CLSA Forum Voices Clean Disruption Why Conventional Energy and Transport Will Be Obsolete by 2030

Stanford BUS45 - Leading Market Disruption-

Clean Disruption - Copyright 2001-2015 by Tony Seba 1

CLEAN DISRUPTION WHY CONVENTIONAL ENERGY AND

TRANSPORTATION WILL BE OBSOLETE BY 2030

Tony Seba www.tonyseba.com

Hong Kong, HK 16 Sept 2015

PRESENTATION TO

!!

"#$%&!'#(#&)#!!

!!"#$%&'($)"vestors Forum *+,"-$.*#/0$1"$2*"3$4*"3$$51.6$/$7*89-$*"$3:*;/:$1"-./;1:1.0$/"#$Chinas new normal$

$!"#$%&"#$%%Monday 14 September 2015: CLSA Limited (CLSA), Asias leading and longest'running brokerage and investment group opens today the 22nd CLSA Investors Forum, one

"(%)*+%,-.$+/)%-#0%,+-01#$%$,"2-,%1#3+/)4+#)%5"#(+.+#5+/%1#%)*+%-//+)%4-#-$+4+#)%1#06/).78%%%The 22nd CLSA Investors Forum provides more than 1400 global fund managers and 230

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1900:Where is THE CAR?

Photo: Fifth Ave NYC on Easter Morning 1900

5th Ave New York City, April 15, 1900

THE?

Source: US National Archives Clean Disruption- Copyright 2001-2015 by Tony Seba

1913: Where is THE HORSE?

Source: George Grantham Bain Collection

Photo: Easter 1913, New York. Fifth Avenue looking north.

5th Ave New York City, March 23, 1913

Clean Disruption- Copyright 2001-2015 by Tony Seba



Technology-based Disruption

Clean Disruption- Copyright 2001-2015 by Tony Seba Rodin Thinker - Photo: Tony Seba

Images Source: Wikipedia

What is a Disruption? A disruption happens when a new product or service helps

!create a new market and ! significantly weaken, ! transform, or ! destroy an existing product /

market category / industry. ! Ex: car -> horse, PC -> typewriter, iPod->Walkman


Photo: Tony Seba




1985

Image Source: GMAuthority.com

Fast Forward to 1985

Mainstream Disruption Forecasts

! In the mid-1980s AT&T hired McKinsey & Co to forecast cell-phone adoption by the year 2000 ! Their (15-year) prediction:

900,000 subscribers. ! The actual number was

109 million ! They were off by a factor of 120x Motorola DynaTAC 8000X from 1984. Source: Wikimedia

Leading Market Disruption- Copyright 2001-2015 by Tony Seba Source: Economist Clean Disruption- Copyright 2001-2015 by Tony Seba



AT&T Disrupted and $$ Trillions Created

Forecast

Clean Disruption- Copyright 2001-2015 by Tony Seba Subscriber Data Source: CTIAThe Wireless Association

Internet Companies: Internet Report 2015 - Mary Meeker

Subs

crib

ers

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

!!AT&T's landline telephony market was disrupted, !!It Missed out on a multi-trillion dollar opportunity!

Actual 100,000,000 109,000,000

$2.4 trillion - Market Cap Top 15 Global Internet Public Companies (2)

"The Internet will catastrophically collapse in 1996." -Robert Metcalfe, 1995. "There is no reason anyone would want a computer in their home."

- Ken Olson, CEO, Digital Equipment Corp., 1977 "I do not believe the introduction of motor-cars will ever affect the riding of horses."

- Scott-Montague, United Kingdom MP, 1903

It's usually the 'Experts' and 'Insiders' who dismiss disruptive opportunities


"The Internet will catastrophically collapse in 1996." -Robert Metcalfe, 1995.



Why do smart people at smart organizations Consistently Fail to

Anticipate or Lead Market Disruptions?


1.! Disruption Models 2.! Exponential

Technologies 3.! Business Model

Innovation 4.! Product Innovation

4 Reasons Why Organizations Consistently Fail to Anticipate or Lead Market Disruption

Leading Market Disruption- Copyright 2001-2015 by Tony Seba



Exponential Technologies


If the rate of change on the outside is greater than the rate of change on the inside, the end is near.

