The most important discovery of the 19th century is about to lose its relevance.
Oil, the fossil fuel originally intended to light poor people’s homes that became the dominant energy source for worldwide industry & civilisation and which John D Rockefeller used to become the richest man the world has ever seen, is about to lose its biggest market – you.
Take note finance ministers of oil economies – be you Middle East, Far East, Russian, American or Norwegian – the demand for your product has peaked. It’s over now. For centuries oil bubbled out of the ground with nowhere to go & nothing to do. It’s heading back there too.
The public have decided & voted with their wallets. So this is a real thing.
Every minute of every day, hundreds of millions of motorists pull into a Mobil/BP/Gulf/Texaco station to gas up their Ford/BMW/Ferrari, purchasing the energy required to propel it & them along the nation’s roadways.
Wow, there’s some worldwide industrial giants I just mentioned there. Ford, for example, sold over 250,000 vehicles domestically in March 2016 alone! Massive production by a gigantic corporation. That’s over now, over, finished. So it is for GM & Chrysler too.
Tesla, makers of the world’s fastest-accelerating passenger car – Model S P90, retail from $NZ150,000 – announced their new entry-level car – Model 3, retail from $NZ50,000 – in March. Joining Model S & the SUV styled Model X, Tesla now has a small but impressive product range.
Model S has redefined motoring, it’s fair to say. This all-electric, self-driving, 6-seat executive vehicle is not only the world’s fastest (0-100km/hr 2.7sec) but also rated the world’s safest car too. Every metric has been redefined by Tesla, the first succesful American car company since, uhh, Ford.
Tesla drivers never need to visit a petrol station anywhere, ever again. Ever. When they park at home, the Tesla charging kit recognises the task at hand, automatically crawls up the Tesla’s flank to the charging port, plugs itself in & fuels the car ready for tomorrow. They never need to wait in line to pay, nor buy an item where the price is leveraged so hard against the convenience factor that if you weren’t already buying petrol…
Surrounded by sensors – radar, lidar, camera & sonar, you can’t crash a Tesla without being deliberately stupid – it just won’t let you. When it senses an obstacle, the electronic brain kicks in & uses whichever avoidance method is required to protect the car & it’s occupants. These same sensors are a vital part of the self-drive function. Choose Self-Drive when you’re on the motorway, get out of the driver’s seat & stretch out in the back. True!! Not legal & not recommended but still true.
No oil, no petrol, no clutch, camshafts, radiator, fan belt, spark plugs, fuel/oil/air filter. That’s all so last century to Tesla, a simple concept that threw away existing preconceptions of what a car had to be like.
At $NZ150,000 + options for the range-topping P90D, a single model-producing Tesla wasn’t ever going to challenge America’s Big Three – Chrysler, General Motors &, of course, Ford. Long-established pillars of American manufacturing, each one of them. Understandably dismissed as too expensive, that thing is for software moguls, wealthy angel investors & patent holders with massive residuals rolling in. A curiosity that while it seems impressive, won’t challenge the establishment. Not at that price.
It wasn’t till almost the end of March that Tesla announced pre-sales orders were available for Model 3, March 27 it was. By then, Ford would have been over 200,000 sales, their massive network chugging along just as Henry Ford intended. 100+ years ago.
As mentioned above, the Dearborn, Illinois-based FoMoCo exceeded 250,000 vehicle sales by March 31. You know what? So did Tesla. With an extra 50,000 Model 3 orders on top of Ford’s quarter million.
In the most succesful launch of any new product of any sort, anywhere, ever, California-based Tesla Motors took an amazing 300,000 orders in 4 days. Holy shit Batman, best get us a Tesla!
Don’t forget, Tesla’s chairman & driving force, Elon Musk, has also delivered the gateway to the future of international travel this year – when his SpaceX rocket booster successfully landed, allowing recycling of the most expensive component of a space rocket for the first time ever. The cost reduction from $60,000,000 to just $2,000,000 turns low orbit flight into a commercial enterprise.
The last major advance in air travel was 1969, when Concorde debuted. SpaceX has enabled airlines to start creating vehicles that’ll boost us into low orbit, wait while the Earth spins, then drop down to your destination. Instead of 22+ hours from Auckland – London direct, you’ll be there in 10 – 11 hours. Back to the cars…
Although only $US1000 is required to confirm your order, that’s still a meaningful sum – there wont be many, if any, cancelled orders. So venerable old Ford does 250,000 in a month, young upstart Tesla – with it’s very first affordable car – does 300,000 in the final 4 days of the same month. Ouch.
Bob Dylan anyone? The Times They Are A Changing.
It’s happened. Right then & there was the historical moment when oil began the downhill slide from it’s perch. No longer will the world’s automotive fleet be combustion engined, nor will their exhausts belch stinking polluting gases – electric cars don’t even have exhaust pipes.
Oil embargoes aren’t even a thing any more, & that ridiculous method of pulverising bedrock underneath towns to extract shale oil (& geological stability) known as Fracking has had its day too, thank God for that.
Ecological disasters such as BP-Amoco in the Gulf of Mexico & the shocking Exxon Valdez wreck that coated pristine Alaska in thick layers of sludge will be far less likely now. This sea-change in motoring won’t change the demand for heating oil or industrial fuel oil, there will still be a requirement – just reduced to a fraction of what it was. Oil will still be pumped, transported, refined – & the risk of a spillage disaster remains but with far less likelihood of happening.
In the relatively short-term future, the huge, fluoro-lit forecourts where motorists gather to be fleeced for overpriced grocery items, drink mediocre coffee & tip litre upon litre of sulphurous benzine into their cars – the signs above indicating massive fortunes made in Mexico, Venuzuela, Russia, Iran, Saudi Arabia – will be gone. No need for giant subterranean holding tanks of noxious fuel, originally pumped from the ground as thick, smelly crude then shipped internationally to be refined to your local blend of petrol and sold as BP or Total or Gulf underneath that selfsame forecourt.
When the bells tolled for Ford, as they did in the last few days of March, they just as surely tolled for the spinoffs from Rockefeller’s Standard Oil & their multinational competitors.
The repurcussions will roll through industry like an earthquake, shaking the foundations of thousands of established manufacturers as their once-plentiful markets for suddenly obsolete items – from the necessary spark plugs (Champion, NGK) to the optional performance additives (Rislone, Prestone, Bar’s) – disintegrate. Currently every car needs at least 4 spark plugs replaced annually, soon no car will. Not just won’t need to replace them annually, won’t need them at all.
Entire established industries require rethinking, redesigning, recapitalising & rebuilding – quickly. The Tesla effect will be mature within 10 years, in 20 years (max) the curious attention attracted now by P90Ds will be directed at dirty old Dodge Challengers, Bentley Continentals & any other surviving petrol-engined curiosity as they noisily rumble down the highway, stopping for lukewarm pies, overpriced Cokes & oh-so-tired looking donuts while they pour the curious & dangerous antiquated petroleum into fuel tanks.
I’ve raved about Tesla several times over in this column – hit Tesla in the Tag Cloud widget thing on the right side of this page to view – & the YouTubes are full of them, everyday cars that annihilate supercars costing 3 or 4 times the price. Universally acclaimed as the very best cars in the world today.
This time it’s not just me, a lone voice yapping in the tech wilderness. @ least 400,000 (they closed the order book then) people, the vast majority of whom drive petrol power currently, agree with me. They had the opportunity to buy gasoline-powered cars, with no production delay. They had the opportunity to not buy too. But they did, and in doing so, by the sheer weight of numbers, created an historical turning point.
The moment has been, the world’s 160 year addiction to and reliance on oil is over.