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June 30, 2022

The ‘robo-taxis’ are coming

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By Giles Parkinson, www.reneweconomy.com.au

It’s almost impossible to imagine in a country with such an attachment to individual car ownership, petrol vehicles and long distances like Australia. But in little more than a decade, the way we travel in cars may be completely different.

A new study from EnergyLab in Sydney suggests that the arrival of autonomous driving and the introduction of shared vehicles, or ‘Transport As a Service’, could mean that by 2030 more than 95 per cent of kilometres travelled in cars could be in electric vehicles.

The ‘robo-taxis’ are coming,

This, author James Tilbury says, could in turn accelerate another major transition – by using the combined capacity and flexibility of the battery storage resource of this electric car fleet to the push towards 100 per cent renewables for both electricity and transport.

This may sound all too ambitious and optimistic, and way too short a time-frame.

Forecasts for the uptake of electric vehicles are generally conservative – held back by the hefty up-front costs of the car that will not make the economics of EV travel and charging them obvious to many, even after capital costs fall. And then there’s the attachment to individual ownership.

The economics of shared vehicles, or TaaS, turns this concept on its head. It reduces the cost of car travel per kilometre to less than 50c – that’s cheaper than a petrol car, and much cheaper than Uber, public transport or taxis.

Within 10 years, this cost could fall to 38c/km, where it starts to match just the running costs of petrol and diesel cars.

‘We argue that autonomous vehicles (AVs) should be considered cleantech and could be one of the most disruptive technologies in the energy transition,’ the paper says

It says that AVs will ‘inadvertently and rapidly electrify Australia’s vehicle fleet’, with the resulting increase in energy storage and flexible demand helping facilitate a transition to 100% renewable electricity.

Why and how?

‘We have estimated the potential cost of TaaS in Australia to be below 50c/km. This would make TaaS not only cheaper than using a taxi, but cheaper than buying a car, and cheaper than even using public transport in some instances.’

In fact, it says the most surprising result of its analysis is that TaaS could be comparable to the average annual marginal cost of owning a car. ‘As a result, TaaS use could quickly displace the use of personal vehicles, possibly becoming the dominant form of transport within a decade.’

The study was inspired by a report by RethinkX, led by Stanford University’s Tony Seba, whose conclusions we summed up in this story: Death spiral for cars. By 2030, you probably won’t own one.

That was followed more recently by the annual energy outlook for BP, which has a conservative outlook for EV ownership – only 15 per cent of all vehicles – but acknowledges that the arrival of ‘shared vehicles’ means that total kilometres travelled by EVs could be twice that amount, 30 per cent.

‘TaaS could electrify our personal transport systems much quicker than natural electric vehicle adoption,’ the EnergyLab study says.

‘Currently, optimistic estimates have EV uptake reaching 90 per cent of personal vehicles around 2085 under the normal model of personal vehicle ownership.

‘One of the reasons for the slow change is that cars have high upfront costs and are retained for over a decade on average, resulting in a slow rate of turnover in the national fleet.

‘TaaS won’t suffer from this turnover brake, with the addition of a new commercial TaaS fleet bypassing the regular replacement process and lowering barriers to consumer adoption.

‘As result, some estimates project that TaaS could provide for 95 per cent of all passenger-kilometres by 2030 – mostly with EVs.’

The reason that studies like RethinkX and Energy Lab push a much tighter timeframe is not just one of economics and regulations, but also driven by factors such as health and insurance.

Consider this. If Automated Driving does deliver the technology and the safety it promises, and is allowed by governments and regulators, how long will it take before insurers price human drivers out of the market?

The study notes that – unlike climate change – politicians appear to like the idea of AVs, and Australian state and federal transport ministers have already agreed to a phased reform program allowing AVs on Australian roads from 2020.

‘There is a surprising level of political support for AVs in Australia,’ the study says. And it is bipartisan.

‘This pace of reform is a breath of fresh air for anyone who has lived through over a decade of climate policy gridlock. Perhaps the road to AVs has been smooth so far because the topic hasn’t been tarred by the climate brush, in which case it might be prudent not to send this paper to any politicians…’

So how exactly would the transition occur? Here, in regional NSW, I cannot imagine a ‘robo-taxi’ fleet filling in the needs of the locals, travelling between towns.

But as Seba suggested in his study for RethinkX, this transition will be driven by inner-city and then suburban dwellers – most of whom need a car for only minutes a day, and can’t find or afford a permanent parking spot anyway.

This latest report suggests that in Australia, with two-car families more or less standard, it could be the second car that goes first.

‘It’s hard to escape the conclusion that robotaxis could be cheap enough to quickly gain a large share of the transportation market. The current taxi and Uber fleet would quickly be replaced, as it is very unlikely they could ever compete with TaaS providers,’ the report says.

‘The impact on car ownership is less certain but still appears likely to be significantly impacted. If nothing else, the argument for owning more than one car could quickly fall over.

‘For low-utilisation vehicles, it might be cheaper to just leave them in the garage and hail an AV. Buying a new car will become uneconomical by our estimates, which we believe will have at least a similar impact as the price of EVs suddenly dropping to half that of an equivalent ICE vehicle.’

It goes through the economics.

‘If you already own a car, with the registration and insurance paid, then it will probably be cheaper to use it than order a lift with a TaaS provider.

‘Fuel and wear-and-tear cost about $0.25/km, significantly lower than even our 2030 TaaS estimate of $0.38/km.

‘However, when it comes time to renew registration and insurance, many might hesitate. Considering these costs increases the rate to a comparable level to our TaaS estimate.’

These rates assume the car is driven 15,000 km per year and increase significantly with lower usage. That means that cars that aren’t used very often, such as second cars, could be particularly uneconomical to keep registered and insured.

However, the real impact comes at the point that people would normally buy a new car because adding the upfront cost of a vehicle makes it significantly more expensive than using TaaS.

And for the grid?

The rapid electrification of transport is likely to help facilitate the transition to 100 per cent renewable energy because the storage capacity that could be made available by a TaaS fleet would help balance out the intermittency of renewable energy, and provide system services.

‘As a result, our grid would be able to handle a greater amount of clean energy, which in turn would decrease the carbon intensity of electric vehicle use. This dual potential to help decarbonise transport and the grid simultaneously makes TaaS highly significant for the energy transition.’

 


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2 COMMENTS

  1. **‘Currently, optimistic estimates have EV uptake reaching 90 per cent of personal vehicles around 2085 under the normal model of personal vehicle ownership.**
    Remarkably pessimistic actually. According to Tony Seba EVs are expected to reach price parity with ICEVs by 2025. Given the massive difference in maintenance and running costs demand for new ICEVs by then will be minuscule. What’s more the continued lowering of battery costs will probably prompt a steep rise in the EV conversion business. On purely economic grounds the conversion of the global fleet will probably be considerably sooner than 2085, much to the dismay of our legacy makers.

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