Will All Cars Be Electric By 2025?
A Stanford economist has made some predictions that will send cold shivers up the spines of petrolheads around the world. If his bold prophecies about the North American car market are correct, then 95% of people in the U.S. won’t own a car; no petroleum-fueled vehicles will be on the road; and the global oil industry will be eviscerated.
And all of this will happen before 2030.
These are not the ramblings of of a doomsday prepper or a science-fiction author. These bold claims are being made by Tony Seba, an internationally-renowned economist and futurist from Stanford University. Mr. Seba is the leader of a project called RethinkX; which consists of a panel of international academics studying the market dynamics of the transportation sector. The 77-page RethinkX report predicts that the transportation industry as we know it will disappear within a few short years.
The report contains a lot of maths and goes into great detail about the widespread economic implications of electric vehicle ownership. It’s a long and thorough report that takes quite a bit of time to read, but the basics behind it are actually fairly simple and intuitive. The most important aspect of the report is centred around the concept of transport as a service (TaaS). Basically, TaaS refers to services that provide transport for individuals (e.g. public transit, taxis, Uber/Lyft, etc.)
Seba predicts that the cost of utilizing TaaS will fall to the point where it no longer makes economic sense to own a vehicle. Autonomous vehicles will play a critical role in this cost shift as it will eliminate the costs of hiring drivers, as well as provide people with the ability to be more productive in their commute. This surge in the value of TaaS will result in a collapse in the value of the private automobile, as it will cost more to buy and maintain a vehicle than it would to hire a car for transportation.
The ripple effects don’t stop there. RethinkX also predicts that the marginal costs of producing and running EVs will also fall such that petroleum-powered vehicles become economically unattractive. Once this happens, the demand for petroleum products in the transportation industry will all but disappear.
This sounds like devastating news for petrolheads, but the implications could be even worse for the economies of many regions of the world. For example, the Canadian province of Alberta relies heavily on its oil industry to sustain its economy. A collapse in the oil market would almost certainly devastate the large cities of Edmonton and Calgary (pictured); and could possibly disrupt the national economies of both Canada and the United States. These predictions seem to make common sense. The shock value of the RethinkX report comes from the time scale—it proposes that these changes will take place around 20 years sooner than previously thought.
Of course, these consequences beg the question of how accurate the RethinkX prophecy is. If the advancement of technology is as rapid as Tony Seba predicts, autonomous EVs and collective ride-sharing will theoretically optimal. I’m not quite as convinced, however, that the private automobile is going anywhere just yet.
There are a few reasons why I am skeptical of RethinkX. Owning a car has thus far been an immortal component of the American Dream, and I don’t see people being very willing to give up the emotional attachment to their own cars. People don’t make decisions purely based on economic efficiency. What’s more, there’s a certain amount of peace of mind associated simply with owning your own car. If your car has ever broken down and caused you to make alternative transportation arrangements, you’ll know exactly what I am talking about.
I am also skeptical of the report’s prediction that the industry will rapidly advance and squeeze the internal combustion engine out of the market. The corporations associated with the automotive industry are incredibly powerful, and I doubt very highly that they will go down without a fight. This is also true of the magnates of the oil industry, which include OPEC and the massive transnational corporations that produce and distribute petroleum products. The implications of international relationships with oil-producing nations would also be a massive challenge to overcome.
Finally, as mentioned above in one of my previous Ecarnomics blogs, one cannot ignore the impact of widespread EV usage on the electrical infrastructure. This concern is particularly obvious in developing nations in the global South, but cannot be ignored even in nations with the best power grids. It will probably never be known how such an increase in the demand for electricity will impact the electrical infrastructure; and the electricity market therein.
Despite the radical and potentially unrealistic view of the future that RethinkX gives us, I cannot dismiss the report outright. It could very well be right. The economics make an enticing case for a driverless future, no matter how absurd it seems to us petrolheads. Tony Seba’s report is incredibly important to understand, as it outlines the inevitable car culture of the future. Whether or not that future will arrive in 10 years or 40 years, however, remains to be seen.
An #ecarnomics post.
Comments
Now what kind of bullcrap is this? I would almost bet you money that won’t happen.
Unless everyone wins the lottery then this is man should be fired because these accusations are 100% false
No way this would happen
I don’t see it happening in third world countries. Knowing I live on top of the world’s largest known oil reserves, I’m quitr sure we’ll still have oil for hundreds of years at the very least and obviously, petrol based vehicles. Although I can confirm the existence of probably the first and only fully electric car in the country (a Tesla model S) and I happened to see a Prius once :(
We just need the get rid of the socialist cancer first.
What if all the batteries start leaking and exploding all at once..
It should happen… It should send all those anti-petrol guys cursing themselves courtesy the stench…..
I honestly doubt combustion engine would be banned at all in the first place. There are people who own classics cars and car manufacturers like Nissan revamping the production of parts for their older models like the Nissan GT-R R32 and the 300ZX. Similarly, the more expensive car market like the Ferraris and the race pedigree ones will still have a small place in our society. It’s very unlikely that combustion engine would vanish all together, but it will become a niche thing… like horses and carriages. So I’m still optimistic provided that the governments around the world let us toy around with the ICEs like it is with horses. :)
Ok so let’s imagine that all cars are electic, Where is the charging infrastructure coming from?
Where are all those people who live in cities going to charge them? It might be OK if your have a drive outside your home and can park your car next to your house, but what about the people’s who park on the street, are they really going to trail cables from their houses across the pavement each night it charge the car? And what happens when the local kids go out at midnight and unplug them all so people can’t get to work on the morning.
It will happen one day but not in the next 8 years. We have a long way to go yet.
No c:
No. They won’t.
2 reasons:
Batteries. They need replacing every 8 years at this point in time and you can’t dispose them cleanly whilst you can run a ice for decades without dumping heavy metals everywhere.
Electricity, if all those leftist id1ots would stop screaming solar panels and windmills (which are extremely bad for the environment) and focus on actual clean energy like nuclear fission.
Solar power is initially not good but if you place them in very sunny areas they make up for their initial harm relatively quickly, I’ve never heard of windmills being bad, just ugly. Fission is “clean” but fusion is going to be the real key, it is as much as 10 times more powerful and its fuel is hydronium ions which are naturally occurring in running water.
“Batteries. They need replacing every 8 years at this point in time and you can’t dispose them cleanly whilst you can run a ice for decades without dumping heavy metals everywhere.”
Batteries are recycled. And ICEs dump carcinogens and Co2 into the atmosphere.
“Electricity, if all those leftist id1ots would stop screaming solar panels and windmills (which are extremely bad for the environment) and focus on actual clean energy like nuclear fission”
Solar panels and wind power are both some of the cheapest sources of electricity. Please explain how either of those are worse for the environment than a coal plant shooting out literal tons of noxious gases and gases and C02 every year.
BS. It’s pretty much impossible to build an electric passenger or cargo plane, so we’ll need some kind of fuel - probably E85 bioethanol. And if fewer people have privately-owned automobiles, the ones that remain will be owned by petrolheads, so there should be more sporty cars.