Evolution or revolution, change is inevitable for auto sector by Chris Varcoe, April 4, 2017, Calgary Herald
Standing in front of a classic 1932 Auburn sedan and just a few feet from a shiny new Tesla Model X, Larry Burns surveys the past — and future — of the global automobile industry.
Electric, self-driving vehicles will power the future, says the former GM vice-president of research and development who’s now a consultant to Google’s self-driving car subsidiary, Waymo.
And this aggressive view of transportation’s rapid evolution — or coming revolution — is gaining speed.
By 2025, Burns predicts electric vehicles will start making a significant dent on the traditional auto industry that has been dominated for a century by the internal combustion engine.
“I’ve watched my own industry in denial,” the Detroit-based engineer said Monday during his speech at Heritage Park’s Gasoline Alley.
“I think this could tip fast. I’m not predicting that. What I’m telling you is if you’re not prepared for that … you’re in big trouble.”
Burns was one of the keynote speakers this week at ARC Energy Research Institute’s forum designed to examine the ongoing battle for the “hearts and wheels” of the transportation market and the ramifications for energy markets, companies and investors.
The former auto executive painted a bullish picture of transformational change that could shake up traditional automakers, buying patterns, consumer habits and, potentially, redefine the current business model.
While the gasoline engine and oil will still dominate transportation over the next eight years, Burns believes alternatives could start having an impact on the marketplace as early as 2020. Beyond 2025, battery and fuel cells could become the best way to design and engineer light-duty vehicles.
“I can see a path to a 10 per cent market share by 2025,” he told reporters after his speech. “Ten per cent is a big deal.”
That would be a huge shift, in a short amount of time.
Electric vehicle sales in Canada last year hit 11,000, up by more than 50 per cent from 2015 levels. Despite the buzz, however, electric vehicles made up less than one per cent of the 1.95 million light vehicles sold across the country last year.
As battery prices fall and technology improves, electric vehicles are in line for exponential growth. Aside from manufactures like Tesla, these vehicles are also being aggressively developed by many established automakers as they strive to meet lower fuel standards.
But Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, believes there are difficult challenges ahead, from winning broad consumer acceptance and lowering the price tags to overcoming regulatory obstacles.
“We have to be reasonable about what is being said and reasonable about our expectations from the industry,” he said in an interview.
“Electric vehicles still have some concerns on the part of consumers … Affordability is one, batteries themselves are still developing. We still have issues with weather.”
Other speakers Monday were cautious about the era of electric and self-driving vehicles arriving en masse, but no one was arguing it wouldn’t happen, only on the pace of change.
Rebecca Lindland, an analyst at Kelley Blue Book, pointed out the industry still doesn’t have the capacity to produce one million electric vehicles a year. It will face resistance getting consumers to buy electric, self-driving cars for use in rural settings or in colder climates.
“It’s not so much the technology isn’t going to be there. We will take flight, we can drive autonomous vehicles by 2025, but the rest of it isn’t going to be there,” she told reporters.
“I love the idea. I love the concept. I love everything about it. But I also love facts.”
Lindland believes a 10 per cent adoption rate for electric vehicles by 2030 is realistic, which is only 13 years away.
There’s no denying electric vehicle sales are setting records, as was seen in Canada last year, and that investors are paying attention.
The debate about the future of the transportation sector came on the same day Tesla Inc. saw its market capitalization top venerable Ford. By Tuesday, Tesla moved past General Motors Co., and now has a market cap of US$53 billion.
What happens with the transportation sector will affect not only car and truck sales, but also the energy industry and oil-producing jurisdictions like Alberta.
ARC Energy Research Institute president Peter Tertzakian noted about half of every barrel of oil produced globally goes toward wheeled transportation.
While crude demand is growing and expected to rise for decades, even a small change in a few hundred-thousand barrels of supply is enough to make oil markets gyrate wildly.
Pressure to improve fuel efficiency, notwithstanding the recent review ordered by the Trump administration on incoming U.S. standards, will also affect future oil demand.
All this means more pressure on petroleum producers to drive down costs to remain competitive.
“It doesn’t mean it’s the end of oil. It just means that the oil business has to change and adapt in a new competitive environment,” said Tertzakian.
