The Autonomous Electric Vehicle – An Emergent New Normal for the Global Bus Market
The human civilization is at a point that is underscored by the swiftest, deepest, momentous disruptions of transportation in history. 95% of the distance traveled by U.S. passengers would be catered by on-demand autonomous electric vehicles, by 2030. These vehicles would be owned by fleets which is monikered as TaaS (transport-as-a-service). With considerable implications across the oil and transportation market negatively impacting a healthy share of the value chains, the TaaS disruption is conversely expected to create new business opportunities leading to robust global gross domestic product (GDP) growth. These estimates by the independent think tank called RethinkX that is known to analyze and forecast the pace and scope of technology-driven disruption and the degree to which such disruption influences society, are also expected to positively impact the global bus market.
In January 2021 it was reported that Huawei Technologies Co., Ltd. is endeavoring the development of smart roads a part of which includes the testing of a stretch of 4 kilometers where a self-driving bus plies while navigating obstacles, managing its speed as well as making stops, along with performing other activities based on the information that is received from the smart road systems around it. Interacting with the autonomous bus the smart road is the first of China’s national project or intelligent and connecter vehicles. Again, during the same month, it was reported that an amount of $310 million was raised by WeRide, China’s autonomous vehicle startup that is backed by the alliance of Groupe Renault, Mitsubishi Motors, and Nissan Motor has from Zhengzhou Yutong Group and several state-backed investors. Out of this funding, $200 million was funded by Zhengzhou Yutong Group, one of China's largest bus manufacturers. with whom WeRide has a strategic partnership. The startup would start testing autonomous buses as per its communique during the same month. Also, during the same month, CRRC Corporation Limited’s (CRRC) (SHA: 601766) manufacturing unit of electric-and gas-powered hybrid vehicles called CRRC Electric Vehicle Co Ltd gad announced that it has received permission to operate its autonomous buses on open roads in Paris. Earlier in December 2020, it was reported that a partnership was formed between an industry leader in autonomous technology called EasyMile, and California based Phoenix Motorcars to facilitate the joint development and deployment of autonomous shuttle buses, among others
New Electric Bus Registrations by Country/Region, 2015-2019
By Fuel Type, the Segment of Electric Buses Is Predicted to Hold a Considerable Share in the Global Bus Market
The aforesaid developments are a partial testimony to the acknowledgment of autonomous electric vehicles (A-EV) as a viable alternative to human-driven, internal combustion engine vehicles (ICE). In November 2020, it was reported that The Indian Institute of Technology Madras (IITM) has formed a partnership with ASHOK LEYLAND (NSE: ASHOKLEY) and Hitachi ABB Power Grids had launched trials of electric buses. During the same month, it was reported that The Go-Ahead Group plc (LSE: GOG) would be launching the first fully-electric bus fleet in the North East of England, which is in line with the UK Government’s commitment to reduce the UK’s net emissions of greenhouse gases by 100% relative to 1990 levels by 2050. In October 2020, it was reported that a Memorandum of Understanding (MoU) was signed by Mytrah a market disruptor in the clean energy sector, to facilitate a ?2,000 crores investment-led electric bus manufacturing unit. Further, another MoU was signed by Olectra Greentech Limited. (NSE: OLECTRA) for a ?300 crore investment-led bus manufacturing project. Both projects are expected to generate employment in the order of,750 people and 3,500 people, respectively. During the same month, it was reported that trial runs for electric-bus for the second time after a gap of over six years was rekindled by BMTC (Bangalore Metropolitan Transport Corporation).
In September 2020, it was reported that in partnership with ElectReon and Dan Bus Company, Tel Aviv-Yafo Municipality has launched a pilot project to enable specially-equipped electric buses to be charged wirelessly. In June 2020, an economical, eco-friendly, and alternative to diesel-powered buses called the Country Electric which is essentially an electric minibus was launched by Hyundai Motor Company (KRX: 005380) for the Korean market. In February 2020, 12- and 9-metre Eco-Life electric buses were launched by JBM Group (NSE: JAYBARMARU) resulting in savings of approx. 350,000 liters of diesel and 1000 equivalent tons of CO2 spanning its utilization over 10 years.
Future Implications of A-EV Adoptions Will Facilitate a Vastly Lower-Cost Transport Alternative i.e., Taas
The effectuation of the swift transition from human-driven ICE to A-EVs will result in a much higher rate of vehicle utilization guaranteeing comparatively lower costs related to energy, finance, insurance, and maintenance. With the estimated merging of public and private transportation and revenue sources from data monetization, entertainment, onboard advertising, and product sales, there exists a potential to make way for free transport. Beginning from the cities such adoption would gradually spread out the rural areas. Further, as a result of reclaimed driving hours GDP would surge at an unprecedented rate. Further with the advent of such technology, many automobiles would become obsolete as well as economically unviable which would lead to the reduction of traffic and put large tracts of land at the disposal of other uses.
Such disruption would also bring about a drastic reduction in air pollution and greenhouse gases from the transport sector, and result in the improvement of public health ultimately leading to the decarbonization of road transport. Additionally, it also has to be taken into account that the geopolitical significance of oil would diminish and the disruption of lithium stock, as opposed to the flow of oil, would not affect service delivery. The automotive industry due to the advent of TaaS would generate trillions of dollars in consumer surplus, greater mobility and access to education, jobs, and health care, provide cleaner, safer, and more walkable communities, and reduction of transportation costs. Above all the function of public transportation, authorities would shift from owning and managing fleets to managing TaaS providers to ensure equitable, universal access to low-cost transportation.
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