- Jack Welch

Source: Wikipedia

Computing: Moores Law (1971-2011)

! # of transistors doubles (roughly) every two years. ! Annual Improvement Rate ~ 41.4% ! Exponential Growth in # of Transistors


Loga

rithm

ic S

cale

1 billion X



!!Technologies improving at exponential rates.

!! Data Storage Kryders Law !! Hard Disk $ cost per bit down 50%

every 18 months. !! Digital Imaging Hendy's Law

! Pixels per $ - 59% / year !! Network Capacity: Butters Law of

Photonics !! The $ cost of transmitting a bit decreases

by 50% every 9 months.

PC / Internet / Mobile Phone industries: Covergence of Exponential Technologies

Clean Disruption- Copyright 2001-2015 by Tony Seba Source: Wikipedia

Kryders Law: Storage Lo

garit

hmic

Sca

le

1.! Sensors / Internet of Things 2.! 3D Printing 3.! Machine Learning / Artificial Intelligence 4.! Robotics 5.! 3D Visualization 6.! Solar PV 7.! Energy Storage 8.! Mobile Internet & Cloud 9.! Big Data / Open Data 10.!Unmanned Aerial Vehicles / Nano Satellites 11.! eMoney / eFinance

2015: Key Exponential Technologies




1.!Solar 2.!Energy Storage 3.!Electric Vehicles 4.!Self-Driving Cars

Clean Disruption of Energy & Transportation


1. THE SOLAR DISRUPTION

If you evaluated rooftop solar a year ago, or even three months ago, you are way out of date. - David Crane, CEO, NRG Energy



Solar PV Costs: DOWN 200X

Graph Source: BNEF Economics of PV Power

$100/W $100/W

50/W

200x


Learning Curve: 22%

! Solar PV Market CAGR 2000-2014 ~42% ! Solar PV installed Capacity 2000-2014 Growth ~ 132X

Data Source: EPIA, PV Magazine

Market: Solar PV Installed Capacity: UP 132X


1,400 1,765 2,235 2,820 3,952 5,364 6,946 9,521

16,229 23,605

40,670

71,061

102,156

141,156

185,356

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Global Installed Solar PV (MW)



! If Solar PV continues to grow at ~42% CAGR ! 100% of all energy (not just electricity) in the world would be

solar by 2030 Source: Clean Disruption

Energy = 100% Solar by 2030 ?


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000 Solar Installed Base (GW)

Can Solar Continue Growing at this Rate?


Can Solar Continue Growing at this Rate?



!"#$%&'"!(&(%)*+!&,!&&

'"*,)*(-"*$#&)*)%./&


Sources: DOE, Clean Disruption

Since 1970 Prices for conventional resource-based energy sources are up 6X 16X


Nuclear

Oil

Nat Gas

Coal



! Since 1970 Solar PV has improved cost by thousands of times relative to most conventional forms of energy.

! Note: unsubsidized cost of solar PV

Solar Cost Improvement vs Conventional Energy


Solar PV Cost Improvement relative to:

Times improvement (1970-2015)

Petroleum 3,165x

Nuclear 2,600x

Natural Gas 2,965x

Coal 1,164x

Source: "Clean Disruption"

Timesimprovement (1970-2015)

2,600x

2,965x

1,164x

3,165x

Oil at $50/bbl

01!-*)!!&2&3-*$*'-$#&4"+)#&-**",$(-"*&




Zero Money Down Solar 3rd Party Finance ! ~80% of California Residential Solar PV is third-party

owned & financed (March 2012) (1) ! This includes PPA and Leasing.

! CA 3rd-party finance = substantially all growth in residential solar

(1) PV Solar Report Images Source: GTM Research California Solar Initiative Colorado Excel Energy

3rd-party

Cash


!"#$#%"$&'(')*+"#,++'-./,&'"##.0$1.#+'$2,&56789:;8&?6@=&6A&?BC:=B5'$#/'B??8589BD;'?'52.@,2AB'6++,++,/'=&,$#'>#,2CB'D4!'E.#/?556'FB)2"/'G4!'=2.H/!*#/"#C'I4!J85'?'J$+A,2'8"-"A,/'5$2A#,2+K"@'L'M4!'N>OP'Q'N,$&'>+A$A,'O#0,+A-,#A'P2*+A'L''6CJ9:=&KLMMNHLMOP&QJ&(6;J&!8QB&&&



! Solar at/below grid parity in 100's of markets globally TODAY. ! Deutsche Bank: Solar Below Grid Parity in

! 47 states in the US by 2016 !Up to 80% of Global markets by 2017

Grid Parity in 80% Global Markets by 2017

Source: Deutsche Bank

100's of markets


Up to 80% of Global markets by 2017

Solar PV costs to drop another 50%+ by 2020

Graph Source: Citibank and GTM

25/W


$100/W Total Res. System

Cost = $l.12/W

! Solar PV costs down 400X from 1970-2020 ! Citi: installed cost of Residential solar ~$1.12/W by 2020

! Installed cost is already



! Solar PV will keep improving unit cost by thousands of times relative to conventional forms of energy.

