Peak Oil Usage

[mauser96]

Saul agree about the bad news for some companies. But it will take decades., and I am not into shorting. Any positive idea stocks beyond NVDA and TSLA?

Re collapse of auto repair shops posted by other. Cars have thousands of moving parts only some of which will be simplified by electrics. There are still lots of things to go wrong. In fact thinking back over my last few cars these involved the steering, the brakes and the A/C .
Repair shops and dealers will lose much of their most profitable business , routine servicing which can be handled by their least trained (cheapest to hire) employees. But mechanics will still be needed.

For the general collapse of public evacuation transit look at Katrina. Autopilot cars might do better, no drivers to desert their jobs. OTOH road signals ,stoplights etc may be down. I doubt if autopilot could handle going into the median to get around fallen trees, judging whether water is too deep to drive through ,pushing stalled cars off the road, etc.

I wonder how many of those posting about the near 100% death of car ownership actually own homes in rural or far out suburban areas. Or have a second vacation home in the woods or on a lake. Needs (maybe more importantly wants) are very different for a NYC resident than for somebody living in Summertown TN (population 866) or Savannah TN (population 6900). Or even up to Nashville TN size.

Ownership and lack of crowds counts.

[Goofyhoofy]

They will know that at 7 AM five people on my street need a ride to work and that at 8 AM another ten people need a ride. Those vehicles will be ready and waiting to pick up their owners.

No, they will know that John leaves at 7:00, but today he’s not going til 7:30 because he has to wait for the baby sitter. Bill isn’t going in at all because he’s sick, Mary needed to go early because of an important meeting, and Harry got fired yesterday, so he’s not going in ever. Over a very large dataset (city) those fluctuations might smooth, but over very small ones they do not. So either there are extra cars sitting around ‘just in case’ or you get a text message saying ‘Misplaced demand algorhythm today. We’ll be there in 5 minutes, we hope.’

A few of those and you’ll go back to private ownership, assuming you can afford it.

P.S. ‘every 40 seconds’ is a joke. You can’t get to the connector road to my neighborhood from my house in under two minutes. You can’t get to the nearest highway in under 5. You know what’s growing? The suburbs. You know what’s shrinking? The urban core of the cities.

[Goofyhoofy]

First, autonomously driven cars will be able to go faster on the same roads, because you won’t have slow pokes in the left lane, rubber-neckers, etc.

Fallacy… until you have 100% autonomous, you are going to travel at nearly the same speed you do today. With near the same accident rate because there are still humans in the way.

Highways are constrained by width. If there’s a Model T in the lane ahead, you go the same speed as the Model T, at least until you can safely pass. On a two lane road, that’s never. On a 4-lane road, you hope there’s not a truck in the next lane, or another caterpillar-of-cars you can’t break in to. The fastest runner in a one-lane race only gets to run as fast as the slowest runner, and until you achieve near universal compliance with ‘autonomous’ that is decades and decades away. (The average car lasts 17 years, meaning virtually all cars being sold today -none ‘autonomous’ - will still be on the road in 2035. We’ll be lucky to see L5 in 10 years, and then it will be an expensive option, to even that will take a decade to penetrate and work it’s way down to most. Maybe … Maybe you will see some of this by 2050. Maybe. More likely 2060 to 2070 - not for the first autonomous cars, but for the last, which means the system can operate efficiently and the benefits apply.)

[Goofyhoofy]

We all own cars that sit in parking lots or in our driveway 96% of the time.

This sounds like one of those convincing statistics that isn’t. My dishwasher is unused 99% of the time, but that doesn’t mean I’m going to share it with others. I am wealthy enough to own my own, and it’s mine. Likewise flat screen tv, cell phone, and -not to put too fine a point on it- but bedroom, RV, garage, power tools, and swimming pool. (I note those are big, unused, and expensive, yet there are more and more of them, even as ‘shared’ pools have been available for a century.)

What if you are saving $5,000 per year by not owning a vehicle.

See ‘swimming pool’, above.

