Are you ready for a massive decline in the cost of transportation?  Can you see how there is going to be a 90% drop in the cost per mile?


Of course not.  That is absurd.


This is the outlook that most will have.  However, the present path of [technology](https://inleo.io/@leoglossary/leoglossary-technology) is leading us to the point where we will see just that taking place.  We are seeing a convergence in many areas which is going to bring profound change.


If one is not accustomed to looking at things such as cost curves, this might see a bit odd.  However, when it comes to technology, costs always decline over time.  As they say, it is like gravity, always there and pulls things down.


We already are seeing the impact of [electric vehicles](https://inleo.io/@leoglossary/leoglossary-electric-vehicle-ev).  The [prices](https://inleo.io/@leoglossary/leoglossary-price) are gaining on traditional ICE vehicles.  What gets overlooked is EVs are still, mostly, in the premium segment.  We still are awaiting the first mass [market](https://inleo.io/@leoglossary/leoglossary-market), [economy](https://inleo.io/@leoglossary/leoglossary-economy) EV.  


When that its, game over for anyone holding onto ICE.

https://www.itdp.org/wp-content/uploads/2019/05/Traffic-USA-1-e1558632602236.jpg
[Source](https://www.itdp.org/)


## Autonomous Driving


Electrification is just one advancement taking place.  We also have the entire sector of [artificial intelligence](https://inleo.io/@leoglossary/leoglossary-artificial-intelligence).  Here again, we see many doubters claiming [autonomous vehicles](https://inleo.io/@leoglossary/leoglossary-autonomous-vehicles) will never happen.


The reality is, we got a wake up call the past year with [chatbots](https://inleo.io/@leoglossary/leoglossary-chatbot).  There is room for debate whether this is taking us towards AGI or not.  However, what is not up for debate is the ability to operate in a human-like manner.  Language is a tough thing to train a [computer](https://inleo.io/@leoglossary/leoglossary-computer) with.  Driving is actually more mechanical than people think.  


For this reason, it is certain that autonomous capabilities will arrive.  It is a matter of when, not if.  Once that happens, we can call game over.  Naturally, there will still be regulatory hurdles to clear.  That said, it is all aligning.


What happens when the costs of vehicles keeps dropping while fleets also start to take over?  One major advantage that an EV has is the ability to go 500K or even 1M miles.  The average driver is not going to keep a vehicle anywhere near that long. 


Fleet operators are a different [story](https://inleo.io/@leoglossary/leoglossary-story).  They can do 100K in a year easily.  This means that a vehicle with 3x the life expectancy is already significantly cheaper.


## Technological History


There was a time when the only way to really see a [film](https://inleo.io/@leoglossary/leoglossary-movie-film) was to head to the [theater](https://inleo.io/@leoglossary/leoglossary-theater-genre).  This means driving across town, buying tickets for each person, and sitting through a 2 hour picture.  If one had to use the bathroom or get a soda refill, that portion of the [movie](https://inleo.io/@leoglossary/leoglossary-movie-film) was missed.


Today, things are a lot different.  The cost of [video](https://inleo.io/@leoglossary/leoglossary-video) consumption is near zero.  People spend a small fortune to have many different [streaming](https://inleo.io/@leoglossary/leoglossary-stream-service) [applications](https://inleo.io/@leoglossary/leoglossary-application) but that is a choice, one many would say is unnecessary.  There are millions of hours of video content available for free. 


We see the same thing with communications.  Does anyone remember long distance phone charges?  There was a time when a monthly bill would show up.  Depending upon one's usage, this could amount to a couple hundred dollars a month.  [Businesses](https://inleo.io/@leoglossary/leoglossary-business) were even worse.


There is going to be another transformation in information.  We already saw a massive shift due to the [Internet](https://inleo.io/@leoglossary/leoglossary-internet).  This is going to change against as [networks](https://inleo.io/@leoglossary/leoglossary-network) become abundant.


The point is we see this happening all the time.  Technological cost curves are very predictable.  We see similar patterns in manufacturing, chemistry and other fields that are going to affect autos such as the material sciences.


## Absurd Until It Becomes Real


Many thought the idea of $100 per kilowatt hour (kWh) for Lithium Ion batteries was thought absurd a few years ago.  That is what some vehicles are at now.  While the average is around $128, that is down from $161 in 2022.  Much of this drop can be attributed to the drop in [commodity](https://inleo.io/@leoglossary/leoglossary-commodity) pricing.  However, this is in alignment with the longer term cost curve.


Remember, it is like gravity.


Technology seems to catch many off guard, especially the incumbents in an industry.  Those are the ones who end up being disrupted and put out of [business](https://inleo.io/@leoglossary/leoglossary-business).  Anyone remember Blockbuster Video?  Those executives did a masterful [job](https://inleo.io/@leoglossary/leoglossary-job) at predicting the rise of streaming.  Even as it was taking off, they were going for a "hybrid" model, believing kiosks were the avenue to take.


Sound familiar?


This is something that many feel is the case with the auto industry.  They simply cannot see passed what is in front of them.  Watching technological trends for so long makes other things clear.  It gets very easy to see the S-curves as they are developing.  Most, naturally, see it in hindsight.


As a side note, one area we are also seeing similar disruption is with food production.  The next 15 years will see a massive shift there also.


Things really change when S curves start to stack on top of each other.  This is what we are referring to here.  When we look at [AI](https://inleo.io/@leoglossary/leoglossary-artificial-intelligence), batteries, manufacturing (Wright's Law) and the material sciences, we see a number of patterns that all tell the same story: massive cost declines.


Do not be surprised that, as we approach the mid 2030s, if the cost of transportation in most [markets](https://inleo.io/@leoglossary/leoglossary-market) is 90% less per mile (KM) than it is today.  We are looking at a few disruptions taking place before our eyes.

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Posted Using [InLeo Alpha](https://inleo.io/@taskmaster4450le/transportation-costs-a-90-drop-over-the-next-decade)