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thank you thank you Boulder thank you so great to be back today I want to take into the future I want us to rethink the future but before I do that I want us to look at the past and so this is New York City 1900 we used horses for thousands of years as our main means of transportation thousands 1900 New York in a sea of horses there is one car can anyone see the one car in this picture there one little car right and if anyone had stood there here and said that this thing called the internal combustion engine automobile was going to disrupt horses as a means of transportation that would have said you're insane right New York City 1913 there is one horse in this picture can anyone see it yeah so New York City went from all horse to all cars in 13 years that's a disruption so what is that was the technology disruption and at the time the the technology was the automobile so what is the definition of a disruption it's essentially when technologies converge and make it possible for entrepreneurs and companies to create new products and services that do two things one create new markets into immediately or soon after essentially either destroy or dramatically transform the existing industry so if you think about film photography some of you know what that is it was totally destroyed by digital if you think about what uber for instance and DD and lyft are doing right hailing they have been destroyed the taxi industry but they have radically transformed that industry and either one is a technology disruption they were both possible because of convergence of technologies and from 1900 all take you to 1985 when the then largest company telecom company in the world AT&T you know they have this thing called the cellphone you know two pounds and so on and they hired consulting company McKinsey and they asked him one question just one question what's gonna be the market for cell phones and 15 years so give me a prediction a forecast for 2015 years from now of how many people will use the cell phone so they were now funded whatever it is that they do and they came back with this number 900,000 that's for America in the year 2000 is gonna be 900 thousand subscribers the actual number was hungry I mean this is the smartest kids from the smartest business goes right and you know my little dog I actually don't have a dog but you know we need to put you right there but when he the pool could actually throw darts and and in do better than days but you know the question that I ask myself and of course you know AT&T is land line telephony business gone but not only did they get disrupted I mean AT&T the AT&T now is not the same as the AT&T then but also when you don't get disruption when you get attached to your existing business essentially you miss out on some potentially huge opportunities so if you look at just the top seven companies in the mobile / web space that's three trillion dollars in market capitalization it's just seven companies and I'm not saying that AT&T could have grabbed all of that but they could have grabbed you know a good chunk of that market because they were way ahead of the market and so that's what disruption does and you know it's usually the experts and the insiders and the mainstream analysts who don't get it who dismiss disruption opportunities you know this is the cover of Forbes magazine can anyone stop Nokia this is from 2007 now what else happened 2007 the iPhone right and in Android and essentially the mainstream analysts were saying nah not gonna happen I mean you can't stop Nokia so they don't get it and you know I can give you example after example after example remember Kodak yeah okay some of you don't even know who that is but you know now I've made my point right here mm but here's the thing about Kodak that a lot of people don't give them credit for Kodak invented digital imaging they actually invested billions of dollars in the imaging the person who discovered how quickly digital imaging was improving on a yearly basis was an employee at Kodak they actually had a business plan for a 200 billion dollar basically coated in digital imaging hmm and yet they got disrupted what's wrong with this picture so I'm gonna walk you through some of the main elements of basically how disruptions happen and then I'm gonna dive into the disruption of energy and transportation so over the last dozen years or more I've been working on a disruption framework because up to then the idea was let's look at this rupture in hindsight and figure out how it happened and and that's interesting but not very useful if you're an investor if you're essentially studying if you you know if your pension is tied up to some companies and so on so I've worked on this framework for a while and this is it I'm gonna walk you through some of the main elements one is and one of the key things here is technology cost curves and the idea is that technologies improve on a yearly basis many technologies so solar PV improves since 70s since 1970 it's improved about eleven eleven and a half percent per year the best-known technology cost curve is of course Moore's Law in Moore's law says that every two years computing power doubles for the same dollar every two years now how many doublings do you need until you get a 1000 time improvement 10 doublings 20 years right so your iPhone $700 the computing power would have cost seven hundred thousand twenty years ago seven hundred million forty years ago and seven hundred billion sixty years ago but also if you look at the future essentially what the computing power will be seventy cents right what do you do with that and in those that's the way in which you start thinking about the future but it's not just about computing power there's a whole number of technologies digital imaging touchscreen bandwidth and so on all of which are improving at different rates so each one of them has a cost curve that is different so when you think about what could potentially disrupt market you can basically converge work on the convergence of these technologies in convergence is a very important point because folks talk about disruptive technologies and yeah some some technologies are disruptive but what I have found is that what enables disruptions