The new elec­tric car revo­lu­tion


France and the United King­dom re­cently an­nounced that they will ban the sales of petrol and diesel-en­gined cars from 2040. The lower house of the Dutch par­lia­ment has passed a law ban­ning such sales from 2025. In­dia says it will in­sti­tute a sim­i­lar ban by 2030.

China, the world’s largest pro­ducer of cars – 28 mil­lion ve­hi­cles last year, more than the United States, Ja­pan and Ger­many com­bined – is also plan­ning to de­clare a ban soon, but is still work­ing on the cut-off date. And in Novem­ber the Euro­pean Com­mis­sion is go­ing to de­bate a min­i­mum an­nual quota of elec­tric ve­hi­cles (EVs) for all Euro­pean car pro­duc­ers.

So if you were look­ing for a safe place for a long-term in­vest­ment, would you choose the oil in­dus­try?

Just over half of the 98 mil­lion bar­rels of oil pro­duced in the world each day goes di­rectly to mak­ing petrol, used al­most ex­clu­sively in mo­tor ve­hi­cles. An­other 15 per­cent goes to make ‘‘dis­til­late fuel oil’’, of which at least half is diesel fuel. So around 58 per­cent of to­tal world oil pro­duc­tion is be­ing used in ve­hi­cles now.

There may be al­most none in 35 years’ time.

That is cer­tainly the in­ten­tion of many gov­ern­ments. Bri­tain, for ex­am­ple, is plan­ning to al­low only zero-emis­sion ve­hi­cles on the road (apart form a few spe­cial­lyli­censed vin­tage cars) by 2050, only ten years af­ter the ban on sell­ing new cars with in­ter­nal com­bus­tion en­gines comes into af­fect.

So the pro­duc­tion of petrol- or diesel-en­gined cars will al­ready have col­lapsed by the late 2030s. If th­ese dead­lines are ob­served, the cars on sale will be al­most en­tirely EVs by the mid-2030s. And what’s left of the oil in­dus­try will have a vastly dif­fer­ent shape.

All this is good news for the en­vi­ron­ment, and also for the health of peo­ple who live in large cities. (No won­der China is the lead­ing EV pro­ducer in the world, with 40 per­cent of global pro­duc­tion. Pol­lu­tion is al­ready mak­ing most of its cities al­most un­in­hab­it­able.) But the revo­lu­tion doesn’t end here: most, and even­tu­ally all of th­ese EVs will be self-driv­ing ve­hi­cles.

Driver­less ve­hi­cles will end up be­ing own­er­less ve­hi­cles. They will be­come public util­i­ties, sum­moned when they are re­quired for the spe­cific trip you have in mind at the mo­ment. Ur­ban car clubs and peer-to-peer rentals are one pre­curser of this phe­nom­e­non, Uber and Lyft in their dif­fer­ent ways are an­other.

Pri­vately owned cars are parked an av­er­age of 95 per­cent of the time. This fig­ure varies lit­tle from one city or coun­try to an­other, and il­lus­trates why pri­vate car own­er­ship will be­come a dis­pens­able lux­ury. The dif­fi­culty in the past was gain­ing im­me­di­ate ac­cess to a car for as long as you needed it at a rea­son­able cost, but the com­bi­na­tion of the smart phone and the self-driv­ing ve­hi­cle will solve that prob­lem.

That, rather than a cheaper taxi ser­vice, is the real goal of Uber’s busi­ness model, but once re­li­able self-driv­ing cars are widely avail­able Uber will find it­self del­uged with com­pe­ti­tion. Pri­vate own­er­ship will de­cline steeply, and the to­tal num­ber of cars on the road world­wide will even­tu­ally crash to per­haps one-quar­ter of the cur­rent num­ber. Af­ter all, there are hardly ever more than a quar­ter of pri­vately-owned cars on the road at the same time.

Buses and con­ven­tional taxis will vir­tu­ally dis­ap­pear, tak­ing mil­lions of driv­ing jobs with them. (There are a mil­lion taxi, Uber and bus driv­ers in the United States alone.)

Long-dis­tance truck­ers and van driv­ers (an­other 3.5 mil­lion in the US) will also find work in­creas­ingly scarce: Daim­ler, Volvo, Uber and Baidu are al­ready road-test­ing the first self-driv­ing 18-wheel­ers. Oh, and one more thing. About a quar­ter of the av­er­age cen­tral city in North Amer­ica (less in Europe and Asia) is de­voted to sur­face park­ing lots and mul­ti­storey garages. They are part of the 95-per cent-parked prob­lem.

The car doesn’t just take you down­town; it has to stay there the whole time you do, so it must find some­where to park.

Once peo­ple re­alise that most of this land is now avail­able for re­de­vel­op­ment, it will get a lot eas­ier and cheaper to live down­town: less com­mut­ing, more com­mu­nity.

Roll on the car revo­lu­tion!


An Audi Ai­con au­ton­o­mous elec­tric con­cept car on dis­play at the 2017 Frank­furt Auto Show in Ger­many.

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