing products. It often involves exponential technologies – those that get 1000 times better in ten years.
Consider the solar disruption. That is related to solar technology, not the sun as an energy source. The cost of solar power has come down exponentially, says Seba, and the amount of solar power generated has grown at a compounded annual growth rate of 42 percent between 2000 and 2014.
Business model innovations play a role in disruption, and approximately 80 percent of California’s redistributed solar power is third-party owned and financed, says Seba. That has helped bring costs down.
The cost of solar power will be at grid parity in 47 states by 2016, he claims. “We are on the cusp of unsubsidized solar power,” says Seba.
Need some proof that Seba is on to something? California utilities have proposed new fees on homeowners who install solar power that would essentially wipe out the cost advantage over traditional energy distribution. They feel the threat.
Another disruption is the cost of energy storage. The price of lithium ion battery storage on laptop computers has fallen 14 percent annually over the last 15 years, says Seba.
Since the automotive and energy storage industries have entered the battery space, the decline of battery costs has accelerated to 16 percent, he says. By 2020, predicts Seba, electric vehicle batteries will be at $200 per kWh.
Which brings us to electric vehicles. Here, Seba takes some liberties. An electric vehicle is at the same sticker price as an equivalent vehicle with an internal combustion engine, he says. That is taking into consideration some additional assertions he made, I assume.
Electric vehicles are five times more energy efficient – “It’s the law of thermodynamics,” says Seba. They are ten times cheaper on a per mile basis than a gasoline vehicle. An electric vehicle has 100 times fewer moveable parts. (All Seba assertions.)
He assumes that by 2022 there will be a $22,000 electric vehicle. “That is the year the market will be disrupted,” says Seba. “You are going to get Porsche performance at a Buick price.”
Seba also assumes that all these electric vehicles will be self-driving, eventually. Autonomous driving technology already exists and costs are coming down fast, he says. Business model innovations are happening concurrent with the trend – witness the rise of car app companies Uber and Lyft.
“Ownership of cars makes essentially no financial sense,” says Seba, who does not own a car.
It is easy to take issue with his assumptions, and Seba seems to ignore issues such as a suitable charging network for EVs and an appropriate legal infrastructure for self-driving cars. Then there is opposition from groups such as utilities and yes, auto makers, that have a vested interest in maintaining the status quo.
So it may not happen quite as quickly as Seba so confidently asserts.
As consultancy McKinsey & Co. points out in a just-published paper called Urban mobility at a tipping point, “Solving regulatory challenges is not easy.” Uber faces a multitude of protests and lawsuits from taxi companies, for example.
But, says Alan Clelland, “Every time I have talked about timelines [for technology adoption], it has been wrong.”
Clelland, who is senior vice president of Iteris, a California-based data and information company that works with federal, state, and local governments on applying technology to mobility solutions, says they thought autonomous vehicles would take much longer to develop.
The U.S. is a very litigious country with “a tremendous ability to raise liability red herrings,” says Clelland, a U.K. native who has been in the U.S. for 28 years. That may slow adoption of autonomous vehicles somewhat.
But he figures Seba is right about the bigger picture, including widespread adoption of electric vehicles.
So do I.
Photo credit: Inverness Trucker / Foter / CC BY-SA
