How Do I Sign North Carolina Banking Presentation

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Thank You secretary Trogdon thank you so much for that kind introduction and thank you all for being here today sold-out audience I want to take you into the future of transportation and energy but before I do that I'm gonna take you into the past this is New York City in 1900 a stir parade there is one car in this picture in a sea of horses we used horses as our main means of transportation all of humanity for thousands of years there is one car in this picture there in 13 years there was one horse in that picture can anyone see it essentially transportation flipped from all horse - one - all cars - one in just 13 years 13 years and this is more than a hundred years ago and as you know technology is changing even more rapidly now and this is how quickly disruptions happen 13 years that's all it took if you had invested in a horse barn in 1900 basically you lost all your money so what is a technology disruption at the time the car was the disrupter a disruption is essentially when there is a convergence of technologies that make something possible that make a product or service possible in that product in turn can help create new markets and new jobs and new opportunities and at the same time destroy or radically transform existing industries that's what a disruption is and it also we talk about disruption as destruction it's not necessarily so where are the jobs well this is for motor camp in 1913 creating jobs and the 20th century America transportation was the economic engine of the country so we talked about disruption and creation disruptions also change tastes and preferences now we think of tastes as something that's constant but in fact there are variables so but then what happened to all those horses we ate them now I didn't write you didn't but essentially they went from being transportation to being food and even the Dean of NYU New York University strongly advocated horses and he called it something like clean wheat and you know later after humans and dogs pet started eating dog food I mean horses so tastes and preferences do change and now let me take you to 1985 when the then largest telecom company on earth AT&T hired consulting company McKinsey and they asked them one question and one question only by the year 2000 give me a 15 year forecast of this new thing called the cell phone how many subscribers would we get if we invested in that market in McKinsey went off and did whatever it is that they do and they came back with this number 900,000 by the year 2000 there's gonna be nine hundred thousand subscribers the reality was a hundred and nine million a hundred and nine million right I mean that's not a small mistake that's a factor of a hundred and twenty times my little dog could have done better and charged a lot less right not kidding but you know really who knew right who knew that the smartphone and the internet and so on were gonna be such a big force well I did write and I'm gonna tell you how I did know right I wish I were an investor because in 15 years ago I posted this portfolio educational portfolio that consisted of little companies like Apple and Google Netflix Salesforce and that portfolio is now worth more than three trillion dollars right 15 years so is there any correlation between high tech disruptions and energy and transportation it turns out that yes there is but here's a question why why do experts and insiders and mainstream analysts consistently get disruptions wrong every single time it is the experts who dismiss disruptive opportunities really smart people Bill Gates I mean he's made a bundle of money right how could he be wrong about the Internet how could he be wrong about the smartphone and so on and so forth I mean the cover of Forbes magazine in the year 2007 had Nokia on the cover remember Nokia yeah who can stop Nokia what else happened 2007 the iPhone right but here's the question that I've asked myself for 15 years why do smart people in smart organizations consistently fail to lead or anticipate technology disruptions because it's a big deal because a lot of money is wasted by not investing in disruption and by investing in the old model right so after all that work I have essentially created a framework for how technology disruptions work not in hindsight that's interesting but can we anticipate can we forecast more less disruptions to come I'll walk you through some of these elements and then I'll dive into transportation so one of the things that I look at is technology technology cost cars essentially every single technology improves every year improves capability and improves cost both right that's what I call the cost curve so if you look at computing its Moore's Law forty one percent per year on a dollar basis not just capability so essentially every two years we can buy for the same dollar twice the computing capability data storage digital imaging and so on and so forth but each one of them is improving at a different rate which makes it difficult to keep up with all of them now here's another element I'll come back to technology cost curves we see a lot of linear projections right you take a baseline and then you add a percent over the next twenty thirty years that's a linear projection but no technology in history and I've looked at history right ten thousand years no technology in history has been adopted linearly they they're they're either a bust or they're adopted as an s-curve now what is an s-curve they go seemingly slowly they're not going slowly but when they're under one or two percent we don't notice them and then suddenly boom they achieve a tipping point a critical mass and they explode and then they slow down again right when they get mainstream so think about the iPhone again smart phones came out in 2007 and they exploded Apple turned into a trillion dollar company and now that market is slowing down make sense now in the mean time the cost not of the phone but if the technology is going down exponentially now this is transportation transportation is not a smartphone right well not really right I mean uber and lyft and so on that's a different story but can't transportation really get disrupted that quickly I went back to the horses and the cars to see how