Why Diesel – Petrol Car Ownership Is A Thing Of The Past – but we just do not realise it yet.
Do I hear you laughing at that statement?
Well you need to think again if the predictions of a new report by the RethinkX Project has any credibility.
The executive summary reads as follows
We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history. By 2030, within 10 years of regulatory approval of autonomous vehicles (AVs), 95% of U.S. passenger miles traveled will be served by on-demand autonomous electric vehicles owned by fleets, not individuals, in a new business model we call “transportas-a-service” (TaaS).
The TaaS disruption will have enormous implications across the transportation and oil industries, decimating entire portions of their value chains, causing oil demand and prices to plummet, and destroying trillions of dollars in investor value — but also creating trillions of dollars in new business opportunities, consumer surplus and GDP growth.
The disruption will be driven by economics. Using TaaS, the average American family will save more than $5,600 per year in transportation costs, equivalent to a wage raise of 10%. This will keep an additional $1 trillion per year in Americans’ pockets by 2030, potentially generating the largest infusion of consumer spending in history. We have reached this conclusion through exhaustive analysis of data, market, consumer and regulatory dynamics, using well-established cost curves and assuming only existing technology.
This report presents overwhelming evidence that mainstream analysis is missing, yet again, the speed, scope and impact of technology disruption.
Unlike those analyses, which produce linear and incremental forecasts, our modeling incorporates systems dynamics, including feedback loops, network effects and market forces, that better reflect the reality of fast-paced technology-adoption S-curves.
These systems dynamics, unleashed as adoption of TaaS begins, will create a virtuous cycle of decreasing costs and increasing quality of service and convenience, which will in turn drive further adoption along an exponential S-curve. Conversely, individual vehicle ownership, especially of internal combustion engine (ICE) vehicles, will enter a vicious cycle of increasing costs, decreasing convenience and diminishing quality of service
Ah well but that is in the USA I hear you cry, that will never catch on here.
Well did you miss this headline
How can cars become fully independent of human direction? What is the best technology to incorporate into new vehicles and infrastructure? How will humans and vehicles interact with each other and their environment?
These are just a few of the questions facing academics and industrialists who will be working on a new £11 million research programme to develop fully autonomous cars, jointly funded by the Engineering and Physical Sciences Research Council (EPSRC) and Jaguar Land Rover.
The research, which will take place at ten UK universities and the Transport Research Laboratory, was announced today by Secretary of State for Business, Sajid Javid during a visit to Jaguar Land Rover’s facility at Gaydon in Warwickshire.
If we refer back to the RethinkX report
Behavioural issues such as love of driving, fear of new technology or habit are generally believed to pose initial barriers to consumer uptake. However, Pre-TaaS companies such as Uber, Lyft and Didi have invested billions of dollars developing technologies and services to overcome these issues.
In 2016, Pre-TaaS companies drove 500,000 passengers per day in New York City alone.1 That was triple the number of passengers driven the previous year.
The combination of TaaS’s dramatically lower costs compared with car ownership and exposure to successful peer experience will drive more widespread usage of the service.
Adopting TaaS requires no investment or lock-in. Consumers can try it with ease and increase usage as their comfort level increases. Even in suburban and rural areas, where wait times and cost might be slightly higher, adoption is likely to be more extensive than generally forecast because of the greater impact of cost savings on lower incomes.
As with any technology disruption, adoption will grow along an exponential S-curve.2
The step away from individual car ownership in the UK is already happening.
I know I have just bought a new EV (Nissan Leaf) on a PCP.
I am not the only one……. Click this link
In my recent article, Driving Change: How Modern Consumers are Challenging the Status Quo in Car Retailing, I introduced the changing and evolving customer journey and role of the traditional car dealership as consumers increasingly take their journey online.
Here we look closer into the rise of car finance, and the reasons behind choosing this method to fund a new car. The growth in new car registrations remains fuelled by finance agreements and the dominance in PCP deals suggests that consumers remain content with the concept of financing their use of the vehicle rather than aiming to own it outright.
If you want further evidence then just watch this video
In his CES keynote, Nissan chairman of the board and chief executive officer Carlos Ghosn announced several technologies and partnerships as part of the Nissan Intelligent Mobility blueprint for transforming how cars are driven, powered, and integrated into wider society.
If you have any money invested in the major oil companies you may want to think about switching into these new technologies now before the rest of the world wakes up.