Tony Seba predicts the Internal Combustion Engine will be obsolete by 2030 – Why? What are the implications?

with 5 Comments

The Internal Combustion Engine (diesel and gasoline) has been the workhorse of transportation since 1910

Here’s a photo of the 5th Avenue Easter Parade taken in NYC in 1913.

. Courtesy, Tony Seba

This photo is used by Tony Seba at the start of his presentations on Clean Disruption.

Much of what is shared in this Weekly Blast is based on Tony’s work.  Tony has an engineering degree from MIT, an MBA from Stanford and lectures at the Stanford Business School.  Tony has been studying, and writing on, disruptive technologies for the last 20 years.

The Internal Combustion Engine (ICE) has come a long way since 1910.  Starting in the 1960s the state of California was becoming increasingly concerned about air quality in the Los Angeles basin and mandated laws that would reduce the emissions of CO, hydrocarbons and NOx from new vehicles sold in CA starting with the 1974 model year.  The US adopted Federal Standards the following year and it was the beginning of the era of reducing emissions and improving the efficiency of the Internal combustion engine.  Emissions have gone down, air quality has improved , and fleet fuel efficiencies have improved.  Today’s ICE (see below) is much improved over the early versions that we saw back in 1910.  It’s a great testimant to the engineers who have taken a powerplant with more than >2,000 moving parts and is only 20% efficient at converting gasoline to kinetic power.

Image under license from Shutterstock, 160116

but the ICE has no further to go. It is now under major frontal attack from six technologies:  Solar Photovoltaics, Electricity Storage, Sensors, Electric Vehicles, Artificial Intelligence and Smart Devices.  The cost of Electric vehicles is coming down at the rate of 16%/annum and it’s just a matter of time before they are price competitive with ICE powered vehicles.


Beyond purchase price, the EV’s fuel costs are 10x lower and maintenance costs are at least 2x lower then ICE powered vehicles…..and EVs have zero emissions.

Why are maintenance costs so much lower?  Because the ICE powered vehicle has >2,000 moving parts (see below)

Courtesy, Tony Seba

compared to the EV which has only 18.

And on top of this, some EVs perform like Porsches.  Don’t believe me?  The Tesla S P95D, which weighs >5,200lb, accelerates from 0-60mph in 2.8 seconds, matching the performance of the Porsche 911 Turbo which weighs 3,693lb.

Courtesy, Tesla Motors

Here’s the power train of Tesla’s S Sedan:

Source, Wikipedia

So what do you with your S Sedan where there would have been an ICE?  You put your bags in your frunk.

Courtesy, Tesla Motors

The days of the ICE are numbered and Tony Seba predicts it will be obsolete by 2030.  That’s only 14 years from now.

ICE_Obsolete_By_ 2030_160117
Image, under license from Shutterstock

Besides Tesla, are there other non auto companies entering the EV market? Yes!

Rumors abound that Apple is developing an EV.  The fact that Foxconn, the manufacturer of Apple’s products in China, is moving forward with plans (see below) to develop and manufacture an EV, lends credence to this rumor.

Faraday Future will be breaking ground on its $1 billion, 3-million-square-foot production facility backed by Chinese tech giant Letv. Together, FF and Letv aim to take on Tesla for dominance in the electric vehicle market.

Fisker Automotive, which filed for bankruptcy in 2013, was purchased by Chinese auto parts giant Wanxiang Group a year later.  According the LA Times, Fisker has signed an 11-year lease worth an estimated $30 million in the Riverside County city — signaling a long-term commitment by the company.

PC World reported Foxconn signed a Collaboration Agreement with Tencent in March, 2015.  Foxconn plans to produce an EV which would be priced at $15,500 but details on performance and introduction date have not been shared.

Google has a fleet of autonomous vehicles they have been testing (see below).


If plans exist for an EV we are not aware of them but its logical, given Google’s array of core technologies, that such plans exist.

GizmoChina reported that Lei Jun, CEO of Xiaomi, denied that his company was planning on introducing an EV in the next 5 years.  Tony Seba has shared that Xiaomi is looking at developing an EV and it would be priced at $6,400.