! Assumption: conventional energy prices in 2020 = 2014 Oil @$50/bbl

By 2020: Solar Cost vs Conventional Energy


Solar PV Cost Improvement relative to:



Petroleum 3,165x 6,329x Nuclear 2,600x 5,200x

Natural Gas 2,965x 5,911x

Coal 1,164x 2,329x

Source: "Clean Disruption"

Timesimprovement (1970-2020)

2,329x

6,329x5,200x

5,911x

Solar Growth Rate may Accelerate! (Tech S-Curve)


Solar Growth Rate may Accelerate! (Tech S-Curve)



Technology Adoption S-Curve (Color TV % US)

182 Telektronikk 3/4.2008

believed that HDTV VCRs (and later DVDs) wouldgive consumers a reason for acquiring HDTV sets,even without broadcast programming.

There were other constraints, but these were themajor ones. There was no question that they wouldhave to be overcome before HDTV would be widelysuccessful and we thought they would be overcomein time. The only exception was the requirement thateconomical flat panel HDTV displays would becomeavailable. They could start out very expensive, butwould have to follow a typical price decline patterncomparable to color television and other consumerelectronics. See, for example, Figure 4. This was themajor area of uncertainty to be addressed throughresearch. That research revealed that R&D was beingfunded by the market leaders, significant progresswas being made and more progress was expected.While no one expected flat-panel displays to followthe improvement rates typical of semiconductormicrochips, there appeared to be plenty of room forcost improvements. Thus, we concluded that (a)HDTV was likely to be successful, and (b) it wouldultimately be a mass market item like color televi-sions. We also reached the preliminary conclusion that,given the initial status of weak drivers and strongconstraints, HDTV would take some years to reachthe market and that it would not be an overnight sen-sation, but would have a moderate adoption rate.

More on Estimating when a Technology willBecome Commercially AvailableAlthough the names and details vary by industry,most innovations go through a process of discoveryor development of concept, laboratory demonstration,field trials, and early commercial trials, before theyare generally introduced to the market. Once you

understand this process for the industry of interest,answering the following questions will help answerthe when? question:

Where in the development process is thetechnology now?

What steps must still be completed? How long does it usually take to go from here

to commercialization? Can and will they be compressed? Who else is working on the process? What resources are there? What problems are likely to come up? How fast can these be overcome? Are there parallel developments or required

conditions for commercial success? When will the market be ready for the technology?

Returning to our HDTV example: In 1992, the year ofour first HDTV study, digital HDTV was in the labo-ratory demonstration phase at an industry-sponsoredtest lab. As noted above, the FCC was analyzing theresults and was expected to decide on one of them inlate 1993 or early 1994. Based on analogies withB&W and color, we estimated that HDTV receiverswould enter the marketplace sometime in 1994 or1995. From there we estimated that it would take fouror five years to reach 1 % penetration. Thus, our esti-mated 1 % point was mid-1999. This was based on acompromise between the two to three years it tookblack-and-white TV, VCRs, and CD players to reach1 % penetration and the eight years it took color TV(see Figure 4 again), HDTVs closest analogy. Again,we felt that lack of programming was much less aproblem in the 1990s for HDTV than it was in the1950s for color TV.

Perhaps we should have spent more time researchingthe problems likely to come up question. As itturned out, in 1993, elements of several of the indi-vidual proposals for HDTV standards were combinedto form a Grand Alliance digital system. Testing ofthe new system began in early 1995, the year of oursecond HDTV study4). In that study we estimatedstandards approval in 1996, commercial introductionin 1997, and 1 % penetration by yearend 2000, a yearand a half later than estimated in 1992. However,before final approval the computer industry inter-vened, demanding progressive instead of interlacedscanning. The result was further delay. After a com-promise was reached in late 1996 to allow both typesof scanning, the FCC approved the standard onDecember 24, 1996, the first HDTV sets were intro-Figure 4 US Color Television Adoption

4) Lawrence K. Vanston, Curt Rogers, and Ray L. Hodges, Advanced Video Services: Analysis and Forecasts for Terrestrial ServiceProviders, Technology Futures, Inc., 1995.