quickly that adoption happened in the whole United States interestingly what I found was that it went from zero to about 95 percent in 20 years nationally but that's not that interesting what was interesting is that from the tipping point to about 80% which is when market slowdown happened in ten years in ten years now this is more than 100 years ago right even more interesting this happened while we built two brand new industries the auto industry and the oil industry I mean we're building it as we went while we built a brand new road infrastructure nationally and while we fought World War one while all of that happened the disruption took place in about 10 years so anyone who tells you a disruption cannot happen in ten years is not looking at the evidence even policies yet adopted as eskers so this is the gasoline tax in America which of course by now we know you know basically as a constant right we all know it we all pay well I don't I don't own a car but Oregon passed the first gas law in February 1919 and then within six years ninety-one percent of US states had adopted that as an s-curve right adoption happens as an s-curve and technologies if you think that technology is changing even more quickly than ever it's because it is look at the vs curves going from 1900 to about 2000 they're getting steeper and steeper and steeper Oh either you're in or you're out in a matter of weeks months or a couple of years right either you're in or you're out now let me take a detour and go back to mainstream analysis now this is the EIA projection of solar PV starting in the year 2000 the black line is reality and all those colored lines they're projections so every year starting in the year 2000 they make a prediction in the year 2030 this is what we think solar PV is gonna be every year solar grows by about 40 50 percent and then the area goes back and says oh okay so I'm gonna move up my line this is what I think is gonna be in 2030 and they keep moving up the line right they haven't got a single projection even in the ballpark of reality right all their projections are linear like that see a line in some cases they even show that adoption is going to go down down now that solar PV is the cheapest form of energy generation BarNone they still think it's gonna go down how is that possible right in any case the projections are linear they are mechanistic in the sense that they take one variable and they essentially extrapolated they don't take into account that society does not work and never has worked technology has never been adopted linearly but as eskers right systems if one thing change a lot of other things are going to change and vice versa that's the reality right so the conclusion is that mainstream analysis is about forecasting the past not the future they take what's today and they basically draw a line right and it's not just about PV or electric vehicles or whatever in 2005 the EIA projected that the US was going to be a natural gas importer over the next few years by 2020 or so importer ten years later they projected that the US was gonna be an exporter now how hard is that to do now right after fracking and shale and so on but in 2005 if you had to make an investment in the future of energy and you looked at the EIA numbers you said look we're gonna have to import and you build ports you build infrastructure and in fact all that flipped right between 2005 8 and 13 they changed their forecasts by 500% and then by another 90 percent right and if you follow that curve essentially all they're doing is taking the recent past and extrapolating it that's all they're doing that's mainstream analysis for you okay so it's about extrapolating the past now back to EVs in 2010 the EIA predicted that there would be a hundred [Music] eighteen electric vehicles sold in the year 2035 a hundred eighteen now I always wonder how do they come up with these numbers I mean I'm imagining them sitting in a room let's see in 25 years 15 too small let's see your hundred I don't know maybe I mean seriously Tesla was already public how hard was it to even predict a thousand right I mean Tesla was selling like a couple of thousand even back then you really think it's gonna go down anyway back to disruption convergence is very important why did the smartphone happen 2007 now I want you to ask that question why didn't the iPhone come out 2005 or 2009 now both the iPhone and the Android came out the same year 2007 not 5 or 9 what was the magic of 2007 2007 is when all the technologies that made the smartphone possible converged so all the technical buting power broadband data storage touchscreen all of these technologies that made a $600 smartphone possible happened 2007 so any of 3040 companies could have actually built a smart phone Nokia could have done it Motorola could have done it remember them blackberry could have done it remember them so why didn't they do it that's another disruption that's another lesson of disruption disruptions happen from the outside neither Google nor Apple had ever built a phone before and yet they're the ones who owned 90 plus percent of the smartphone market disruptions happen from the outside it's very rare the company that can disrupt itself business model innovation is every bit as disruptive as technology is every bit but business model innovations are enabled or may possible by the convergence that I'm talking about so uber lived right Hanning for instance on-demand transportation started uber started in 2009 in a little apartment in San Francisco seven years sober and lived or business model innovations they were made possible by the smartphone in the cloud so it's no coincidence that uber started 2009 two years after the smartphone came out see one thing makes the other possible now in seven years uber had more bookings than the whole taxi industry in America talk about a disruption seven years from little apartment to more bookings than the whole taxi industry in America so again anyone who tells you a disruption cannot happen in transportation in seven years is not looking at the evidence in eight years after Ober got started uber and lyft became so big they're like more than 20% of the vehicle miles traveled in cities like San Francisco in New York and so on 20% from zero to 20 so my question is how do you go from 20 to 100 