Responding to Singularity2050.com remarks on Battery Tech, EV Adoption, and faSDVs

The website called "The Futurist" had a recent post that discussed major technological changes that will have dramatic societal and economic impact.

From http://www.singularity2050.com/2017/08/atom-award-of-the-month-august-2017.html:
"...Hence, the first three factors, and possibly the fourth, combine by 2032 to generate a disruption that will be so comprehensive in the US that the inability of government to change zoning laws and permitting at anything close to the speed of market demand will be greatly exposed..."

 The first two are Battery Technology & EVs and the second is fully autonomous Self Drive Vehicles ("faSDVs").

 The post is worth a read and below are comments I made in response to this article:

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I strongly agree with the forecasted strength of the disruptions but I do think there is some additional points that might make for a faster arrival.
Batteries
The biggest missed point is the residual value calculation on ICE vehicles that businesses and consumer financing entities will make once it becomes certain that battery cost will achieve a $50 KWH market clearing level. Let’s assume that, consistent with your chart, the $50/KWH battery cost will be achieved by 2024 with this certainty seen somewhere around 2020-2022.
One the $50/KWH level becomes certain, there will be a rush to build dozens of battery factories the size of the Tesla gigafactory and automobile manufacturers will rush to move the vast majority of production to an electric platform.
The auto companies will understand that beginning 2024, ICE vehicles will be hard to sell, requiring lower prices and ever higher marketing costs. The reason is that ICE cars sold from 2022 on will not have the normal expected financial life. And it will get progressively worse as battery costs drop to the $25/KWH level in the late 2020s.
EVs will have half the cost of an equivalent ICE vehicle when fuel, repair and maintenance costs are computed. The simpler EV has a longer service life which makes it even more attractive.
So businesses will defer ICE purchases to get the less costly EVs. Banks and finance entities will shorten the projected financial life of ICE vehicles which will substantially raise consumer monthly costs. And the consumer will only choose an ICE vehicle as a last resort because they will know that the ICE vehicle will have little value when paid off.
And EVs will have great residual values because of their operating cost structure and longer projected life. Which means lower monthly costs for initial purchases which puts even more downward pressure on ICE vehicle prices.
ICE will be in a sharp downward production spiral in the mid 2020s and almost gone by 2030 in first world countries.
Autonomous Vehicles
Autonomous vehicles are going to be here way before 2032.
Google /Waymo has millions of autonomous miles on real roads today. And billions via simulation. At the beginning of 2017, a driver had to touch a wheel only once per 5,000 miles. And moving quickly to once in a 100,000 miles in early 2020. We will see consumer sales of fully autonomous Self Drive Vehicles (“faSDVs”) in the early 2020s.
And they will also have a very fast adoption.
Once the true availability date is known (say 2022), at least two years earlier purchase behavior will change. Car rental, Taxi, Rideshare, sales, and service companies will defer human driven vehicle (“HDV”) purchases around 2020 or earlier. The productivity impact on businesses of the faSDV is huge enough that if a company has too many HDVs in use when faSDVs become widespread, they might be so uncompetitive as to go out of business. It’s a binary event, the companies without faSDVs die.
Selected consumer categories will also defer purchases of HDVs because the value of the faSDV is so great. Examples include commuters, families with two cars, elderly, and the physically impaired. And of course, the coming availability and then real availability of faSDVs will crush the residual value of HDVs.
And the story becomes like the battery one above. Some buyers will not buy a HDV at any price. HDV prices fall and marketing costs rise for everyone else. Declining residual values means higher monthly HDV costs and initially faSDVs will have lower costs because of longer life spans.
Auto manufacturers get crushed again and faSDV adoption accelerates at a high level.
============
Retail is going to be far worse than projected here. And construction is already moving quickly.
Watch this 30 story building go up in a bit over 15 days including interior finish: https://www.youtube.com/watch?v=ajlUVSiUvWg
Watch this 57 story building go up in 19 days: https://youtu.be/AhLk7L1B_fE
I’d write more on these two but this comment is waaay too long!
Posted by: Bob Reisner | September 05, 2017 at 10:06 PM
and

When faSDVs become available at HDV prices will anyone want the 'obsolete' HDV? The HDV will lose all its resale value when faSDVs become available in volume. And Taxis/Rideshare/Rentals will not buy HDVs at any price. faSDVs will be a production capacity issue, not demand. And manufacturers have the same problem ... no one will buy the HDV once the faSDV is available.
The transition will be very quick.
Posted by: Bob Reisner | September 06, 2017 at 05:38 AM
and

To: Kartik Gada
(Gada in normal type and my comments between /***/ marks)
Note that of the 100M+ HDVs in the US that are under 6 years old, many were bought with debt. If those lose resale value quickly, most people won't even have the money to buy a new faSDV. They will have to keep using the HDV for a few more years, whether they like it or not. The average household can't just take a $20,000 hit to upgrade.
/***/Not all HDV will be replaced immediately because USA production & sales capability is less than 20MM units per year. The faSDV move will compress a 10 to 12 year cycle to 5 to 7 years. Everyone will not move immediately but the vast majority will move much sooner than the normal replacement cycle. Some buyers will not move to a new vehicle but will end up with short term faSDV rentals or a 'timeshare' version of a rideshare faSDV. They might even save money even with a HDV disposal loss./***/
The three stages are :
1) When does a faSDV achieve complete cost parity with an HDV?
/***/faSDVs do not need to get to cost parity. They provide unique capabilities to taxi companies, companies with field personnel, elderly, disabled, those that shrink from 2 HDVs to 1 faSDV, long distance commuters, etc. Cost parity might be as early as 2022 but PRICE parity will not be for 5 to 7 years because high demand and shortage of production will allow for higher manufacturer price./***/
2) When do faSDVs achieve 80% or more penetration, enabling VtV communication?
/***/ 80% penetration might be late 2020s but no later than mid 2030s. But V2V communication is not that important. V2V helps with some edge conditions and traffic flow but not really a driver in vehicle automation. /***/
3) When do faSDVs (along with EV capabilities) make on-demand more efficient than ownership?
/***/For a substantial part of the population, on demand is viable on day 1 (think urban dwellers). Just a bit later as a way to eliminate suburban second & third vehicles. But there will always be consumer owned faSDVs. Demand peaks will always be an issue (by definition) as will the desire for some level of vehicle personalization and customization. A lot less ownership than now but still very substantial. Maybe even still a majority./***/
I say it takes until 2032 for Step 3 to complete, partly because hundreds of millions of people worldwide will be left holding the bag on their HDV that they can't afford to ditch. Sooner would be better, but I wouldn't bet on it. Remember that faSDV progress 2007-present was much slower than they claimed it would be in 2007 (when they acted like it was just around the corner).
/***/I've stayed away from world wide adoption predictions because faSDV adoption in some second world countries and almost all third world countries might be problematical. 2007 era predictions were all over the spectrum ... from never to tomorrow. My guide has been Google pronouncements and they have been off by only a year or two. The faSDV is an extraordinary product and the development speed has been astounding./***/
Posted by: Bob Reisner | September 14, 2017 at 05:43 PM

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