Getting Results Magazine Getting Results Magazine Fall 2018 - Page 9

“Civilization requires energy, but energy use must not destroy civilization.” -Pope Francis Now, let’s explore the impact of the autonomous revolution on public infrastructure, the energy sector, the finance industry, and the justice system. You will be surprised to learn how far the ripples of this revolution extend. car dealerships. In the same way that we are seeing the manufacturers need to change, so are dealerships. Tesla sells direct to consumers (no dealer markup!) and AutoNation services Waymo’s self- driving fleet. PUBLIC INFRASTRUCTURE Where will the electricity come from? UBS calculates that 14 to 27 “giga- factories” would be enough to produce batteries for all of the world’s electric vehicles. Where will all the raw materials come from to make those batteries? We will need 30x more lithium and 20x more cobalt (the choke point in the supply chain). Researchers are also working hard at developing new types of battery chemistry. Oxford Economics forecasts $5T (yes, Trillion) will be invested on roads in Asi a-Pacific, more than the rest of the world combined. Lyft has calculated self-driving fleets will require just one lane versus the four lanes that it takes today. Additionally, our system of paying for roads will transition away from being based on these usual methods: • Gas taxes—because these cars won’t be powered by gasoline • Vehicle registration and driver’s license fees—because we won’t have them ENERGY One third of all energy is used for transportation. Has the era of peak oil come to an end? Opinions vary. The International Energy Agency is less optimistic than industry forecasts, and Bloomberg is more pessimistic. Even oil industry leaders believe in a low-carbon future; they just want it to happen later than sooner. Recently, Pope Francis hosted a gathering of the energy sector’s leading thinkers and policy makers to discuss ways of reducing emissions of carbon dioxide and methane. He began the meeting by declaring that “Civilization requires energy, but energy use must not destroy civilization.” So how and where will electric fleets get charged? It won’t be at our home or workplace if we aren’t owning the car. It may be one big central location—all the parking garages will be empty. Or how about where car dealerships are located (prime real estate all across the country)—since there won’t be any more FINANCE Insurance, car rentals, and car loans are just some of the industries that will change. Self-driving cars are going to be a lot safer than cars with human drivers, and as a consequence, premiums will fall significantly. Forty million people sell a car each year, generating enormous revenue for government agencies, dealerships, and finance companies. This will disappear. The car rental market will also disappear, as fleet transport replaces the “one car, one driver” model. Even advertising is going to have to change. Insurance companies spend $6 billion on advertising, and just the top three auto advertisers spend another $8.4 billion. At least 10 percent of all ad spending will go away. JUSTICE SYSTEM The autonomous revolution isn’t just limited to hardware and software companies. Cities, regions, even entire countries are also racing to establish the legal and regulatory framework necessary to lead the change. Big questions need to get answered about how the “mobility value chain” will evolve. Will the software be proprietary or open source (once again, think Apple and Google)? Will governments require technology companies to be more transparent about their privacy policies (especially when your car is generating gigabytes of data a day!)? Who owns that data and who will have access to it? There is an all-out race from Silicon Valley to China underway, and change will happen faster than you think. There are already several countries that have laws on the books that outright ban the sale of gas-powered cars. And when Germany, China, and California take action, that will set the direction for the entire industry. Governments are already using a combination of carrots (e.g., tax incentives) and sticks (e.g., laws and regulations) to incentivize us to get into electric cars. Lastly, there will be no DUI or distracted driving when humans aren’t driving. One third of civil trials are auto related. Level 5 cars (no steering wheel) will eliminate 95 percent of accidents. The big question is about liability. Who’s liable? The car maker? The fleet operator? The person sitting inside the car? The software provider? Now is a great time to go to law school, as an entire new generation of case law will be created. CONCLUSION The Autonomous Revolution is a great example of exponential disruption. At this stage, the hype is greater than the reality. As we have seen with other technologies, these big changes appear deceptive right before they become disruptive. Change is coming. Faster than you think. There will be winners and losers. You’ll hear more from, and about, the losers than the winners. Entrenched industries and ways of thinking will resist the change. Having accurate information about the state of the world will increase your confidence, success, and happiness. u Source: Jim Jubelirer is indebted to Frank Chen, of Andreessen Horowitz, for much of this original research. Watch his excellent video series: http://bit.ly/jubelirer_ futurecars. FALL 2018 | 9