I asked a dozen friends of mine when they think petrol-driven vehicles will disappear from the U. S. That’s right, when will 100% of all cars, buses, vans, trucks run on Electricity! The average answer I got was: in about 30-40 years, if then.
The reality: How about in 8 years?!
That’s the thing about exponential growth – even very plugged-in people (no pun intended) underestimate wildly the meteoric rise due to such growth that occurs when the conditions are right.
And the conditions for Electric Vehicles (EV’s) today are just right. Here’s an article by Tony Seba of Stanford that predicts an all-EV future in the US in 8 years! His previous articles, just a few months ago, said 95% EV’s by 2030 but he was underpredicting! He is right on the money – and given his very realistic predictions the Oil, Coal and even Gas industries should realize they are dead. Some 70-80% of all the fossil fuels will be left in the ground. Worthless. Killed by the most abundant fuel on earth – Sunshine!
I just finished reading my friend, Vivek Wadhwa’s excellent book, The Driver in the Driverless Car, which brilliantly lays out the prospects for our exponentially growing future and the paradigm shifts that are ahead of us: paradigm shifts in Energy, Healthcare, Education, Finance, Jobs and Automation etc. Do read the book because this is the mindset that must be adopted by anyone who wants to benefit as an investor, planner or career seeker with an eye to the future. (Peter Diamandis and Ray Kurzweill are the earliest futurists to see this and through their Singularity University, create awareness and companies to exploit this).
It’s not evident to all, but those who see it are bailing out of Oil – Oil companies, Oil service companies, Pipelines, Drilling and ancillary support companies, Coal, Natural Gas – all are on death watch. I would sell now.
Et Tu India!
India – yes, that $5/day-per-person-GDP, highly developing country with helpless governance, horrendous illiteracy and a hopeless infrastructure – has realistic ambitions to go all Electric by 2030! Read on.
India is a petroleum poor country. It imports $80 billion of oil every year – that is more than 1/3rd of all its imports and 100% of its foreign currency trade deficit.
However, India has an abundance of another fuel it can extract and it’s virtually free. This wonderful fuel is Sunshine! With exponentially growing improvements in technology India has the potential to leapfrog directly to a solar-based, cheap, sustainable and green energy economy. But can this be done in any reasonable time frame?
Professor Jhunjhunwala at TiE/ICC Event, May 24, 2017
A few weeks ago, invited by my friend and entrepreneur, Vish Mishra, I went to an amazing talk by Dr. Ashok Jhunjhunwala sponsored by TiE (the Indus Entrepreneurs) and ICC (India Community Center) and learned first hand about his sweeping, game-changing efforts to transform India to a self-sufficient, green energy country at break neck speed!
Prof. Jhunjhunwala, a graduate of IIT Kanpur, has also studied and worked extensively in the US. He is the head of TeNeT in India, which does extraordinary things in communcations, energy and innovations in numerous fields. Currently he is on the faculty of IIT Madras. He has spawned over 50 companies and has been awarded the Padmashree for his invention of the micro-grid.
Dr Jhunjhunwala has been tapped by Prime Minister Modi and Power Minister Piyush Goyal to give wings to an ambitious market-based plan to meet India’s power needs and solar/green goals, far exceeding the commitments in the Paris Accords. The objective is
. 60% of all electricity generation using solar by 2025!
. 100% Electric Vehicle adoption in India by 2030!
That’s right – in 13 years, Dr. Jhunjhunwala says, India will have no petroleum based road transportation! No diesel belching trucks and buses, no choking, smog-generating cars, and noisy, sooty, inefficient three-wheelers. He plans to convert 400 million vehicles, including cars, three-wheelers, two-wheelers, buses, trucks etc. to electric power – most of it generated by solar. It’s an amazing vision, but listening to him talk I could sense that it is eminently doable and his detailed blueprint for doing it is utterly practical and feasible.
Among Jhunjhunwala’s deep insights is to use DC on the electricity grid instead of AC, which is the default everywhere in the world today. He has invented the design of a 48-volt DC electrical micro-grid, powered by solar energy, which is much better suited and safe for India, and results in very much more efficient appliances in the home. Many years of engineering design and innovation have gone into this idea – see this YouTube talk for details. The bottom line is that a lot of power that is wasted in converting repeatedly from AC to DC and back (upto 50-60%) can be saved by staying with DC throughout.
In addition, the home appliances themselves are way more efficient when DC power is used. For example, a DC ceiling fan consumes 30W of power vs 72W for AC. At low speeds the savings are even more: up to 90%. For LED lighting the power consumption can be as low as 10 Watts, vs 36 W for tube lights commonly used in India. Similarly, TV’s, laptops, battery chargers and even refrigerators and air-conditioners are far more efficient when designed for DC versus AC. So the savings are multifold: 40-55% in conversion costs, and 70% in appliance efficiencies!
Dr. Jhunjhunwala says he can meet the electricity needs for a small rural or poor-to-middle class family in India (more than 650 million people!) with a 125 watt solar panel and a 500 Wh battery. The solar panel is the surface size of a medium sized dining table and the whole system can be made in India and sold profitably for under Rs. 20,000, (or about $300) and falling rapidly.
