A keynote speaker at #BMCEngage – my company, BMC Software‘s, user conference – was Tony Seba. Mr. Seba is a lecturer in entrepreneurship and distruption at Stanford University and he spoke of some amazing technological disruptions that have happened and are forecasted to happen, and these are quite amazing. He covered multiple industries, but I found one that particularly interesting to me personally – cars and transportation.
Where Did The Horses Go?
Mr. Seba started with two photos of Fifth Avenue, one in 1900 and one in 1913. In 1900, there’s one car, and it’s a bit hard to spot among all the horses. In the photo just thirteen years later, there’s only one horse – also difficult to spot among the sea of cars. The car was one of the top technological disruptions in transportation.
What’s So Great About Electric Cars?
Tony then talks about various forms of disruption, including “disruption from above,” or the idea that a new product or service starts at a premium price point. As technology becomes more affordable, the products fall in line with conventional products and displace them in the marketplace.
He specifically calls out the Tesla Model S. This is a vehicle that was ranked by Motor Trend in 2013 as the vehicle of the year – not the electric vehicle of the year, THE vehicle of the year. Consumer Reports said it was the best car they’ve ever evaluated, and even just yesterday, Car and Driver Magazine listed the Tesla Model S in their top 10 cars of the year, displacing the BMW 3-Series.
What are the Stats?
Compared to conventional internal-combustion gas engines, electric motors are 500% more efficient at converting energy to motion, says Tony Seba. From around 20% to 95%, electric vehicles like the Tesla Model S vastly decreases the energy lost to heat and noise. What impact does this have on the driver? It’s about a 90% savings in energy costs, from about $15k in five years for a Jeep Liberty, to $1500 for an electric equivalent.
Also notable is reliability. Electric vehicles have 90% fewer moving parts than their gasoline counterparts. This means that there are fewer parts to break and maintain. Tesla offers an 8-year, unlimited-mile warranty. You won’t see that matched by Detroit or Tokyo.
So when will Electric Cars displace Gas en masse?
Tony takes a look at the major component of electric cars, batteries. They’re falling in price about 16% annually. At that rate, we could see a competitive all-electric, 200-mile SUV around $40k by 2017. By 2019, electric vehicles could be cost-competitive with the average new vehicle price, around $31k, and by 2022, they could compete with low-end vehicles around $22k.
Does this mean that you’ll have an electric car in your driveway within eight years? Tony says that by 2030, nearly all cars will be electric. Here’s a link to Tony’s book, Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. (affiliate link).
Or view his speech here: