Peak Oil Usage

Investment Analysis Clubs Saul’s Investing Discussions
61

Smor:“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)”

Yet, much of agriculture continued worldwide with horse/ox power and probably still does in VERY large parts of the 3rd world.

During WW1 - nearly ALL the transport on land was by horse.

During WW2 - the Germans used millions of horses…since they were short on fuel supplies…for hauling everything from guns to food wagons to supplies

So even after 40 years, horses were still around - and are today -

“That was a 13-year change over a 100 years ago.”

Well, it took at least another decade to penetrate…and of course, 99% of the ‘early’ automobile companies went bust. Starting in the 1920 era, another 90% of ‘new’ auto companies went bust…and since the 1945 era, another dozen including Hudson, Turner, American Motors, Chrysler, etc, all went BK.

So I’m sure MOST investors lost MOST of their money in the automobile industry. Even most of the suppliers went B-K.

If you didn’t luck out and buy GM or Ford, the other 99 other companies ate your money.

Not much different than the computer industry. 100 companies, many ‘innnovative’…bust…from Kaypro with the first ‘portable’ to mass market producer Tandy/Radio Shack that kick started the home PC business with the TRS-80, to Commodore, to the Vic20, Timex, NorthStar, and a zillion others. Of all that industry - hardware, only IBM survived, and it sold, at a loss, it’s PC business to the Chinese. (if you picked ‘software’ you had a better chance of ‘winning’ but there were thousands of losers as well ). What went up like a rocket in the dot com era often came down to a spectacular crash.

Smor:“Things move faster today. How quickly did we migrate from film to digital?”

Oh, about 15 years or so?

But…who made money in the digital camera business? It wasn’t most of the regular camera makers, was it? Kodak went bust.

Smor:“From cell phone service being charged by talk minutes to data bytes transferred?”

About 25-30 years…took a decade just to get from analog to digital in the US. Then took another decade. Remember, the first cellular systems went on the air 1985 or so, and large prototype systems were operating in the late 1970s in DC and Chicago.

And if you tried to ‘invest’ early in the cellular industry, you likely lost your shirt. Nearly all the original start ups and original ‘winners’ went bust. Western Union. MCI had half a dozen cities…bailed out early…(and went bust later anyway). Graphic Scanning. All fat rises from speculators…and horrific crashes. Who won in the end? Those with VERY DEEP pockets who could take a decade of red ink and survive. And buy out the competition bit by bit.

Smor:“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 US went from coal power production to NG production only because of a revolution in NG production that drove the price to extremely attractive levels. We still burn millions of tons of coal. China still burns millions and millions of tons of coal and is still completing coal power plants, and India and other countries are still building coal power plants.

As to cars…I’ll wait and see. I see enough road hazards, construction lanes that change daily or weekly, and other challenging things for autonomous cars. I suspect most people over 35 are steeped in car ownership.

You know, I’ve heard about the ‘smart house’ now for 50 years. People STILL live in the same house, built the same way as 400 years ago - stud by stud, sheet rock after sheet rock, brick by brick - or siding. 300 year old technologies. Insulated by blown in or batt insulation. With a furnace or two - natural gas or oil…or the occasional heat pump in some areas. With copper or plastic water pipes and plastic sewer pipes plumbed the same way as 200-300 years ago. Electrical wiring and outlets same as 120 years ago, with appliances and devices that plug into outlets that haven’t changed in 120 years, other than maybe a ground pin now. Circuit breakers that are 60-80 year old technology. Doors and windows - improved but still the same.

We’ve got a few more gadgets…cooking things, microwave (now 60 years old), same old refrigerator and freezer, same TV as from the 1940s other than color - same type programs…

Yeah, the world has gone ‘digital’ but your house is not much different than 200 years ago. Downstairs , upstairs, kitchen, dining room, doors, windows, bedrooms, bathrooms… just things that are functional. Same beds. Same nightstand and dresser. Same kitchen table/dining table and chairs.

You know anyone with a smart home? Oh, yeah, you can control your thermostat from 140 miles away. Big deal. Or check your security system. Minor incremental adds. same old house.

I suspect that ‘smart cars’ will have a tough start. They won’t be cheap to start ($10,000 to $15,000 in additional electronics). It will take years to get the bugs out.

And I suspect they will start in the affluent suburbs, not the cities. From rich folks homes to the business park not downtown. And I doubt there will be ‘AV’ lanes any time soon. The majority of taxpayers aren’t going to fork up hundreds of millions, per city, for a special lane for the ‘wealthy’ to get to work while they sit in traffic, plus of course, it takes years to complete those lanes and it screws up all the others while it is underway. Millennials will be happy using Uber as will many others, which will work better in the cities/urban areas and suburbs as well.