is a convergence it's not just one technology is a technology convergence and what does that mean so go back to 2007 both the iPhone and Android came out 2007 the same year so ask yourself why not 2005 or 2009 or 11 I mean you know but they both came out 2007 the reason is that all the technologies that were needed for building a smart phone basically converged 2007 I mean to make a $700 smartphone possible happen 2007 so if you were paying attention basically anyone could have built a smart phone Nokia could have done it remember Nokia blackberry could have done it basically anybody could have done it but it ended up being Google and Apple and that is another lesson in disruption disruptions happen from the outside the incumbents are not the ones traditionally who enable disruptions that's because they're addicted to the cash flow I mean you know there's a reason why they're incumbents they're very successful at doing what they do and they're addicted to that and so they they either don't see the disruption or basically this message and dismiss it because you know mainstream analysts tell them don't worry about it it's not gonna happen any time soon so I follow I wake up every morning and I follow these technologies which in my opinion and that of many of my colleagues different convergence points in different industries all of these technologies and others are going to enable so the 2020s are gonna be the biggest so every single industry in the world is gonna be disrupted in one way or another in the 2020s by a combination of these and other technologies the 2020s are going to be the most disruptive decade in history in history bar none or us my friend hunter Levin says it's gonna be the mother of all disruptions now I'm gonna walk you through some of it another very important point is that technology adoption doesn't happen linearly it happens in s-curves every single successful technology in history and I've looked maybe not all history I've only looked about about 1450 for that far back but since then every single technology ever everywhere gets adopted as an s-curve so it may take a while until you hit a tipping point but when it tips it essentially grabs 80% of the market and wipes out the existing industry in weeks and months in a in a few years but it never happens linearly it always happens as s-curves and this is an example this is a beautiful example of color television adoption in America see yes the question is from our point of view when is it going to tip so at which point because you know solar with that solar for 40 years 50 years when is it going to tip I'm gonna tell you when right it may take decades before we hit that point but it's an s-curve so cars comes down and the s-curve happens and you know it only takes a few years for it to go from a few percentage points a 10% so 20% now let me go back to the horse and the car because you know I get a lot of pushback from mainstream analyst it's interesting not from the oil industry so much as mainstream analysts and so when we look at the adoption of the car in terms of passenger miles not number of horses or vehicles what we found was that it went from 11 percent to 80 percent in 10 years 10 years now this is what's interesting so this is more than hundred years ago right when things didn't happen that quickly now things are happening much more quickly now that happens while we built the brand new industry the car industry I'm brand new in the sweeter oil industry a brand new road system it took 10 years and we fought a war and while all of that happened it still took 10 years from the tipping point to 80% so whoever tells you a disruption in transportation cannot happen in 10 years it's not looking at the evidence they're not looking at the data all right I don't know what they're looking at there's an echo chamber that basically they live in but they're not looking at the data because all of these s curves are getting steeper and steeper and steeper they're happening faster if you look at how quickly technologies are getting to that 80% now they look like Jacobs just straight lines it happens it gets adopted or not right or they die and then which is fine because you know entrepreneurs can move on to the next thing so disruptions are happening much more quickly a lot more quickly and if it happened in 10 years 100 years ago why would it not happen today so why does it happen in s-curves well there is a whole number of things but adoption is exponential dynamic and systemic so there are feedback loops and you know when your neighbor adopts you're like mmm that's nice maybe I'll buy it and so on right so so there are all kinds of feedback loops negative and positive that that enable a quick transformation a quick disruption and yet when you look at mainstream analysts they still draw lines I mean I don't look this is the the International Energy Agency I in every year that produce an annual report and every year they say this is how solar is going to grow over the next decade or two and every year as you see it's a line okay so Solar has been growing at 40 percent per year since 1990 right so 1990 40% 40% 40% and so what does the IEA do they go back and say oh it proved 40% let's move up the line look I mean it's there right I mean so you know 2010 it grows 40% okay we'll move up the line at which point do they get that this is an exponentially growing market right that is doubling pretty much every two years they don't you know every year we get a line oh it's got to be 10% by 2040 or whatever and even even policy policy innovation which you know we see us this very very slow thing this is the s-curve how quickly a car taxes gasoline taxes were adopted in America so Oregon had the first gasoline tax and then within less than ten years every state in the Union had gasoline taxes boom even policy innovations didn't happen that quickly so ninety-one percent adoption in six years so you know when when they have the right incentives even policy makers you know adopt in s-curves another very important point is business model innovation and missus model innovation is every bit as disruptive as technology innovation and if you look at uber for instance uber is a business model innovation it's not really about technology uber is a marketplace