“And those that survive it are going to do very well. Those that don’t are out of business.” [Emphasis added]
Canada’s oil industry ponders its fate as the threat of electric cars looms in the rearview mirror by Geoffrey Morgan, Financial Post (article below), April 4, 2017, Calgary Herald
Comment by Diana Daunheimer to the Herald article:
“the threat to the oil and gas industry is more near-term. ‘If you’re not prepared for this inevitability, I think you’re in trouble,’ he told conference attendees.”
This is well worth a watch for anyone interested in just how much “trouble.”
Tony Seba’s Clean Disruption Keynote presentation at the Swedbank Nordic Energy Summit in Oslo, Norway, March 17th, 2016.
Some of the comments to the Financial Post article:
David Schell · Victoria, British Columbia
EV Technology has proven itself for city living and as battery range continues to be increase, combinded with the general migration back into the cities means you don’t need a car that has to go long distances. I bought an EV car last year and 4 months ago moved back into the city. I have not charged the car once at home as their are so many charging outlet around and I don’t drive that far now to get to where I am going. I think the artical is spot on and big oil is very much concerend.
Patrick Rafferty · Mount Royal College
You need to go on our counties Highways if you don’t think people travel long distances anymore. Right now you can’t drive from Calgary to Edmonton on a single charge. Trust me gasoline will be here for a long time. Not to mention the 400,000,000 cars that are on the road at any one time on the entire planet.
Eileen Jessop · Ottawa, Ontario
Meanwhile in Québec there are charge stations at pretty much every MacDonalds. Maybe it’s time for Alberta to catch up?
Luc Nocente · President at Norpix
You obviously have no clue what you’re talking about. The Tesla supercharger network allows for quick charging. Driving from Montreal to anywhere in North America is now feasible and easy. Educate yourself and stop buying the lies from the oil industry.
Carl Chabot · Forman at A.C. Civil Contracting
Mike Telford, Ever heard of clean energy???
Haha. There’s so much of it here in Canada.
Especially hydro.
Did you know that Quebec got so much of it that they are selling tonnes to the State?
Carl Chabot · Forman at A.C. Civil Contracting
Tim Rosnau, any of that doesn’t change the fact that cars running on fuel is becoming a thing of the past.
It is happening cause it has to.
The faster it happen, the better it is.
Don’t fight it, join it.
You’ll be better at the end.
Carl Chabot · Forman at A.C. Civil Contracting
Patrick Rafferty, there’s already places in Europe that are talking about completely stoping the sell of new fuel running cars.
Europe is way in advance compare to us and we have a way bigger access to clean energy like hydro electricity and it is also very cheap compare to their electricity.
David Mosher
Patrick Rafferty – A Tesla S could travel Calgary to Edmonton on a 70% charge.
Finbarr Wilson · Calgary, Alberta
Patrick Rafferty The range of a Tesla does get you to Edmonton, and even if it didn’t there is a supercharge station in Red Deer.
Luc Nocente · President at Norpix
Edmonton to Calgary is 300 km so easily doable with a Tesla. Inform yourself before you improvise yourself as an expert.
Luc Nocente · President at Norpix
Now I find out that there’s a supercharger in Red Deer! So that makes it even easier !!!!! Amazing how people will give their opinion not knowing anything.
David Mosher
How many gas stations existed in the early days of automobiles? Demand will drive supply and electricity generation and charging stations will follow suit. Cue the naysayers.
Douglas Gray · Retired at Canada Post Corporation
It would have been nice if someone had included how much the price of oil would drop if say just 10 percent of vehicles were electric. Can one imagine the fall out if a few million barrels a day of demand were replaced. This is the year China puts 500,000 EVs on the road and Tesla ramps up to 400,000, not to mention all the electrics coming fron BMW, Renault and Mercedes in the next 2 years.
Adam Kurzawa
The EV technology is already proven, and with battery costs going down 15 to 20% per year, the adoption will only accelerate. Think of all the savings in healthcare, the improved quality of life in the city, the reduced on street parking for autonomous vehicles. The future is bright for the cities and electrification and automation of transportation will really help a lot.
Douglas Gray · Retired at Canada Post Corporation
But we do not burn it…and can you imagine the price of oil if there was just a 10 percent drop in demand from the use of electric cars?
