The Transportation Revolution by Al Hammond

If you are thinking of buying a new car or light truck anytime soon, you may want to reconsider. That’s because conventional gasoline-powered vehicles are about to become technologically obsolete and economically uncompetitive—which means it will become progressively harder to find gas stations to refuel them, mechanics to repair them, or buyers for used vehicles when you want to sell.

One cause of this transformation is the impending surge in the production of electric cars and trucks by every major manufacturer. These electric models—apart from the cost of the batteries that power them—are already cheaper to produce (many fewer parts) and maintain than those with internal combustion engines. The batteries themselves are about to see dramatic improvements that will increase their driving range on a single charge to 600 miles or more, reduce the time required to recharge them, increase their lifetime, and lower their cost—which in turn will make electric vehicles less expensive to buy and far less expensive to operate than comparable gasoline-powered models. Indeed, Tony Seba, a Stanford University economist, has published estimates that electric vehicles will soon be 90% cheaper to operate than gas-powered cars, taking into account the cost of fuel and repairs over the lifetime of the vehicle. All these changes add up to one thing: gas-powered vehicles may no longer make economic sense.

A second major technology-driven shift is the coming scale-up of autonomous or “self-driving” vehicles that use multiple sensors to detect roads, traffic signals, driving conditions, and other vehicles, combined with artificial intelligence tools to interpret this data instantaneously and guide the vehicle accordingly. That will save lives: human drivers make mistakes that cause nearly 40,000 fatalities and 4 million injuries per year in the U.S. alone. The proliferation of self-driving vehicles will also mean that people can potentially use their travel time to do other things.

More importantly, many people won’t need or want to buy a car at all—they will summon a self-driving vehicle to take them where they want to go. This revolution—often called Transportation-as-a-Service (TaaS)—will happen in urban areas first, reducing traffic congestion and air pollution. Already Waymo (owned by Google) has driven autonomous vehicles over 20 million miles without any accidents and has completed 100,000 self-driving rides in its test city, Phoenix, Arizona; it is buying another 60,000 self-driving vehicles to use there, which may enable it to provide half of all the local travel needs for that city. Waymo is not alone: a company called Aptiv has also completed 100,000 self-driving rides in Las Vegas and is starting service in several other U.S. cities.

For those of us that live in small towns or rural areas and can’t imagine not having a vehicle in the driveway or carport, the TaaS transformation may seem irrelevant, but we will nonetheless be affected by it. Among other changes, TaaS combined with electric vehicles will disrupt the car insurance business, lower the revenue that governments get from gasoline taxes, save families that can avoid buying a car lots of money, and lower the cost of shipping goods (because of self-driving trucks). TaaS will change the value of homes and other real estate (imagine what can be built on all those soon-to-be-empty parking lots, which in cities like Los Angeles take up nearly one-third of the space, or how much less attractive a house outside the range of a TaaS service might be to a potential buyer). It will also enable expanded home delivery services for packages or food by self-driving electric vehicles or battery-powered drones.

If all this seems too abstract, consider the following: Consumer Reports estimates it costs about $15,000 to fill up a Jeep Liberty over five years, if you drive 12,000 miles per year; the electricity to power an electric Jeep Liberty is estimated to cost less than $1,600 over the same period. And fuel savings are just the beginning. The drivetrain in a conventional car has as many as 2,000 moving parts, compared to as few as 20 in an electric car. Electric vehicles have motors, not engines, so they don’t need to shift gears… and they don’t need oil, spark plugs, air filters, coolant, or transmission fluid. A conventional car’s engine might last 150,000 miles before it needs rebuilding, but electric car motors can last 600,000 miles or more. That’s why some electric car makers warranty the drive unit for up to 8 years, with unlimited miles—something no gas-powered car can offer.

So if you could buy essentially the same car, except cheaper and 90 percent less costly to use and maintain, quieter to drive, capable of much more rapid acceleration and greater pulling power, as well as likely to last several times as long, which would you buy? That’s why many experts think that electric vehicles will account for more than half of all new cars and trucks sold in the U.S. within 5 years. And because of TaaS, the total number of cars sold is likely to be far lower—and most cities are likely to have fleets of electric, self-driving cars that can each deliver 100,000 miles of rides a year with little maintenance.

While all that’s good for us as transportation users, it means disruptive change for quite a few segments of the economy. Professional drivers—chauffeurs, cab drivers, truckers—may simply disappear. Demand for mechanics and replacement auto parts will drop. Insurance companies will have fewer accidents to pay for and will have to lower premiums, losing revenue. We won’t need as many gas stations and truck stops—electric cars will mostly recharge overnight at home and self-driving trucks don’t need to stop for food and rest. Oil companies will suffer. With less traffic on the roads, driving (or being driven by your car) may replace short-haul air traffic and the hassles of airports, to the detriment of the airline industry. On longer trips, you could simply sleep in your car’s fully reclining seats while it drives you, so roadside hotels and motels may face problems as well. And as TaaS scales up, the sales of auto manufacturers will drop; many may not survive.

That’s what disruptive technological change looks like. It happened before when cars replaced horses; now it’s happening again as electric vehicles with self-driving capabilities replace conventional cars and trucks.

Al Hammond was trained as a scientist (Stanford, Harvard) but became a distinguished science journalist, reporting for Science (a leading scientific journal) and many other technical and popular magazines and on a daily radio program for CBS. He subsequently founded and served as editor-in-chief for 4 national science-related publications as well as editor-in-chief for the United Nation’s bi-annual environmental report. More recently, he has written, edited, or contributed to many national assessments of scientific research for federal science agencies. Dr. Hammond makes his home in Chestertown on Maryland’s Eastern Shore.