I’ve seen promotions for smart cars, jet cars, hydrogen powered cars, and everything else since I was a kid growing up in the 1950s, and almost none of it came to pass. Cars that would whisk you to work on automated highways while you ate your breakfast …which it also provided…

Maybe by 2030 -2040 we’ll see the technology arriving, but 100 million standard cars will be still on the road by 2030…and likely into the 2040 era…many might be EVs by 2040…and likely have ‘SOME’ AV functions…and intelligence…but I doubt most will be driving themselves.

It took 45 years for your cellphone to morph…and you were happy to throw them away after 3-5 years for a ‘better one’…people change cars every 10 years…they last another 10 or more…and are as functional. The only retirement of cars is due to crashes, floods, etc, where the car is ‘totaled’ by the insurance company or owner. (or real lemons like a Yugo). Or stupid government programs like cash for clinkers (really saving the auto industry in reality at taxpayer expense)

I think it will take 3-4 changes of car ownership before you see a lot of AVs seriously penetrating the market…and I doubt that it would be wise to think that buying the ‘founders of the industry’ means you’ll have good investments 15 or 20 years from now. How deep in debt is Telsa?

t.

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not only will insurance rise…

with a huge reduction in personally owned cars, how will the states pay to keep the roads maintained?

Currently, vehicle registration fees, toll roads and traffic tickets account for the majority of the funds that states use to pay for the construction and maintenance of the roads that we drive.

I could see toll roads continuing, but vehicle registration fees will drastically be reduced. Will the state impose a use tax that is part of the fee for when you request a car?

As for traffic tickets, not only will automated vehicles not need to be monitored for traffic violations but the reduction in the police force from the reduction in funds received from ticket-writing could be quite dangerous.

JK

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What replaces the gasoline tax? Roads need maintenance. This is already a known problem for California which robably has the highest concentration of EVs and hybrids.

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64

Plus, for all your examples, all one really needs is a glorified golf cart for driving around the neighborhood.

No, you would be a fool to take a golf cart on a 2 lane country road where others fly by at 50 mph, as they do around here. You need an actual vehicle with actual seat belts, headlights, and pre-tested crash crumple zones.

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?

Sure. You ever have to call a plumber because your toilet was stopped up? Did it make you think about sharing a toilet with the ToiletaaService? Ha ha ha. Maybe I could make it cheaper and easier, and you could ‘call ahead’ for a spot in line :wink:

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.

Pure dreamery in either your lifetime or your children’s. Is there some inconvenience to owning a car? Sure. There is massive more convenience than inconvenience, special circumstances aside (like urban core dwellers.) And, as I say, we are wealthy enough to own. Even millenials, someday.

They appear to be wrong, because they didn’t acknowledge the battery price/kWh trend would be as steeply downward as it’s been.

I’m not sure what you’re talking about here. The trend in battery progress has been linear, and relatively slow, not geometric as with chips or screens. Battery development happens in fits and starts, but it is safe to say there is an upper limit on how much electricity you can get out of any chemistry; unlike Moore’s law (based largely on miniaturization.) Energy is different, and chemistry only takes you so far, otherwise we’d have plastics that are 10 times stronger than Kevlar. We don’t.

Those who didn’t see the EV trend coming might have invested in Ford. Those who did see it coming invested in Tesla.

Or you might have invested in the GM Impact. Or the Chrysler TEVan. Or the Ford Ranger EV Truck. Or the Honda EV Plus. Or the Nissan Altra EV. Or the Toyota Rav4 EV. Or the REVA Electric Car Company. Or Mitsubishi, which has the iMiEV. And, of course there’s the Volt and the Leaf. (I encourage a backward glance at the Gorilla Game here…) By the way, that’s far less than half the list where you could have put money in the EV world. Easy to say “Oh, Tesla!” Well, yeah, now.

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.

Wikipedia has it correct, but wrong. Rural is declining. Urban (core) is declining. What’s increasing? Suburban, which wikipedia is counting as urban, which (for purposes of this discussion) it’s assuredly not.
**"The Myth of the Return to Cities"** https://www.nytimes.com/2017/05/22/upshot/seattle-climbs-but…

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.

There is a yawning chasm of distinction between “an Uber driver” and “an unattended car.” I can’t imagine making a prediction about autonomous vehicles based on the uptake of unglorified taxis in downtown Manhattan compared to the suburbs of America, where most people live.

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.

So you’re going to re-engineer the largest infrastructure project in the history of the world (paved roads, including superhighways)? Last research I find says there are about 1,000 corridor miles of HOV lanes in the entire country. Out of 165,000 corridor miles of highways, not including local feeders and neighborhood roads. Methinks this prediction is a little far out over its ski-tips.

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.

