The Oasis Reporters
September 23, 2018
Before Henry Ford built the first car in the United States, Horses were the “engine” of transportation. It was equally used to pull carts, but with Henry Ford’s automobile company, all that suddenly changed from the animal horse to the iron horse and petrol fuelled it, leading to petrol dollars income for unprepared nations like Nicaragua and Nigeria.
A new shocker is coming up in less than 8 years for lazy bone countries leaders that rely on natural resources wealth to build infrastructure and build their nation rather than relying on brains and inventions of its human resources.
Petrol cars will vanish in 8 years, says US report from a Stanford economist.
” A Tesla Model S, which has 18 moving parts, one hundred times fewer than a combustion engine car with essentially zero maintenance ,” says Stanford University economist Tony Seba. “That is why Tesla is offering infinite-mile warranties. You can drive it to the moon and back and they will still warranty it.”
No more petrol or diesel cars, buses, or trucks will be sold anywhere in the world within eight years. The entire market for land transport will switch to electrification, leading to a collapse of oil prices and the demise of the petroleum industry as we have known it for a century.
This is the futuristic forecast by Stanford University economist Tony Seba. The professor’s report, with the deceptively bland title Rethinking Transportation 2020-2030, has gone viral in green circles and is causing spasms of anxiety in the established industries.
Mr Seba’s premise is that people will stop driving altogether. They will switch en masse to self-drive electric vehicles (EVs) that are 10 times cheaper to run than fossil-based cars, with a near-zero marginal cost of fuel and an expected lifespan of 1 million miles (1.6 million kilometres).
Only nostalgics will cling to the old habit of car ownership. The rest will adapt to vehicles on demand. It will become harder to find a petrol station, spares, or anybody to fix the 2000 moving parts that bedevil the internal combustion engine. Dealers will disappear by 2024.
Cities will ban human drivers once the data confirms how dangerous they can be behind a wheel. This will spread to suburbs, and then beyond. There will be a “mass stranding of existing vehicles”. The value of second-hand cars will plunge. You will have to pay to dispose of your old vehicle.
It is a twin “death spiral” for big oil and big autos, with ugly implications for some big companies on the London Stock Exchange unless they adapt in time.
The long-term price of crude will fall to $US25 a barrel. Most forms of shale and deep-water drilling will no longer be viable. Assets will be stranded. Scotland will forfeit any North Sea bonanza. Russia, Saudi Arabia, Nigeria, and Venezuela will be in trouble.
It is an existential threat to Ford, General Motors, and the German car industry. They will face a choice between manufacturing EVs in a brutal low-profit market, or reinventing themselves a self-drive service companies, variants of Uber and Lyft.
They are in the wrong business. The next generation of cars will be “computers on wheels”. Google, Apple, and Foxconn have the disruptive edge, and are going in for the kill. Silicon Valley is where the auto action is, not Detroit, Wolfsburg, or Toyota City.
The shift, according to Mr Seba, is driven by technology, not climate policies. Market forces are bringing it about with a speed and ferocity that governments could never hope to achieve.
“We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history,” Mr Seba said. “Internal combustion engine vehicles will enter a vicious cycle of increasing costs.”
The “tipping point” will arrive over the next two to three years as EV battery ranges surpass 200 miles and electric car prices in the US drop to $US30,000 ($40,600). By 2022, the low-end models will be down to $US20,000. After that, the avalanche will sweep all before it.
“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,” Mr Seba said.
“Global oil demand will peak at 100 million barrels per day by 2020, dropping to 70 million by 2030.” There will be oil demand for use in the chemical industries, and for aviation, though Nasa and Boeing are working on hybrid-electric aircraft for short-haul passenger flights.
Mr Seba said the residual stock of fossil-based vehicles will take time to clear, but 95 per cent of the miles driven by 2030 in the US will be in autonomous EVs for reasons of costs, convenience, and efficiency. Oil use for road transport will crash from 8 million barrels a day to 1 million.
Insurance costs to fall by 90 per cent
The cost per mile for EVs will be 6.8 cents, rendering petrol cars obsolete. Insurance costs will fall by 90 per cent. The average American household will save $US 5,600 per year by making the switch. The US government will lose $50 billion a year in fuel taxes. Britain’s exchequer will be hit at the same rate.
“Our research and modelling indicate that the $10 trillion annual revenues in the existing vehicle and oil supply chains will shrink dramatically,” Mr Seba said.
“Certain high-cost countries, companies, and fields will see their oil production entirely wiped out. Exxon-Mobil, Shell and BP could see 40 per cent to 50 per cent of their assets become stranded,” the report said.
These are all large claims, though familiar those on the cutting edge of energy technology. While the professor’s timing may be off by a few years, there is little doubt about the general direction.
Additional Reporting from The Telegraph UK