The upheaval of the car industry will be the most significant social and economic shift of the next decade, according to Yuri Koropachinski, founder of graphene nanotube manufacturer OCSiAl.
• Modern car industry is one of the largest consumers of raw materials and oil on the planet. It also consumes a vast amount of global financial resources, with an average car company’s debt hovering between $150..200 billion.
• At the end of last year, car companies were responsible for roughly 18% of the entire stock market capitalization.
• Internal combustion cars are poised to be replaced by EVs soon, but an entirely new crop of companies will make those EVs of companies. Think of the cellphone market: today, none of the leading phone manufacturers are called Blackberry, Nokia, or Motorola.
• EVs are made of fewer parts. Combined with the drastically simpler assembly process, it leads to much higher robotization of their manufacturing and better scalability, which in turn lowers the financial threshold to launching a new car company
• Incumbent car manufacturers will have to reduce their manufacturing capacity quickly and drastically, primarily due to the change in consumer behavior. Current consensus forecast puts the future global production at 20 to 30 million vehicles per year. Presently, 80 million new cars are made every year.
• In 5..7 years, most cars will be capable of self-driving. Subsequently, people will be barred from driving in the name of road safety. This will break the last emotional bond between human and car, removing any reason to own one.
• Car manufacturers’ production capacity will be destroyed almost completely, leading to massive losses and putting them on the brink of bankruptcy.
• New businesses will be of smaller scale but more diverse, employing 5 to 10 times fewer people. This will put up to 37 million people out of work, leading to a massive crisis in the very near future, around 2024..2026.
• The turmoil will offer nations that previously didn’t have a domestic car manufacturing a chance to spawn it.