Myth: It is impossible to convert the entire global road transportation fleet to electric vehicles.
False. The global vehicle fleet turns over roughly every 20 years.
As in other disruptions throughout history, once the new technology becomes overwhelmingly economically competitive, it will naturally replace the older technology as market adoption follows an s-curve. Today, EVs have reached parity and now represent better value for money than ICE vehicles, which means fleet turnover will naturally result in electrification as well.
Furthermore, the promise of autonomous driving technology will further accelerate the pace of adoption because electric and autonomous technologies are complementary. Vehicle utilization will thus shift substantially away from private ownership toward Transportation-as-a-Service (TaaS) provided via “robot taxis”, or "robotaxi's" for short.
History also shows that supply chain constraints are only ever temporary for materials that are not fundamentally scarce. Recent supply chain bottlenecks in batteries that were exacerbated during the COVID-19 pandemic, for example, have already begun to yield as new investment expands supply to meet demand.
Explore the evidence...
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It was possible for the entire horse and cart industry to be converted to internal combustion engine (ICE) cars within 10 years, and the same will happen as EV's disrupt ICE cars. Phase change disruptions have occurred again and again throughout our history. Read our blog post to learn more about historical cases of disruption, where decision makers failed to adapt to disruption
- The technology convergence that led to the disruption of the horse and cart by internal combustion engine vehicles occurred rapidly in the 20th century, and can provide a historical example for how disruptions affect market dynamics. Read p15-17 of our report Rethinking Humanity to learn more about this historical example of disruption within the transportation sector
- 10% of new car sales are EVs in all major markets... The disruption is inevitable and the transformation is already happening. EV's taking over ICE vehicles is the first phase of the disruption. The next phase is the rise of Level 4 autonomous electric vehicles (A-EVs)...Watch RethinkX co-founder Tony Seba discuss this in more detail here
- In this blog post we explain how we can decarbonise road transport efficiently and cheaply using incentives: read here
- Learn more about the scale and speed of A-EV adoption worldwide in p27-30 of our report
- Find out more about the economics behind AEV & Transport as a Service (TaaS) adoption in p15-19 of our report
- Find out how policy makers can accelerate this conversion and transition on p26 of our report
- The scale of the cost differential will be the key factor in the global disruption, as consumers choose TaaS over independently owned ICE's. Read more on p57 of our report Rethinking Transportation illustrates our cost methodology.
- TaaS (shared A-EVs hailed on demand) will rapidly replace the model of individual car ownership and with it the combustion engine. Electric vehicles (trucks, vans, buses, and cars) can drive half a million miles (soon to be one million) as opposed to around 140,000 miles for ICE vehicles. This means fleets will also have to go electric because the per-mile cost of EVs is one third (soon to be one sixth) the cost of ICE transportation in high-utilization models. Companies like Amazon and Fedex will have no choice but to quickly replace their whole fleets with electric trucks and vans for purely economic reasons. Read more about the disruption across foundational sectors on p45-47 of our report Rethinking Humanity
- In this video, Director of Research Adam Dorr describes the transportation disruptions cost curves; how adoption of EVs is growing explosively and how Tony Seba, RethinkX Co-Founder’s original predictions were, in fact, correct
Witness the transformation
The disruption of the transportation sector by robo-taxi's (A-EV's) and transport as a service (TaaS) is inevitable. In common with other technology-driven disruptions, the shift to TaaS will be non-linear and follow an S-curve, where TaaS will become progressively cheaper and improve its functionality, while ICE vehicles become ever more expensive to operate and harder to use.
Learn more about the disruption and transformation of the transportation industry here
Published on: 12/07/23
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