0

20

40

60

80

100

1950 1960 1970 1980 1990 2000Time

Source: Technology Futures, Inc.

Consumer Adoptions 2008

Installed base

Price

Color TV

Data Source: eBrain Market Research

Percentage

Graph Source: Technology Futures, Inc

! Solar PV is a technology. Tech adoption is not linear but follows an S-Curve.

Solar GOD Parity Point of No Return

Clean Disruption- Copyright 2001-2015 by Tony Seba Image: RedOrbit.com



God Parity by 2020 - $ Rooftop Solar < $ Transmission

! God Parity: cost of rooftop solar lower than cost of transmission!

! Centralized Generation can't compete ! Obsolete: Nuclear, Natural Gas, and Coal

Clean Disruption- Copyright 2001-2015 by Tony Seba Source: Clean Disruption

4-5 /kWh 4-5 /kWh

Transmission Costs /kWh

4-5 /kWh

Solar Growth Rate may Accelerate even

more! (S-Curve)


Solar Growth Rate may Accelerate even

more! (S-Curve)



But Not all power generation will be rooftop, right? What about Utility Scale?


Utility Scale?

Rodin Thinker - Photo: Tony Seba

R3S':.*2%,T'UPJ'N,+,$2%K'R9S'5V'J$C$W"#,'R;S'=&,$#P,%K#"%$'

! LMOP&1!$&II$&RP&S2TU>&VW2H&&OS2TU>X&VOX&OY! *,&);89&RX*&'Y3DS&VLX&

1D5:=J&!?B58&!65B9&:;&1!$&]Z&PS2TU>&&&

'6CJ9:=&KLMMNHLMOP&QJ&(6;J&!8QB&&&

! !BFE:&$9BQ:B&II$&^Y_&2TU>&VF;@FQX&R6*C'Y3DS'V[X&



! If Solar PV continues to grow at ~42% CAGR ! 100% of all energy in the world will be solar by 2030

Source: Clean Disruption

Energy = 100% Solar by 2030?


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000 Solar Installed Base (GW)

2. ENERGY STORAGE

While there are many kinds of stories, there's only one plot: things are not as they seem.

- Jim Thompson, film-maker



! Laptop Li-on battery costs dropped ~14% per year over 15 years. (1)

! Investments in battery tech increasing dramatically: ! Now 3 multi-trillion $

industries investing: 1.!IT/Electronics 2.!Automotive & 3.!Energy

(1) Clean Disruption

Li-on Battery costs dropping exponentially


Photo: Telegraph.uk

! Since 2010, battery costs have dropped at ~16%/year -> ACCELERATING

Laptop Li-on battery costs

Photo: Wirkipedia Photo: Wirkipedia

'58B;&+:@9FCD6;H&'6CJ9:=&K&LMMOHLMOP&QJ&(6;J&!8QB&

Projected Cost of Li-On Battery $/kWh

Assumptions: 16%/year cost improvement Source: Clean Disruption

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$200/kWh $100/kWh

Cos

t of L

i-On

Bat

tery

Sto

rage

($/k

Wh)

Copyright 2001-2015 by Tony Seba



Gigafactory Projected Figures

2020 Tesla Vehicle Volume 500,000/yr 2020 Gigafactory Cell Output 35 GWh/yr!

2020 Gigafactory Pack Output 50 GWh/yr!

Space Requirement Up to 10M ft2!

w/ 1-2 levels!

Total Land Area (acres) 500-1000

Employees 6,500

New Local Renewables !

Solar and Wind!

Tesla Gigafactory!!

!

Rendering!

! $5 billion investment (6,500 jobs) ! Battery pack output: 50 GWh/year -> 500,000 cars/

year ! Double world battery production ! Reduce battery pack costs by 30+%

Source: Tesla

Tesla's Battery GigaFactory


! Tesla PowerWall Residential Battery: ! $350/kWh (7kWh or 10kWh)

! Tesla Microgrid/Commercial Battery: ! $250/kWh for commercial/microgrid (100kWh)

Sources: Tesla, Bloomberg

Tesla's Battery Ahead of the Curve


! Market reaction: Tesla received $800+ million in orders / reservations first week!

