You might already own the last car you’ll ever buy

Posted in: Articles, Business Insights

Since my article Autonomous RVs Will Disrupt The Airline Business, I’ve been reading and thinking more about other, significant industries that are ripe for disruption. One of the most significant is the auto industry.

Even if you haven’t been paying attention, I think most people would agree that fully electric cars are becoming mainstream, and probably (at least passively) agree that “someday” they’ll drive themselves.

What’s not being realized, or discussed – and this is critical to our economy – is how fast both things will happen. With that, you won’t own a car anymore and the amount of disruption on the North American workforce (and likely economy) will be very serious.

Much of the research, including the predictions in this article, is thanks to Tony Seba and this excellent talk he gave, published June 9, 2017. He explains how disruption works, where to find it and then goes on to make several predictions about the Auto and Energy industries. I highly recommend you check it out. I’m sharing some of his predictions but also my research showing that they are coming true.

While today, we do have technologies that when put together can drive an electric (or car) car for you, but honestly, they aren’t great and there are too many trade-offs to make buying one worthwhile for most.

However, according to Mr. Seba, the “right” technologies to fuel this disruption (pardon my pun) are getting better and when assembled together, will be poised to not only disrupt the internal combustion engine, but also the vehicle ownership industry, which, will affect several other industries.

Today’s batteries are too expensive and don’t have the range we need in North America, but they will soon store much more energy and become far cheaperLIDAR is needed to have the vehicle “sense” it’s surroundings and was prohibitively expensive, but thanks to Google, and other competitors, it will soon cost approximately $100. We also need processing power to process the surroundings and actually drive the car. NVIDIA and Google have both created processors, this year, that can handle more than 120 teraflops.

These are the technologies that need to come together to make a good, usable, autonomous electric vehicle.Now you might still shrug your shoulders and say “So what? We’ll still have cars driving around.” – and you’d be right. Let’s peel the onion back a little more. A typical car with an internal combustion engine (ICE) has approximately 30,000 parts (according to Toyota’s kid’s corner.)

Now what we really care about is moving parts, because anything that moves wears out much faster than anything that is stationary (or electronic). I couldn’t find any research to reference on the number of parts in an internal combustion engine, but as a regular backyard mechanic who works on engines all the time, I can tell you that in a 4 cylinder engine there are more than 100 moving parts, and many moving parts in the transmission as well. So conservatively we can say around 200 moving parts.

Tesla states they have 18 moving parts. With far fewer moving parts, means far less maintenance, and heck, far fewer parts to make. More on EV maintenance here. EV owners typically report only changing tires as their common maintenance regime.

So now we have the range resolved, and we recognize that owning an EV will be far cheaper on the maintenance front, we can justify buying one, even if they are more expensive than our old-fashioned Internal Combustion Engine (ICE) vehicles. You can start to see some of the disruption forming.

The need for fossil fuels goes down, and there will be far fewer mechanics, auto parts shops, gas stations. That’s a pretty significant disruption. I cannot believe the number of auto parts stores in my city, and every small town has a mechanic, or two. (These are often cornerstone businesses.)

I was unable to find an article that clearly, credibly, and un-disputably outlined the maintenance costs of an EV so I will defer to a (unfortunately) more generic article from Forbes. Which indicates that an EV should be quite a bit cheaper to maintain compared to a vehicle with a internal combustion engine. So now its pretty easy to see that most people will buy an EV, because they won’t be able to justify the cost of an ICE vehicle.

Let’s take that further to see the potential for a larger magnitude for disruption. What if these EVs become autonomous? Innovative companies like Uber, Lyft (and new players) will suddenly be able to offer rides at a fraction of what an Uber ride costs now. Think that’s far off? A quick Google Search will show multiple predictions that we will have fully autonomous vehicles the first part of the 2020 decade. Here’s just one but you can do your own search.

Once this happens and you will be able to take an Uber at a fraction of the cost today, so owning a car, for most people becomes unjustifiable. And when it does, the ICE vehicle that you own today becomes worthless. A big part of the auto industry collapses, oil sands projects will collapse, expensive political minefield pipelines will be gone. This will affect the global economy in a big way. Any economy based on oil and  gas will collapse. … and its happening fast. So fast that the referenced pipeline project will probably never ship a drop of oil.

Still don’t believe me? Check out Waymo which is here, driving (itself) around, today. I happened to be behind one in traffic recently. Just think of the impact this will have, both positive (environment? convenient?) and negative (economic) on the world and how prepared we are for it.

This type of innovative thinking is highly encouraged here at Pythian. Does that sound like you? Why not check out our career page? Want to obtain some for yourself? I’d love to discuss how my team and I can help your business adopt trans-formative, disruptive technologies. Now it’s your turn. Let’s continue the discussion below.

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About the Author

Director of Consulting
Chris Presley loves order—making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion with budding DBAs as SQL Server instructor at Conestoga College in Kitchener, Ontario. Drawing on his strong disaster-recovery skills, he monitors production environments to swiftly detect and resolve problems before they arise. A self-described adrenaline junkie, Chris likes tackling the biggest database problems and putting out the toughest fires—and hitting the road on his motorcycle.

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