Sorry, another inapt comparison. People gave up horses for cars, but the infrastructure didn’t have to change (much.) A few stables were replaced with a few gasoline stations, but otherwise nuthin, and for half a century. We now have trillions of dollars of infrastructure in place. To some extent we are captive of our own history (not unlike Sears with its expensive mall locations, or AT&T with its wireline telephone system.) Making the kinds of change this study “predicts” involves massive dislocation and astonishing expense (not to mention consumer comfortability with the whole idea.) It was trivial for AT&T to gin up a cellular service, not so for Sears to disrupt itself, and surely not so to re-engineer all roads to be “fully autonomous compatible.” Some, sure. Not as many as you would like.

Read the report, but the basic argument is that since this provides both more convenience and far less cost, the change will happen quickly

I dispute that it’s “far less cost”, but then my habits may not be typical. (About 12,000 miles a year, which, ahem, is pretty typical.) How much is an Uber from Tennessee to Pennsylvania, again? Even Avis and U-Haul have figured out hefty surcharges when everybody wants to go more in one direction than another.

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.

Good answer, but let me ask you this. Suppose every individual time you wanted a clean shirt you had to call ahead, wait 20 minutes, and hope it arrived timely. Would that make you think about having your own “owned” shirt reservoir? Remember, there’s no “stocking ahead” with a ride. You need it when you need it.

To think that car ownership won’t change is being blind to the very real trend.

Oh heavens I think the ownership ratio will change, I just think it will be much slower than these dewey-eyed predictions. There’s just the turnover of the metal, for one. Is it cheaper for me to get rid of my (already paid off) car now, or 5 or 10 years from now? I live in the suburbs. Is there really going to be an autonomous (or even uber) car available to me at midnight if I need one? (I just looked: 5:00 on a Sunday afternoon. Wait: 25 minutes. There’s no business here at non-peak times because we live horizontally, not vertically with crushing population densities like Manhattan, where I just spent a week.) (Oh wait, proofreading, it’s now only 17 minutes. Still no good, at least for me.)

You never have to pay insurance for it,
Money and investment wise -1) insurance companies -Don’t own any

Of course you pay insurance, it’s just folded into the mileage cost. It’s like a renter saying “renters don’t pay property tax.” As a landlord, I assure you they do, I just don’t break it out on the lease, but trust me, they’re paying it, not me. And just for the record: insurance companies are now starting to add hefty surcharges for Tesla ownership because the cost of repair (body, but also drive train) is so incredibly much higher than ICE cars. That will change, I suppose, but not soon.

We still use tons of steel, but I don’t see anyone suggesting we invest in steelmakers today.

Whoops!

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&…

OK, maybe not rocketships to the moon, but not pie-in-the-sky thinly sourced research, either. Be careful out there :wink:

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65

“Currently, vehicle registration fees, toll roads and traffic tickets account for the majority of the funds that states use to pay for the construction and maintenance of the roads that we drive.”

Some counties in TX collect 70% of their annual revenues from speed traps. Culberson County TX is a giant county that has under 5000 people…but regularly collects a half million a year in traffic fines from 4 speed traps that run almost 24/7.

The problem of EVs will be solved by having either a fairly large registration fee for them or states will impose a ‘per mile’ charge based upon the GPS data collected in your car (or by electronically reading the odometer). Regular and hydrogen and other fuels will have a per gallon/pound charge on them as is today.

“I could see toll roads continuing, but vehicle registration fees will drastically be reduced. Will the state impose a use tax that is part of the fee for when you request a car?”

I’m sure, absolutely sure, that states will tax Uber and similar as a service - likely like the standard 8.5% that TX charges, plus our communities tack on another 5%. Plus they might wind up paying ‘road tax’ via electronically reading the odometers - annually or day by day.

“As for traffic tickets, not only will automated vehicles not need to be monitored for traffic violations but the reduction in the police force from the reduction in funds received from ticket-writing could be quite dangerous.”

Yes, more than a dozen counties in TX get 70% of their annual revenues from traffic fines. They’ll go bust. Of course, they only have a dozen police officers and they spend 99% of their time writing speeding tickets at their 4 main speed traps…and there is no shortage of speeders at the moment…they are busy. They’ll be seeing less speeding but those old cars will still be a source of $$$ for them.

They might spend time hunting for folks illegally or ‘off the books’ renting out their cars…just like some DC area police spent lots of time cruising parking lots for folks without a county tax sticker on their cars…or long time ‘out of state’ registrations used to avoid the VA tax man.

Less insurance written…but I’m not sure how many fewer accidents…people might be even more inclined to go out in bad weather knowing the ‘car should take care of them’ on icy and slippery roads or heavy downpours and flooding. Heck, and it is ‘someone else’s car’ if they get stuck in snow or ice or slide off the road on black ice…or it gets flooded out at a bad intersection…

t.

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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.