Image: Tesla,



! BYD plans to add 6 GWh every year. ! Could ramp up to 34 GWh by 2020 -

matching Tesla's 35 GWh (1)

(1) Reuters (2) Benchmark Minerals

Battery Megafactories are coming!


! Foxconn and LG Chem could add combined 22 GWh (2)

! Plus Samsung SDI, Apple, etc.

! Tech Cost Curve could accelerate!

Picture 2015 by Tony Seba

)*)%./&!("%$.)&01!-*)!!&4"+)#&-**",$(-"*&





Business Model Innovation: Storage As A Service

Image: Stem

! Stem and GreenCharge Networks offering storage-as-service to reduce DEMAND CHARGES for businesses ! Zero-money down, 10 years

! Lower utility bills by 10-50% (1) ! Similar business model that made solar skyrocket

Image: Stem

(1) Source: Bloomberg

!=69B 2014 2020 2024 2028

Purchase Cost of Battery Storage System ($/kWh) -> $600 $500 $300 $200 $100 $50

SaaS Services Hours kWh Storage: Monthly Cost Demand Response 1 1.25 $4.6 $3.8 $2.3 $1.5 $0.8 $0.4

Avoid peak, buy low & shift usage 4 5 $18.4 $15.3 $9.2 $6.1 $3.1 $1.5 Store all solar self-generation 8 10 $36.8 $30.7 $18.4 $12.3 $6.1 $3.1 Self-sufficiency 16 20 $73.6 $61.3 $36.8 $24.5 $12.3 $6.1 Off-grid 24 30 $110.4 $92.0 $55.2 $ 36.8 $18.4 $9.2

Assumptions: 4% cost of capital (mortgage) over 20 years

$12.3 $6.1 Self-sufficiency 16 20 $73.6 $61.3 $36.8 $18.4 $9.2

Self-sufficiency Off-grid Off-grid 24 30 $110.4 $92.0 $55.2

2020

$300 $200

Storage: Monthly Cost Storage: Monthly Cost Storage: Monthly Cost $2.3 $1.5

$9.2 $6.1 $18.4 $12.3 $36.8 $24.5 $36.8 $24.5 $55.2 $ 36.8



3. The Electric Vehicle Disruption


Photo Tesla Motors

Motor Trend 2013 Car of the Year: Tesla Model S

It drives like a sports car, eager and agile and instantly responsive. But it's also as smoothly effortless as a Rolls-Royce and carry almost as much stuff as a Chevy Equinox. Oh, and it'll sashay up to the valet at a luxury hotel like a supermodel working a Paris catwalk.

Nov 16, 2012

Sources: Motor Trends, (1) Consumer Reports, (2) Extremetech.com

Consumer Reports: Best Car EVER!(1)

Best-selling high-end

large luxury car in America! (2)


Image -Tony Seba



But who can afford an Electric Vehicle?

Photo Tony Seba Clean Disruption- Copyright 2001-2015 by Tony Seba

Is the Electric Vehicle

Disruptive?

Is the Electric Vehicle

Disruptive?

Clean Disruption- Copyright 2001-2015 by Tony Seba Photo by Tony Seba

(You always need to ask)



0

10

30

40 50 60

70

80

90

100

20

90%-95%

1. Electric Motor 5X more Energy Efficient Internal Combustion

Engine

Energy Efficiency 17%-21%

Energy Efficiency

0

10

30

40 50 60

70

80

90

100

20

Images Source: ICE - Tony Seba , Electric: BradMerritt.com Sources: ICE DOE, EM Wikipedia


Electric Motor

2. EVs are 10X cheaper to charge / fuel

Source: Tesla Clean Disruption- Copyright 2001-2015 by Tony Seba

! It costs $15,000 to fill up a (gas) Jeep Liberty over five years (Consumer Reports).

Assumptions: ! 12,000 miles/year ! Tesla Roadster: 4.6 miles per kWh. ! Ave retail electricity in the U.S.: 12 /kWh ! 5 year-cost = (60,000 miles * 0.12 $/kWh) / 4.6 miles/kWh = $1,565.

Sources: Consumer Reports, DOE, Clean Disruption

! Improvements in power electronics will increase 10X.

Image: Jeep.com

! An Electric Jeep Liberty would

cost $1,565 in electricity.

to fill up five

would

in electricity.