Kevin Carr
secondary automotive industries will get kicked in the pocket book when electric gets cheaper ….. kiss ….. fuel filters, fuel pumps, alternators, oil filters and pumps, spark plugs, glycol, radiators, water pumps et cetera …. all those industries will have to change their product lines or kiss them all bye bye to ….when the internal combustion engine replaced horse carriages …… buggy whips, and bridles went down with them ….. history repeats ….. keep up or die standing still
Luc Nocente · President at Norpix
Exactly nothing is going to stop electric cars now. Tesla’s advances in technology have shown that nothing is better than using a battery with home charging and their supercharger network. It’s hilarious to read the comments on this thread from dinosaurs who haven’t caught on yet.
Simon Joe · Works at BuyerSave2 Realty
Why electric? Hybrid cars are using mature technologies & doing great – accompolishing gas saving (almost double the MPG) with same driving experience. And no need to plug in or worry about stranded on highway like pure electric vehicles.
Luc Nocente · President at Norpix
I have a Tesla and I’ve never been stuck anywhere.
Oil industry mulls its long-term fate as electric cars set to take over by Geoffrey Morgan, April 3, 2017, Financial Post
Canada’s energy industry gathered at a petroleum museum Monday to consider how electric cars threaten oil, the country’s biggest export, especially if battery-powered cars make up 50 per cent of vehicles on the road by 2050 as projected.
Peter Tertzakian, executive director of ARC Energy Research Institute — which organized the event — said even a slow or modest adoption rate for electric vehicles over petroleum-burning vehicles could cause pain for oil producers because “when demand moves, the price of oil moves,” which could result in large losses for higher cost oil producers.
Related
Tesla sets record with 25,000 deliveries, beating estimates as it prepares to build Model 3
Cars and trucks currently account for 40 per cent of the worldwide demand for oil, meaning electric vehicles could represent a large market share threat to the oil and gas industry depending on how quickly consumers replace their conventional cars with hybrids or electric vehicles.
Tertzakian said there are currently more than 1 billion cars and trucks in the world – a quarter of those are on the roads in the U.S. – and electric vehicles make up less than one per cent of the mix, but the proportion is projected to grow.
On Saturday, Tesla Inc. said it shipped a record 25,000 cars in the first quarter, exceeding analyst expectations.
Tertazakian says his team organized the conference as there are too many oil conferences that disregard how electric vehicles are challenging their market, while attendees at electric vehicle conferences “drink their own bathwater.”
Oil and gas companies have attempted to forecast the rise of electric vehicles in recent years to determine the threat to their market. ExxonMobil Corp, for example, issued one of the more conservative estimates that 10 per cent of cars on the road in 2040 will be electric, but analysts at the conference say the transition may be quicker.
Keynote speaker Steve Koonin, former under secretary at the U.S. Department of Energy and New York University professor, predicts that 50 per cent of the vehicles on the road in 2050 would be electric, meaning the threat to the conventional oil and gas business is large but not immediately imminent.
The adoption rate for electric vehicles is relatively slow, but is projected to ramp up over time and with regulations.
“It takes a long time to penetrate the fleet,” Koonin said, adding that the pace of adoption of electric vehicles will depend on battery technology.
Larry Burns, a former General Motors executive who has consulted for energy producer Hess Corp. and Alphabet Inc.’s self-driving car subsidiary Waymo, said the threat to the oil and gas industry is more near-term. “If you’re not prepared for this inevitability, I think you’re in trouble,” he told conference attendees.
“It takes a long time to penetrate the fleet”
Burns said fuel efficiency regulations in the U.S. could hamper the demand for petroleum in North America by between 30 and 45 per cent by 2025.
He said car manufacturers across the board are working to boost efficiency by reducing the weight of their cars, building electric cars or hybrids and also by engineering more driverless cars, which are being designed to be lighter than conventional vehicles and therefore more fuel efficient.
“Just over 1 per cent of the gas being burned (in your car) is moving you, the rest is being used to move the machine,” Burns said.
At present, ARC Energy Research Institute director of research Jackie Forrest, one of the biggest impediments to electric vehicle adoption is price, as electric cars are twice or three times as expensive as gasoline-burning cars.
