- Massive effort is being invested to reinvent the car, but the most influential future technologies may be those that avoid the car altogether.
- Two such technologies are analysed in this article: advanced telecommunications and small electric vehicles.
- Potential economic benefits for these two technology classes are estimated at $18500/year and $10000/year respectively.
- In addition, these technologies complement each other and will synergize well with future autonomous vehicles.
Personal mobility is one area that is likely to experience great changes over the coming decades. Many people think this change will come from the battery powered electric motor. Others go one step further and bet on autonomous driving technology. Personally, I’d go another step beyond that and say that the biggest changes will come from technologies which avoid the car altogether.
As outlined in earlier articles (costs and benefits), I’m not terribly optimistic about electric cars. They will definitely see a lot of growth, but I’d be surprised if they grow to dominate the global market. Autonomous cars, on the other hand, have greater fundamental promise and will therefore be the topic of Part 2 of this article. Given the paradigm shift demanded by the assumptions of car-free lifestyles and full autonomy, Part 3 will discuss the types of vehicles that may be preferred in the vehicle fleet of the future.
The greatest fundamental promise, however, comes from technologies that will actually remove cars from our roads. Two such technology classes are discussed below: advanced telecommunications and small electric vehicles (SEVs).
Before we start, however, it is important to point out that this discussion is about economic efficiency, not about climate change. Passenger light duty vehicles (PLDVs) account for a little over 20% of global oil use – 40% of transport energy (below) which represents about 55% of oil consumption. This equates to only about 7% of global energy related CO2 emissions. Alternatives to oil (e.g. electricity or biofuels) also have significant associated CO2 emissions which may exceed that of conventional cars in many cases (see this earlier article for example).
It is therefore important to note that the most important sustainability contributions of personal mobility advancements will not be direct emissions reductions, but indirect economic efficiency gains (lower energy intensity and a greater capacity for investment). Policies pushing for direct emissions reduction from PLDVs can hurt much more than they help by reducing economic efficiency and misdirecting limited investment funds.
So, with that in mind, let’s get started.
Over the course of this century, more and more people will add value by sitting in front of a computer, processing information. With steadily improving telecommunications technology, the number of these jobs that can be efficiently completed from a home office is increasing rapidly. This is set to be a major trend and many companies are getting ready.
In the US, more than 3% of the employed workforce currently “telecommute” based on recent trends (below), with self-employed people working from home adding another 2%. Telecommuting is defined as working from home using a computer terminal electronically connected to your place of employment. In the UK, about 14% of the workforce work from home, earning 26% more than regular office workers.
One can already communicate very efficiently via videoconferencing on two screens – one showing some digital content and the other showing the person(s) on the other end. Interactive screens, whiteboards and tabletops where all members in the online meeting can easily manipulate digital content seem to be the next near-term step. Following that, we might end up with a full virtual reality experience where it feels like everyone is in the same room – maybe even with holograms like Star Wars!
Capitalizing on telecommunications technology to completely eliminate the daily commute will bring great economic benefits. In the US, the cost of car ownership is about $0.6/mile. Accounting for the value of time spent driving, this increases to about $1/mile. For an average daily commute of 30 miles, savings amount to about $6000/year.
In addition, high value office and parking space in central locations will now be freed up for other purposes. A 100 ft2 midtown office costs about $5000/year. Adding the potential value of developing the area previously dedicated to parking can bring this up to $6000/year.
And then we have not even talked about the benefits of taking all these cars off the road during rush hour. For example, converting 25% of commuters into telecommuters will remove the rush hour peaks from a typical traffic profile (below). If this can be done, people who still need to commute will save a lot of time (and stress), there will be fewer accidents, fewer emissions and fewer road damages, and the city will simply become a much more livable place. These effects are harder to estimate, but I would not be surprised if they amount to more than $3000/year.
Another potential benefit of advanced telecommunication technology is a reduction in long-distance air travel for business purposes. Similarly, long-distance car travel may also reduce. The positive effect will definitely be smaller than for commuting, but cutting three 300 mile trips can save almost $1000 per year.
In the longer term, it is easy to imagine car-free neighbourhoods especially for people who work from home. These neighbourhoods will have every necessity (e.g., a school, some shops and restaurants, a sport centre, a GP, etc.) within walking/cycling distance and will probably rely on delivery services for easily standardized stuff like groceries, electronics and basic appliances. As discussed in George Moniot’s “Heat“, such delivery services can also bring significant environmental and economic benefits by avoiding the need for large stores with open fridges and long drives to the mall.
Such a car-free neighbourhood really sounds like a fantastic place to live. It would also eliminate the need for a garage, saving about 250 ft2. Assuming that half of current households have garages, this can bring another $2500/year in savings.
Given that the median personal income in the US is $29000/year, the potential total saving in the order of $18500/year is simply huge. Of course, the price for this enormous saving (and the bliss of car-free living) is the need for a home office. This can be as simple as a comfortable desk and chair with a computer in any room at home. Most homes already have something like this, so the incremental costs should be small, even negligible.
