I was talking with my stepson last night, and I said something like, “Wait until you’re middle-aged.” And he told me that I’m not middle-aged, I’m old. At which point I said I could live to 94, as my grandmother lived to be 101. She lived in three centuries — she was born in 1899 and died in 2000.
Oftentimes when I bring this up, I ruminate on the enormous changes she saw in her life. She was born on a farm in Arkansas. She drew her water from a well, made her own dresses, and killed and plucked her Sunday chicken. She lived essentially the same way people had for hundreds of years.
By the time of her death, we had a great swath of technological advancement — from space shuttles to PCs to MRIs and mobile phones.
Arguably the greatest invention in terms of how it impacted humanity was the internal combustion engine and the automobile. It changed how food was produced and marketed, where we lived, whom we dated, and how we perceived success.
The United States of the last 100 years was built on the car and personal car ownership.
In the next few years, like it or not, that will change dramatically. In December of 2015, Elon Musk, the CEO of Tesla Motors (NASDAQ: TSLA), said we were two years away from autonomous cars. Stefan Moster, head of Product and Technology at Audi, says the next A8 will be fully autonomous by 2017.
And just as Grandma Mildred saw her world change, so will we.
The Big Shift
Cars will go from internal combustion engine to electric vehicles, from single ownership to shared asset, and from human driving to robotics and software. This will change everything from where we live and how we show off to how we date and spend our time.
Giles Parkinson at RenewEconomy writes:
This is not just a multi-billion dollar market, but a multi-trillion dollar one – more than $10 trillion if some analysts are to be believed. It will impact the oil industry, and the car industry. And it will filter down to the electricity industry and home energy systems, because battery storage will become so endemic. It will also redefine the way we live and drive.
The current model of car ownership is expensive, dangerous, and inefficient, according to Morgan Stanley analysts. Cars are used sparingly, they take a huge amount of time when they are in use, they pollute (using 45 per cent of all oil use) and they are deadly (at least 1.3 million deaths a year).
Incidentally, Volvo said it will have a death-proof car by 2020.
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There is much talk about shared vehicles and Uber going driverless, etc. We don’t know what percentage of the car market will be shared.
Morgan Stanley predicts that by 2030, more than 20% of all miles traveled in Europe will be shared. In the U.S. and India, it will be 25%. In China, it will be more than 34%.
Uber CEO Travis Kalanick said he expects all of his cars to be driverless in 10 years.
We do know that as soon as the sensors and technology become commoditized, they will filter down from the expensive cars like Tesla, BMW, and Infiniti to the Ford Fiestas and the Honda Fits.
For investors, this great switch has a huge potential for profits. You can invest in lithium, as it is used in the production of car batteries.
You can also look at the companies that make the Light Detection and Ranging (LIDAR) sensors and software that enable the cars to do what they do. Change is happening fast.
All the best,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
