Electric vehicles by 2030: Disruptions and opportunities galore

An economist from Stanford University, Tony Seba, is causing much anxiety in the energy and automobile sectors. He predicts that people in the US will stop owning vehicles. According to his report, “By 2030, within 10 years of regulatory approval of fully autonomous vehicles, 95% of all US passenger miles will be served by transport-as-a-service (TaaS) providers who will own and operate fleets of autonomous electric vehicles.” Annual manufacturing of new cars in the country will drop by 70%, electric vehicles will rule its roads, and the geopolitical importance of oil will vastly diminish.

No doubt, then, why investors in the US are betting big on Tesla – the country’s most valuable car maker, although it sold just a handful of vehicles in 2016, compared to General Motors' millions. Tesla is all geared up to disrupt the automobile industry with the launch of its affordable Model 3 electric car.

China, the United States and India (in that order) are the top-3 carbon emitting countries in the world according to data published by EDGAR. A few days ago, the US withdrew from the Paris climate accord. In response to that, large American corporations have pledged their support to the treaty, including Elon Musk; and China and the EU will together take a leading role in tackling climate change.

Closer to home, India is doing its bit to support the Paris treaty. The vision of the country’s prime minister is to electrify all vehicles by 2030, a roadmap detailed by the government’s think tank, NITI Aayog. Analysts have predicted that India will be the world’s third largest seller of cars by 2020. If the country achieves its 100% EV (electric vehicle) goal, players in the industry must be prepared … Car makers will be forced to go electric; what happens to the manufacturers of combustion engines? Will energy companies set up an infrastructure of charging stations, or develop cheaper and more efficient battery power?

There is already much activity in India that is potentially pointing towards achieving the 100% EV target –

• Mahindra Electric entered the EV market with the acquisition of Reva Electric Car in 2010. Apart from its range of electric cars, the company will soon launch an electric three-wheeler, and a 32-seater bus.
• In April this year, Kinetic Green launched its first electric three-wheeler, powered by an advanced lithium-ion battery
• India’s first electric mass mobility ecosystem was launched in Nagpur earlier this month. The pilot project will see a fleet of 200 EVs – Mahindra e-taxis and Kinetic e-rickshaws – that will run on the Ola app.
• Late last year, Hero MotoCorp acquired a stake in Ather Energy, a maker of electric scooter makers
• NTPC, a state-owned power utility company, recently entered into a new business segment of setting up EV charging stations

It will be interesting to see how electric vehicles will impact our lives. No doubt there will be disruptions hurting some businesses; but there will be opportunities for many others. Perhaps Elon Musk’s energy storage business will one day be bigger than his car business.