broker the business model is not even new I mean it's an old business model that was made possible by the convergence of two disruptions one is the smartphone in one is a cloud so the smartphone happened 2007 uber got started 2009 so it's a business model innovation same thing with Airbnb it's a business model innovation and you know again uber and lyft I don't need to tell you how they've disrupted the taxi industry so far in San Francisco 20 percent of vehicle miles traveled today or uber and lyft 20 percent I mean these are companies that didn't even exist 2008 20 percent and so from a disruption point of view what I think is hmm what would it take for right having for that business model to go to 100% because if it's gone that quickly then there's something there and also public transportation is being disrupted and you know we we one of the push box that I get yes we love our cars right we love our cars we're not gonna give up our cars well guess what right hailing is not just disrupting taxis last year almost 10% of Americans who traded in their cars did not buy a new one 10% and you know they're starting they they're using retailing 10% is not a small number I mean this is this is huge so again how do you grow that two to 100% so business model innovation it's really disruptive now I take that framework and about four years ago six years ago in a wrote a book called clean disruption of energy and transportation so I'm going to walk you through the conclusions of that and this is the the executive summary there are four technologies and one business model all of which are disruptive but together when they converge and they enable one another essentially they're going to wipe out disrupt all of energy and transportation as we know it and it's going to be over by 2030 not start it's going to be over and I'm gonna show you how so I'm going to start with batteries energy storage and batteries are interesting because you know battery lithium ion batteries from 95 to about 2010 they had a cost curve of 14% so 14 percent improvement in cost for performance per kilowatt hour every year and then over the following four years it actually improved by 16 percent per year so it accelerated why because two new industries came into that product auto and energy so when I wrote the book the cost curve was 16% so I said okay let's assume that that 16% is going to continue over the next decade or two and let's map out a disruption what can batteries disrupt at different cost curves and what you hear from the experts is all we need to get to this magic point and when we reach that magic point which is $100 per kilowatt hour it's supposed to be like disruptive and it's the end of the internal combustion engine era and so on and so forth that's not true because again convergence happens at different points for different industries for different markets but by the way lithium ion they built out of lithium ion manufacturing capacity has increased exponentially by more than six times in three years alone so of course what does that do learning curve that makes the cost come down so in fact over the last few years the cost of lithium-ion batteries has come down by 20 percent per year so when I wrote clean disruption and I said oh it's gonna come down by 16 percent the experts 16 percent what are you smoking right it's not gonna happen well they were right it's 20 percent right it's 20 percent it's actually accelerated because of the build-out of the of the infrastructure and now even Dyson is getting into that business has gone into that business Dyson know Dyson is a what vacuum cleaner company and they acquired the company from Detroit solid-state batteries and they have announced that they're going to build an electric c
r by 2020 2020 Dyson I mean hello isn't making cars difficult I mean don't you need to like do precision manufacturing and you know have 100-year history well yeah for internal combustion engine automobile but not for an EP and I'll tell you in a second but you know a vacuum cleaner company into electric vehicle that is what I call a clean disruption I like sorry okay I can't help it but so even even at today's cost of batteries essentially what's called Pickers peaking power mostly natural gas is being disrupted so now they're building huge batteries Southern California Australia and so on that because you can store electricity you don't need these speaking powers and and generation Pickers are about a third of generating assets in the United States a third of generating assets that are used only a few hours every year less than six percent of the time what a waste of your money right of afraid their money but basically we needed that because we didn't have cheap enough batteries we do now at these costs today essentially Pickers are being disrupted and even in the conventional energy industry they say by after 2020 we will never build another pker but they're not saying is that existing peekers are already stranded already stranded any picker that you built today gone wiped out within a couple years so you know peaking power gone right because today because of batteries and commercial businesses get to pay 40 50 percent of their electricity because of something called demand charges it doesn't have to do with energy itself but when and how they use it if you have a battery within your business according to basically the US government five million US businesses according to NREL can save money if they had a battery today 25% of American visitors they may not know it but they can save money on energy this is not by the way energy efficiency this is they're gonna use the same energy only they're going to use it you know whenever and they want not at the rates that so essentially they're gonna store energy when power is low and and they're gonna use it when power prices are high twenty five percent at today's prices in business model innovation is also important it's also important because our companies today that are going to these businesses that are going to the hotel center in the 7-elevens and so on and they're saying I'm gonna put a battery behind the meter and I'm going to help you save 40 50 percent of your energy costs and by the way you don't have to pay anything down you take no technology