Futurists make predictions. That’s what they do. Sometimes they are right; sometimes they are wrong. As futurists go, Stanford economist and RetinkX founder Tony Seba has a pretty good track record. He predicted the solar energy boom at a time when prices for solar power were 10 times what they are today. His latest report predicts two things. One, he says that by 2030, 95% of people won’t own a private car, killing off the auto industry. Two, he predicts electric vehicles will devastate the global oil industry by the same date.

Tony Seba on auto industry

Death Of The Auto Industry

“By 2030, you probably won’t own a car, but you may get a free trip with your morning coffee. Transport-As-A-Service (TaaS) will use only electric vehicles and will upend two trillion dollar industries. It’s the death spiral for cars (and the oil industry), he says. “We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history. But there is nothing magical about it. This is driven by the economics.”

“A-EVs (autonomous electric vehicles) engaged in TaaS will make up 60 per cent of U.S vehicle stock. As fewer cars travel more miles, the number of passenger vehicles on American roads will drop from 247 million in 2020 to 44 million in 2030. Using TaaS will be four to 10 times cheaper per mile than buying a new car, and two to four times cheaper than operating an existing paid-off vehicle, by 2021.

“The cost of TaaS will be driven down by several factors, including utilization rates that are 10 times higher; electric vehicle lifetimes exceeding 500,000 miles; and far lower maintenance, energy, finance and insurance costs. The average American household will save $5,600 per year by giving up its gas powered car and traveling by autonomous, electric TaaS vehicles.”

If 70 percent fewer passenger cars and trucks are manufactured each year, global automaker supply chains will shrink to a fraction of their current size. Seba believes the auto industry, including car dealers, service providers, and insurance companies, will suffer “almost complete destruction.” Traditional auto industry leaders like Ford and General Motors will either become assemblers of A-EVs or make the transition to being TaaS providers. Many car makers are already preparing for the transition by investing in ride hailing and car sharing services like Lyft.

Death Of The Oil Industry

Seba says the impact on the oil industry will be “catastrophic.” He predicts, “Global oil demand will peak at 100 million barrels per day by 2020, dropping to 70 million barrels per day by 2030. This will impact different companies and countries disproportionately — and in many cases, dramatically — depending on their exposure to high cost oil,” reports North American Energy News.

Seba’s vision has implications beyond the auto and oil industries. There is an active and growing movement to pressure institutional investors to divest themselves of their fossil fuel holdings. Many of those institutions are pension fund managers who are charged with maximizing the return on investment realized by the fund’s holdings. Professional managers are reluctant to mix politics with economics, but now they may have a purely economic reason to dump their fossil fuel holdings — they are about to become worthless, which will cost the beneficiaries dearly.

Predicting The Future Is Hard

Hindsight is always 20/20 but foresight is fraught with danger. If predicting the future was easy, we would have all bought Tesla at $31 and loaded up on Apple 20 years ago. Seba does not offer any guarantees with his prognostications, but his projections have to be given some weight. Right now, a cold breeze is beginning to blow through many board rooms around the world. Political pressure to do the right thing for the environment may have only limited success, but economics could destroy both the automotive and fossil fuel industries in a relatively short period of time.

Source: RenewEconomy