is that possible at all but again that's a serious disruption and starting a few years ago a lot of folks stopped buying new cars because of writerly stopped this is not new this started a few years ago and I predicted by 2020 because of several reasons this is one of them there's gonna be peak new car or peak new gasoline car and what did mainstream analysts call me insane not gonna happen number of course it's gonna double we're gonna go from a billion to two billion and so on and the planets gonna choke and it's the end of the world as we know it and I said no by 2020 we're gonna have peak new gasoline car right yes what's going on last year I may have been off by a year I don't know but last year China was down the auto market India was down Europe was now in the US was down was it a blip I don't think so the trend is clear right people are not buying new cars essentially no gasoline cars and these of course right now okay I'll keep going on this because this is very disruptive now another concept in my framework the idea of market trauma now what is market trauma essentially because I mean what you hear from a lot of mainstream analysis is don't worry about it there's only 2% 3% of the market how much damage can it do it's gonna take 10 20 years before you know essentially this this takes over the market and so on don't worry about it all right keep investing in whatever it is the truth is different the reality is that a technology can disrupt the economics of an incumbent way before they have 10 20 30 percent of the market way before so small changes from technology can have swift dramatic impact in existing industries in an example that I'm gonna show you is the case of GE which essentially GE power has collapsed because they made the wrong choices but solar and batteries are still a small percent of the market right so I'll get back to that now what are the key technologies that aren't following that I think in combination different convergence of different technologies are going to disrupt everything pretty much over the next 10 15 years these are basically the technologies that I'm following this is not everything but the energy in transportation in food and so on these technologies at different times and the when places are essentially going to disrupt everything in the 2020s now taking this in 2014 i wrote a book called clean disruption of energy and transportation and i'm gonna walk you through the conclusions and also further work that i've done the conclusion of that book essentially for technologies batteries Eevee's autonomous technology on-demand transportation meaning great hailing in solar are going to disrupt all of energy and transportation and it's over by 2030 we can go home now right and yeah of course I mean you can imagine what I was called back then so I'm gonna walk you through this the first one is I'm not going to talk about solar in 2014 so almost six years ago this is a cost curve that I drew about lithium-ion batteries and it was based on the recent cost curve of lithium-ion batteries which have been around since the early 90s I said over the next 15 years LIF you mine is gonna go down at about 16 percent per year now I don't need to be accurate I just need to see a trend right that things are not gonna be the way that you know most people think it is and of course at the time I'm not gonna repeat it I was called insane but guess what it's 2020 and the cost of lithium-ion batteries is exactly what I predicted exactly right but in fact why because in 2014 very few folks imagined how big this industry would be in only five and a half years there were only three lithium-ion mega factories now there are 96 96 I mean this is not a linear scale this is t tally super exponential right and of course the cost curve has actually accelerated so maybe they were right 60 percent was not gonna happen it didn't now it's more than 20% every year right so it's actually happening even more quickly now storage is enabling disruptions in electricity so one example is in Australia where a big Tesla battery that had 2% of the market 2 percent of the capacity of that market in South Australia essentially took fifty five percent market share money and brought wholesale prices down by about 90 percent repeat with two percent of capacity they brought down the incumbent revenues by 90 percent this is what I call market trauma you don't need a battery to take 50 percent of the capacity market to disrupt the electricity providers right that's market trauma and the cost of batteries because it's going down so fast and because it's being enabled both by energy and transportation it is disrupting ancillary services and then Peters and now base load right just as I predicted boom boom boom a disruption from above okay and today natural gas plants are being disrupted they're being shut down because of big batteries today this is not in the future natural gas our speakers are already stranded all of them right you just need to put our battery and then it's over right and this market is growing by leaps and bounds today right so what happened to GE this is what happened to GE they expected the natural gas market to keep growing over the future the next 20 years and then nuclear market in the coal market and they bet on that and they double down on that and their stock went down 74% or so they almost got wiped out this is one of the eeprom industrial companies in America in the world of the 20th century right making a linear projection that things were gonna happen in the future just like they did in the past it didn't happen they expected they knew about solar I mean they have a wind company they know what's going on but they would have expected those markets not to affect their revenues for another 10 20 years wrong because of market trauma okay so batteries enable the electric vehicle right so here's a question is the electric vehicle disruptive or is it a you know calming conspiracy greeny conspiracy against the oil companies write in another question who can afford the Navy right did I say I don't own a car I can't afford yeah I have the same suit 10 years later that's 10 years ago same suit that same time so V's are 10 times cheaper on a per mile basis to charge 10 times cheaper and that may be improving actually in Georgia the University