Autonomous electric cars are on the cusp of transforming business auto fleets. These smart cars will deliver a quantum leap in cost reduction. They will accelerate the shift to “mobility as a services.” Not unlike how smart phones have impacted telecommunications, your business fleet is on a technology threshold of dramatically lower operating costs, increased productivity and reduced emissions.
Smart cars are coming to your business fleet
Autonomous and electric technologies dominated the 2016 North American International Auto Show. Ford provides an example. They announced plans to invest $4.5 billion to launch 13 electric car models by 2020. Last Fall Ford invited me to their new engineering and research center in Silicon Valley. This is a new initiative to advance smart and connected vehicles. To accelerate this initiative Ford entered into a joint development agreement with Google to build an autonomous vehicle. This type of commitment to autonomous and electric technologies will transform the composition and management of business auto fleets.
The economies of autonomous electric cars
Even at $1.50 per gallon, autonomous electric cars will reshape the economics of business auto fleets. Here’s how:
Reduced labor, insurance and litigation risks. The driver is the riskiest part of an Industrial Age “dumb” automobile. Evidence continues to grow that autonomous automobiles will be safer than human driven cars. Reduced accidents will be the first tier of cost benefit for autonomous vehicles. Reduced liability will be the second tier of cost savings. Imagine the potential law suits from an accident caused by human failure when a company could have been using an autonomous vehicle. If this sounds far fetched then consult your legal counsel.
Reduced fuel costs. Electric vehicles have a cost equivalent of 75 cents per gallon! Autonomous electric car deliver additional fuel costs savings from accelerating and braking more smoothly than human driven cars. The financial bottom line is that autonomous electric cars will have lower fuel costs.
Increased electric range. Technology solutions to range anxiety are now entering economies of scale. The Chevy Bolt is a breakthrough car offering a 200 miles range between charges with a less than $30,000 price point after tax incentives. It is the first of many vehicles planned by the auto industry that will be price competitive and offer a safe margin of battery storage for daily driving. Recharging station costs and availability are also gaining economies of scale, most especially along the West Coast and the Northeast Corridor. As these combined technology solutions gain mass scale the issue of electric driving range will be resolved for most urban and high traffic corridor driving.
Reduced capital costs. GM just invested $500 million in Lyft, a ride service company. This investment reflects the capital cost reality that today’s average car costs $33,000. Mobility as a service will grow in its cost competitiveness against traditional buying or leasing. This cost saving potential will accelerate as autonomous cars, versus human driven cars, are the preferred ride sharing option.
Reduced maintenance costs. Electric cars are less costly to maintain than combustion engine cars. For example, electric cars do not require oil changes. Electric cars have fewer parts. Like an iPhone, electric car technology can be upgraded through software. Electric cars will have lower costs for maintenance parts and labor.
“Free” renewable electric charging. I wrote an article called “Solar is getting weird” after working with homeowners who have installed roof top solar system and then bought an electric commuter car. What these homeowners discovered is that they could pay for their solar system through utility bill savings and still have enough solar electricity to recharge their electric car. How long before businesses discover this same path to “free electricity?” The emerging technology path is for fleet managers is to install onsite solar to lower both their facility costs and vehicle fuel costs.
About the author
Bill Roth is the author of The Boomer Generation Diet, now on sale at Amazon! Here’s what Jen Boynton, Editor in Chief of Triple Pundit says about the book: ”Written in Bill Roth’s lovable, relatable tone. The Boomer Generation Diet is a must-read for any Boomer who is looking to jumpstart their health and have fun at the same time. I hope my parents read it!” Follow Bill on Twitter and Facebook.