risk you take no financial risk and by the way I'll just take 50% of the savings how about that you take zero risk there's only upside for you that's a business model innovation in that's happening today residential right residential in many markets basically in the summer peaking prices they can be ten times more expensive the rates than at night ten times now we have to pay that today but when electricity storage when batteries are cheap enough essentially we don't have to so you know if you pay five cents per kilowatt hour in the evening and fifty basically from four to eight all you need is four hours of electricity storage in your home to save a couple hundred bucks per month or whatever it is that your bill is and by 2020 American the average American household will be able to have one full day of story of electricity for a dollar a day a dollar a day will keep the utility away by 2020 that's only two years away right but you don't need a full day of electricity storage all you need is four hours because that's when the peak is in just four hours of electricity storage by 2020 will cost six dollars per month two lattes two lattes a month basically and you save on peaking power and that's how the disruption of electric powers can happen and as batteries get cheaper and cheaper and cheaper essentially you know it's easy to say because you know now we have batteries and every single one of our devices batteries are going to be cheap enough that every home every business parking lots every uh tree is gonna have batteries because it's gonna make sense it's gonna make economic sense now and disruption that batteries are gonna enable is the electric vehicle the electric vehicle disruption and I don't need to tell you some of you drive Eevee's Tesla more or less you know best car ever made Consumer Reports gave them a hundred and three rating out of 100 yeah that's like 11 right it's not ten it's 11 I couldn't make that up by the way and and after that two more EVs the bolt and the Tesla Model 3 have got car of the year but of course the question is who can afford an electric vehicle and I can't right I mean yeah I'm worried I'm wearing the same suit right I mean ten years ten years later but you know the question is is the e be disrupted is the e V disruptive or is it just a nice you know greeny and a product right so let me give you a few reasons why the electric vehicle is disrupt everyone is that the electric powertrain the electric motor is up to five times more energy efficient in converting the energy battery into actual usable power I mean today we waste 80% plus of the diesel or the the gasoline in the car we waste it because it's very inefficient now that in and of itself is not what's disruptive when you combine that with the fact that transporting and creating electrons electricity is much cheaper than transporting fuel atoms gasoline or diesel you get that on a per mile basis EVs are 10 times cheaper to feel or charge on a per mile basis 10 X 10 X is a sign of disruption you know maintenance how much do we get to spend this is your car basically it has more than 2,000 moving parts 2,000 moving parts the Evie has 20 okay more or less s 1820 from 2,000 moving parts to 20 this is how a Dyson can make an electric vehicle this is how a high school team can make an electric vehicle 20 moving parts and they don't even touch many of them don't even touch because magnetic and and all that good stuff the other thing about partly because of this EVs last forever I mean at least we know that they last at least 500,000 miles and maybe a million miles versus 144 the internal combustion engine automobile now we only drive 10,000 miles a year so is having a 500,000 mile car really that disruptive I mean who drives the same car for 50 years unless you live in Cuba right yeah but if if you're a fleet though if you're / if if you're FedEx and and lyft and DD and so on you do drive a hundred thousand miles a year now it gets interesting if you're a fleet because you can use one car one TV and Phi years or two-and-a-half internal combustion engine cars over five years so suddenly the the equation shifts when you were talking about fleets because at that point then internal ice vehicles are two-and-a-half times more expensive over five years five hundred thousand miles and I'm gonna come back to that and v's are also more powerful way more powerful than internal combustion engine you know this is a university team and Switzerland that built an Eevee that beat the the Porsche 928 Spyder that costs million dollars so if anyone here has a Porsche you know where to head because you know what the value of that car is gonna be but you know University team beat Porsche okay how cool is that so that gives you an idea that EVs are so much more disruptive and by the way you know you're 200 mile EBE can store two full days of electricity in the average American home two full days of electricity try that with a VW diesel okay so you know what about the cost so in again in 2014 I drew this cost curve at 16% baby battery cost curve and this is what I got I got that by essentially twenty by this time essentially 2018 we would have electric vehicles with 200 mile range in the 35 to 40 thousand dollar price unsubsidized and guess what we have we have already two of them and of course at the time folks said oh you're insane not gonna happen and so on well it has happened but but this curve also says is that by 2020 of the average American new car is 33,000 by 2020 and Evi was too mile range is gonna be 10 20 percent cheaper to buy than a nice car I scarred not nice car and it's gonna be 10 times cheaper to buy I mean 10 times cheaper to maintain 10 times cheaper to fuel and it's essentially gonna last forever what oh and it's more powerful so you'll be able to buy Porsche performance or Buick prices what do you think the markets gonna do I mean what do you think the markets gonna buy right and if you keep going down that oz curve essentially what it means is this by 2025 assuming that we keep the existing model of individual ownership which is not gonna happen and I'm gonna tell you why but assuming that that's the case by 2025 every new car will be electric by 2025 for purely economic reasons by 2025 a retractor every bus every truck