To
understand why , read following report from CNBC Reporter's notebook :
-----------------------------------------------------------Be warned: $25 oil is coming, and along with it, a new world
order
The world as we know it, will
be no longer. The balance of power on a global scale will shift. All in the next decade.
First and foremost, RethinkX co-founder and Stanford University economist and
professor Tony Seba told CNBC's
Street Signs that the rise of self-drive cars will see oil demand plummet, the
price of oil drop to $25 a
barrel, and oil producers left without the political or financial capital they have
today.
It's a big call, right ? But if you look at what's behind Seba's
premise, surprise, surprise, it comes down to money.
He says we are not going to stop driving altogether, just switch to
self-drive electric vehicles, which will become a much larger part of the
sharing economy.
And these electric vehicles are going to cost less to
both buy and run.
"The day that autonomous vehicles are approved, the
combination of ride
hailing , electric and autonomous means that it's going to be ten times cheaper, up to
ten times cheaper, to use a robot taxi, transport as a service car, than it is to own a
car. Ten times."
China and India are accelerating the adoption of
electric vehicles. China wants to get electric, plug-in hybrids and fuel cell
cars to account for 20 per
cent of all auto sales by
2025, while India aims to
electrify all vehicles in the country by 2032.
Also Monday, Toyota Research Institute ramped up their investment,
teaming up with MIT Media lab and five other companies to explore block-chain technology
for the development of driverless
cars.
Trip Chowdhry, managing director and senior analyst at
Global Equities Research, points out that while some people think Tesla is an Auto
company, it is not.
"It is a cloud computing company,
it's a machine and an artificial
intelligence company, it is an app company, it is an energy company, and just an automobile is
nothing more than a laptop
on four wheels."
One point that is agreed, is
that the auto industry
will look vastly different in the future.
The question is,
just how long will that change take, and who is going to successfully adapt.
----------------------------------------------------------------------------------------------------------------------
CONTEXT
:
In my yesterday’s blog ( Pawan
Goenka knows his Onions ) , I had quoted Pawan Goenka ( Chairman , Mahindra
Electricals ) , as :
“ Plus, instead of giving any more subsidies, the
government should instead be steady on its policies for the next few years, which
will give confidence to the OEMs, suppliers and others to invest in the segment
“
He
is confident to bring down the cost ( - and the selling price ) of Mahindra
Electric cars by 20 %
He is not alone in pointing out that the Car
Manufacturers DO NOT need incentives to switch over from
Petrol / Diesel to Electric cars
Yesterday’s
Business Line , quotes Toyata Kirloskar Motor Vice Chairman , Shri Shekhar
Viswanathan as saying :
“ We are saying that you don’t even
have to offer incentives , but one should not discriminate against hybrid.
The strong hybrids we make run on
electric . It behaves exactly like electric cars but it also runs on fuel
Whenever we have engaged with the government
on promoting hybrid cars, there is a fear that we want to do it at the expense
of the electric
Encouraging hybrid will lead to
creating an eco-system for electric cars
Promotion of hybrid will, in fact,
promote electric cars, and at the same time, bring down the cost of batteries
The automobile
industry is heavily taxed anyway . Nearly 60 per cent of the total cost of car goes towards taxes “
QUESTION
:
Apparently , both, Shri Goenka and Shri Viswanathan understand that manufacturing
an Electric car will cost LESS than manufacturing a Petrol / Diesel car ,
simply because,
·
Petrol / Diesel car has 2000 parts
·
Electric car has 20 parts
·
Li-ion Battery prices ( per Kwh ) are
expected to drop from current $ 270 to $ 150 by 2019 ( which , currently make
up 50% - 70 % of car cost )
Obviously this has prompted Mahindra to announce ramping up its
production of electric cars from current 500 / month to 5,000 / month, by 2019
There can be no doubt that lakhs of auto component manufacturers have
realized that , unless they too “ re-invent “ , they will be dead by 2022 !
And auto repair shop owners will not get caught “ sleeping “ when the
D-Day arrives !
What about Hindustan Petroleum and Bharat Petroleum ?
Will they re-invent
themselves or turn into another Air India ?
I have no doubt , Minister for
Petroleum , Shri
Dharmendra Pradhan , has a
strategy !
26 May 2017
www.hemenparekh.in
/ blogs