A new report predicts that a ‘historic revolution in transportation’ brought about by shared, autonomous electric vehicles will end more than a century of vehicle ownership, as car owners switch to driverless forms of transport.
Within a decade of driverless cars receiving regulatory approval, predict the authors, 95% of US passenger miles travelled will be in on-demand, autonomous electric vehicles owned by companies providing Transport as a Service (TaaS).
These vehicles will make up the majority (60%) of US vehicle stock, with the number of passenger vehicles on American roads dropping dramatically from 247 million in 2020 to just 44 million by 2030, according to the authors.
The report – Rethinking Transportation 2020-2030: The Disruption of Transportation and the Collapse of the ICE Vehicle and Oil Industries – was produced by independent research group RethinkX and assumes existing technologies and established cost curves.
“We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history,” said Tony Seba, co-founder of RethinkX and co-author of the report. “But there is nothing magical about it. This is driven by the economics.”
Rethinking Transportation predicts that the approval of autonomous vehicles will lead to a ‘market grab’ by both new and existing ride-sharing companies, who will switch from internal combustion engines to autonomous electric vehicles for cost reasons.
The authors forecast that:
- Using TaaS will be four to 10 times cheaper per mile than buying a new car, and two to four times cheaper than operating an already paid-off vehicle, by 2021.
- Several factors will help to reduce the cost of TaaS, including utilisation rates that are 10 times higher than regular car ownership; electric vehicle lifetimes that exceed half a million miles; and far lower maintenance, energy, finance and insurance costs.
- The average American household giving up a gas-powered car and travelling in autonomous, electric TaaS vehicles will be able to save $5,600 per year.
- As a result of these cost savings, both potential new car buyers and existing owners are likely to abandon vehicle ownership and move to TaaS.
“While these projections may seem radical because they differ from mainstream and incumbent industry projections, they are really quite conservative because they are based on assumptions that in some cases have already been bested by new technologies and plummeting prices,” said Bryan Hansel, CEO of Chanje Energy (formerly Nohm Technologies).
The report predicts that as demand for new vehicles falls, 70% fewer passenger cars and trucks will be built each year, potentially leading to ‘total disruption’ for the car value chain. The authors say that car manufacturers will be able to adapt, either as low-margin, high-volume assemblers of autonomous electric vehicles, or by transitioning to become TaaS providers.
The shift to shared autonomous electric vehicles will also be ‘catastrophic’ for the oil industry, warns the report, with global demand peaking at 100 million barrels per day by 2020 and dropping to 70 million barrels per day by 2030.
While the authors acknowledge that many experts foresee a more gradual move towards electric vehicles, driverless cars and shared transportation, they believe that the change will be much faster and more profound as the three trends converge.
“Mainstream analyses fail to account for the impacts of technology convergence, and a new business model born in response,” said James Arbib, technology investor, philanthropist and co-author of the report.
“This results in far greater cost differential between individual ownership and Transportation as a Service, leading to far faster and more extensive adoption as people choose cheaper, better transportation provided as a service.”
Last month, research by The Boston Consulting Group forecast that shared self-driving electric vehicles could account for a quarter of all the miles driven in the US by 2030.
Separately, a survey of automotive executives published earlier this year suggested that more than half of today’s car owners will not want to own a vehicle in less than a decade.