In total therefore, the shear magnitude of potential savings, the increased quality of a car-free life, and the minimal enabling costs convince me that advanced telecommunications will have the biggest impact on personal mobility over the course of this century. Travelling virtually instead of physically will simply become a no-brainer for a substantial portion of the workforce. No subsidies, no mandates, no tax breaks – just simple market forces.
Small electric vehicles
In an earlier article on this topic, I outlined the reasons why small electric vehicles (SEVs) are making a much bigger positive economic impact than electric cars (and will continue to do so). In summary, there are three main reasons for my optimism about this technology class:
- Low up-front costs make SEVs accessible to billions of poor people who cannot afford a car
- A smaller physical and pollution footprint makes them much more suitable for commuting in densely populated cities
- Some SEVs like e-bikes or Airwheels involve exercise which can bring great health benefits to a sedentary modern lifestyle
The low up-front cost of SEVs like electric bikes is already a huge hit in developing nations. While Tesla is making all the headlines, these SEVs are creating orders of magnitude greater real socioeconomic value, especially in China. The reason is obvious (below).
It is hard to believe, but the bottom 71% of adults on planet Earth have an average wealth of only $2185 per person. Most of these people are very far away from being able to afford a decent car. As a result, they are often excluded from the economy and tragically get stuck within the vicious cycle of poverty.
China, as has become the norm, has deployed SEVs to break this cycle on such an extreme scale that it now faces some backlash. 200 million e-bikes are in operation in China (compared to 170 million cars), the vast majority of which still run on old lead-acid batteries. A lack of regulation regarding maximum speed, safety and traffic laws for e-bikes has now led to an outcry from wealthier car owners. Hopefully China can sort this out without doing too much damage to the livelihood of lower income families depending on this highly efficient mode of transportation.
It is doubtful that China could have developed as quickly as it did without the efficient economic inclusion of lower income families via e-bikes. We can estimate that roughly 25% of working Chinese depend on an e-bike for transportation. In doing so, it seems reasonable to say that e-bikes enable about 2.5% of Chinese economic output, assuming that e-bike owners are half as economically efficient as the average and their efficiency would be reduced by 20% without their e-bike. This amounts to a value of $280 billion or $1400 per e-bike per year.
However, given that e-bikes have been a more than 10 million unit/year market since 2006 (easily beating sales of new cars), the compounded economic development value of the e-bike is much greater. An extension of the calculation above over the past 15 years using e-bike sales data, yields the following graph:
At first glance, the $1.5 trillion gap in economic output ($7500 per e-bike) in 2015 seems unbelievable, especially since this will continue to compound over coming years. However, if the massive number of e-bike users in China had to use cars, buses and motorbikes instead, development would have been much slower and pollution would have constrained economic growth at an earlier time. In addition, traffic would have become a much more severe economic burden. Imagine doubling the number of cars in a country with the kind of traffic shown below. In recognition of these positive effects, China is now readying the next wave of SEVs (essentially modified golf carts) for its wealthier population, so this compounding economic benefit is set to continue.
Finally, the health benefits of electric bicycles are also highly significant. Daily moderate exercise can add 3 years to life expectancy according to this life expectancy calculator. Quality of life will also get a significant boost from daily moderate exercise due to better fitness and reduced risk from degenerative disease.
The economic consensus for the value of an additional healthy year of life in the developed world is around $100000, putting the value of a daily commute via e-bike at about $300000. Over 60 years of adult life, this amounts to $5000/year.
These are rough estimates, but I would say that the benefits of SEVs in terms of ensuring economic participation of low income households, limiting congestion and pollution, and improving population health can grow to $10000 per SEV per year. This is enormous compared to the average developing world per capita income. The compounding effects of SEVs on economic growth in developing nations is especially noteworthy. Early deployment of e-bikes and small electric 3- and 4-wheelers could even exceed this estimate over time by economically including a greater number of workers and delaying the onset of serious congestion and pollution constraints in growing cities.
In the developed world, replacing the car with an SEV for all city driving can cut the aforementioned $0.6/mile cost by 70-90% (depending on the size of the SEV). For 6000 city miles per year, this amounts to about $3000/year. Reduction in traffic, pollution and parking spaces should fetch another $3000/year. Many SEVs will also avoid the need for a garage, resulting in a saving of $1500/year (60% of the earlier estimate). Adding half of the health benefit estimated above then brings the total benefit up to $10000/year.
It should be clear from these simple estimates that the economic value of these two car avoiding/removing technologies is very high. They are also highly compatible with each other and with the autonomous driving technology to be discussed in Part 2 of this article.
For example, future car-free neighbourhoods for people working from home can draw great value from SEVs for enhanced mobility and on-demand autonomous vehicles for the occasional long/heavy trip. The idea of the car-free city centre is also gaining traction, strengthening the case for SEVs.
Of course, it is clear that the car is here to stay. Despite the massive benefits of a car-free lifestyle, it is not yet practical for most and may never be practical for some. Growth in total auto sales will therefore continue for a while as the developing world grows, but I think this number will peak sooner than most people expect. And we’ll surely be better off because of it.