Two candidates for the future in the alternative energy field that I have positions in for the past 2 years and have discussed here previously are Enviva Partners (EVA) and Hannon Armstrong Sustainable Income (HASI)
For those that aren’t familiar with them, both EVA and HASI are profitable and paying growing dividends/distributions as they continue to grow
They might not be familiar names to most of you here now, but going forward if any of the projections being discussed here come to pass, they will probably become more familiar.
Meanwhile they are paying me handsomely to wait

b&w

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Thanks to all of you who responded regarding how my summer road trips with bicycles might be affected by independently-owned autonomous vehicles. Many of you presented ideas that were new to me, and I’m much appreciative of that. It will be fascinating to see how this plays out. And I’ll DEFINITELY feel safer as a cyclist on the road when autonomous vehicles rule.

If I work with a company that has a uniform fleet, I can probably just buy a bike rack that works with that fleet’s vehicles. If they’re smart, I’ll have to pay a surcharge because the bikes on the vehicle will increase drag, reducing miles per battery charge. It can be made to work; I’m sure it can. I still wonder whether achieving my needs will be a TaaS 1.0 reality, but you’ve helped me see a clearer path – and the potential obstructions to resisting that path.

I’m so glad I posted!

Thanks and best wishes,
TMFDatabaseBob
See my holdings here: http://my.fool.com/profile/TMFDatabasebob/info.aspx
Peace on Earth

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Maybe by 2030 -2040 we’ll see the technology arriving, but 100 million standard cars will be still on the road by 2030…and likely into the 2040 era…many might be EVs by 2040…and likely have ‘SOME’ AV functions…and intelligence…but I doubt most will be driving themselves.

Elon Musk has plans for one of his AEVs to drive across the country, from LA to New York, this year - be the end of 2017. He made that statement last year and reiterated just a few months ago that Tesla is still on track to accomplish this. The hardware that will be able to accomplish this is already in every Tesla that is sold today. And not in a high end Tesla at that, in the Model 3 which starts at 35K. My bet is it won’t be but a few years after that when almost all self-driving obstacles are overcome. Since the hardware already exists, Tesla will push out all the software updates you need over the air. So all the Tesla vehicles sold at the end of 2016 will be fully autonomous within just a few years. If Elon Musk drastically improves manufacturing like he thinks he can, he’ll be pumping out self driving cars into Urban areas with Tesla’s TaaS platform quicker than you think.

-AJ

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Btw/

There is a reason for a report like this that produces such world changing results. That reason is that a company like Uber is so far in debt, so far into its investors, that its valuation just to break even these days has to exceed, dang I forget the exact figure, but something like $50 or $70 billion, despite losing $1 billion a year or more.

Uber will continually need to get more and more from its investors, or from public investors if they ever IPO.

The only way they can do this, is to build a future scenario where an Uber like company, with its fleet of autonomous vehicles, can rule the world in an enormous fashion. Because frankly, if Uber goes public at $70 billion and needs to dilute by a $1 billion or more per year, with a decade or more until profitability, the expected returns from this valuation are not so great.

So you create a public perception that Uber (and the industry as a whole, but Uber as the leader in this industry) is the second company from the transition of the horse to the automobile.

Don’t believe me that this sort of study actually happens and is paid for investors and companies themselves? They are all the time.

The key is looking at the report, and then tossing out the hype. I know full well how disruptive the cloud is, autonomous driving is, etc. Autonomous driving may disrupt 25% or more of the jobs in this country, and around the world. How many of our jobs require a driver? A crappola load of them do.

I certainly would (and do use such services). But they do not fill my entire need and never will. As for example, today, I just decided to take my hounds out for a stroll around a randomly picked mall. No big 45 minute walk. Yesterday, however, I took my hounds out for a walk in the deep woods. 4 or 5 hours the car stood parked in a rural lot. And that car had to be there when we got back, with an air conditioner that worked perfectly (as the dogs were steaming), and the car would not be returned in pristine condition. Muddy dogs, drooling dogs as they cooled off, shedding dogs, and I guarantee you I was at least mildly perspiring (as we humans do - wonderful evolutionary advancement that we inherited the dogs cannot keep up with).

That is a car, that will be out all day, will be sweated in, drooled in, shedded in, driven through dirt and mud, and all I need to do is pay a few dollars for it? I rather doubt it.

TaaS is already an enormous business and it will continue to grow. But like laundry as a service it has its place, and its place is not removing laundry machines from our homes (yeah, I dry clean, still have my own machines).

This report is way over the top, and makes every positive connection possible. Sounds like a George Gilder report from the internet bubble.

Battery cars are upon us, and if the incumbents would get out of the way and actually really try to bring them to market, we would have lots of them (not happening, companies like GM are tanking their battery cars even as they portray otherwise, like the VOLT, sold less than 10,000 - they are losing money on battery cars). BMW is doing a little bit better. Ford doesn’t even care. Tesla cannot produce enough to make a material dent.

Conclusion: internal combustion engine will be the dominant automobile technology for far longer than you can imagine, but battery will eventually make some sort of dent. 2020 20 million cars expected to be sold in the U.S., 1% of that is 200,000. By 2020 battery cars may have a 2-3% market penetration, and almost all of that will be Tesla.

Despite this, things like autonomous driving will be upon us! I look forward to it.

Tinker

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I dispute that it’s “far less cost”, but then my habits may not be typical. (About 12,000 miles a year, which, ahem, is pretty typical.

I believe this is the crux of the issue, if it’s not far less cost then the AEV and TaaS adoption rate will proceed at a trickle, ordering on many decades. If the cost drops drastically like the report suggests and like I believe, then TaaS powered by AEVs will utterly change society and rapidly.

From the report:
As a result, transport-as-a-service (TaaS) will offer vastly lower-cost transport alternatives — four to ten times cheaper per mile than buying a new car and two to four times cheaper than operating an existing vehicle in 2021.

Of course you pay insurance, it’s just folded into the mileage cost.

The point here is that once vehicles reach full autonomy, the cost of that insurance will drop drastically, to the point where many fleet owners may choose to be self-insured. Yes, risk is still involved and obstacles will be damaged but take humans out of the equation, which I believe accounts for 90% of accidents, and the rate of traffic accidents will plummet.

-AJ

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Btw/

To reiterate, in a much abbreviated way, a week or two ago Morgan (or Goldman) came out putting a $70 billion value on Waymo (google’s TaaS product):

https://www.forbes.com/sites/alanohnsman/2017/05/23/morgan-s…

And they extrapolated by mileage, fees per mileage, etc., all numbers are WAGs, with the W standing for Wild and the G for Guess and the A equating to a wonderful beast of burden that has been given multiple nomenclatures through the years.

What there is a concerted effort to create a story so that companies like Waymo and Uber can go public and make money for their investors, their investment banks, and the parties at interest. And so much money has been invested in these companies that this only happens if these companies are second coming of the WinTel or Ford or Google or BIDU themselves. A company like ISRG, as amazingly successful as it has been will not suffice to produce an ROI for most current investors in these companies otherwise.

So take the report for what it is worth. Interesting things to discuss (as we have seen), no doubt a degree of what is spoken about will (and is) happening. Societal upheaval will result if just a portion of this comes to pass (and it will). But also keep in mind the specific purpose for these reports, and that is to create a market for the future IPOs of companies like Uber and Waymo and the enormous market values they must demand if the stake holders are to come out of these investments with ROIs intact.

In the interim, DO NOT RUSH TO INVEST SO QUICKLY. Yes Tesla, yes NVDA, but most of the companies that will be significant in autonomous driving may not even have been formed yet (or perhaps even conceived).

companies like TTD may be a beneficiary. As for example, the autonomous car becomes a place for passive passengers who are captive to advertising buys. It creates additional rooms for television programming. Streaming services, beverage sales, who knows what.

There was a time in my life (and can’t say I’m much past it) when the only time I had to get a haircut or a new suit, was if I got stuck in a small town and had to wait 4 or 5 hours for my case to be called in. I’d drive around town to find a barber, or call my tailor. With downtime and captivity comes opportunity.

But that opportunity is pre-Radio Shack at the moment for the most part.

But will be fascinating to watch. Currently we know the players. The biggest rewards will probably come from the players not even yet conceived yet.

Tinker

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Battery development happens in fits and starts, but it is safe to say there is an upper limit on how much electricity you can get out of any chemistry; unlike Moore’s law (based largely on miniaturization.)

The problem today is not with the chemistry. The problem is with the cost of that chemistry. A battery pack can be built today with a 500 mile range but clearly it’s cost prohibitive or the EV manufacturers would be doing it.

-AJ

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saul:"Bad news for gas stations. Bad news for chains like Casey’s. Bad news for high cost oil drilling. Bad news for oil rigs, pipelines, etc. Bad news for car part manufacturers. Car manufacturers will make electric cars and do fine. Maybe even make more profit per car sold (cheaper to build). But bad for car dealers who make all their money on service and repairs. Good for lithium producers? Good for battery manufacturers.

Just my amateurish analysis."

Most of Casey’s business is NOT selling gasoline. The profit is all in selling tobacco products ($$$$), lottery tickets ($$$$$) and junk food by the ton. Check the statistics. Most of these stores don’t make a lot of money selling gas.

Second, there will be a HUGE market for ‘fast charge’ electric stations - likely located at, of course, current gas stations. Remember, half the folks in this country live in apartments, park ‘on the street’ or in parking lots of buildings not wired, and likely not wired for charging, for decades to come. Plus, they too, will likely be metered. If you go somewhere in your EV, even with 200-300 mile range, and then want to head home, you might need a charge to complete the trip. Or maybe even halfway to your destination.

Until EVs can be quickly recharged in 15 min or less, they’ll be a small market.

And when they can be, folks like Casey and 7-11 and Race Track and others will step up and sell you a charge (for a couple bucks of course) and you can consume junk food, buy your lottery tickets, etc, while it charges up.

There will still be a major need for oil production. It provides the lubricating oil for the transmission and parts, wheel bearings, CV joints and everything else in your car, and is the basis for most paints, many solvents, plastics, composites, and everything else going into cars.

You never seem to mention transport - either jet - or trucks. Trucks consume one heck of a lot of fuel…hauling all the food from farm to market…and running all the machinery in the farms. And of course, flying those trillion air miles a year in jet engines. Plus river barges, tow boats, cruise ships, ocean liners hauling freight, the military machine, snow plows and construction equipment.

over 1000 products you use in your life come from oil.

Don’t write off the oil companies.

Remember, people used to say that after everybody owned a cell phone, after every kid had a cellphone, the cellphone makers would go out of business. Who would need a second and third cellphone.

Car repairs? The more complicated cars become, the more they’ll need to be repaired. Yeah, your corner mechanic, who is almost obsolete now as far as ‘engine repair’, might be gone, but you still have steering and brakes, a/c and heat, audio systems, and you’ll have a car full of highly complicated electronics and sensors by the boat load. Half the car problems today are with ‘car computers’ and ‘display screens’ and ‘dashboards’… and even if you have AVs, some will be gas or diesel ones…likely hybrids…plus of course, there will be 100 million legacy cars on the road.

Car dealers - will do just fine. AV or EV cars will wear out. The seats wear out. The interiors wear out. All the car systems wear out. The suspension gives out …the ride suffers. The rubber gaskets around windows dries out. Power windows stop working…batteries will die or need replacing.

Plus now you’ll have homes with ‘chargers’ that will fail and you’ll need mobile mechanics to diagnose and repair them. Millions and millions to maintain. Full of ‘high power’ parts likely to fail.

And no, routine serving will likely take a highly trained mechanic/electronics qualified person. . Are you going to let a 17 year old kid in for a summer job dismantle your dashboard and display, with 17 computers located behind it, and 60 connection cables, to find out why your display blinks at times, or has gone bad? Heck, I don’t even want that 17 year old fixing a CV joint or replacing the steering rack…

As to battery producers, you would have already lost your shirt trying to be a bleeding edge investor (bleeding edge). Half a dozen battery companies that went public went bust. remember A123?

So far, I’ve seen a lot of folks lose a lot of money on ‘green energy’ - solar - EVs - dozens and dozens of companies. The ones that will likely be successful are often either part of a giant conglomerate or are privately held.

http://nation.foxnews.com/obama/2012/10/20/list-36-obama-s-t…

https://www.nytimes.com/2016/04/24/business/energy-environme…

http://www.breitbart.com/big-government/2013/12/05/energy-su…

Even in the cellphone business, power houses like Northern Telecom - went bust. Ericsson lost its shirt…Nokia? Hit the skids…Motorola…sailed high then crashed…

When cellular come out…Apple wasn’t even in the radio business…and wasn’t for 15 years or more…

Big winner in cellular? Qualcomm…a company few ever heard of…before 1990…

I have no idea who the winner will be in the EV/AV field. The first is not necessarily the last standing… and Tesla has got to get pricing down to ‘consumer levels’. Not many can afford $50,000 vehicles.

or a $25,000 Prius with an added $10,000 or $15,000 in AV electronics added in.

t

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Saul,
First of all, I wouldn’t refer to your analysis as amateurish by a long shot.

One of the points I made repeatedly is how TaaS will impact the auto insurance industry and what that bodes for premiums on personally owned non-autonomous vehicles.

I did not take into consideration that the car in your garage may well an A-EV. If that were the case, it would be as “safe” in traffic as all the other A-EVs on the road. In that we’re all speculating about how this might play out, I imagine the “A” part would have a lock-out that would allow driver assist (or whatever) under certain conditions such as guiding the car into your garage, extremely low density traffic (again, assuming A-EVs were programmed to have awareness of traffic density and other vehicle presence), driver blood alcohol level (built in breathalyzer monitor), etc., etc.

Still begs the questions of risk and liability should an accident occur (even if no other vehicle is involved). But I imagine it would be worked out somehow. Maybe the whole question of liability becomes “socialized” (uh-oh, I used a dirty word) in some manner, the cost of insurance is rolled into the purchase price and/or annual licensing fee and no one actually buys coverage and pays premiums. Everyone is automatically covered and liability is “normalized” in some manner. IDK, but it has to be addressed. OTH, if you got one of them old fashioned rigs that you gotta steer and pedal (and even shift gears!) manually - well, it’s probably just not street legal.

