Why the switch to electric vehicles may be more important than the rush to autonomous cars
November 14, 2017
November 14, 2017
4 steps in our transition to autonomous mobility starts with embracing EVs—and ultimately converting our minds away from vehicle ownership
Tesla and Elon Musk are driving (pun intended) the market for electric vehicles (EVs) through their massive investment in solar collection and battery storage. Volvo is also “all in” on EVs, as they recently announced their commitment to a hybrid or all-electric fleet starting in 2019 and plan to kick the internal combustion engine to the curb by 2025.
California, the largest auto market in the United States and the 6th largest economy in the world, is pushing legislation to ban gas or diesel powered cars by 2040 to aid in reducing their greenhouse gas emission to 80% below 1990 levels by 2050. Globally, London is requiring that all vehicles for-hire must be zero emissions by 2023. And China, the second largest and fastest growing market for mobility, is leading the world in their conversion to electric vehicles with estimates for a full conversion now as close as 2030.
It’s a revolution that’s been more than two decades in the making, but it’s beginning to hit the top of the curve toward a very expansive rollout in the coming years (mostly due to the dropping price of battery storage). Given the fast pace of technological advance, electric powertrains and the batteries that support them are projected to be less expensive to construct than traditional vehicles in about five years. And because electric powertrains have substantially fewer moving parts—about a dozen—than their internal combustion engine counterparts (hundreds of moving parts), their much lower long-term maintenance is expected to be very attractive to consumers.
What does this mean for cities? An electric car driven by a person still requires a parking space at both ends of a trip. It still needs lanes wide enough to accommodate operator error (like texting), traffic signalization, motor vehicle police, and freeway capacity. These issues aside, and they are substantial, the switch to electric will revolutionize how mobility is delivered and how cities perform. Most importantly, it is this switch to EVs that will move us closer to an autonomous revolution.
There are four steps in how the transition to EV will further push us toward accepting autonomous mobility:
Step 1: Transition to predominately electric powertrains: This has been occurring for some time but Tesla, Volvo, Toyota, and other major automakers’ shift to EV will accelerate in the coming years as battery pricing drops. I expect at least one last ditch effort from big oil to impose its superiority, but gasoline-based internal combustion engines are headed the way of the dinosaurs, at least for single-passenger automobiles.
Step 2: Public revenue conversion to usage-based pricing: State legislatures have been scrambling for years as their gas taxes (the principal revenue source that supports transportation networks) have been dropping as increasing fuel economy now outpaces vehicle miles traveled (VMT). Some cities and states are piloting user-fee systems that are based on the number of miles travelled by a car. We should expect that this will need to take hold when it’s no longer convenient to “pay at the pump.” There is no doubt that suburban dwellers are going to pay the price for their long commutes. Toll roads will no longer be necessary because algorithms will invoke demand-based pricing for roadway usage based on time of day, location, and road network used. The longer you drive during peak hours, the more expensive it will (or should) be.
Also, embedded within this pricing is the cost of building and maintaining our transportation systems, which will more accurately reflect the true cost of operating a vehicle. It could also mean that drivers will get a monthly or periodic bill—not too dissimilar from their mobile phone bill—that taxes them for the actual cost to maintain the system.
Step 3: Behavior modification: Like how we manage data plans for our cellphones, I anticipate that users will start to modify their driving behavior based on the bills they receive. Remember in the early days of cellphones, we had peak and off-peak pricing? People shifted their calling behavior to avoid surcharges. Just like modifying cell phone use, some would argue that the ebb and flow of gas prices has impacted our driving decisions. When gas prices hovered around $4 a gallon, VMT dropped and transit use increased. Unfortunately, there is no pure “one-to-one” relationship between VMT and gas prices. And, the increment in which we pay our taxes is so small that it’s difficult for the consumer to discern how they can make a difference in their monthly bill. When they receive their itemized driving bill (just like itemized long-distance bills) based not just on miles traveled but also on the time of day, there will be many who will not only question their travel behavior but will question whether vehicle ownership makes sense at all!
Step 4: Mobility as a service will take hold: If we add the cost of VMTs with the vehicle’s capital cost, plus maintenance and insurance costs, many consumers will look to mobility service providers to ease their monthly costs. Transit use will increase as it’s more cost effective for longer trips—and transportation network companies will handle the first mile/last mile and point-to-point trips. These transportation network companies will include not just Uber and Lyft but technology companies like Google’s Waymo and automakers. In 2017, GM’s CEO declared that it was no longer an auto manufacturer, but instead was a mobility service provider. The truth is, the future of mobility is in providing monthly services—not one-time capital goods. Like buying licenses and subscriptions for computer software, the trend in the auto industry has been toward renting rather than purchases (with nearly one in three new vehicles under lease in 2016). Further, sharing vehicles and pooling trips, being made popular by Uber and Lyft, will drop the cost and eliminate the hassle of vehicle ownership.
Simply moving past step one has huge implications for the livability of our cities. It means the air quality rises dramatically, urban trees flourish, and pedestrians are no longer exposed to second-hand smoking carcinogens. Even along the busiest thoroughfares, the elimination of noxious fumes and the muting of auto noise makes urban outdoor living nearly comparable to life in the leafy suburbs. Outdoor seating is once again possible even along the busiest roads.
Gasoline stations, once present on nearly every prime corner, will dwindle in numbers, in favor of destination-based charging stations due to generally longer battery life. We’ll still need auto service stations, but on-site storage for oils and engine fluids will no longer be necessary.
Long before we convert to fleets of autonomous vehicles (AVs), automakers want us to convert our mindset from vehicle ownership to “mobility as a service.” Why are major auto manufacturers, transportation network companies, and rental car companies partnering up? Because they view the future with fleets of cars owned by companies rather than individuals. For example: GM builds the vehicle, Lyft manages the subscriptions, and Hertz maintains and balances the fleet.
A great example of a traditional company embracing electric and autonomous vehicles is Ford. Ford has refocused its efforts to move from auto manufacturer to mobility service provider, offering a single, seamless mesh of transportation modes through partnerships with cities and sharing data. Even before we convert to autonomous vehicles, the opportunity to spread mobility across a wider platform is good for cities and good for business (and good for profits, too). Electric vehicles won’t eliminate congestion or parking demand, or reduce pedestrian injuries and deaths, but EVs do move us toward reclaiming our streets from the noxious odor and rattling noise of internal combustion engines.
Autonomous vehicles are dominating the discussion these days but it’s the move to electric that will pave the way to public acceptance. Once we’ve converted to electric and accepted “mobility as a service” as a normal part of our lives, the transition to autonomous is a relatively simple step.
People always ask me how long it will take before autonomous driving takes hold. These days, I believe it will occur within five years of when electric engines replace internal combustion engines. Just like it took the introduction of the smart phone to give rise to Uber and Lyft just three years later, so too will electric give rise to AVs. Once EVs cause us to change the way we fund our infrastructure, the conversion to AVs will be a natural and quick progression.