In transportation, Dr.Jhunjhunwala has much simpler designs for electric vehicles (EV’s), including cars, buses and three-wheelers, with only 20 (or so) different parts needed to manufacture, instead of the 2000+ parts for internal combustion engine cars. He sees many vehicles In India needing batteries for only a 50 Km range, which will cost about Rs. 15,000 ($250) for three-wheelers and Rs. 100,000 ($1500) for buses. This he couples with a STD-PCO type concept for roadside charging shops throughout urban and rural locations, small entrepreneurs who can charge your battery in under 30 minutes, or replace them in a couple of minutes with pre-charged ones. The running cost of a three-wheeler would be about 1 cent per mile., for a bus about 7 cents. His electric vehicles will have a long running life (over 250,000 km) and almost zero maintenance costs. These ideas are being implemented in New Delhi right now and he hopes to see the first EV’s on Delhi’s roads, including buses, by October 2017!
The most appealing thing about Jhunjhunwala’s plan is that it is not dependent on large subsidies by the government. It is a market based system and he has already got more than 50 start-ups producing battery packs, DC appliances, vehicles, and battery chargers etc. Crompton Greaves, the biggest maker of ceiling fans, is already making DC fans, which are cheaper and use only half the power of existing AC models.
I think this is the start of a paradigm shift for India. The country greatly exceeds its green commitments under the Paris accords, it saves hundreds of billions on oil imports and taps the Sun for virtually unlimited energy needed for fast economic growth.
It is very much in our (American) interest to support this vision.
The Indian diaspora, particularly in the Silicon Valley, should heartily embrace this process and help with collaborations, technology, and business investments. Dr. Jhunkhunwala is very open to this and is a frequent ambassador for entrepreneurship here in the Silicon Valley.
I note that China has grown rapidly in the last two decades thanks to active involvement of its 80-million strong diaspora. The Indian population in America is tiny by comparison, but rightly positioned in technology, influence and resources to plug in to transform India, and bring Dr. Ashok Jhunjhunwala’s grand vision into reality. It’s a win-win for Indian and American entrepreneurship, and a win for a cleaner world.
Thanks Ashok. Very hopeful and uplifting. Let’s hope the individuals involved prevail. So much good thinking and potential gets mired into the bloody politics and the insecurities of established vested interests.
You are probably correct on the decision to eventually sell your fossil investments, but the timeline may not be correct. Fossil fuel use in not going to disappear as soon as they stop making new fossil fuel consuming machines – there is a huge backlog of older such machines still being used. You are also counting on exponential growth of renewable fuel production and consumption which will be slowed by powerful well-entrenched opposing forces who will employ strategies that may be based on dishonesty and corruption. Finally, we humans are well known for making non-rational decisions.
In the perfect world, it seems perfect. Go for it. Otherwise timeline is very aimbitious.
Right now, there are just two electric cars that can go more than 200 miles on a charge; a minimum requirement for electric cars to be viable. There are also 2 hydrogen fuel cell cars with 300 mile range on a fill. Yes electric cars have won the marketing battle but looking at this data why do you believe electric cars will rule in 8 years?
Right now all the evidence points to EVs being better than hydrogen and having a larger chance of taking over.
see: https://tinyurl.com/EV-betterthan-H2
There’s a very steep learning curve here and batteries are improving fast.
In 5 years (2022 or sooner) here’s what you’ll see in EVs:
Cost: $25,000 or less
Range: >300 miles (from 50 KWH batteries for $5000, capable of 15,000 cycles or 50 years of driving.)
Lifetime: >500,000 miles. – very low obsolescence compared to hydrogen or gas.
Running Costs: <3c/mile
Zero Maintenance
Networked cars and Auto-pilots for even greater cost efficiency
Software upgradable
Huge Fleet benefits from self-driving, serviceless cars - Uber, Trucking, FedEX etc.
Very few component parts to manufacture - maybe <20 vs >2000 for internal combustion
Huge infrastructure for charging and replacing batteries.
Lower insurance costs and accident rates
Longer leases due to low obsolescence and higher trade-in
Huge deployment in China and India
The average American will save over $5000/yr buying these cars. It will be a no brainer. Why would he buy anything else? After 2022 oil will not be competitive at even $10/barrel.
I’m not including the benefits to our environment. This is only an economic argument.
Ford recently fired their CEO to replace him with a EV-passionate guy. BMW has big EV plans, including a collaboration with MobileEye. All big auto companies are seeing the writing on the wall – go electric or go bankrupt.
That’s why I believe Tony Seba when he says 8 years. Even if it is 10-12 the basic story remains one of a huge paradigm shift.
