A century after the Model T, electric cars, self-driving vehicles and carsharing are contributing to the latest revolution in the way people drive.
Henry Ford’s iconic Model T was launched in Detroit in 1908 and five year later the machine became the first car to be mass produced on an assembly line, with some 15 million exemplars produced over its lifetime. Also known as the Tin Lizzie, the car was started with a crank handle and resembled a horse-pulled carriage, only without the horse.
Ford’s horseless carriage revolutionized the car industry. Little over a century later, another transformation is underway that is changing the way people get from one place to another. Change is necessary, as the mass use of automobiles fueled by diesel and gasoline have contributed significantly to the world’s carbon emissions. Auto makers around the world are investing heavily in both electric vehicles and self-driving cars using artificial intelligence (AI), technology that can both help make driving safer and reduce its environmental impact.
According to the International Energy Agency’s New Policies Scenario, the number of electric cars on the road will reach 125 million by 2030 after surpassing the 3 million mark in 2017, a more than 50% rise on 2016. But the IEA, also estimates rising ambitions to meet climate goals and other sustainability targets could drive a rise in the number to as high as 220 million in 2030.
Although still a niche market, growth in e-car purchases in some countries has been impressive. Encouraged by government incentives and the rollout of charging infrastructure, Norway has led the way in Europe, with over 39% of new car sales in the country last year for electric vehicles. But more than half of the over 1 million new electric cars sold in 2017 were in China. While other countries may be less advanced, there are signs this could be about to change. In Italy, power producer Enel has announced plans to establish 7,000 e-vehicle charging stations by 2020 and double that by 2022.
Looking further ahead, Bloomberg New Energy Finance estimates that by 2040, 55% of all new car sales and 33% of the global fleet will be electric. Of course, this implies that traditional fossil-fueled cars will also continue to co-exist with electric rivals for some time. Just how long will depend largely on government policies, technological and price developments. For example, many European cities have announced that the days diesel vehicles can circulate freely are numbered. At the same time, the driving range of e-cars is increasing and battery costs are falling.
The revolution hitting the global auto industry isn’t only an electric one. Artificial intelligence (AI) is another big area of investments for auto makers, although here too policy, technology and price will be key factors in the speed of deployment for self-driving cars and other AI-enabled functions. One of the biggest bets in AI has been made by none other than Ford, which last year announced plans to invest $1 billion over five years in Argo AI, a start-up focused on developing autonomous vehicle technology.
And the industry transformation underway is also seen altering the idea of car ownership, particularly in cities, where the costs of owning an automobile may clearly outweigh the benefits. According to an analysis published this year by business consultancy Frost & Sullivan, the global carsharing fleet is set to grow by 13.2% globally in 2018 as shared mobility becomes mainstream. Like electric vehicles and AI, this trend also hasn’t been overlooked by automotive powerhouses. BMW and Daimler recently merged their carsharing units to become the global market leader.
