Big auto and big oil will be hit as e-cars rule: Study
That’s because electric vehicles will be cheaper to operate and improvements in technology will ensure they run longer – for 400 kilometres on a single battery charge. Car dealerships and petrol stations are expected to disappear by 2024, according to the study by Stanford economist Tony Seba.
The shift to electric vehicles and autonomous modes of transport is being driven more by technology and costs. “Internal combustion engine vehicles will enter a vicious cycle of increasing costs. What the cost curve says is that by 2025 all new vehicles will be electric, all new buses, all new cars, all new tractors, all new vans, anything that moves on wheels will be electric, globally,” said the lead author of the study.
The report titled Rethinking Transportation 2020-2030 predicts a revolution in the way we move, and spells the death of big auto and big oil. Oil prices are predicted to slide further after 2020, according to the report. In the long-term, it could touch $25 a barrel after the transport disruption by electric and self-driving vehicles.
These vehicles will be more reliable and efficient and would be able to drive 500,000 to a million miles during their lifetimes. Seba says people will stop driving altogether and those holding on to their petrol cars will find it hard to sell them.
The tipping point is close, very close, when prices of electric cars begin to fall and e-car batteries last longer than 200 miles.
Prices of these vehicles will then come crashing down to $20,000, which will make it affordable for more people. According to the report, oil used for road transport will slump from 8 million barrels a day to just $ 1 million. All this could lead to a 90% decrease in finance costs, an 80% decrease in maintenance costs of vehicles, a 90% decrease in insurance costs and a 70% decrease in fuel costs.
The UAE and other countries have already seen this disruption coming. Last week, the Ministry of Energy launched a programme to encourage motorists to use electric vehicles. Government department vehicles also plan to shift to 20 per cent electric by 2020.
Tesla motors founder Elon Musk signed a deal with Dubai’s Roads and Transport Authority for 200 electric cars in February as the company makes a big push into the country with its green vehicles
Dubai has already rolled out its Smart Autonomous Mobility Strategy which will make 25 per cent of total journeys autonomous by 2030. As part of this strategy, government institutions must purchase 10 per cent hybrid or electric vehicles.