Economist Predicts Fossil Fuel Vehicles No Longer Sold In 8 Years

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No more petrol or diesel cars, buses, or trucks will be sold anywhere in the world within eight years. The entire market for land transport will switch to electrification, leading to a collapse of oil prices and the demise of the petroleum industry as we have known it for a century.

This is the futuristic forecast by Stanford University economist Tony Seba. His report, with the deceptively bland title Rethinking Transportation 2020-2030, has gone viral in green circles and is causing spasms of anxiety in the established industries.

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I agree with some of his reasoning (I don't think oil will drop back to $25/barrel anytime soon) but I think he gets carried away with his optimism and ignores the motivation factor of Joe Consumer.

Unless a consumer is in the market for a new vehicle, they'll stick with what they have. And you also have the whole Used/Pre-Owned market. As long as gasoline stays below $3-$4/gallon the incentive for many buyers will be to stick with a fossil fuel vehicle.

There's also the whole issue about recharge time. People wanting to take road trips aren't going to just go 200-300 miles then call it a day while they wait for the car to charge (battery replacement stations could be viable, but that's getting into the weeds a bit much for now).

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Seba’s premise is that people will stop driving altogether. They will switch en masse to self-drive electric vehicles (EVs) that are ten times cheaper to run than fossil-based cars, with a near-zero marginal cost of fuel and an expected lifespan of 1 million miles.

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The “tipping point” will arrive over the next two to three years as EV battery ranges surpass 200 miles and electric car prices in the US drop to $30,000. By 2022 the low-end models will be down to $20,000. After that, the avalanche will sweep all before it.

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I agree with his tipping point (and have stated something similar on these forums for a while now) but I think he fails to take into account the used car market, especially as the prices on those drop to almost nothing as the new tech pushes the old tech out. At that point finding a year-old Lexus with 12k miles for $6k is still going to be a very attractive offer.

It took about 23 years for the Model T to replace the horse and buggy (depending on what you are looking at as start/finish points). Going from fossil fuel to electric isn't as dramatic a change as going from horse and buggy to a car so there's no real reason to expect the market to change that much in such a short amount of time.

But, like winter, it is coming.