Electric vehicles won't just change how we get around. They'll transform large swathes of how our economy operates. That's the thinking behind a new article from Michael Liebreich and Angus McCrone of Bloomberg New Energy Finance, in which they point out that similar economy-wide shifts have happened many times before:
"Mobile phones have eaten entire industries (cameras, alarm clocks, maps) and are set to do the same to others (newspapers, cash handling, music systems). No sector is immune, right down to furniture design, the size of pockets sewn into garments, even how many single diners a restaurant needs to plan for each night."
Indeed, say Liebreich and McCrone, history is full of examples of how innovation in one area of our economy can lead to much broader shifts in sometimes hard-to-predict places. And because cars are a form of "keystone species" in our economy, they are a prime candidate for initiating a similar phase shift. Here are just some of the areas of economic/societal activity most likely to be impacted by the electrification of the transport sector:
Vehicle maintenance and retail: Electric cars require much less maintenance than your average gas guzzler, meaning both neighborhood repair shops and big box dealerships may be in trouble. The authors suggest we'll see more Tesla-like retail locations in malls and other convenient locations, combined with out-of-town second hand dealerships. And because electrification is likely to go hand-in-hand with increasingly autonomous/semi-autonomous vehicles, demand for auto body repair work is likely to drop too.
Autoparts suppliers: If you make gearboxes you are probably going to need to diversify. If you make batteries, you may be about to get busy. That's an over simplification, but you get the idea.
Fueling and charging infrastructure: Obviously, any drop in demand for gas is likely to impact those in the fuel retail business. It's not necessarily a question of when everything goes electric—but rather at what point does the drop in demand become significant enough to make a significant number of gas stations no longer viable. On the reverse side, there'll be plenty of work installing electric vehicle charging stations—in homes, offices, car parks, retail locations and on-street parking too. For long distance travel, providing electric vehicle charging to travelers may be a new business opportunity for restaurants and retail locations where people can pass the time as they charge.
The electricity system: Electric vehicles won't just increase demand for electricity, but they will fundamentally change how the system operates. By adding a huge amount of battery capacity, there's significant potential for a smart grid to use vehicles as a decentralized storage asset, storing power when it's cheap and abundant and buying it back at times of high demand. And because batteries will have plenty of useful life left in them once they are no-longer fit for powering a car, there's significant potential for second hand batteries to be used for stationary renewable energy storage—improving the economic case for both electric vehicles and clean energy in the process.
Ministries of finance: Gas taxes make up 7% of government revenue in some countries, so a large-scale move away from gas and diesel could have a significant impact on public finances. Similarly, while some fuel-importing nations may see an overall benefit in terms of their trade deficits, there are plenty of oil producing countries who will lose out as demand falls and oil prices remain depressed.
That's just a sampling of the kind of wholesale change that may be in store as electrified transportation kicks into a higher gear. (Sorry!) As the authors point out, this isn't even just about cars anymore. From buses to ferries to lawn mowers to (eventually) planes, there's no transportation/engine sector that won't be impacted by these shifts.
In fact, one of the biggest areas for potential uncertainty on this whole topic may not be whether people go electric, but how they choose to go electric. We've already seen how e-bikes may broaden the appeal of cycling, for example, and car ownership may become pointless in many cities. The only thing we can say for certain is that things will change. And electric vehicles of all shapes will be a big driver in making that happen.
Check out Liebrech and McCrone's full article for more on the economic implications of electric vehicles.