What are the implications of this Clean Disruption from the ICE to the electric motor?

Many major industries will be impacted. Here are some examples:

Auto Dealers and Repair Shops:

In the US there are >300K of these dealerships and repair shops.  Their bread and butter is servicing and repairing ICE powered cars and trucks.  The maintenance required on an EV is far less, both in terms of frequency and the maintenance required.  The demand for their services will drop and the qualifications for the technicians will change dramatically.  Changing out the oil, spark plugs and head gaskets, fixing transmissions, etc. will disappear while changing tires and repairing brakes will still be required activities. Technicians will need to be trained in autonomous vehicle controls, sensors and artificial intelligence.

Auto Manufacturers:

Many have announced they are developing EVs, have already introduced them, or will be introducing them during 2017 to 2019.  Here are some examples:

Chevrolet plans to sell the Bolt starting in 2017.

Chevy Bolt, Ian Merritt - Yahoo Autos
Chevy Bolt, Ian Merritt – Yahoo Autos

Priced ar $35,000 it will have a range of 200 miles.  Is this the start of a line of EVs across all of GM’s brands?  We don’t know but their aggressive timing and desire to beat Tesla to market with their Model 3 suggests that GM “gets it.”

GM and Volkswagen have lithium-ion battery production deals with South Korean LG.

Audi plans to introduce its etron Quattro in 2018.

Courtesy, Audi

The president of Audi expects EVs will represent 25% of Audi’s sales by 2025.

BMW introduced the i3 in 2014 and they sold 16,053 units.  It sales price is $42,400 and has a range of 137 miles.  Since then they have introduced the i8.

Courtesy, BMW website

According to Green Car Reports i3 unit sales in the US in 2014 were 6,092 and through July, 2015 were 5,391.

Mercedes Benz plans to introduce the B Class EV in 2018:

Coutesy, Mercedes Benz

Nissan introduced their EV, the Leaf, in December, 2010 and has sold 83,300 units since then.  They have 3 Leaf models.  The low end is the S – it sells for $29,910 with a range of 84 miles.  The SL, the high end model sells for $36,790 and has a range of 107 miles.

Source, Nissan website

The Leaf was the best selling EV in the US but it has now been surpassed by the Tesla S Sedan.  Wikipedia shared S Sedan sales topped 100,000 units in December, 2015.  The first 5 S Sedans rolled off the production line in Fremont, CA on June 22, 2012.  Production rates in August, 2012 were 15-20 units/week.  Rates increased to 1000 units /week in 2015.

Toyota does not appear to have placed its bet on EVs.  We excerpted this from Toyota’s website: “In the future, optimally combining diverse energy sources and powertrains, as well as factoring in different combinations of driving needs, will be essential for preserving our environment and intelligently using our limited resources. Among these options, Toyota believes that EVs are ideal for mobility in the short distances of urban areas. Toyota is continuing to research and develop related technologies for better performing batteries, with the ultimate goal of improving the vehicles’ quality for future commercialization.”  For more, go to:

Toyota started to collaborate with Tesla in 2010 to produce a 2nd generation RAV4 EV (see below).  The EV drive train was that used in Tesla’s S Sedan.  Range was stated to be 113 miles.

Source, Toyota website

Toyota has cooled on EVs for reasons we are not privy to.  They’ve cancelled their Agreement with Tesla and appear to be placing their best on hydrogen fuel cells, see the Mirai prototype which Toyota claims has a range of 312 miles.


Toyota is out on their own with the hydrogen fuel cell bet.  Unless other auto manufacturers follow Toyota’s lead, this looks like a losing strategy.

Volkswagen introduced its e-GOLF in November, 2014 (see below).  Priced at $36,300 and with a range of 83 miles, the e-GOLF appears to be positioned to compete with the Nissan Leaf.  Acceleration from 0-60mph is a disappointing 10 seconds.  That’s not sports car performance!

Courtesy, PluginCars

Volvo plans to introduce its first EV in 2019 and projects that 10% of its global sales will be EVs in 2020.

