Benedict Evans, a blogger who works for a venture capital firm that invests in technology, has an interesting article on the shift to electric and self-driving vehicles.

Please consider snips from Cars and Second Order Consequences by Benedict Evans.

There are two foundational technology changes rolling through the car industry at the moment; electric and autonomy. Electric is happening right now, largely as a consequence of falling battery prices, while autonomy, or at least full autonomy, is a bit further off – perhaps 5-10 years, depending on how fast some pretty hard computer science problems get solved.

Both electric and autonomy have profound consequences beyond the car industry itself. Half of global oil production today goes to gasoline, and removing that demand will have geopolitical as well as industrial consequences. Over a million people are killed in car accidents every year around the world, mostly due to human error, and in a fully autonomous world all of those (and many more injuries) will also go away.

However, it’s also useful, and perhaps more challenging, to think about second and third order consequences. Moving to electric means much more than replacing the gas tank with a battery, and moving to autonomy means much more than ending accidents.

Electric Discussion

In regards to electric, Evans points out 150,000 gas stations while noting cigarette purchases and snacks are the way most of those stores make their money.

What happens to those stations?

On September 29,2015, Elon Musk said Tesla Cars Will Reach 620 Miles On A Single Charge “Within A Year Or Two,” Be Fully Autonomous In “Three Years”.

How’s that prediction working out?

On March 30, 2016, Bloomberg noted Tesla Model 3 Electric Car Seen Getting 225 Miles Per Charge and we are not there yet. Business insider a month later suggested a range of 215 miles.

Quartz reports Tesla’s cheaper, more powerful battery cell is the perfect embodiment of its factory model.

Supercharging

A Tesla presskit says Their “Supercharger network covers major routes in North America, Europe, and Asia Pacific. There are more than 3,000 Superchargers worldwide.”

Their click here link for Supercharger locations turn up “404 page not found”.

Tesla says their Supercharger can “replenish a half charge in about 30 minutes.” Why not state a quarter charge in 15 minutes or a 16th of a charge in 3.75 minutes?

If a gas fill-up takes up to 4 minutes, then via Supercharger you will only need to stop 16 times as often for a long trip.

Am I missing something here?

It would be one hell of a lot easier if there was a quick and easy way to slide one battery pack out and another into its place.

Home Batteries

Evans notes …

More speculatively (and this is part of Elon Musk’s vision), it is possible that we might all have large batteries in the home, storing off-peak power both to charge our cars and power our homes. Part of the aim here would be to push up battery volume and so lower their cost for both home storage and cars. If we all have such batteries then this could affect the current model of building power generation capacity for peak demand, since you could complement power stations with meaningful amounts of stored power for the first time.

Long Distance Woes

Large home batteries do not solve long distance travel.

There either needs to be much greater battery capacity, much faster charging, or a way to quickly swap batteries.

I suppose one could simply swap vehicles every 200 miles but that seems like quite a nuisance.

For those who drive back and forth to work, or only drive within a city, electric works.

But why have a car at all if that’s all you do? Fleets of self-driving cars will work quite nicely vs the cost of one of these babies.

Autonomy Discussion

Per Evans …

The really obvious consequence of autonomy is a near-elimination in accidents, which kill over 1m people globally every year. In the USA in 2015, there were 13m collisions of which 1.7m caused injuries; 2.4m people were injured and 35k people were killed. Something over 90% of all accidents are now caused by driver error, and a third of fatal accidents in the USA involved alcohol. Looking beyond deaths and injuries themselves, there is also a huge economic effect to these accidents: the US government estimates a cost of $240bn a year across property damage itself, medical and emergency services, legal, lost work and congestion (for comparison, US car sales in 2016 were around $600bn). A similar UK analysis found a cost of £30bn, which is roughly equivalent adjusted for the population. This then comes from government (and so taxes), insurance and individual pockets. It also means jobs, of course.

Even simple ‘Level 3’ systems would cut many kinds of accident, and as more vehicles with more sophisticated systems, moving up to Level 5, cycle into the installed base over time, the collision rate will drop continuously. There should be an analogue of the ‘herd immunity‘ effect – even if your car is still hand-driven, my automatic car is still much less likely to collide with you. This also means that cycling would become much safer (though you’d still need to live close enough to where you wanted to go), and that in turn has implications for public health. You might never get to zero accidents – the deer running in front of a car might still get hit sometimes –  but you might get pretty close.

I am in complete agreement with the above. And with that is where it gets very interesting.  Evans has given this a lot of thought.

if you have no collisions then eventually you can remove many of the safety features in today’s vehicles, all of which add cost and weight and constrain the overall design – no more airbags or crumple zones, perhaps.

As more and more cars are driven by computer, they can drive in different ways. They don’t suffer from traffic waves, they don’t need to stop for traffic signals and they can platoon –  they can safely drive 2 feet apart at 80 mph.

Parking is another way that autonomy will add both capacity and demand. If a car does not have to wait for you in walking distance, where else might it wait, and is that more efficient?

So, the current parking model is clearly a source of congestion: some studies suggest that a double-digit percentage of traffic in dense urban areas comes from people circling around looking for a parking space, and on-street parking ipso facto reduces road capacity. An autonomous vehicle can wait somewhere else.

If you remove the cost of the human driver from an on-demand trip, the cost goes down by perhaps three quarters. If you can also remove or reduce the cost of the insurance, once the accident rate has fallen, it goes down even further. So, autonomy is rocket-fuel for on-demand. This makes it much easier for many more people to dispense with a car, or only have one, or leave their car at home and take an on-demand ride for any given trip.

Do you end up with reduced bus schedules? Do marginal bus-routes close, pushing people onto on-demand who might not otherwise have used it – if they can use it? Does a city provide, or subsidise, its own-demand service to replace or to supplement buses in lower-density areas? Does your robotaxi automatically drop you off at a bus stop on the edge of high-traffic areas, unless you pay a congestion charge?

Then, of course, there are the drivers. There are something over 230,000 taxi and private car drivers in the USA and around 1.5m long-haul truck-drivers.

Does an hour-long commute with no traffic and no need to watch the road feel better or worse than a half-hour commute stuck in near-stationary traffic staring at the car in front? How willing are people to go from their home in a suburb to dinner in a city centre on a dark cold wet night if they don’t have to park and an on-demand ride is cheap?

In 2030 or so, police investigating a crime won’t just get copies of the CCTV from surrounding properties, but get copies of the sensor data from every car that happened to be passing.

More Questions than Answers

There is much more in the article. It’s worth a closer look.

Evans raises far more questions than he answers. Yet, I think the question list is just beginning.

My timeframe for long-haul driving jobs vanishing has not changed. I still say it starts 2021-2022 at the latest.

How Many Jobs?

All Trucking says “There are approximately 3.5 million professional truck drivers in the United States, according to estimates by the American Trucking Association. The total number of people employed in the industry, including those in positions that do not entail driving, exceeds 8.7 million.”

I may have over-estimated the number of long-haul jobs that vanish. However, I may have under-estimated the add-on effects.

 

If a truck can be on the road 24 hours instead of 11, how many trucks do we need? How many people servicing trucks do we need?

Opportunity for short-haul drivers with smaller trucks will vanish as well. How quickly?

Package delivery by drone is going to happen, especially smaller packages in rural areas. How Quickly?

For now, the savings on long-haul trucking are the greatest, and the obstacles the least, so I see no need to change my belief this will begin in a major way within a 2021-2022 timeframe.

The competition is so massive, all of the above things will happen much faster than most realize.

Mike “Mish” Shedlock