Having one or two extra vehicles in a neighborhood, parked and ready,

Hmmm. We don’t allow on street parking. And it’s a two lane road in any direction for 7 minutes. Are they going to rent space at the corner gas station. (I know, I know, those will be out of business soon. Not. Quite profitable - just not on the gas. Exxon (Shell, BP don’t want to own them because it ties up capital in 10,000 tiny businesses which they have to manage. Not their thing.)

I know one exec who Ubers to/from work every day precisely to be able to do work during his commute.

So do I. He still has two cars. Well three, actually, but who’s counting?

OK, fascinating thread, but the plane is about to leave. See you on the other side (Yeah, I’m sharing the plane, but trust me if I could afford my own I’d be there, too.)

[qazulight]

Saul,

You are a successful investor. I am an extremely unsuccesful investor.

I used this type of analysis to lose money in a bull market and more in a bear market.

Show me a bussiness making money. That is what I an interested in.

Cheers
Qazulight

“Show me da money!”

[ajm101]

Pipelines will still be needed. How does everyone charge their electric vehicle? Unless all power plants go nuclear, natural gas going to be needed and utilized.

Until alternatives are available natural gas will be needed for residential and commercial heating, plastics precursors, and ammonia production for fertilizer (Haber-Bosch process).

[btresist]

Anyone actually living in the country would feel completely isolated and cut off without their OWN means of transportation.

A good argument for owning one car. But the availability of TaaS makes the cost/benefit of owning a 2nd or 3rd car less appealing.

But to run your kids three blocks over to go swimming at a friend’s on the spur of the moment…And you stay and talk to the other adults for ten minutes and then need a car to head back…And what if come home from the store and you have to run back because you discover you forgot something…there’s an emergency meeting of parents at the High School, or a make-up football game, or whatever, and there are only a fraction of the needed cars available.

Again, yours is an argument for owning one car, but not multiple as is the norm today. Plus, for all your examples, all one really needs is a glorified golf cart for driving around the neighborhood. The need for soccer moms/dads to buy SUVs for perceived safety reasons disappears. That alone is a pretty big change.

THIS WILL NEVER BE THE ONLY TRANSPORTATION. PEOPLE WILL ALWAYS KEEP THEIR OWN (ELECTRIC) CARS.

Perhaps. But it suggests that privately owned cars may soon not be the primary mode of transportation.

[btresist]

A few of those and you’ll go back to private ownership, assuming you can afford it.

Some will feel this way. But you ignore the benefits of not owning a car. No more time taken from work bringing the car in for scheduled service or, worse yet, unscheduled repair. Anybody ever start the work day off with a dead car battery in the middle of winter?

Point is that a lot of people will choose TaaS over car ownership. The more that do, the fewer amenities will be available for those that do own cars. As more TaaS cars get refueled/recharged and repaired at central facilities there will be fewer repair and refueling/recharging stations for the general public. In other words, there is a feedback loop here and it works against car ownership.

[Smorgasbord1]

Cut down on cars? Next time I find a chick who gets excited to see my stamped Uber app. Not.

I would advise not investing based solely on what you like, or even what an older generation likes. It’ll be more profitable to see what the growing consumer generation likes.

In general, the younger “chicks” of today care less about a man’s car than the “chicks” who would even look at my aging face & body. My 25 yr-old son doesn’t give a whit about owning a car - when I was 25 I was into convertible Triumphs and Jags and did my own wrenching.

The younger generation is more about experiencing than owning. They’d rather take an Uber to the lake, rent some jet skis, record the whole thing with GoPro clones, and then edit and post the video online from the back seat of the Uber ride home - as opposed to my generation’s owning, trailering, cleaning, maintaining, and insuring their own Jet Skis. Importantly, during this next decade, they’ll be more of them as consumers than those of us still alive as consumers. It’s more profitable to follow the trend.

In the early 1900’s when automobiles were first on the scene, there were many who made fun of cars and their unreliability. Watch/read The Magnificent Ambersons were they make fun of the automobile tinkerer as he gets stuck and shout at him: “Get a Horse!”

It’s likely that we’ll look at ICE vehicle ownership like we look at house maids today. Read this article: https://www.theatlantic.com/business/archive/2015/09/decline… That has shifted from being pretty commonplace to being reserved for the uber wealthy.

