Earlier this week Waymo and Jaguar announced a partnership to deploy 20,000 fully autonomous, Jaguar I-PACE vehicles into a fleet of on-demand (think Uber) shared vehicles over the next few years.
Here at Repower Group we are focused on the development of electric vehicle charging infrastructure, regardless of if the vehicles that utilize that infrastructure are driven by a human or not. However, we closely follow the development of autonomous vehicle technology as we believe the introduction of autonomous vehicles will have a number of implications on the deployment of electric vehicle charging infrastructure. Waymo and Jaguar’s announcement present an opportunity to highlight how:
1. Autonomous vehicles, at least at first, will largely be shared
The hardware that is required to support autonomous driving is estimated to cost up to $100,000 per vehicle today. And while this cost is declining dramatically and quickly, it is still cost prohibitive for mass market personal vehicles.
However, if compared to the cost of a compensating a driver, this added cost is quickly compensated for over the life of the vehicle, making autonomous vehicles less expensive to operate vs. their driver operated peers.
Additionally, offering transportation as a service instead of just selling vehicles will allow the developers of the technology, such as Waymo, to monetize their technology over the life of the vehicle, vs. simply selling the vehicle upfront.
For these reasons, Repower expects the initial deployment of electric vehicles to be in shared fleets, and we are not surprised that Waymo is choosing to deploy this fleet of Jaguar’s in a shared fleet.
2. Shared autonomous vehicles will be electric
As we have written about previously, despite the higher upfront cost of electric vehicles, electric vehicles can have a lower total cost of ownership vs. their internal combustion engine peers. This is driven by electric vehicles lower per mile operating costs, and occurs when vehicles are highly utilized.
Autonomous vehicles have the potential to be the highest utilized vehicles ever deployed, as they can operate virtually 24/7 (expect when they need to be charged, cleaned, and maintained).
For this reason, Repower fully expects all shared autonomous vehicles to be electric.
Waymo’s decision to deploy Jaguar’s new electric vehicle can easily be viewed as an opportunity to present a green image. But it is ultimately an economic decision. Waymo’s upfront additional vehicle cost to purchase Jaguar’s I-PACE vs. the similar Jaguar F-Pace is approximately $27,000/vehicle. However, over the course of the vehicle’s life, Waymo can expect to save $31,000/vehicle in fuel alone. And this does not include additional savings from lower maintenance costs.
3. Deployment is going to occur quickly
As autonomous technology matures to a point where commercial deployment is viable adoption is expected to occur extremely quickly. Some projections show over 50% of all passenger miles traveled in the US being in autonomous electric vehicles by as early as 2025 (Figure 1) – And this is assuming deployment doesn’t begin until 2021, not 2018.
This speed of adoption can be explained by the lower operating cost of autonomous electric vehicles. This gap is expected to be so large that it will make economic sense to retire human operated vehicles long before the end of their useful life, even if they are largely depreciated already.
When this transition begins is more at question then the speed at which adoption will occur. Technical and regulatory questions still loom and could take years to resolve. However, Waymo’s announcement indicates the transition could begin sooner than anyone is anticipating.
Figure 1: Speed of autonomous electric vehicle adoption
Implications on electric vehicle charging infrastructure deployment
The implications of these projections on the electric vehicle charging infrastructure market are significant in two primary ways. First, the location of charging infrastructure will need to be strategically placed for the needs of these vehicles. Second, deployment is likely going to need to occur more quickly then most current projects expect. Repower is here to help EV infrastructure providers think about the implications of this transition on their business and access capital markets to ensure that infrastructure is not the roadblock reducing the speed of this transition.