Ashok: First, I like the blog. Second, the discussion about 8 years vs. 12 years or longer is not productive. None of us can predict with such certainty, such earth-shaking changes. What matters is that our perception of renewable energy has evolved in just twenty years from “it is a cute notion, but will never replace fossil fuels” to “maybe useful for a niche market” to “OMG, could it displace oil?” That is what is encouraging about exponential growth. It is always slow at first {allowing the naysayers to remark on its lassitude (think hare vs tortoise)}, but when it takes off, it screams upwards, of course inevitably saturating. The question is not whether but when. Because oil will not give up without a fight, I say 15-20 years instead of 8. But in our lifetime (I hope?) we will see this sea change. People like Jhunjunwalla are truly inspiring. I hope that history will write one day that he is to technology as was one Mohandas Karamchand to politics and civic affairs.
Ashok, I enjoyed your blog. I have a question for you. What stocks do you own in the electric car segment? I would like to buy some but I find Tesla too expensive!
Sharam
Ashok,
I commend you for advancing such a provocative dialog. In my humble opinion, 8 years is too short a time frame for such a massive transition of our current petroleum based transportation system to electricity. Some of the challenges to achieve this goal are as follows;
1. The amount of electricity required to replace the gasoline demand is between 8 and 10 times the electricity generation capacity we have now. Assuming money is no object and there is political will and consensus for this massive transition, the sheer logistics of developing and constructing such “humongous” capacity will take several decades (remember the “shovel ready projects”?)
2. The California Energy Commission (CEC) forecasts that the legislated incentives that have been introduced during the period between 2010 and 2015 in California will likely reduce the on-road gasoline demand in California from 14 billion gallon per yr. to about 10 billion gallon per yr. in decade (2015-2026). Even this forecast appears to have a lot of caveats. Please refer to the CEC’s Integrated Energy Policy Report (IEPR 2015) for additional resource. I can assure you that even if we incorporate solar panels in the so called “wall” (forgive my humor), it will provide a tiny fraction of the demand.
3. The physics of electricity generation, transmission and distribution should not be mistaken with that for wireless transmission of voice and data. We in the industry have learned our lessons over the last 20 years and do not compare them anymore as benchmark. There must be a reasons why some 20% of the world population still do not have access to electricity to serve their basic needs ( such as light their homes and cook their meals) even though electricity is commercialized more than 100 years ago. In contrast, many of the same population have access to cell phone today.
In any case, your proposal is a bold one. Whether it can be achieved in 8 years or 80 years is immaterial. We should move forward incrementally each year for the sake of managing climate change.
Dear Shankar,
Thank you for your comments. You have insights in this field and provide good reasons for why this kind of innovation can be slow to implement.
From all the comments I am receiving it is clear that I am projecting a very fast change in the EV scene, and I agree that it is probably on the very optimistic side – lots of assumptions and adjustments by society and the transport market will be needed. But, in my opinion, the timing though very optimistic, is not implausible. Solar power generation is competitive already with much of fossil energy cost – even without subsidies. If we get battery storage costs to come down by a factor of another 2 to 4, solar, wind and EVs will go crazy.
Last year, in the US, all vehicles – cars, light trucks, vans etc – drove about 3.1 trillion miles. An electric vehicle like the Tesla goes 3 miles/KWH so we need 1 trillion kWH (or 1000 TWH) to power all road vehicles. And 3 mi/KWH is for Ferrari-like performance! That’s 25% of the electricity generated last year not 8-10 times the current capacity as you suggest. How do we get to 1000 TWH and how fast? In 2016 the US produced 54 TWH (both Utility scale and rooftop). At the current exponential growth rate we should be at 500 TWH in 8 years. Wind provides the rest (it’s at 200 TWH already). The key is battery storage.
Imagine the following in even 8 years:
A $25,000 electric car with the performance of a BMW.
Zero maintenance and software upgradable
Autonomous driving – a car that can go fuel itself while you are at work or having lunch.
500,000 miles of car life with very few parts. Low depreciation and insurance costs
Less than 10 cents/mi operating cost
The average American family can then save more than $5000/year in switching from gas-powered cars. Why would anyone buy anything else?
My time frame may prove too optimistic. But this is happening faster than most people expect.
Love to discuss more.
Best,
Ashok
Thanks, terrific article. In the boondocks, a.k.a. State College Pa, where I live it is still hard to find a charging station for a Tesla! But you’re probably right. We tend to overestimate how much progress can happen in one year but underestimate what can be done in 10 years.
When I heard that fishermen were making deals with their buyers with mobile phones while still at sea, it sunk in to me how transformative mobile phone communication had been to India previously mired in monopolistic decrepit land line technology. Similarly, the push to cash-less transaction following the recent monetary shock, which has already taken off in Kenya, bodes well to an economy that still exchanges sweets in lieu of change due to a perennial shortage in coins. India’s best hope in energy is to bypass nuclear and coal power generators and go solar with distributive energy networks and battery storage. Already many homes, experiencing frequent brown-outs, have inverters and lead-acid batteries to keep essentials powered. Incentivizing lithium battery manufacturing in India would be smart in the long run. Leave it to the Indian people’s ingenuity in how they adapt new technology to fit in an ancient society. They have repeatedly shown an ability to blend and synergize when unfettered from bureaucracy.