is gonna be new truck it's gonna be electric that's what the cost curve says for purely economic reasons and you know there's even a $5,000 evie with a hundred mile range in China today today you can buy the hundred ninety five thousand dollars so and you know I don't need to tell you about Tesla more or less you know five hundred thousand people have put up about $1,000 each to wait to have the right to drive this car when it comes out this is the latent demand for a car of that quality in the 35 to 40 thousand mile range but as disruptive as studies did I say by 2025 every new vehicle will be electric by 2025 there's an even bigger there's another technology that is even more disruptive and that's autonomous vehicles and I'm going to show you a quick video of the Maemo formerly known as Google [Music] now this is happening today this is Phoenix Arizona way mo already has a service that has level 4 self-driving level 4 self-driving means no humans needed at all I mean they have the steering wheel just for show they they actually don't need a steering wheel or a pedal level 4 means just computers essentially and they have the service in Phoenix today today and they essentially have announced that they're gonna blanket Phoenix with these vehicles autonomous and electric and on demand so basically competing with the ubers of the world by the end of this year they're there they have a 600 square mile geo fence which covers pretty much all of Phoenix and which covers every city in America except for and and it's ready I mean it's there it's not that we need to wait that long but it's not about way mo today we have 40 50 companies that are spending investing billions and billions of dollars in autonomous technology billions of dollars now why are they investing and this is not just startup companies I mean these are the incumbents that are getting into this space I mean GM has said we're a transportation as a service company now we're not a car company anymore why are they doing that so I'll tell you why because well first of all there's there's a lot of you know the experts and so on saying that we need level 5 or we need you know all kinds of things all we need is one it's like having a spouse right all you need is one the history of computing says so an elect an autonomous vehicle an AV is a computer on wheels you don't need a human at all drive and if you look at the history of computing you learned many things but two things one all you need is one I mean Apple did not wait for anybody else when they went out with with the smartphone with iOS once iOS was ready they were you know off to the races and then came Google with Android and that's another lesson basically because of something called network effect only two operating systems survive maybe a third Linux but no more than that so all you need is one in order for this market to start taking off and in the end only two or three are gonna survive what about the cost on these things expensive I'm gonna show you the cost curve of two essential technologies for self-driving and one is computing you do need a supercomputer in the trunk to process all of this information and this is what an autonomous vehicle sees when it uses a sensor so that that hat on top of those cars that's a that's called lidar laser like laser and radar it emits about a million pulses of laser per second about 100 200 yards and they bounce back like a radar and in per second a million per second and it creates a real-time view of the world so you do need like super computing power now let me show you the both the cost curves of lidar and supercomputing so lighter when in 2012 was $70,000 $70,000 so what did the experts say autonomous technology not gonna happen I mean this is twice the cost of an average car not gonna happen right not now not in the next generation well what did happen was that the cost of ladder went down exponentially so the next gen was 10,000 and and then a a Silicon Valley company came out with and actually they're producing it a $1,000 Lichter 1000 it's in the market already that company's making a ton of money selling that from 70,000 to 1,000 not bad right the that same technology that same company called quality actually came out with a 250 dollar lidar about the a big 250 from 70 grand to 250 in about six years that is what technology cost curves do so lidar even if you put four because it's a big and I'm gonna show you what it looks like oh by the way and their next generation lidar is gonna be $90 90 you'll be able to plug it into your iPhone now what you're gonna do with it I don't know but but it's gonna be $90 what disruptions that's gonna enable we'll see because there are entrepreneurs already working on that now this is the Fisker electric autonomous electric vehicle that is announced to come out 2020 and it has five light hours five can you see them yeah because you know essentially they're this big they're part of the car you don't see the heart that says I'm a Navy um you know autonomous hit me hit me hit me right because yeah so essentially what about computing because you do need a super computing power to make this happen now in 2000 this was the world's most powerful supercomputer at Sandia National Labs it was one teraflops of computing power for about 50 million dollars one teraflops year 2000 last year the eight teraflops computer the jensen one is holding in his hand was 600 bucks should I say that again okay that's a six hundred thousand plus improvement in pricing for the same performance six hundred thousand and this is what you need or a level 4 car and you know they announced their next generation which is going to be for 40 times more powerful and according to them that's what they need to run level 5 and level 5 means you can drive on or it can drive and any circumstance Smith's no rain you know fog all slow Boulder San Francisco it doesn't matter Kenya New Delhi so here's another interesting thing about so cost is not the issue cost it's not gonna be an issue for AVS now the other thing to think about when we think in the future is this these are operating systems that they're building and in all of these parts are portable basically you can take them down from a robot all the way to a truck anymore so you know just like we