Since iPhone, This Is How Electric Cars Can Create The Biggest Disruption

A surge of innovation that upended the mobile phone industry was unleashed by Apple Inc. ten years ago. And about to pull the same trick on Big Oil could be electric cars, with a little help from ride-hailing and self-driving technology.

Just as the iPhone rode the app economy and fast mobile internet to decimate mobile phone giants like Nokia Ovi, similarly, charged by complementary services from Uber Technologies Inc. and Alphabet Inc.’s Waymo unit, the rise of Tesla Inc. and its rivals could also change the industry.

predictions that battery-powered vehicles will have a limited impact on oil demand in the coming decades could be confounded and how people travel could be transformed by the culmination of these technologies — autonomous electric cars available on demand.

“Electric cars on their own may not add up to much,” David Eyton, head of technology at London-based oil giant BP Plc, said in an interview. “But when you add in car sharing, ride pooling, the numbers can get significantly greater.”

Progressive tightening of emissions standards and the slow improvements in the cost and capacity of batteries would result in an incremental shift away from oil in transport as viewed by most forecasters. Tim Harford, the economist behind a book and BBC radio series on historic innovations that disrupted the economy said that big economic shifts are rarely that straightforward.

“These things are a lot more complicated,” he said. Rather than electric motors gradually replacing internal combustion engines within the existing model, there’s probably going to be “some degree of systemic change.”

While Waymo is testing fully autonomous vehicles on the streets of California and Arizona and companies like Uber and Lyft Inc. are turning transport into an on-demand service, today, Elon Musk’s Tesla and established automakers like General Motors Co. are striving to make their electric cars desirable consumer products.

According to RethinkX, a think tank that analyzes technology-driven disruption, a new model of transport as a service that would be a cheap compelling alternative to traditional car ownership would be provided by a combination of all the three above, for example through an Alphabet investment in Lyft.

Francesco Starace, chief executive officer of Enel SpA, Italy’s largest utility, said in an interview that electric cars are more suitable for the heavy use, allowed by driverless technology and the lack of mechanical complexity, which is one key advantage of electric cars.

With the electric motor having just three moving parts compared with 133 in a four-cylinder internal combustion engine, UBS Group AG concluded it required almost no maintenance, after disassembling General Motors’s Chevrolet Bolt.

“Competitiveness very much depends on the utilization of the car,” Laszlo Varro, chief economist at the International Energy Agency, said in an interview. The average Uber vehicle covers a third more distance than the typical middle-class family car in Europe, amplifying the benefit of lower running costs to the point that “the oil price at which it makes sense to switch to electric is $30 per barrel lower,” he said.

(Adapted from Bloomberg)

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Categories: Creativity, Economy & Finance, Entrepreneurship, Strategy, Uncategorized

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