The Car Industry Is Going To Change Forever Because Of Tech, And Nobody Is Ready For It

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When was the last time you checked in on the car industry? If it was a while ago, prepare to be shocked. Things have changed a lot, and in a good way. In the past when a company released a new car, it released both petrol and diesel versions. Doing that made a lot of sense. People either wanted the comfort of a gasoline engine, or the economy of diesel. But in 2016, it’s hard to find a single model release that doesn’t come in a third variety. Yes, I’m talking about the plug-in hybrid.

But it’s not the plug-in hybrid itself that presents the biggest change in the industry. It’s what the plug-in hybrid represents that is truly game changing.

The End Of Internal Combustion

Nissan is, by and large, a regular car company. Like other businesses, it sources rigid PVC compounds for sunroof and door seals. And it procures zinc from mines in Asia to make its carburetors. This year, the company is going to announce it’s new hybrid vehicle, similar to the BMW i3. And it too will hop on the hybrid bandwagon, like every other traditional carmaker in the industry.

When was the last time you checked in on the car industry? If it was a while ago, prepare to be shocked. Things have changed a lot, and in a good way. In the past when a company released a new car, it released both petrol and diesel versions. Doing that made a lot of sense. People either wanted the comfort of a gasoline engine, or the economy of diesel. But in 2016, it’s hard to find a single model release that doesn’t come in a third variety. Yes, I’m talking about the plug-in hybrid.

But it’s not the plug-in hybrid itself that presents the biggest change in the industry. It’s what the plug-in hybrid represents that is truly game changing.

The End Of Internal Combustion

Nissan is, by and large, a regular car company. Like other businesses, it sources rigid PVC compounds for sunroof and door seals. And it procures zinc from mines in Asia to make its carburetors. This year, the company is going to announce it’s new hybrid vehicle, similar to the BMW i3. And it too will hop on the hybrid bandwagon, like every other traditional carmaker in the industry.

But here’s where the problem lies for companies, like Nissan. They’re wedded to an old ideology. They trust in the old-fashioned gasoline engine because it has served them for over a hundred years. And even though electrics cars are here today, they can’t bring themselves to leave them behind. Despite the price of batteries collapsing, Nissan insists that the petrol engine in its hybrid is necessary. Range anxiety has forced it to include it, the company says. But that’s a short-term play. The company knows it can’t compete with world leaders, like Tesla, anytime soon. And so it has to put up with dwindling battery supplies and hybrid designs. That won’t last.

The End Of Drivers

The biggest carmaker in the world announced a deal worth $50 million with MIT in the US. The partnership is designed to supercharge the company’s effort to automate its vehicles. It’s a positive move from Toyota, who know what’s coming. But few companies are really trialing driverless cars. It’s not the car companies themselves this time: it’s all the ancillary companies. Take the parking garage operators, for example. Who is going to want to pay for a parking space when their car can drive itself home after it’s dropped them off at work? And what about the insurance companies? How will they fare once the risk of driving has fallen to rock bottom levels, thanks to autonomy? They too will have to change their business model.

The End Of Fuel

But perhaps the biggest impact of all this new technology in the automotive sector will be in the fuel industry. For decades, oil barons have controlled the car industry and prevented them from pushing EVs. But now the supporting tech is cheap, making EVs economical and desirable. What is going to happen to the oil empires when EVs really take off at the end of this decade? Where will all the wealth flow? And what will happen to public utility demand when everybody is charging their EVs using their own solar? It’s worth thinking about.

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