In this discussion paper, we argue that autonomous vehicles (AVs) should be considered cleantech and could be one of the most disruptive technologies in the energy transition. At a minimum, we consider AV technology to be clean technology because it is likely to increase the energy efficiency of personal transport. However, of greater interest is the possibility that AVs will inadvertently and rapidly electrify Australia's vehicle fleet. The resulting increase in energy storage and flexible demand would help facilitate a transition to 100% renewable electricity.
AVs will enable a new business model – transport as a service (TaaS). This Uber-like service (sans-driver) could have a significant cost advantage over alternatives.
We have estimated the potential cost of TaaS in Australia to be below 50c/km. This would make TaaS not only cheaper than using a taxi, but cheaper than buying a car, and cheaper than even using public transport in some instances.
Due to its cost advantage, TaaS could quickly capture a large share of the personal transport market, on a passenger-kilometres basis. The most surprising result of our analysis is that TaaS could be comparable to the average annual marginal cost of owning a car. As a result, TaaS use could quickly displace the use of personal vehicles, possibly becoming the dominant form of transport within a decade.
TaaS fleets are likely to be electric. TaaS providers, like all businesses, will minimise costs. In high-utilisation conditions, EVs have a lower total cost of ownership due to their lower running costs, and therefore are likely to be favoured by TaaS.
As a result, TaaS could electrify our personal transport systems much quicker than natural electric vehicle adoption. Currently, optimistic estimates have EV uptake reaching 90% of personal vehicles around 2085 under the normal model of personal vehicle ownership. One of the reasons for the slow change is that cars have high upfront costs and are retained for over a decade on average, resulting in a slow rate of turnover in the national fleet. TaaS won't suffer from this turnover brake, with the addition of a new commercial TaaS fleet bypassing the regular replacement process and lower barriers to consumer adoption. As result, some estimates project that TaaS could provide for 95% of all passenger-kilometres by 2030 – mostly with EVs.
Rapid electrification of transport is likely to help facilitate a transition to 100% renewable energy. The storage capacity that could be made available by a TaaS fleet would help balance out the intermittency of renewable energy. As a result, our grid would be able to handle a greater amount of clean energy, which in turn would decrease the carbon intensity of electric vehicle use. This dual potential to help decarbonise transport and the grid simultaneously makes TaaS highly significant for the energy transition.
Even if TaaS doesn't come to dominate, AVs could reduce the energy consumption of personal transport by about 60% compared to business as usual (Figure 2). These savings are due to driving with greater efficiency (~25% reduction), enabling cars to be redesigned to be more efficient (~50% reduction), but slightly offset by factors such as induced demand (~10% increase).