have small smartphones and large smartphones and iPads and bigger ipads and so on and so forth it's the same operating system in the same technology pretty much so everything that moves basically on roads is going to be autonomous at some point right when I'm gonna tell you when and of course that enables product innovation there's gonna be a whole host of new products enabled by these technologies like delivery so you'll be able to you know if you're a retailer deliver products basically with with autonomous little delivery vehicles or postal service or so on and basically this already exists I mean this is not in the future this already exists and there are things that could accelerate the disruption like what well what's going to determine the winner is probably going to be computer simulation because you know way mo has done all something like ten million miles in nine years of actual road miles but they do ten million miles in the computer in computer simulation and in simulation ten million miles per day right that's billions of miles that they can do every year and you know in in computers you can do anything you want through an elephant in the middle o
the highway and see what happens right and so computer simulation is going to accelerate how quickly we get to level four and five and so on and the other one is open source and Baidu which is the Google of China is investing twenty twenty five percent of their revenues in self they're betting their company on self-driving technology and it's open source just like Linux it's open source and so they have a ton of companies that are partnering with them helping them develop that software so that accelerates it and so the question is our consumers ready for you know autonomous vehicles so my old company Cisco did a study around the world and you know some countries consumers are saying bring it on right now bring it on right eighty six percent ninety percent so you know if we're afraid for whatever reason China's not India's not Brazil is not they're actually saying bring it on right now why this this is my best estimate as to as to why they don't want to drive right okay so so this is cool we're gonna have cars that we don't drive or worse the disruption which is going to be a big bank disruption and I did a follow-on study so I created a new think tank called we think X and we rounded ADA again and did another analysis and this is what we came up with that it's gonna happen a little bit faster than what I thought initially you know twenty thirty and so on but let me let me first let me tell you this your car is your second largest capital expenditure middle-class after our house and yet we only use it for percent of the time four percent we park at 96% of the time that is such a waste of money and space and everything right so what is the disruption of transportation so the we curve that I showed you it's not quite gonna happen that way transportation and such a service is the convergence of three things right hailing this is modern innovation electric vehicles and autonomous technology so that's remember 2007 the convergence of that made the smartphone possible we expect essentially that convergence on demand autonomous and electric to happen around 2021 now I showed you that Weimer is making it happen this year but let's assume 2021 and take into account that fleet the ubers of the world and so on drive about a hundred thousand miles per year as opposed to individuals who drive 10,000 miles so when you put that together essentially what you get is this that on a five-year 500 thousand mile basis the cost of on-demand autonomous electric is going to be two and a half times cheaper than on-demand autonomous and combustion so fleets like uber and DP and lyft have to go electric for purely economic reasons not because of green reasons but because of green reasons and when you see what's going on out there basically it's already happening so way Moe has ordered 20,000 Jaguar ip's electric that they're gonna deploy over the next couple years 20,000 order to billion dollar order I mean they started they have about 600 combustion automobiles and now they're ordering 20,000 so they're already making the transition to electric because of purely economic reasons DD which is the largest right ailing company and the world way bigger than over said that by 2020 they're going to have a mess electric vehicles one company their company's network is gonna have 1 million electric vehicles so basically the leaders in the space already making that transition and just to give you an idea of what a fleet service right transport as a service can do with 1 million EVs basically the they can drive the equivalent of a third of all the passenger miles in California which is the largest you know car market in the u.s. a third and that's just with 1 million EVs so transportation as a service is what on-demand autonomous and electric owned by fleets not individuals fleets now why fleets don't we love our cars well yeah but not that much 20:21 assuming 2021 is when regulates when level 4 technology is ready and accepted by the regulators that day the cost per mile of on the task of a EVs is going to be one tenth of the cost per mile of of car ownership whether it's TV or ice 110 10 X cost difference for similar products of services has always caused a disruption always every single time in history 10 X has called cost has caused a disruption every single time right if anyone here finds an example that contradicts me please let me know but I've never found one and so 10x is gonna cause a disruption what happens 2021 when someone goes to buy a car this is the decision that they need to make do I want to spend fifty thousand dollars over the next five years in owning a car I was gonna say a break or do I want to spend one hundred bucks a month as a service right I mean do I want to buy a subscription just like a Netflix or you know software or whatever music you know essentially people are gonna stop buying cars word toss is available 50% of American families have less than a thousand dollars of savings in the bank 50% of American families have less than $1,000 in the bank what do you think they're going to decide do you think they're gonna add $50,000 that doesn't right I mean and