These are the same sort of prognostications that picked “peak oil” something we use to talk about all the time, just a few years ago. I scoffed mightily at that one. And I have not heard anyone talk of peak oil for years now.

This is a really lame argument. You group the current people making a prediction with a completely different group of people who made a different prediction some time ago. Unless you can find me something where the authors of the ReThink paper also wrote about Peak Oil, your argument is lame. I could just as easily point to a prediction that did come to pass and group the ReThink people with that.

What’s interesting about Peak Oil being delayed (thanks to Fracking, btw) is that despite the current and expected medium-term cost of oil remaining low, electric cars are gaining in popularity and demand. Some prognosticators claimed that unless/until gasoline was $5/gallon or higher on a consistent basis that electric cars would not take hold. They appear to be wrong, because they didn’t acknowledge the battery price/kWh trend would be as steeply downward as it’s been.

For us here on this board, in what to invest is the question. Those who didn’t see the EV trend coming might have invested in Ford. Those who did see it coming invested in Tesla. If you deny Transportation as a Service, in what companies do you invest, and conversely, if you believe in it, in what companies do you invest?

[Smorgasbord1]

People living in the country…Are they going to do without a car of their own? IT JUST WON’T HAPPEN.

Wikipedia (https://en.wikipedia.org/wiki/Rural_America) claims that only 15% of the US population lives in rural areas, and even that is declining by about 30K people per year while urban populations are growing at about 2 million per year.

If something works better for 85% of the population, that’s a trend in which I want to invest.

Did you read the report? Here’s what is says on this:
“Adoption will start in cities and radiate outward to rural areas. Non-adopters will be largely restricted to the most rural areas, where cost and wait times are likely to be higher.”

THIS WILL NEVER BE THE ONLY TRANSPORTATION. PEOPLE WILL ALWAYS KEEP THEIR OWN (ELECTRIC) CARS.

Indeed, the report says that only 60% of vehicles will be autonomous. But the other 40% will account for only 5% of the miles driven.

The report says this about changing people’s behavior:
“Behavioral issues such as love of driving, fear of new technology or habit are generally believed to pose initial barriers to consumer uptake. However, Pre-TaaS companies such as Uber, Lyft and Didi have invested billions of dollars developing technologies and services to overcome these issues. In 2016, Pre-TaaS companies drove 500,000 passengers per day in New York City alone.1 That was triple the number of passengers driven the previous year. The combination of TaaS’s dramatically lower costs compared with car ownership and exposure to successful peer experience will drive more widespread usage of the service. Adopting TaaS requires no investment or lock-in. Consumers can try it with ease and increase usage as their comfort level increases. Even in suburban and rural areas, where wait times and cost might be slightly higher, adoption is likely to be more extensive than generally forecast because of the greater impact of cost savings on lower incomes. As with any technology disruption, adoption will grow along an exponential S-curve.2” (bolding mine)

What does this mean for investing?

From the Executive Summary:
"The TaaS disruption will have enormous implications across the transportation and oil industries, decimating entire portions of their value chains, causing oil demand and prices to plummet, and destroying trillions of dollars in investor value — but also creating trillions of dollars in new business opportunities, consumer surplus and GDP growth.

And from the report body:
Savings on transportation costs will result in a permanent boost in annual disposable income for U.S. households, totaling $1 trillion by 2030.

Productivity gains as a result of reclaimed driving hours will boost GDP by an additional $1 trillion.

Today’s cars won’t be worth anything as used cars: Nearly 100 million existing vehicles will be abandoned as they become economically unviable.

Demand for new vehicles will plummet: 70% fewer passenger cars and trucks will be manufactured each year. This could result in total disruption of the car value chain, with car dealers, maintenance and insurance companies suffering almost complete destruction.

Infrastructure such as the Keystone XL and Dakota Access pipelines would be stranded

Conventional energy and transportation industries will suffer substantial job loss. Policies will be needed to mitigate these adverse effects.

The TaaS transport system will reduce energy demand by 80% and tailpipe emissions by over 90%. Assuming a concurrent disruption of the electricity infrastructure by solar and wind, we may see a largely carbon-free road transportation system by 2030.