of Georgia they're buying I think 20 electric passes they did a test and in terms of gasoline they spend actually 94 buses and 10 a day for electric buses so that's 9 X 9 times cheaper to fuel than electric than than gasoline or diesel now maintenance if you own a gasoline or hybrid actually car this is your car I mean it has more than 2,000 moving parts that's your car right whereas an Eevee has about 20 20 mowing parts that's it these things don't break maintenance is essentially free for these things only 20 moving parts and they're magnetic right there they're not they're magnetic they barely move that's why companies can offer infinite mile warranty because these things don't break right now modular design architecture I want you to see this especially if you own a truck tell me if you can do this good luck doing that with your f-150 yeah now there's nothing magic about this electric power trains you can have any number of motors now this truck has four four motors but you can have eight or two or three you can't do that with a conventional engine so basically it gives you or the computer a lot more control over traction you can actually park sideways with an Eevee I'm gonna try that with your diesel right now here's the most important thing about electric vehicles the last five hundred thousand miles right the gasoline car lasts Oh 140 maybe 200 if it's a Volvo 140 more or less we drive them 12 years ten thousand twelve thousand miles a year but an Eevee lasts five hundred thousand miles and actually Tesla just announced a million mile a V coming soon right but let's keep it at five hundred thousand now here's the thing we drive 10,000 miles every year if an Eevee lasts 500,000 miles we would need 50 years to drive one who drives a car for 50 years right unless you live in Cuba but so for individuals it may not be that interesting but if you're a fleet your uber your FedEx if your lift then you drive your car or van a hundred thousand miles a year so over five years you either want one Evie or three internal combustion engine cars or vans does that make sense so for fleets it makes total sense for them to go a full Evie even without autonomous technology because for purely economic reasons so when the cost of Evie's approach the cost of ice vehicles then you're gonna see the market flip for fleets right so this is the same curve that I drew again for electric vehicles in 2014 so almost six years ago and I said by now by the year 2020 you will see the market offer a 200-mile electric vehicle and by the way 200 miles for me has been the minimum I don't consider hybrids I don't consider anything below that I only consider 200 mile plus v's right I said that by now 2020 you're gonna see $30,000 Evie's no subsidies $30,000 Evie's now back then an Evie was eighty hundred thousand dollars and of course you're insane and all that stuff guess what I've been right on the money I mean last year Tesla $35,000 this year we've seen several actually cars in China break the $30,000 barrier already it's been right on the money almost of the month right almost of the month now here's what's interesting about $30,000 the average of the median new car in America costs $34,000 now the market is offering EVs which I showed you are far better right they last longer they fuel up you know a tenth of the cost no maintenance and so on for less money than the median new car in America right the shift is gonna happen for purely economic reasons starting next year okay next year is the tipping point but for purely economic reasons it won't make any sense to buy gasoline cars and the cost is gonna continue to go down by 2025 you'll be able to buy a $12,000 electric vehicle with for 200 miles $12,000 right if I'm if I continue to be right which I am right I mean sorry I mean you know I am right I mean we can see this in China anyone who has any doubt please go there we're already seeing $10,000 cars with you know hundred twenty hundred thirty miles today how hard is it to believe that the same car is not gonna have 200 miles not right it's only twenty five so if this is right then every new car after 2025 is gonna be electric every new car for purely economic reasons because they're more powerful they're cheaper to maintain and so on and so forth 20:25 not 40 not 50 for purely economic reasons because it makes sense right now Amazon just ordered a hundred thousand vans to hit the road starting 2021 to 2020 a hundred thousand now Amazon is not known for being green right they're known for making green they're making the right economic choice for Amazon and they're already essentially going electric because they have to because it's cutting the cost of deliveries for Amazon okay now if Amazon is doing this what do you think their competitors have to do what do you think where X has to do in UPS they have to otherwise they cannot compete they all have to go electric right and by the way then say that a 200 mile Eevee can provide power for the average home in America for two days two full days of power you can power your house with your electric vehicle try that with your f-150 right again you can't do that you can actually make money with your electric vehicle right or save money and okay so that's the AV and that's disruptive in its own way and right Hayling is disruptive in its own way in autonomous technology let's talk about autonomous technology just watch this a little bit this is Google now way MO and they've had this program in Arizona in Chandler now they have about 1500 active monthly users of this autonomous right hailing program they go to work go to school put a shop let's look at it no pants mom okay there are more than four dozen companies actually one new one pops up every day yesterday Sony announced that they have an autonomous vehicle Sony who knew all of these companies are investing tens of billions of dollars in autonomous technology I mean it's there's there's a race to be the first in autonomy why is that right I mean can't you just wait for somebody else to do it because mainstream analysts say that not gonna happen until 2040 right why are they in such a rush well I'll tell you what autonomous technology is like an operating system so think of EVs or autonomous vehicles as computers on wheels that's what they are there are computers with one