So aside from the bad news businesses you mentioned, I’d certainly say the insurance industry is due for some big shake-outs, especially those that specialize in auto insurance.

But, it’s all “down the road” so to speak. The report speculates that this won’t really come into its earliest fruition until 2030. Geezers like you and me and some others here will most likely only see the very early stages of it all. But, I have no doubt TaaS is coming. Already, I see my daughter and her husband (both with cars) frequently choose Uber/Lyft over driving themselves.

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"Elon Musk has plans for one of his AEVs to drive across the country, from LA to New York, this year - be the end of 2017. "

Great…the first modern ‘cellular’ demonstration systems went on line in 1970s…in Washington DC and Chicago with a couple thousand subscribers - many in cars with external antennas and a few ‘bag portables’ that weighed 5 lbs. It took another 25 years to reach the true ‘hand held’ device that weighted six or 8 ounces and didn’t die after 20 minutes of talking. Twenty Five years.

The first transcontinental road trips happened, what, in the 1920s? It wasn’t until the 50s that you had the interstates.

“He made that statement last year and reiterated just a few months ago that Tesla is still on track to accomplish this. The hardware that will be able to accomplish this is already in every Tesla that is sold today.”

No, not by a long shot.

" Since the hardware already exists, Tesla will push out all the software updates you need over the air. So all the Tesla vehicles sold at the end of 2016 will be fully autonomous within just a few years. "

Ain’t no way. It’s going to take another decade of developing ‘sensors’ that will work in ice and snow and sand storms. …and 50 below and 130 above, in downpours of epic proportions…

Did you ever try to take pictures in the rain? or look at your backup camera in a downpour and try to figure out what was going on?

And in constantly changing construction zones…where the lanes change daily …or even hourly…

No, 99% of the needed sensor technology and implementation is NOT in current cars…

“If Elon Musk drastically improves manufacturing like he thinks he can, he’ll be pumping out self driving cars into Urban areas with Tesla’s TaaS platform quicker than you think.”

I suspect the initial deployment will be to certain cities only…and those will be sunbelt cities…and flat…

Now just imagine a car…trying to pick up someone on a street with only street parking and no parking in front of the apartment building. Where does the car park itself? How does it pick up the person? Does it understand how to get to the strip mall and find the right store area? If there is no parking in front of the store, where does it drop you? If you are headed toward a stadium, does it understand the waving policeman directing traffic? really? That’s going to take a lot of smarts…try writing the computer and sensor code for that!..if there is an accident on the road and the police are directing traffic onto the shoulder, is it ‘smart enough’ to follow those directions? Hmmmm…

or how about at school crossing walks with the crossing guard stopping traffic with a waving ‘stop sign’…is it going to understand that and not mow the kids down? or the kids that will be coming?

Does it understand school zones? Read those signs that say ‘30 mph from 9-10 and 2-3pm weekdays’?

We’ll see.

or construction zone signs that flash - 45 mph ahead…that wasn’t there 2 days ago…

t.

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Goofy, maybe you didn’t read the report. You are assuming the linear adoption rate that is at the heart of the analysis the report disputes. They anticipate an exponential adoption rate which will push those manually driven vehicles off the road in a hurry for a wide variety of reasons, but mostly economic ones. Using TaaS will be approximately equivalent to giving yourself a 10% raise. That’s a strong motivator for the vast majority of folks.

I have speculated that the cost of owning a manually driven car will become cost prohibitive in short order do due to insurance premiums. L5 A-EVs will be far, far safer than anything with a human at the wheel. As adoption of A-EVs accelerate (whether part of a TaaS fleet or individually owned), insurance premiums for manually driven cars will sky-rocket before the entire auto insurance industry collapses. At that point, I expect manually driven cars will not be street legal.

How fast? Well, as I said, the report says pretty damn fast. Those West Coast Liberals (guilty) will probably adopt first, but even if you live in a state that says hell no, it won’t save you from insurance premiums that eat up most of your disposable income, or having to shoulder all the liability on your own . . .

Widespread TaaS is inevitable, but I’ll grant that personal A-EVs will be part of the future as well. Manually driven cars? Seen any horse and buggies lately?

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And, don’t overlook the economic differences. Using BEVs greatly reduces the cost to fleet owners in terms of maintenance, insurance, etc.

I’ve been thinking about this, and I’m pretty sure it’s not true. Or if it’s true, it’s overstated.

Say I have a one hour commute to work (personal experience, in Chicago.) So need to drive 25 miles, one way. But wait, if I ‘rent’ the TaaS vehcle it has to come from somewhere. Lets say it’s 5 miles away. And when I’m done, it has to park somewhere. So a 25 mile commute just became 35 miles of travel. That’s maintenance and energy (in whatever form). But now you have all those TaaS vehicles downtown, while (presumably) some of the demand is out in the suburbs. Do those cars go out there to serve that need (yes?) but then return downtown for the commute home? (yes?) You say there are already vehicles out there? OK, but surely the balance isn’t perfect, so there has to be some shuttling around of empty cars, or “direction pricing” or some cost mechanism to compensate, doesn’t there?

