Times are changing in the automobile industry and it’s not looking good for Ford, Chrysler, and GM.
With Google and Tesla teaming up to build a driverless car, and ridesharing services like Lyft and Uber becoming more ubiquitous, a future without personal cars has become more of a reality in the last several years.
And a driverless society is actually a lot closer than expected. That’s if a recent report is to be believed.
This report from Zack Kanter predicts that the big automakers will be bankrupt and out of business by 2025, when autonomous cars will be the norm. By 2030, most all traditional cars will be off the road — dude, that’s just 15 short years from now.
The article references a report from PricewaterhouseCoopers predicting the number of vehicles on the road will be reduced by 99%. The impact won’t take any prisoners. It just won’t be the automakers and their millions of employeess, but think of auto insurance, auto finance, parking, car rental industry, not to mention the oil companies and thousands of gas stations.
Disruptive innovation does not take kindly to entrenched competitors – like Blockbuster, Barnes and Noble, Polaroid, and dozens more like them, it is unlikely that major automakers like General Motors, Ford, and Toyota will survive the leap. They are geared to produce millions of cars in dozens of different varieties to cater to individual taste and have far too much overhead to sustain such a dramatic decrease in sales. I think that most will be bankrupt by 2030, while startup automakers like Tesla will thrive on a smaller number of fleet sales to operators like Uber by offering standardized models with fewer options.
Obviously a shift like this is enormous in its impact, a lot of which will be viewed negatively with millions of jobs eliminated, but it’s not all doom and gloom. The other side of the coin is there’s a lot of benefits to having autonomous cars:
Morgan Stanley estimates that a 90% reduction in crashes would save nearly 30,000 lives and prevent 2.12 million injuries annually.23 Driverless cars do not need to park – vehicles cruising the street looking for parking spots account for an astounding 30% of city traffic, not to mention that eliminating curbside parking adds two extra lanes of capacity to many city streets. Traffic will become nonexistent, saving each US commuter 38 hours every year – nearly a full work week. As parking lots and garages, car dealerships, and bus stations become obsolete, tens of millions of square feet of available prime real estate will spur explosive metropolitan development.
And the benefits don’t stop there:
The environmental impact of autonomous cars has the potential to reverse the trend of global warming and drastically reduce our dependence on fossil fuels. Passenger cars, SUVs, pickup trucks, and minivans account for 17.6% of greenhouse gas emissions – a 90% reduction of vehicles in operation would reduce our overall emissions by 15.9%. As most autonomous cars are likely to be electric, we would virtually eliminate the 134 billion of gasoline used each year in the US alone. And while recycling 242 million vehicles will certainly require substantial resources, the surplus of raw materials will decrease the need for mining.
That’s if you believe in global warming.
The biggest loss is for those millions of people that will lose their jobs. Yes, there will be new jobs created with this new reality, but will the autonomous car industry be able support millions of unemployed auto workers?
But the idea of a more efficient society opens other doors:
But despite the job loss and wholesale destruction of industries, eliminating the needs for car ownership will yield over $1 trillion in additional disposable income – and that is going to usher in an era of unprecedented efficiency, innovation, and job creation… most exciting for me are the coming inventions, discoveries, and creation of entire new industries that we cannot yet imagine.
I dream of the transportation cloud: near-instantly available, point-to-point travel. Ambulances that arrive to the scene within seconds. A vehicle-to-grid distributed power system. A merging of city and suburb as commuting becomes fast and painless. Dramatically improved mobility for the disabled. On-demand rental of nearly anything you can imagine.
The idea of the driverless car is a technology that can’t come quick enough. I just hope it isn’t Uber leading the way.