“They do have lower operating costs but it’s hard to justify the initial capital cost,” Forrest said.
Another impediment to electric vehicle adoption is car dealerships, which frequently do not keep an inventory of electric vehicles so it’s difficult for consumers to test-drive a battery-powered car before making the decision to switch, said Bruce Power vice-president, corporate affairs and environment James Scongack said during one panel.
“We think there’s a big group of people who, despite the price, want to buy electric vehicles,” Scongack said.
Another challenge was managing the electric grid, and output from power plants, if cars were fuelled electrically rather than with gasoline. Scongack said power producers were preparing for the transition and provinces, which regulate Canada’s electricity markets, need to prepare long-term plans as well.
[Forget the awful grid! Install solar and Musk’s Power Wall at every home with electric cars]
Encana Corp. president and CEO Doug Suttles said his company has worked to become more efficient and lower its costs to compete with cheaper sources of energy.
For example, Suttles said Encana is now running crews 24 hours per day, fracking multiple wells at the same time, and using highly-automated drilling rigs to drill and finish a well as fast as possible. [New definition of insanity? Frac 24 hours a day?]
“I think these trends are not going to slow down,” Suttles said. “You’re going to find these innovations moving to field application is happening in weeks now.” [Emphasis added]
‘Super inquiry’ into toxic air scandal launched in unprecedented move by Nicholas Cecil, March 20, 2017, The Evening Standard
MPs today launched a “super inquiry” into Britain’s toxic air scandal to force the Government to dramatically step up action to tackle the health threat to millions of people.
In an unprecedented move, four Commons committees are to grill ministers and air quality experts on the dangers from filthy air in London and other cities.
The hearings by the health committee, transport committee, environmental audit committee and environment, food and rural affairs committee will be held as the Government draws up its latest plans to deal with toxic air.
Labour MP Mary Creagh, who chairs the environmental audit committee, said: “Ministers will face unprecedented scrutiny in Parliament to ensure they finally step up to the mark to ensure adults, and children in particular, do not have their health damaged by filthy air.
Some Londoners are considering leaving the capital due to air pollution levels
“Four committees coming together for a joint highlights the degree of MPs’ concern at the Government’s slow pace in cleaning up Britain’s air.
“It’s time for action on a far bigger scale.”
London Pollution – In pictures [Excellent visuals at article link]
Ministers have been forced to draw up new proposals to cut air pollution after judges backed environmental lawyers ClientEarth in two high-profile cases that the Government was failing to do enough to reduce nitrogen dioxide levels.
The draft new plans are due to be published on April 24 and the MPs want to ensure they not only meet legal requirements but also deliver maximum health and environmental benefits.
Dr Sarah Wollaston MP, the Conservative chairwoman of the health committee said: “Poor air quality is affecting the health of millions of people across the UK because of the impact of invisible particulates and other pollutants.
“Our joint inquiry will include an examination of the scale of the harm caused and the action necessary to tackle it.”
Scientists estimate that toxic air is to blame for a death toll of up to 9,400-a-year in London, with emissions from diesel vehicles significantly blamed for air pollution levels.
MPs are also concerned that a lack of cross-Whitehall working is hindering the battle against dirty air.
The Department for Environment, Food and Rural Affairs is responsible for air quality but has limited tools to improve it. Moves such as cracking down on diesel vehicles spewing out dirty fumes would need the agreement of the Treasury and the Department for Transport.
Neil Parish MP, Tory chairman of the DEFRA committee, stressed: “The solutions to cleaning up our air are not the responsibility of just one minister.
“That’s why we have taken the unprecedented task of convening four select committees so we can scrutinise the Government’s efforts from every angle and look for holistic solutions that are good for health, transport and the environment.” [Emphasis added]
Video at link: London Taxi Company unveils £300m Coventry plant by BBC, 22 March 2017
A new car production line that will create the next generation of black cabs has gone on show.
The London Taxi Company has released footage from inside its £300m manufacturing plant at Anstey Park, Coventry where it will make its new electric taxi, the TX5.
The vehicle will roll off the production line and go on sale in London in the final quarter of this year before being sold around the world early in 2018. [Emphasis added]
[Refer also to:
