Volvo has unveiled its first fully electric vehicle, and with it, an important commitment to decarbonization. The carmaker says it will bring out a new electric model every year and reduce production of traditional combustion vehicles and hybrids, so that by 2025, half of its sales will be electric, and the other half will be a decreasing number of plug-in hybrids, with their non-electric motors produced outside the company.
The launch and mass marketing of Volkswagen’s ID.3, the increased manufacturing capacity of market leader, Tesla, after opening a factory in China, and the efforts of other manufacturers to quickly electrify their catalog, leaves no doubt about where the motor industry is going: the transition to electric vehicles is no longer about when, but at what speed it takes place. If you were thinking of purchasing a new vehicle with an internal combustion engine, know that you are buying obsolete technology. A strike by GM workers over a production switch to electric vehicles, which will mean smaller workforces, says it all.
Initially, the arrival of the electric vehicle will create two types of car-owners, not so much because of the price of electric vehicles — which will fall, as economies of scale and competition come into play — but because of the limited availability of garages. Buying an electric vehicle when you have nowhere to charge it makes no sense, so for a time, there will be the haves and the have nots. The have nots will continue to use their traditional vehicles for as long as possible, until increasingly stringent emissions laws will mean they have to be scrapped.
The second change will be related to ownership. The German car industry seems to have understood already that for most people it will make little sense to own an electric vehicle, meaning that manufacturers will look to enter the car-sharing market, becoming fleet operators hoping to compete with companies like Uber or Didi. The idea of not owning a car and, instead, using it as a service when necessary is already popular among younger generations, especially for people who live in cities, where private vehicles will be restricted and priority given to public transport, micro-transport and pedestrians. Simple economics and urban planning will dissuade more and more people from owning a car.
The third major change in the motor industry will be self-driving vehicles. For most people, the idea of climbing into an autonomous vehicle still seems the stuff of science fiction, but the reality is very different: Waymo says it will soon be offering completely autonomous taxis, without a safety driver. Its competitors are fast catching up, as they see the potential of a passenger transport business with its highest cost, the driver, removed from the equation. It’s not a question of if driverless transport will be available in your city, but when: all that’s needed is a player who sees the potential and is prepared to make the investment in detailed mapping.
In short, the automotive industry is about to enter one of the most interesting technological transitions we will have seen for a long time, and one that will have major repercussions for our societies.
By Enrique Dans, Contributor, Forbes.com