Electric, Self-driving Vehicles and the Future of Transportation Energy – 3/17//16

About 25% of all energy used in the world goes to transportation while in the US that share is even higher at 28%, and 92% of that energy comes from petroleum products. The industrial sector still uses more energy at about 31% – commercial at 18%, residential at 21% – but only transportation increased in usage last year as measured in trillion Btu.

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Transportation is becoming a larger piece of the energy usage pie. Advances in fuel efficiency have been eclipsed by the gains in efficiency of appliances, lighting, HVAC systems, etc. For that reason, interest in electric and/or autonomous cars has skyrocketed, especially after the VW scandal created bad press for diesel engines. To meet tightening emissions regulations, many major car makers like BMW AGGM, and Tesla are promising to put more electric cars in more diverse markets by 2020 – Volkswagen making electric cars a key part of its plan to recover from the cheating scandal – taking advantage of falling costs and technological advances in battery capacity and charging time. Although some such as Fiat Chrysler Automobiles CEO, Sergio Marchionne, have expressed skepticism of the current trend, many are optimistic that government policies will favor the cleaner cars. In addition, there are always new technologies pushing cars towards running on electricity as seen in the development of a retrofitting for older cars that turns them into hybrids.

It will be interesting to see how Tesla fairs in a more competitive environment. A surprisingly successful entrant into the brutal car maker industry, Tesla has lasted over ten years selling expensive, stylish electric cars direct to customers while benefiting from minimal direct competition from more established companies, most of which had already sidelined electric vehicles as unprofitable. In 2015, Tesla’s sales surpassed 50,000 cars; it hopes to sell 500,000 a year in 2020, mostly Model 3s costing $35,000 before government subsidies. It will be interesting to see if the company is capable of ramping up production so greatly in so short a time frame.

Another technology with the potential to send shockwaves through the transportation sector is autonomous vehicles. If electric cars would change the fuel used, then autonomous vehicles would change the usage. A long promised solution to traffic jams, parking, and transportation of the elderly, self-driving cars could reduce or increase driving depending on who you ask. Ideally, the cars would be more efficient drivers spending less time idling or searching for parking spots; they could be summoned like a taxi or shared, reducing the total number of cars needed; and they would allow those too old, or even too young, to drive greater mobility and independence. Of course, the biggest question is when are they going to be ready.

Autonomous vehicles have been the news so much lately because we are so close to seeing them hit the mass market. Google is the most visible participant in the race to develop a viable product, but plenty of other big names like General Motors and Chinese tech giant Baidu are throwing their hats into the ring. General Motors’ recent acquisition of software firm Cruise Automation as part of a larger effort to develop fully autonomous vehicles as well as its partnership with ride service Lyft show the company’s interest and the rising competitiveness in the field. Meanwhile, Baidu is claiming that it will be able to develop a commercially viable driverless car by 2018. Still other companies like Ford, Volkswagen and Toyota are funding artificial intelligence research in order to avoid being marginalized by Google and other tech companies.

“Like it or not, autonomous cars are coming, and coming fast,” said Akshay Anand, an analyst with the auto research firm Kelley Blue Book.

Patchwork state regulations might be the main speed-bump facing autonomous vehicle makers. This week, the Senate heard testimonies from Google, General Motors Co., and a number of other companies calling for uniform, national rules for the technology on the grounds that it help combat accidents in a time of widespread distracted driving and elderly drivers.

“If every state is left to go its own way without a unified approach, operating self-driving cars across state boundaries would be an unworkable situation,” Chris Urmson, director of self-driving cars at Google said. Different state laws will “significantly hinder safety innovation, interstate commerce, national competitiveness, and the eventual deployment of autonomous vehicles.”

Another witness, Mary Cummings of Duke University suggested a cautious approach requiring more research, testing, and leadership by the federal government.

“While I enthusiastically support the research, development, and testing of self-­driving cars, as human limitations and the propensity for distraction are real threats on the road,” Cummings submitted in written testimony. “I am decidedly less optimistic about what I perceive to be a rush to field systems that are absolutely not ready for widespread deployment, and certainly not ready for humans to be completely taken out of the driver’s seat.”

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