big battery and in wheels right autonomous technology is the operating system now if you think of computing history Android iOS 2 survived Mac Windows 2 survived right I mean you have a third one maybe Linux or whatever but because of network effects only two operating systems usually take more than 90% of the market in that exactly what is going to happen with autonomous technology it's an operating system in only two things we can learn from the history of computing the first one is no one is going to wait Apple did not wait for anyone before they came out with the iPhone once iOS worked they came to market and to only two companies are gonna survive right maybe three but that's it and everybody's gonna have to pay money to these two companies if they want to play that's why everybody's investing so much now way mo ordered 62,000 self-driving minivans that are gonna be delivered this year 2020 60 thousand fleet vehicles are about five percent of all the vehicle miles traveled in North Carolina that's it 60 mm they're super disruptive right and expect them to go to market I expect them to go to market this or next year 60 mm and that's not all right but here's the question are autonomous vehicles safe right that's all I hear all I read there's death death fatalities right so let me give you a number from Tesla according to Tesla Tesla's with autopilot based on actual mileage are eight point eight times safer today than human drivers today that's not even level for autonomy okay Tesla's with auto pilots or eight plus times safer than humans and we're not getting any better we meaning humans right and Tesla's technology is I mean oh it's computer technology both the hardware and the software are getting better now interestingly I predicted in rethinking transportation that by 2020 that autonomous technology would be five times safer than humans how am i doing and by 2022 it would be ten times safer how am i doing they're gonna be a lot more I mean this is the latest quarter data by the end of this year Tesla's technology may well be already 10 times safer than humans by 2030 let me make another prediction we're gonna be talking about taking driver licenses away from humans because we're so dangerous if this keeps improving at 40 percent per year that's 2x every two years we're looking at autonomous technology being a hundred times say further than humans within five six years that's it not 2030 insurance costs are gonna go up for human drivers right because we're gonna be considered dangerous if the whole world used the technology of Tesla autopilot according to the company we would save 900,000 lives we kill 1.2 million people every year in car accidents using that technology we could save today 900,000 people now who is not safe here humans or autonomous technology if we apply that to North Carolina we could save a thousand lives every year starting now if we use the tournament this autonomous technology a thousand people every year so the question is not whether autonomous technologies safe the question is why are we not implementing Lee why are we not saving a thousand lives every year right now how quickly is this improving the cost curve of supercomputing which is what AVS use essentially let me give you an idea the largest supercomputer on earth was called was I mean cost 15 million dollars it was you know the size of this room and you know 150 whatever 1,600 square feet and sorted so forth that was one teraflops whatever that is right one teraflops 50 million dollars by 2016 8 teraflops were 600 bucks repeat 1 teraflop 50 million dollars to 8 teraflops 600 bucks in 16 years that's an improvement of 600,000 times now it gets better right the Apple 10 has five trillion operations per second free with your iPhone right that power would have cost 250 million dollars in the year 2000 right which is why companies are investing in not five or ten in hundreds of trillion of operations per second and that's what Tesla is doing and in various doing and and so on and according to Nvidia 25 companies are developing level 5 which is the very very very best autonomous technology using their stuff so it's improving not just exponentially now if all you remember is one thing is the improvement of AI may well be not just exponential but double exponential not just exponential but insanely super exponential right so if you remember google deepmind beating the world champ at the game of go now go is not chess you can't beat somebody ago with raw computing power you actually mean intelligence or something like it now it took deep mind about three years to beat the european go champion three years right and that was huge because the experts thought it would take another ten for computers to beat humans five months later the computer beat the world champion now the world champion is probably ten times better than the european champion and that took three months and then they took that software they chopped it and they developed a brand new one from scratch in that brand new technology beat the technology that beat the world champion in less than three days three years five months three days that is double exponential right that that's insane anyone who thinks that autonomous technology is not gonna improve at the exponential rate is not looking at this evidence right and autonomous technology is not just for cars remember this is a computer on wheels right and if you can run an operating system on a small computer you can run it on a bigger computer and so on and so forth anything that moves anything that moves on wheels is gonna be autonomous even bicycles even anything tricycles trucks you name it and this means that delivery vehicles FedEx just announced their delivery vehicle little one big one bigger one everything that moves on wheels is going to be autonomous and the marketing bug now if anyone is worried about the last mile now on highways there very easy check this out all right anyone who likes gaming you can actually drive a car from across the country so that's last mile delivery and that answers the question of what happens if a car breaks down right essentially you can drive it from halfway across the country no this is all good right autonomous is disruptive EVs are disruptive on-demand transportation is disruptive so where's the big disruption