there are so many people who don't have access to 2 car so essentially people are gonna stop buying cars and it's gonna be a very quick disruption by and I'll tell you how quickly it's gonna happen by 2030 when we model this 95% of all passenger miles in America are gonna be tossed on demand autonomous an electric 95% of all miles now this doesn't mean 95 percent of car ownership we still see 60/40 would still see 40% of cars being owned by individuals but they drive 10,000 miles a year so the 60% fleet cars are gonna drive a hundred thousand miles a year and they're going to contribute 95% of the miles ninety-five percent by 2030 this is gonna be a 10-year disruption now what are the implications implications the size of the fleet so new cars are going to basically sales of new cars are going to crash immediately because the size of the fleet individuals are gonna stop buying cars the size of the fleet that we're gonna have of the whole fleet in America which is now about 250 million cars it's going to shrink by about 80 percent so new vehicle sales are going to basically collapse immediately and new vehicle sales are going to be of course autonomous an electric otherwise you're out of business but even if you are in business the size of the market is going to shrink by about 70 percent implications for the oil industry so this is for purely economic reasons right I mean this is all happening for purely economic reasons essentially we see 2020 is going to be peak demand for oil assuming that AVS are approved 2021 so the year before it's going to be the peak demand at about a hundred million barrels per day and it's gonna go down volume of oil to about 70 million barrels by by 2030 because everything new is gonna be electric but prices are gonna collapse immediately so even though volume is gonna go down you know Kenna's smoothly prices are going to collapse immediately why because as we learned from 2014 all you need is a two million barrel over supply in the market for prices to crash and at 70 million the equilibrium price is going to be $25 equilibrium now there's gonna be disequilibrium for a while I mean I know an oil CEO who told me you know I'm getting ready for $15 a barrel why I mean it was 11 in 99 why not 15 so price is gonna collapse let's say to 25 what does that mean and it's gonna collapse immediately that's gonna be 2021 or two it's not gonna be 2030 what does that mean well it means that any oil that can't compete at 25 is gonna be stranded any oil sands gone shale gone deepwater gone if you can't compete at 25 essentially you're gone forever because oil prices are going to keep crushing because there's gonna be a lot of oversupply for a long time gone not only lifting but also all the assets ciara tutorial you know pipelines that serve all of these areas gone right we're fineries that serve these the these types of oil gone because of course we're not going to pump that oil and that's gonna happen in the early 2020s that's the implication any new oil any new capital that's going into pumping oil today gone right and within four or five years what are the implications for society financial the average american family is gonna save about six thousand dollars a year right down to our pockets six thousand dollars a year by choosing essentially this autonomous electric vehicle that can take us in our kids and our parents to to work and basically drop us off and then go pick up somebody else and so on and so forth and that's a trillion dollars in additional GDP additional to that is that the time that we waste driving and if we do anything else we study we teach with insult we sleep that time is gonna essentially another trillion dollars productivity to the US economy two trillion dollars in in basically addition to consumer to the to the gdp social for the first time in history ever there's going to be cheap convenient transportation available to all the very young who can't drive the very old who can't drive or doesn't have access to public transportation the poor who live too far away from jobs to basically have access to those jobs there are plenty of jobs that they don't have access to because of really bad public transportation so for the first time in history everyone everyone is going to have access to cheap convenient transportation more environmental essentially we're going to see ninety percent decrease in co2 emissions Road transportation by 2030 and this is gonna happen for purely economic reasons this is not gonna happen I mean the old narrative that oh we need carbon taxes we need this we need the government to help no this is gonna happen because consumers us are gonna make the rational choice to spend ten times less for transportation than we pay now so that's a major implication for the disruption of Transportation geopolitical so you know essentially we're gonna be free energy free of oil you know both domestic and imports for the first time and since I remember free of imported oil now oil it's not gonna go away I mean there's so plastics and stuff that are made with oil but we're not gonna need it for transportation now what does that mean from a geopolitical point of view does that mean that we're gonna withdraw from the world does that mean that they're gonna be isolationist tendencies in America that are actually gonna say you know what we don't need to patrol the world for oil or invade anybody or whatever so the world is going to change dramatically because we're not going to need to import oil and not just us but China and India and so on essentially oil is gonna not gonna be needed for transportation parking 80% of parking gone gone yeah because we're gonna have 80 percent fewer cars that drive better than humans meaning you know they don't need as much space in highways or roads and so on to drive so essentially parking especially in the cities in the downtown's empty and I did the numbers for Los Angeles and in Los Angeles with the empty parking you will be able to fit in three cities the size of San Francisco with parking and all in the empty space left parking vacant parking in Los Angeles so we have to make these choices today what do we do with all of this empty space which in some cities is about a third of the size the land mass of the cities is parking