3. Maintenance - Gasoline Car: 2,000+ moving parts (1)

Photo Todd McLellan

Clean Disruption- Copyright 2001-2015 by Tony Seba (1)! Baron Funds

Transmission, driveshaft, clutch, valves, differentials, pistons, gears, carburetors, crankshafts...

(1)! Baron Funds (2) Tesla blog

Electric Vehicle (EV)

18 moving parts (1)

3. EVs: 100X fewer Moving Parts


! EVs 10X-100X cheaper to maintain! ! Tesla: Infinite Mile Warranty!(2)

Photos: Tony Seba

ICE (Gas) vehicle

2,000+ moving parts (1)



Image Source: BRD Motorcycles

4 EVs FAR MORE powerful than ICE

Teslas EV SUV will have the performance of a Porsche 911 Carrera! - Elon Musk, Tesla

EV Torque

ICE Torque


Car Images Source:WikiMedia

EVs Shift the Price/Performance equation -> Disrupt the BASIS of COMPETITION

EVs: Porsche performance for Buick prices! Clean Disruption- Copyright 2001-2015 by Tony Seba

Price

Performance

Low $

High $$$

Low High

Porsche 911 Carrera

Buick Enclave Tesla Model X


Medium $$



Ok, so the EV is DISRUPTIVE.

How long will the transition take?


Disruption from Above: Cost of EV with 200-mile (320 Km) range

Source: US DOE Vehicle Technologies Program

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Assumptions: 4 miles/kWh, 50kWh batteries,16% yearly improvement in battery costs, EV Costs = 3X cost of battery

Ave gas Car cost in US: $31K

Ave cost of Low-end gas car in US: $22K

gas "Affordable SUV": $35-$40K

Cos

t of E

lect

ric V

ehic

le


Source: Clean Disruption



ComputerWorld

Foxconn to make EV for $15,000

Foxconn, the maker of the Apple iPhone to invest $811m to develop Electric Cars."

Sept 4, 2014

"Foxconn CEO Terry Gou said they are targeting EVs priced at less than $15,000. " (1)

Clean Disruption- Copyright 2001-2015 by Tony Seba Image Copyright 2015 by Tony Seba

4 - The Autonomous Vehicle Disruption


Photo Wikipedia



! Daimler Benz autonomous self-driving truck approved in Nevada

Video: WSJ Leading Market Disruption- Copyright 2001-2015 by Tony Seba

Financial Times Nevada approves Autonomous Trucks

May 5, 2015

Daimler Benz autonomous self-driving truck approved in Nevada

Nissan autonomous Car by 2016 Reuters June 3, 2014


Nissan autonomous Car by 2016 Reuters June 3, 2014




TheVerge

Tesla capable of Self-Driving 90% of the time by 2015

90% of your miles to be autonomous. For sure on highways." (Elon Musk)

Oct 2, 2014

(1) UK Daily Mail

Photo: Tony Seba

"Legal, regulatory issues must be overcome." (1)

Graphic Source: Audi

High End: Semi-Autonomous Capabilities "! High-end cars already have autonomous

('Drivers Assist') tech




What about the COST of

Autonomous Vehicles?


GraphicPopular Science

What an Autonomous Car Sees


"! Google Car: 3D Machine Vision uses LIDAR " Google Car: 3D Machine Vision uses LIDAR



Graphic Source Wikipedia

Exponential Technologies: Machine Vision LIDAR Sensors


! By the end of 2013, the next-gen LIDAR was: $10k

! By Oct 2014, a SV startup company announced LIDAR

for $1k

"! In 2012 Google announced that the cost of technology in its self-driving car was ~$150k.

"! LIDAR Sensor (for Machine Vision) was $70k in 2012

Source Quanergy Leading Market Disruption- Copyright 2001-2015 by Tony Seba

LIDAR: From $70,000 to $1,000 to $90

6 2015 Quanergy Systems, Inc.

Mark VIII (M8) & Solid State (S3) LiDARs

Designs focus simultaneously on cost, performance, size and reliability Gen 1: mechanical LiDAR (M8) Gen 2 & 3: solid state LiDAR (S3)

One beam is pointed skyward to prevent blind spots in the event of pitch or roll

Disruptive Pricing: Gen 1:



Autonomous Vehicles = Computers on Wheels

Clean Disruption- Copyright 2001-2015 by Tony Seba Image Copyright 2015 by Tony Seba

!!What is the Cost Curve of Computing Power? !! to process sensor input?

