It\u2019s been 10 years since\u00a0Apple Inc.\u00a0unleashed a surge of innovation that upended the mobile phone industry. Electric cars, with a little help from ride-hailing and self-driving technology, could be about to pull the same trick on Big Oil.<\/p>\n

The rise of\u00a0Tesla Inc.\u00a0and its rivals could be turbocharged by complementary services from Uber Technologies Inc. and\u00a0Alphabet Inc.\u2019s Waymo unit, just as the iPhone rode the app economy and fast mobile internet to decimate mobile phone giants like\u00a0Nokia Oyj.<\/p>\n

The culmination of these technologies \u2014 autonomous electric cars available on demand \u2014 could transform how people travel and confound predictions that battery-powered vehicles will have a limited impact on oil demand in the coming decades.<\/p>\n

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\u201cElectric cars on their own may not add up to much,\u201d David Eyton, head of technology at London-based oil giant\u00a0BP Plc, said in an interview. \u201cBut when you add in car sharing, ride pooling, the numbers can get significantly greater.\u201d<\/p>\n

Most forecasters see the shift away from oil in transport as an incremental process guided by slow improvements in the cost and capacity of batteries and progressive tightening of emissions standards. But big economic shifts are rarely that straightforward, said Tim Harford, the economist behind a\u00a0book\u00a0and\u00a0BBC radio series on historic innovations that disrupted the economy.<\/p>\n

Systemic Change<\/h3>\n

\u201cThese things are a lot more complicated,\u201d he said.\u00a0Rather than electric motors gradually replacing internal combustion engines with the existing model, there\u2019s probably going to be \u201csome degree of systemic change.\u201d<\/p>\n

That\u2019s what happened 10 years ago. The iPhone didn\u2019t just offer people a new way to make phone calls; it created an entirely new economy for multibillion-dollar companies like Angry Birds maker Rovio Entertainment Oy or WhatsApp Inc. The fundamental nature of the mobile phone business changed and incumbents like Nokia and BlackBerry Ltd. were replaced by Apple and makers of Android handsets like Samsung Electronics Co. Ltd.<\/p>\n

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Today, as Elon Musk\u2019s Tesla and established automakers like\u00a0General Motors Co.\u00a0are striving to make their electric cars desirable consumer products, companies like\u00a0Uberand Lyft Inc. are turning transport into an on-demand service and Waymo is testing fully autonomous vehicles on the streets of California and Arizona.<\/p>\n

Combine all three, for example through an\u00a0Alphabet investment\u00a0in Lyft, and you have a new model of transport as a service that would be a cheap compelling alternative to traditional car ownership, according to RethinkX, a think tank that analyzes technology-driven disruption.<\/p>\n

One key advantage of electric cars is the lack of mechanical complexity,\u00a0which makes them more suitable for the heavy use allowed by driverless technology, Francesco Starace, chief executive officer of Enel SpA, Italy\u2019s largest utility, said in an interview. \u201cI don\u2019t see driverless being pushed into internal combustion engine\u201d vehicles, he said.<\/p>\n

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After disassembling General Motors\u2019s Chevrolet Bolt, UBS Group AG concluded it required almost\u00a0no maintenance, with the electric motor having just three moving parts compared with 133 in a four-cylinder internal combustion engine.<\/p>\n

\u201cCompetitiveness very much depends on the utilization of the car,\u201d Laszlo Varro, chief economist at the International Energy Agency, said in an interview. The average Uber vehicle covers a third more distance than the typical middle-class family car in Europe, amplifying the benefit of lower running costs to the point that \u201cthe oil price at which it makes sense to switch to electric is $30 per barrel lower,\u201d he said.<\/p>\n

Uber on Steroids<\/h3>\n

The total cost of ownership of electric and oil-fueled vehicles will reach parity in 2020 for shared-mobility fleets, five years earlier than for individually-owned vehicles, according to Bloomberg New Energy Finance.<\/p>\n

Already in London, Uber plans for its UberX service to be\u00a0hybrid or fully electric\u00a0by the end of 2019. Its rival Lyft aims to provide at least\u00a01 billion rides a year\u00a0in autonomous electric vehicles by 2025, saying they can be used much more efficiently than gasoline-powered cars.<\/p>\n

This combination would be \u201cthe Uber model on steroids,\u201d Steven Martin, chief digital officer and vice president of\u00a0General Electric Co.\u2019s Energy Connections unit, said in an interview. \u201cOnce you have the complete autonomous operation of a vehicle, then my desire to own one is going to go down\u00a0and I\u2019ll be more willing to sign up to a subscription service.\u201d<\/p>\n

Autonomous Hurdles<\/h3>\n

The transition to fully autonomous fleets may not match the speed of the smartphone revolution\u00a0because of the many regulatory, legal, ethical and behavioural hurdles. Self-driving technology should become available in the 2020s, but won\u2019t be widely adopted until 2030, BNEF says.<\/p>\n

Even so, the shift to electric cars could displace about 8 million barrels a day of oil demand by 2040, more than the 7 million barrels a day Saudi Arabia exports today, the London-based researcher says. That could have a significant impact on oil prices\u2014a drop of 1.7 million barrels a day in global consumption during the 2008-2009 financial crisis caused prices to slump from $146 a barrel to $36.<\/p>\n

That doesn\u2019t mean\u00a0oil giants like BP or\u00a0Exxon Mobil Corp.\u00a0are heading for an inevitable Nokia-style downfall. While transport fuels account for the majority of their sales, they also have huge businesses turning crude into chemicals used for everything from plastics to fertilizer. They also pump large volumes of natural gas and generate renewable energy, both of which could benefit from increased electricity demand.<\/p>\n

Even if electric vehicles do grow as rapidly as BNEF forecasts, the world currently consumes 95 million barrels a day and other sources of demand will keep growing, said Spencer Dale, BP\u2019s chief economist. The London-based energy giant expects battery-powered cars to reduce oil demand by just 1 million barrels a day by 2035, while also acknowledging the potential for a much larger impact if the industry\u00a0has an iPhone moment.<\/p>\n

The sheer breadth of the potential disruption makes it hard to predict what will happen. When Steve Jobs unveiled the iPhone, few people anticipated that it meant trouble for makers of everything from cameras to\u00a0chewing gum.<\/p>\n

\u201cThe smartphone and its apps made new business models possible,\u201d said Tony Seba, a Stanford University economist and one of the founders of RethinkX. \u201cThe mix of sharing, electric and driverless cars could disrupt everything from parking to insurance, oil demand and retail.\u201d<\/p>\n

 <\/p>\n

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