what are we gonna do affordable housing more business green parks yes yes and yes because there's going to be a lot of new basically space that's going to open up but we have to make those decisions today and of course you know the whole urban landscapes gonna be redesigned roads highways everything is going to be redesigned because of disruption of transportation because a third of essentially cities is gonna open up so we'll be able to decide to us this question an answer who do we want to be what city do we want to be essentially in about ten years but we have to start making those decisions today and last but not least I'm gonna run through how do we power all of this and this is Copenhagen as anyone who's from Copan Danmark yes how sunny is there in Copenhagen I love Copenhagen yeah not not so much right yeah so so this this is a school and in Copenhagen that essentially generates a hundred percent of its energy with solar power Copenhagen is at the same latitude as Juneau Alaska so the excuse all were you know not sunny enough or whatever doesn't really work if Copenhagen can generate 50 percent it can happen and so again solar is a technology it's come down and caused by eleven and a half percent per year since 1970 and the market has grown by forty percent per year basically doubling every two years since at least 1990 right so how many more doublings now it's at about 2% of generation how many more darlings until if it keeps growing at this rate solar is 100 percent of all generation now we can do anything in a spreadsheet let's do it two percent one doubling for two doublings 8 16 32 64 128 we need six more doublings 12 years for solar to be a hundred percent of all energy now is that possible right and it continued growing at that rate if you look at every other source of energy conventional energy coal oil nukes and so on they've all gone up by 6 to 16 times since 1970 at the same time that Solar has come down by 300 times so you know essentially solar right now is cheaper than what we buy from the electric utility in 80% of the world not bad for an industry in crisis right 80% of the world we can put up rooftop solar 69% of corporations are looking at solar right now and they're looking at solar for purely economic reasons not because they're green but because again of this green and some companies are choosing to get off the grid because of this because they can generate at a much cheaper rate than what the utility offers right now because of this the the the the 40% may actually accelerate the the question is is there an s-curve and what is the tipping point so essentially I I created a new term I call it God parity it's not religious it's generation on demand which says this at some point in the next few years and this has already happened in a few markets the cost of rooftop solar plus batteries is going to be cheaper than the cost of transmission transmission so even if the utilities generate at zero when you are the cost of transmission it's still gonna be more expensive than self generation and storage that's called God parity at that point it becomes in everyone's every company every individuals best selfish economic interest to put up solar and batteries in their house in their factory and and so on and so forth and that is the tipping point the tipping point is God parity now when is that going to happen it's already happening in many countries it's already happened in Australia Australia solar is seven cents transmission is 12 cents Australia residential solar twenty-five percent of the market so it's happening already in many countries and it's essentially by 2021 we'll see this basically in every large market around the world and utility scale but we are gonna need still large you know generation sources wind or solar or whatever to power data centers and to power aluminium smelters and so on solar is already at one point eight cents solar unsubsidized is already the cheapest form of energy period today 2018 not 2030 2018 today there is no excuse to build a new coal plant none right none not financial right you know excuse to build a new gas plant no excuse to build a new nuke none the solar is already the cheapest form of energy but what about dispatchable what about in in the evening and so on solar plus storage is already at four and a half cents again cheaper than almost anything else right and all of these costs are coming down now since we're in Colorado I wanted to show the the last RFP from from Xcel for essentially clean energy this is what came back they wanted about you know 700 megawatts and essentially what came back is this Wayne plus solar plus tour so essentially 24/7 clean energy 3 cents per kilowatt-hour 3 cents per kilowatt-hour this is the median that came back they haven't given us details but I know at least one company who told me that they offered two cents tw
cents for solar plus wane plus storage two cents this is not just cheaper than any other source of energy this is cheaper than because to operate any other source of energy this is this this is steeper than the marginal cost of coal gas nukes anything already this is 2018 so from now on any investment in conventional energy is essentially stranded gone gone and you don't want to be stuck with that debt so let me take you back to the future we are today essentially driving typewriters on wheels dirty ones right and if you don't know what a typewriter is I've made my point right that's what we're driving and this disruption is going to happen really really quickly I mean by 2030 it's over and we're on the cusp of that disruption to happen on the cusp of the deepest fastest most consequential consequential because everything is going to change everything depends on energy and transportation water food cities the built environment everything depends on it we're on the cusp of that happening the tipping point is 2020 2021 and it's going to be over by 2030 in the last point I'm going to make is this this is not an energy transition that's going to be you know pushed by governments and so on and so forth this is a technology disruption it's going to happen for purely economic reason and it's going to happen despite government's not because of government thank you [Applause] thank you [Applause] thank you
