Electric and Driverless Vehicles

Electric and Driverless Cars

By Michael Keane

There has been a large progressive move within the car industry in the last decade when it comes to power and ease of transporting. Both of these issues will have a major effect on energy (oil especially), insurance, and local governments  This series of articles will focus on the effects of the moves on these particular industries. It is very important that these industries get ahead of the situation to avoid trouble.

This blog post is the first in a series to cover this topic. It will briefly cover the topics and possible solutions with later posts going into more detail on each topic and solutions to that particular topic. Awareness of the issues at this point is paramount for all involved (industries, customers, etc.) so that nobody can claim ignorance for when a tipping point regarding organizational survival comes upon them. Per disclosure, KeaneVCC has clients who have investments in the car industry, software industry, communications industry, and a bond portfolio that includes local governmental municipal bonds.

At this point, the move to electric vehicles is rolling along well. This past month, Tesla introduced the Model 3. The company has reported that there have already been over 400,000 orders for the car, which indicates a new level of scalability. Nissan, GM, BMW, Toyota, Ford and others are also currently in the market with vehicles.  The prices of electric vehicles are showing up at affordable levels. Competition is growing in the industry and seems to be creating a ceiling on prices. The loss of gas revenue should be a clear red flag for the oil companies. Are they going to sit back with their heads in the sand or will they understand that progressive industries adapt? Government taxing authorities should also take notice as to what the effect will be for them.

To expand on the manner, the movement towards driverless cars is increasing. Leaders in the car, software, and and other industries are committing large amount of resources to this effort. At this point, driverless vehicles have racked up over 1 million miles in planned trips with varied levels of success. Ancillary industries are watching and planning carefully on the progress. Industries that should be paying particular attention are Insurance and local governments. Revenues for both will be affected heavily if driverless cars are adopted.  

**As always, this blog is to be read as opinion. Please do your due diligence before acting on any information read here.**