Source Wikipedia

Year 2000: World's 1st 1-TeraFlops Computer ASCI RED Sandia National Labs


"! Space = 1,600 sq ft (150 m2) "! Power Consumption = 850 kW "! Cost = $46 million

Image: ExtremeTech



Exponential Technologies: GPU: NVIDIA Drive PX !! Dual Tegra X1 GPU Processor

!! 2.3 TeraFlops !! Power Consumption = 15 W

#!56,666X improvement

#! Cost = $59 #!~1 million X improvement

'58B;&+:@9FCD6;H&'6CJ9:=&KLMO^&QJ&(6;J&!8QB&Image & Data Source: NVIDIA

#! Built for Self-Driving Cars ! Surround Computer Vision (CV) with Advanced Rendering ! Deep Learning S/W, and ! Over-the-air updates

Ok, cost is not an issue...but

Is the Market Ready for Self-Driving Cars?


for Self-Driving Cars?

Rodin Thinker - Photo: Tony Seba



Are consumer ready for Autonomous cars?

Clean Disruption- Copyright 2014 by Tony Seba Source: Cisco Systems

2.8b people

Cool! I can and also while NOT driving!


But what's the disruptive impact?



01!-*)!!&4"+)#&-**",$(-"*&


01!-*)!!&4"+)#-**",$(-"*

My Smartphone On-Demand Transportation

Photos: Tony Seba

Plan & schedule ALL transportation needs with Apps 1.! Buses: NextBus 2.! Trains: CaltrainMe, iBART

3.!Car-Sharing: Zipcar 4.!Ride-Sharing: Uber, Lyft 5.! Parking: PayByPhone 6.! EV Charging: ChargePoint

Image 2015 by Tony Seba Clean Disruption- Copyright 2001-2015 by Tony Seba



CAR- Sharing

Images: Tony Seba

Zipcar: !! On-demand individual transportation

!! By the hour, by the day !! 760k members and $270m in revenues (2012) !!Share-to-own ratio: 15 !! Each shared zipcar replaces

15 cars on the road. On-Demand Mobility: changing the concept of "Car Ownership" !!while reducing the need for

new cars Clean Disruption- Copyright 2001-2015 by Tony Seba Source: "Clean Disruption"

RIDE- Sharing

Image: Tony Seba

Companies disrupting private and public transportation.

"! =.##,%1#C'*+,2+'H"AK'/2"0,2+'"! >bT'c),2d'8Be'

"! Uber (started 2009): "! May '15 - 311 cities in 58 countries (1) "! Est. 2015 Bookings = $10 billion(2) "! 1 million drivers (global) (3)

(1) (2) (3) Business Insider

(4) Wikipedia Clean Disruption- Copyright 2001-2015 by Tony Seba

San Francisco Figures !! # Uber Drivers (2015): 22,000 !! # of Taxicabs (2012): 1,825 (4)

!!Carpooling ~= half of Uber Rides



! Cars are our 2nd largest Capital Expense.

! Ave. car costs = $31k ! Plus OpEx: gasoline,

insurance, maintenance, etc

Cars: Hugely Inefficient Use of Assets

Photo: Tony Seba

! But cars are parked 96% of the time! (1)

! 4% Asset Utilization is a disruption waiting to happen!

Leading Market Disruption- Copyright 2001-2015 by Tony Seba (1) Donald Shoup

But cars areparked 96% of the time! (1)

!)#3H+%-,-*.&W&'$%!c$%-*.d&'"*,)%.)*')&"3&

()'c*"#"./&e&01!-*)!!&4"+)#&-**",$(-"*&


!)#3H+%-,-*.&W&'$%!c$%-*.d&'"*,)%.)*') "3

()'c*"#"./&e&01!-*)!!4"+)#&-**",$(-"*



The Verge UBER announced Self-Driving Car Project Uber announced plans with Carnegie Mellon University to create the Uber Advanced Technologies Center: R&D of autonomous vehicles."

Feb 2, 2015

"When there's no [driver], the cost of taking an Uber anywhere becomes cheaper than owning a vehicle...and

then car ownership goes away." said Uber's CEO

Image: Tony Seba Clean Disruption- Copyright 2001-2015 by Tony Seba

Helsinki, Finland: Clean Disruption by 2025 "! Helsinki announced intention to build 'mobility on

demand' platform based on self-driving cars by 2025.


