Image: OnInnovation
Image: OnInnovation

There is something intimate about a human’s relationship with their car.  Some of us feel highly attuned to our vehicle, we can sense its workings, it can almost feel part of us. We may get a kick from pressing hard on the accelerator, feeling it roar into life, and for some male drivers their car can feel like a type of appendage. But how may that change if cars become autonomous?

Elon Musk, CEO of Tesla, has revealed what he calls his ‘master plan part deux’.

There are four elements to it.

Firstly, ‘Integrate Energy Generation and Storage’. So this means solar power, for example – which may be great in the southern states of the USA and north Africa, but may not work so well in the English countryside in November. But Musk wants to tie in the Tesla technology with Solar City, the energy storage business. This may require tricky negotiation, as the boss of Solar City is quite independently minded; he is a chap called Elon Musk.

The conversation might go like this “Oh Hi Elon, it’s Elon here, do you fancy merging our two companies?” To which may come the reply “Oh hello Elon, haven’t seen you since this morning when I was shaving, let’s think about your idea. Oh alright then.”

Secondly, expand to the major forms of terrestrial transport. So that’s electric heavy-duty trucks and high passenger-density urban transport.

Thirdly, autonomy. As you may have heard, a Tesla car crashed recently when it was in auto pilot mode. But don’t let this fool you. Bear in mind that cars do tend to cash when they are driven by a human, no one is suggesting that autonomous cars are less safe. The point is, however, the technology is improving. They will become so much safer than cars driven by humans that it may eventually be illegal for a car not to be in auto pilot mode. But the economics of autonomous cars is compelling. For one thing, they can drive close together securing a peloton effect that cyclists are familiar with. This will create an aerodynamic benefit, and mean cars can make more efficient use of existing road infrastructure. Traffic jams will be less common – no slowing down to look at an accident on the other side of the road, for example, and you won’t need to worry about parking.

Fourthly, car sharing. Musk said: “You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.”

He explained further: “Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.”

Truth is, autonomous cars make car sharing inevitable. And autonomous cars are themselves inevitable.

But consider the impact on the car industry. If most us only use our cars for say five% of the day, does that not mean that with car sharing we could meet our current transport requirements with 5% of the existing global car fleet?

It won’t happen overnight, but two inevitable events make a third event inevitable, and that is a  disruptive shock to hit the car industry that is similar to the shock that once hit the industry for making horse-drawn carriages.

 

By Michael Baxter, economics writer, author and entrepreneur