right the disruption is actually in the convergence of these three technologies the convergence that's how this the big disruptions happen now before I take you into that and and that consequence is just a reminder that cars are the second largest expenditures of the middle class in America after our homes but we only use them for percent of the time we part them 96% of the time I mean anyone knows 4% asset utilization is a disruption waiting to happen and in fact it will happen because of this convergence because a fleet car or van or truck and drive ten times more efficiently instead of four percent forty percent or 50 or 60 right so if they drive a hundred thousand miles per year and because of lower maintenance cost and everybody know the cost per mile of electric autonomous on-demand transportation it's a lot lower how much lower I'll show you Oh everyone is going electric did I say that DB which is the over in China or actually uber is the dhih dhih of America they expect to have 1 million electric vehicles thi year 1 million this year now just to give you an idea 1 million fleet can drive the equivalent of 80% of all the vehicle miles in North Carolina just 1 million you just need about one point two or three million fleet TVs and you can cover all the transportation needs in North Carolina so transport as a service is what I call this disruption on demand autonomous and electric owned by fleets not individuals fleets that's transport as a service the day that autonomous technology is approved now let's assume 2021 let's assume this happens next year that day the cost per mile of tasks is going to be up to 10 times cheaper than the cost of owning a car so next year essentially if autonomous technology is ready and approved this is the decision that a potential buyer is going to have to make do I want to spend 50 grand over the next five years to buy a new car or do I want a $100 subscription to uber or lyft or whatever per month just like Netflix 100 bucks no-brainer 10x cost differential has always caused a disruption in history every single time a 10x cost differential has always enabled a disruption so let's assume 2021 the cost per mile drops by about 10 times and in fact the cost of transport as a service which is going to be about 10 cents it's going to be below the operating costs of your car it's gonna be below I mean even if your uncle gives you a free car the costs of fuel and insurance and parking and all that are gonna be higher by two to four times than the cost of transport servus so you may not sell your car right away but you will eventually because the cost of tasks are gonna keep going down right and you know many companies have agreed with these numbers three years later including Tesla which is saying now that their transport as a service is gonna cost about eighteen cents which is in the ballpark now if this happens essentially by 2030 ninety five percent of all vehicle mile travel in America would be on demand autonomous an electric essentially folks are gonna stop buying new cars and if they do because of whatever reason they live too far away or they have too much money or whatever you know essentially by twenty thirty sixty percent of cars are gonna be late and forty percent are gonna be individually owned but the fleet cars are gonna contribute the hundred thousand miles a year so it's gonna be 95% of all miles which means that essentially the whole system of gasoline vehicles trucks vans cars and so on it's gonna come to an end over the next ten years the implications of that are gonna be astonishing so I'm gonna walk you through some of that folks are gonna start buying new cars because they don't make any economic sense because you know they can save on average fifty six hundred dollars every year by going with transport as a service fifty six hundred dollars per person by not owning a car right so new vehicle sales shrink the total vehicle fleet meaning every single car in America is gonna drop by about seventy percent yes eventually we're gonna sell our cars and we're gonna have fewer cars doing 100,000 miles rather than a lot of cars doing ten thousand miles per year implications an income boost per family of $5,600 in our pockets this is not for the government this is in our pockets by not owning a car and using toss right us disposable income increases by one trillion dollars trillion with a T now because also so that goes into our pockets one trillion dollars this is bigger than 80 a me boost to the economy ever one trillion dollars in our pockets productivity increased by not driving instead of spending all that time on the road driving if we can do anything else now we're not all necessarily going to work some of us are going to sleep some of us are going to play but by not driving and doing other stuff we're gonna free up we're gonna increase productivity by about another trillion dollars on a national level what does that mean for North Carolina more or less personal income boost of 45 billion dollars per year which is equivalent to an increase in wage of 10 to 18 percent 10 to 18 percent that's not bad right every year I mean this is money in your pocket every year productivity increase by not driving is 45 billion dollars in our pockets right that's 90 billion for the North Carolina economy social because it's gonna be so cheap ten cents five cents per mile I mean you'll be able to go from Durham to Raleigh for less than a dollar right door-to-door less than a dollar on demand okay everybody's gonna benefit everybody elderly pensioners retired folks young middle-class doesn't matter right essentially transportation is gonna be almost free compared to what it is today an increased transportation benefits everybody everybody I mean there's all kinds of evidence that a lot of jobs are not where people are a lot of people can't access those jobs because of transportation right so essentially more people can access those jobs and vice versa economic case wolf gains social gains and that accrues to everybody in society now vehicles are gonna be redesigned it's not you know this is not your father's Oldsmobile right I mean it's gonna be more like this it's gonna be like a living room this is gonna be a commute okay totally redesigned it's not the same vehicles and by the way we're gonna get money