"! Mobile platform / app would knit together: "! Driverless cars, "! Little buses, "! Shared bikes and "! Ferries,

"! into a seemless "mobility on demand" service.

"! Objective: make car ownership (in the city) obsolete

(1) Guardian

Image: Fool.com Image: Fool.com



1.!Car-as-a-service (CarSharing + Self-Driving Vehicles) will make Individual Car Ownership Obsolete

2.! New Car Market to shrink by ~80%. ! Disruption of Auto industry ! Disruption of Car insurance industry

3.!~80% parking space not needed ! Citiscape to be re-designed

The Self-Driving Car Disruption



!144$%/&



2015:we are HERE

Summary: On the Cusp of a major Disruption in Energy and Transportation

HERE

Source: US National Archives Clean Disruption- Copyright 2001-2015 by Tony Seba

2015 Clean Disruption of Energy & Transportation !! The technologies, skills, organizations, and culture of the

industrial revolution have run out of steam !! They are being disrupted by the technologies, skills, organizations,

and culture of the "Silicon Valley" technology revolution

1.! Solar 2.! Energy Storage 3.! Electric Vehicles 4.! Self-Driving Vehicles

Clean Disruption- Copyright 2001-2015 by Tony Seba Image: Tony Seba

!! Generation, Storage, and Intelligence pushed to the edges !! Distributed, Mobile, grid-independent

!! Bits + photons are replacing atoms (coal, nukes, gas, oil) !! Electric + ICT replacing combustion



1.! ALL Energy will be Solar (+Wind) ! Disruption of Conventional Electric Utilities ! Obsolete: Nukes, Coal, Gas, Diesel

2.! ALL NEW Vehicles will be Electric ! Disruption of Conventional Car Industry ! Obsolete: ICE Vehicles, Petroleum

3.! ALL NEW Vehicles will be driverless ! Disruption of Conventional Car Industry, Car

Insurance, Parking

Clean Disruption - By 2030


Clean Disruption of Energy & Transportation


This disruption is not in the future. It is NOW!



(c$*f!g&'

www.tonyseba.com

!!

"#$%&!'#(#&)#!!

!!"#$%&'($)"vestors Forum *+,"-$.*#/0$1"$2*"3$4*"3$$51.6$/$7*89-$*"$3:*;/:$1"-./;1:1.0$/"#$Chinas new normal$

$!"#$%&"#$%%Monday 14 September 2015: CLSA Limited (CLSA), Asias leading and longest'running brokerage and investment group opens today the 22nd CLSA Investors Forum, one

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,+-01#$% ,1/)+0% 5".9".-)1"#/% (."4% :;% 5"6#).1+/% -% 9,-)(".4% (".% 01/56//1"#% -#0% 0+2-)+% "#%4-.%5".9".-)+%$"3+.#-#5+%-#0%4".+8%%%?$-1#/)% -% 2-5%5"#)1#6+0%6.2-#1L-)1"#%-#0%0+3+,"94+#)%"(%)*+%/+.315+%/+5)".%J1,,%9."310+%-%2-/1/%"(%$."J)*%J*1,+%A*1#-%-0M6/)/%1)/%1#06/).1-,%/+5)".%)"%the realities of excess capacity in a more mature domestic economy, Slone said. %%ABC?%9."310+/%-%0+)-1,+0%31+J%"#%A*1#-%)*."6$*%/+3+.-,%#+J%.+9".)/%)"%2+%1//6+0%)*1/%J++%J1,,%"((/+)%4-M".%.1/% 1#% -% M"1#)% .+9".)% J1)*% AKPKA% C+56.1)1+/8%./.01#2+34#/&3(#'"5#2&'#0,'5%.+31+J/%)*+%5"6#).1+/%-#0%/+5)"./%)*-)%J1,,%2+#+(1)%4"/)%(."4%Chinas brilliant plan to export its overcapacity, e/)-2,1/*% /).-)+$15% $+"'9",1)15-,% -,,1-#5+/>%*-.#+//%+#+.$7%/+56.1)7%-#0%(".4%-%$1-#)%#+J%(.++').-0+%L"#+8%%%Forum delegates will hear from more than 40 CLSA analysts on Chinas banking, energy,

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CLSA Forum Voices Clean Disruption Why Conventional Energy and Transport Will Be Obsolete by 2030

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