[mauser96]

if you believe in it, in what companies do you invest? a key question that has mostly gone unanswered
It will not be either/or but some mix ,and anyway is nearly a decade off into the future.
Each member of a generation is unique, the few 24 year olds I know do like their cars. Though they like Uber when they have been drinking. Maybe it’s a Southern thing but even the ones who have no personal use for one admire fancy pick up trucks…

Predicting is easy, doing it correctly is hard. Make enough of them and people may forget your failures. Being persuasive and articulate is the key, nobody can prove you wrong about what hasn’t happened yet.
It’s much easier than saying "I think stock X will go lots higher soon, I am a buyer at Y price, and here are my reasons. Because the answer to your correctness will come soon.

The only “futurists” who got most of it right may have been the Tofflers (Future Shock) .I wish I could find a modern day equivalent.

https://www.fastcompany.com/1695307/future-shock-40-what-tof…
Tofflerisms:
They predicted the “electronic frontier” of the Internet, Prozac, YouTube, cloning, home-schooling, the self-induced paralysis of too many choices, instant celebrities, and the end of blue-collar manufacturing. Not bad for 1970.

“Change is not merely necessary to life — it is life.”
“Technology feeds on itself. Technology makes more technology possible.”
“The illiterate of the future will not be the person who cannot read. It will be the person who does not know how to learn.”
“Change is the only constant.” (I bet you’d forgotten who said that.)

[Smorgasbord1]

until you have 100% autonomous, you are going to travel at nearly the same speed you do today. With near the same accident rate because there are still humans in the way.

Just as we have Carpool lanes today (and in SoCal they’re even sometimes blocked off with concrete dividers), we’ll have Autonomous Only Lanes and eventually Autonomous Only Highways in the future. You will still be able to drive your 2017 Corvette from LA to SF, but you won’t be able to take Highway 5, you’ll have to take surface streets, and as others have pointed out, bear the way higher cost of insurance.

We’ll be lucky to see L5 in 10 years, and then it will be an expensive option, to even that will take a decade to penetrate and work it’s way down to most. Maybe … Maybe you will see some of this by 2050. Maybe. More likely 2060 to 2070 - not for the first autonomous cars, but for the last, which means the system can operate efficiently and the benefits apply.)

On what data are you making those predictions? The Rethink authors provide data to backup their predictions.

Have you seen this: https://www.inmotionventures.com/movement-disrupted/ ? There’s a photo of the NY Easter Parade in 1900, with many horse driven carriages and ONE automobile. Scroll down to the 1913 photo of the NY Easter Parade, with many automobiles and I couldn’t spot even ONE horse-driven carriage. Even people who liked automobiles back then said things like “I do not believe the introduction of motorcars will ever affect the riding of horses.” (British MP, John Douglas-Scott-Montagu)

That was a 13-year change over a 100 years ago. Things move faster today. How quickly did we migrate from film to digital? From cell phone service being charged by talk minutes to data bytes transferred? Read the report, but the basic argument is that since this provides both more convenience and far less cost, the change will happen quickly. The US went from more than 50% coal to less than 33% coal in 18 months - not because of regulation but because of costs. When things are cheaper, the change to them happens really quickly.

The average car lasts 17 years, meaning virtually all cars being sold today -none ‘autonomous’ - will still be on the road in 2035

First, Automobile manufacturers do pay any attention to making a car last, much less plan on support it, beyond 10 years. Second, when the new AEV vehicles cost less to own and run than a 10 year old car, no-one’s going to want that old car.

[Smorgasbord1]

My dishwasher is unused 99% of the time, but that doesn’t mean I’m going to share it with others.

You’re looking at this the wrong way. It’s not Owning vs Sharing, it’s Owning vs Service.

The correct analogy is: If there was a DaaS (Dishwashing as a Service) available to you, and it worked such that you tapped a button on your phone and your dishes got cleaned and put in the cabinet for a price that was cheaper than owning and operating your own dishwasher, and obviously less work than loading and unloading your own dishwasher, why wouldn’t you use it?