back and on top of that we're gonna get a 90 percent decrease in co2 emissions how cool is that it's not gonna cost us money we're gonna get money back and decrease co2 emissions by 90% right traffic accidents like I said a million lives saved a thousand plus in North Carolina and this is the road to freight transportation I mean imagine a Starbucks on wheels right I mean I live about 40 miles away from Palo Alto 40 miles I pay about 60 for an uber now I don't commute every day right a tenth of that would be $6 right so with transport as a service it would cost me six bucks to go 40 miles just about maybe 4 bucks but if you're Starbucks and you can round up 10 people in my neighborhood and take them to Palo Alto essentially it costs Starbucks $0.60 per person they can offer me free transportation hop on the bus right by the lot a 60 cents is cheaper than them paying the rent in a downtown shop does that make sense and I get free transportation and it's not just Starbucks its offices on wheels it's physical therapy and this is gonna change everything about work about retail and of course transportation oil industry implications are massive of course if autonomous technology is approved next year as I expect right we're gonna peak this year oil demand is gonna beat this year okay now it may take a year or two more but it's not gonna be ten years right so assume it Peaks this year that means that oil consumption is gonna go down from a hundred million barrels per year to about 70 by 2030 okay so it's gonna be a smooth curve down not up okay now what happens because of the economics of oil is that at 70 million barrels I mean we know from 2014 15 that if you have an oversupply of about 2 or 3 million barrels per day the price of oil collapses to about 2025 it's already happened now in this scenario that will happen next year right so the price of oil is gonna crash to about 25 dollars next year or the year after $25 right which means that a lot of the investments in oil now are gonna be on commercial starting the next couple of years anything that cannot compete at 25 is gone stranded forever as it's not coming back right the implications for land use also our cities are about a third party a third parking because we park our cars 96% of the time but what if we don't own cars well what if their fleet cars going round and round and round right we all need parking 80 plus percent of parking is gonna be obsolete it's gonna be the first time that we're gonna have an opportunity to redesign or cities to envision the cities that we want rather than the cities that we have right more green parks checked more businesses checked more you know residential buildings checked a third of the land mass of every city it's gonna open up more or less now I did the numbers for downtown Durham not all of them but downtown in downtown Durham can open up 2.6 million square feet that are given to parking now what can you put in 2.6 million square feet Apple computers they're headwords Apple Park is about to 2.8 million square feet just saying right that we can attract big employers and people and so on and so forth in all that space I did the numbers for San Francisco in the obsolete freed parking space in Los Angeles you can put three cities the size of San Francisco three whole cities so essentially today whether it's San Francisco or Charlotte or during or Raleigh we need to envision what do we want to do with this space or somebody else is gonna do it for us right now let me give you tell you something about parking other people have heard this message the largest parking operator in the u.s. is a cloud kitchen company Wow what is a cloud kitchen company right there's a new model of food and food this being disrupt disrupted I'm you know I can talk about that some other time but essentially you have places for food preparation only for delivery only so the cloud kitchen company is buying up parking in the downtown to put up these cloud kitchen they prepare for than just you know deliver them no seeds nothing right that's happening today so this disruption is happening and I'll leave you with this thought the disruption is not just about transportation everything is changing you know now you're gonna have now anyone who went to the drone event yesterday awesome drones can already transport people today right and drones are going to be combined with autonomous vans to deliver packages so two technologies converging and we have the technology when it's gonna happen it's more of a regulatory thing than it is a technology thing right in real estate also solar batteries electric vehicles artificial intelligence are turning buildings into essentially autonomous buildings they can create their own energy they can store it they can sell it and so on and so forth the disruption of Transportation is changing everything work real-estate food parking everything now is the time for us to imagine what city what state we want to be with in ten years because we can because when these disruptions happen it's gonna be too late everybody's going to be in execution mode so I'll leave you with this thought I started with New York City in 1900 we are here we are we're New York City was in 1900 this is 2020 and we're on the cusp of the deepest fastest most consequential disruption of transportation in energy and food and cities in 100 years if not ever this is the time to envision what we want our cities to be when we grow up and it's going to happen quickly and I'll leave you with one thought this is not happening this is not an energy transition this is not happening because of climate this is not happening because of governments this is happening for purely economic reasons this is a technology disruption is gonna give us money back it's not gonna cost money we're gonna get money back thank you thank you I'm sit down I think we're gonna put up the survey question and see what the audience's opinion was a fits up let me step out so I can see it so what technology has the potential to be the most disruptive in the next 50 years but strong support over 50% for autonomous vehicles solar energy at 11% electric vehicles at 18 and drones at night I think 19% if I'm seeing that correct so you're seeing those as individuals but Tony pointed out that it's the convergence of some of those that's