So depreciation is accelerated, fuel costs are higher, vehicle repair certainly cannot be lower (at least until many humans are not controlling vehicles), and there are cleaning costs, overhead, and lots more. If you ask Hertz or Avis, I’m sure they will tell you that wear-and-tear is far higher on vehicles which “people” rent rather than own (and they wash and clean the vehicle between every rental, which is either a great expense for TaaS or it is dirtier cars and a less pleasant experience for users. Now you have to replace the vehicles more often, perhaps much more often. (A NYC taxi lasts about 6 years, not the 20 for a privately owned car.)

L5

L5 is a long way off. The NYT has had several stories on it recently, and it’s really a LONG way off. Google just downgraded its program to achieve it, it’s so far off, and they’re the wild west cowboys of “technology can do anything.” They’re hoping for competent L3, at 25 mph, soon.

None of which even begins to address “market penetration” which is an even longer way off.

Elon Musk

I have no doubt that he may get one of his cars to drive coast to coast this year, or perhaps next. It’s a publicity stunt, and has no discernable effect on getting L5 cars into the mass market. General Eisenhower drove coast-to-coast in the early 1920’s, but he didn’t sign the bill for the Interstate Highways until the 1950’s, and we didn’t really get the system we know today until the 1980’s. Most things move slow. Once in a while they go fast, like cell phones which were invented in the 1980’s and the iPhone came along in 2007 or something. OK, bad example. :wink:

A battery pack an be built today with a 500 mile range

Do you have a link? I’m assuming you don’t mean “just twice as big” because there’s no “back seat” big enough to hide such a behemoth. That’s not my understanding, not from the analyses I have read, but I’d love to find out I’m wrong.

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Smorg,
If there was a DaaS (Dishwashing as a Service) available to you…

You hit the nail on the head. I live about 25% of the time in China. I don’t think there’s a single restaurant I’ve been in that has a dishwasher or hires someone to do it. No, the dishes on the table are not soiled, they are sterilized and shrink wrapped. There’s an outside service that delivers the shrink wrapped dishes every day and picks up the soiled ones. I don’t know who actually owns the dishes (of course, as a patron, I don’t really care).

My first trip to China was in 2007, this mode of operation was not very prevalent. Today, it appears nearly universal, even in off the beaten track rural restaurants. That’s an incredibly fast adoption rate. It’s just cheaper (I speculate), more convenient, and just as importantly (or maybe more importantly), trusted for insuring cleanliness than washing dishes in house. The only exception is buffet style restaurants with a pile of plates and bowls at the head of the buffet tables - I speculate (have no way of knowing, and never thought to ask) that they too use an outside service but forgo the shrink wrap place setting (usually a plate, a bowl, a spoon, a glass, a small condiment plate, and a tea cup), chopsticks are separate, but usually wrapped in pairs.

But, my wife and I still wash our own dishes at home. And everyone else I’ve met does as well. The service hasn’t reached that level of personalization - yet.

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Telegraph -

Human drivers only use a few sensors to navigate traffic, primarily eyes and ears. They can be used in any weather condition - sun, snow, ice, and sand storms. It’s understanding the data from those sensors which is the crux of the issue. Clearing those sensors during inclement weather is no different than what human drivers do today and is not insurmountable. Tesla already has all the sensors it needs in place. A Tesla has 8 cameras, 12 ultrasonic sensors, and 1 forward-facing radar. Tesla’s main problem is solving computer vision. They (and many other Silicon Valley companies) are in hot pursuit of that goal and that is a software problem and not a sensor problem.

Yes, self driving cars an already read traffic signs. They will know how to park themselves on street parking only and they already can. It will know where a person is based on the cell phone in their hand, which I believe Uber does today so yes it will know in what area of the strip mall to find a person. Googles AEVs can already read hand signals from cops and construction workers.

-AJ

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Tinker,
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.

I assume you don’t get out of the country very often. Maybe an occasional trip to Europe. Take a look at the Indian sub-continent, much of the Mideast or sub-Saharan Africa which accounts for an awful lot of the world’s population and it’s a different story.

Even here in the good ol’ USofA, if you’ve been paying attention to income inequality you can see cracks in economics. I drove down west coast Highway 101/1 with my wife in 2009. It was scenic as ever, that’s why we drove that route, but the bridges were downright scary. Our infrastructure is rotting and not getting maintained, let alone upgraded.

You may think the Club of Rome was completely wrong, but you have to ignore a lot of stuff to believe that. They weren’t completely right, but they weren’t completely wrong either.