Many us already use LaaS: Laundry as a Service. It’s just not worth my time to clean and especially iron my own shirts when I get them done for a bit over a buck and they’re picked up and delivered to my workplace.

Important to how fast this change will happen is the extremely low cost to try the new way. You don’t have to sell your existing cars to try Uber out, just download an app and enter a credit card number. Same for TaaS - people will try it out for some unusual circumstance. They’ll like it. Some will decide to not have a car and use TaaS instead. That number will grow.

The people who are now Ubering to/from work still own cars, although I wouldn’t be surprised if they sell one of them. The report says 40% of the cars in 2030 will still be the old fashioned kind. But, those cars will account for just 5% of the miles, and the used market for them will be tiny. Unless they’re special in some way, no-one’s going to want to buy them as a used vehicle when TaaS is cheaper and more convenient.

[Smorgasbord1]

I wrote:
First, Automobile manufacturers do pay any attention to making a car last, much less plan on support it, beyond 10 years.

That should have been:
First, Automobile manufacturers do NOT pay any attention to making a car last, much less plan on support it, beyond 10 years.

[XMFBreakerTinker]

I may be old (not that old), but I do occasionally date a millennial. They are no different than anyone that came before them. Like baby boomers, they were unique, different, out to change the world. Unlike baby boomers they came of age in an economic downturn, and like the baby boomer’s parents they are more conservative financially.

However, in the end, they will settle in just as their parents settled in. They will roll their eyes at their children, and they will buy houses, cars, etc. They were just delayed by the economic downturn.

I don’t usually see eye to eye with Goofyhoofy, but he got it just right when he said that non dense urban people will give up their cars. I will refer you to his posts on this thread. Nothing has changed in regard to the generations.

I am invested in NVDA, I was invested in TSLA back in the TSLA catches fire days as that was utterly ridiculous and a wonderful time to buy.

I would never invest in any of the legacy automobile companies. What is a measurable is that Goldman Sachs (or was it Morgan) came out and gave Waymo a $70 billion valuation if it were to go public (despite having not a single customer). I figure that puts NVDA’s valuation, as the clear leader in autonomous driving enabling technology, into better perspective. We shall see where it goes if Tesla succeeds in its plans by year end to drive coast to coast with no human intervention, except to hit the start button (which in a Tesla, you don’t really need to do, so it is just a “go” button which you can probably just speak to the system to do anyways).

But the point is, we always try to look at the extremes of each new generation, each trend, assume they are different, when in the end, most people will be pretty much the same as their parents, with the same wants, needs, desires, and way of doing things and we always over-extrapolate from the extreme.

In regard to peak oil. The reason why that was always an inane prediction is because people are adaptable if the free market allows it. Pricing power will decrease or increase demand, driving habits will be influenced by price. Weight of cars etc. as well. At the same time if the price of oil goes up, so will the intensity of investment in oil drilling. It was an absurd target to pick to begin with as it ignored the dynamism of human economic behavior when it responds to price.

It is this same sort of mentality that goes into the argument that everyone will be happy not owning a car. I will refer you again to Goofy’s posts.

Tinker

[XMFBreakerTinker]

Btw/ somewhat of an analogy, I did get rid of my on premise server for my business and now have everything in the cloud. There were trade offs but I was dang glad to be rid of everything that comes with server ownership.

However, if I am working so hard to make surplus money, why am I not going to spend it on my own wheels? Wheels equal freedom, if nothing else.

Maybe 2050. Lord know what the world will be like in 2050.

And I do not deny that there will be a trend towards more people choosing not to own their own car. That makes sense, particularly in lower to lower middle class people, and moving into the middle class in some areas, with higher predominance of this in heavy urban areas. That is going to happen.

But this extreme conclusion of no private automobile ownership…

That does remind me of a bet with the Club of Rome, made in the early 1970s about Malthusian scarcity and how the world was up the beep creek because we would run out of resources from over population. Similar to the peak oil predictions that came later.

Who won? Given that commodities, food, clothing, shelter, housing, et al., are all far more available now, and less expensive now, in real terms, than they were back then, the famous and influential Club of Rome was completely wrong.