going to make a big difference just a few questions and I'm gonna leave with one because I know folks out here have heard lots of predictions about autonomous connected all electric and shared vehicle services it will result in increasing BMT not changing VMT substantially decreasing BMT where we need less capacity what is your analysis show yeah so the analysis shows the cost of transport is gonna go down substantially demands gonna go up so I see a 50% increase by 2030 and that's because folks don't have that 60% increase 15 20 30 projection over what we drive again over the projections yes yes so folks that don't have access to good transportation the elderly the disabled the kids and so on are gonna have access to transportation so there's gonna be a big bump 50% at least yeah and so then my last follow-up to that would be in this and we see the trends nationally we see them in North Carolina where we're working hard to better connect our rural suburban and urban sinners what do rural communities need to be doing to prepare and how do they leverage this potential yeah so so rural the cost of transport as a service in rural communities it's gonna be higher because they don't have the critical mass I think what we need to do as a society in the past what we did was we decided that we would provide electricity the world communities even though you know I didn't make that much sense in terms of causation but for equity reasons we decided we would need to do it water Postal Service so essentially we decided that all Americans need to have access to electricity and water and communication and so on I think that's what we need to do in the case of rural communities I think that the role of public transportation has to change will change from one of managing assets buses and so on to one of managing transport as a service to provide equity for all transportation is not a want transportation is a need so we need to do that that's that's how it's all going to change and we need to start doing that now and there are many ways to start doing that school buses I mean any kind of ways in which you know we don't need to touch individually on transportation right so that this is an experience good an experience good means that you need that it's a good that you need to experience it before you know how good it is so we need to show them right we need to do pilots and testing and so on and so forth I'll give you an example Singapore which really wants self-driving to happen Saturdays in this one Park they give free rides in autonomous technology Yeah right just for a half a block so that people can experience it and they go like oh this is it no big deal okay yeah any questions from the audience this was terrific I just thought I'd ask I'm Mike Solomon I'm an engineer working on a number of mega sites in North Carolina for transportation the one that we lost the big Toyota master plan I've been working off eight years yeah so I've been having a luckily I haven't opportunity to talk to the Tesla folks of the last six months and about sites here in North Carolina and here's something that is a real challenge for our transportation team one of the executives that I've been meeting with and talking to is seeing one of the challenges for the whole United States for electric vehicles is charging stations okay and I just wanted if as an industry if you have any thoughts about how the world is going to be able to to prepare for the change to electric cars throughout the whole country right so let me let me take you back to 1900 does anyone know when the first gas station in the country was built in the whole country 1905 okay 1905 before that gas used to be delivered by horses right so my point is that you know the chicken and egg thing is not because of the lack of charging stations it's because of the lack of affordable 200-mile electric vehicles and when we have that in abundance in the market then the market is going to build the charging stations I don't see a reason why the government should do it I mean the government then build the gas stations right Tesla is building its own god I mean a charging station nationally and worldwide right so once you see that the market is gonna take care of it you know I'm an early I was an early employee in a then little company called Cisco Systems 93 94 a lot of folks you know looked at us thinking yeah you're never going to disrupt the landline telephony market right famous last words and you know we built the internet we built it us we went and we've done that with any number of infrastructure highways and and and and communication and so on and so forth so I don't see ow this time is gonna be any different please join me in thanking Tony for the wonderful and thought-provoking thank you thank you thank you Tony and Jim my job is to keep us on time here and also make sure you know where you need to go next I got to tell you how excited I am about this conference because as great as that just was and that was great you know all of our sessions are like that so I really am excited about the rest of the day our next session you will take a small break about 15 minutes come back at 10:45 and we'll be in this room for our next general session I do want to note for the breakout sessions you can obviously attend anyone that that you that you're interested in there's been one change tomorrow the NC go metro mayor's session will be at 11:00 and the urban rule will be at 1:30 that's in the app so it's updated so if you've if you've got the app downloaded you'll have that at your fingertips snacks are outside the ballroom all the meals are in the exhibitors hall I really encourage you to actually go around look at the exhibits talk to the exhibitors those are the folks that make it possible for us to be here on the one hand on this on the other hand they've got some fascinating stuff down there the autonomous drone taxi is down there we got an opportunity to see that fly for the very first time and North America here North Carolina is again first in flight so I would encourage you to all go down and see that it's fascinating technology and the exhibitors will be happy to talk to you about anything they have there so with that please come back here for our next session at 10:45 and thank you very much for your attendance [Music]