These predictions deny the power of the market, through pricing mechanisms, and the dynamic ability of humans to adapt, if pricing mechanisms and regulations don’t get in the way, to changing circumstances. We did not survive the ice age because we were stupid.

Tinker

[Smorgasbord1]

They will roll their eyes at their children, and they will buy houses, cars, etc.

This is a short term perspective. 100 years ago a much smaller percentage of the population owned their own home. Mortgages were rare. Today people buying a home outright are rare.

Go back to the late 1800s when almost everyone was involved in some form of agriculture, but by well before the late 1900s less than 5% of the US population was involved in agriculture.

To think that car ownership won’t change is being blind to the very real trend. And remember, the report doesn’t say that no-one’s going to own cars in the future. It says in 2030 that 40% of the cars will still be non-autonomous. That’s a massive shift. Even if every one of the 15% of the population that lives in a rural area still owns the same number of vehicles and never uses TaaS (never?), that’s many millions of vehicles changing, if not going away.

The question for us is how to profit off of the potential eventuality that within 13 years 60% of the (fewer total) cars will be AEVs, mostly owned by companies selling TaaS. It’s a warning not to invest in automobile insurers, or auto parts places (a couple TMF recommendations come to mind there), or truck driving schools, etc. What to avoid is easy - in what to invest is harder.

PS: As for Peak Oil, the obvious rejoinder is that the Stone Age didn’t end because we ran out of stones. Same for copper, bronze, steel, etc. We still use tons of steel, but I don’t see anyone suggesting we invest in steelmakers today. The Oil Age won’t end because we run out oil, but because we’ll find better alternatives.

[BGM]

What to invest in after reading all these great post. Well how about Oneok (OKE). Gas pipeline and more. Was suggested here some time ago. A little out of favor at the moment.

Bruce

[mauser96]

new AEV vehicles cost less to own and run than a 10 year old car, no-one’s going to want that old car. t

the new AEV will cost a lot more to buy, and that is what many people are forced to consider by economic necessity.It s does not matter how much it costs to run s new $30,000 car if you have poor credit and only $6000 to spend to buy one.

I do agree autopilot will come way faster than most expect. It is a huge advance,. In a decade or so selling a car without AP to the masses will be like trying to sell an orange colored non A/C stock shift car. I once saw a lemon yellow Aztec, the ugliest car I can remember. I bet the owner got a great deal when he bought it. And money losing great deals will be the only way they will be able to sell anything except the most base car if it does not have autopilot. Especially if it is gas powered, by then costing more to buy as well as to run.

Where are the profit suggestions? I already own NVDA and TSLA. Both partly based on eventual ubiquity of autonomous vehicles. But I would like more, even if I suspect development will be dominated by giants like Bosch and will rapidly become a commodity .
Maybe we should focus on users of the tech like trucking companies but I can’t come up with anything non commodity.
It’s painful to see a non profit trend . All that work (yes partly fun) to figure it out and no jackpot at the end.

[mauser96]

Laundry as a Service not working outside the home,or needing ironed shirts , I do 99% of my own laundry in my own washing machine. It’s vastly cheaper. Again different life styles result in different usage patterns. In the real world laundries and home washing machines coexist. Maybe more laundries among elite city dwellers and more washing machine among ordinary working folks. Similarly I think TaaS and ownership will coexist, just as they do today. Which will predominate remains to be seen , so far it’s just idle speculation.

TaaS will probably cut down on the number of cars many own. My second car is an old Toyota Corolla, no collision insurance, second car insurance discount, ,low mileage , great reliability and condition and it’s not even depreciating much. It costs very little to own it. I probably spend more on my dog.
For it’s uses I can not see the advantage of TaaS. I don’t commute regularly… But if it wears out before I do, and TaaS is available I might use it .Since I don’t see using the Tesla that way.

I fail to see the difference between Uber and autopilot TaaS cars except the lack of a driver will make them cheaper. And thus more desirable. But if money were everything people would not drive SUV. Or Tesla roadsters

The report says 40% of the cars in 2030 will still be the old fashioned kind. But, those cars will account for just 5% of the miles do they have a shred of hard evidence for this prediction?