Other companies:  Quant in Germany has approval to test its fuel cell powered sports car on autobahns, see more at

Auto Parts Distributors:

Companies like NAPA and Carquest will see major segments of their business decline as the need for their products slowly drops.  Closing and consolidation of their warehouses will be the name of their game unless they can figure out other uses for the space.  But it would appear that Amazon, DHL, FedEx, and UPS have already figured that out.

Auto Parts Manufacturers:

Demand for their products for new vehicles will drop probably starting in the early 2020s as EVs start to become the power source of choice.  A reduction in parts from >2,000 to 18 will require these companies to determine how they will restructure and what manufacturing facilities they will consolidate or close.

We have a company HQd in Denver, CO called Gates.  They manufacture and market belts and hoses used on ICEs.  They sell to the automotive OEMs but they also have a very healthy replacement parts market.  Once ICE production eventually goes to zero, Gates’ OEM business disappears because there are no belts and hoses on an EV.  Their replacement parts business will continue for several years but over time their sales will decline.  Gates needs to reinvent themselves.

Battery Manufacturers:

Wikipedia lists 17 companies who are developing and plan to produce Li-on batteries for EVs.  The table below shows the alignments between Li ion battery manufacturers and auto/truck companies:


Because we regard Tesla Motors as a Value Innovation company and have followed them since they were manufacturing the Roadster, we are very aware of their plans to produce Li-ion batteries in partnership with Panasonic.

“Panasonic is doubling down on its investment both in Tesla and the electrified future of mobility,” Nick Jaynes, Mashable, January 16, 2016.  Panasonic has promised up to $1.6 billion toward the construction of Tesla Motors’ lithium-ion battery-producing Gigafactory in Nevada.

Courtesy, Panasonic
The Li ion Giga Factory (capacity, 500,000 batteries) in Nevada (see below) is believed to cost between $4 and $5 billion to complete and won’t be online for several years.Tesla projects the surge of inexpensive (30% lower cost/unit), long-range batteries will help push its sales to 500,000 units annually by 2020.  400,000 of these are expected to power the Tesla Model 3.
Panasonic aims to bolster its sales of electronics to carmakers, which is expected to double in the next four years. “We are sort of waiting on the demand from Tesla,” Panasonic President Kazuhiro Tsuga told MarketWatch. “If Tesla succeeds and the electric vehicle becomes mainstream, the world will be changed and we (Panasonic) will have lots of opportunity to grow.”


“Clean Coal” is an oxymoron.  The coal companies have already seen major drops in demand and several have already filed for bankruptcy.  This trend will continue and ultimately the demand will go to zero as the conversion of photons to electrons to electricity increases.

Gas Stations:

Demand for gas will drop starting in the early 2020s but it will be replaced by the demand for quick charging of EVs.  Owners and operators that recognize this and provide this quick charge capability and a place for their customers to relax and grab a bite to eat, will see their business grow as other gas stations, who don’t convert, close their doors.

Oil and Gas:

90% of the oil produced globally is used in transportation.  Demand will shrink and presumably prices will increase, further hastening the demise of the ICE.  Major producers around the world including bp, Chevron, CNOC, ExxonMobil, GAZPROM, Indian Oil, Phillips, Shell, and Saudi Aramco need to refine their visions and implement new strategies.

The following was excerpted from an article published on October 3, 2014 by EE Publishing:

<<ELECTRICITY:  Why the oil majors are backing away from renewable energy

Chevron Corp.’s new solar and geothermal business seemed to be having a great year. In January, after just one year in operation, it had established projects with returns of 15 to 20 percent and had plans to build several geothermal plants in Europe.Then Chevron changed its mind. In a series of transactions, it sold off the unit, as well as others that do smaller solar installations and energy efficiency upgrades, and canceled a pair of giant solar farms in Hawaii, according to reports from Bloomberg Businessweek. With that, the oil majors have beaten a near-final retreat from solar power.Why? It is a puzzling question for those who have watched the oil majors bestow their dollars and attention on clean energy and a few years later abruptly walk out the door.Three of the supermajors — BP PLC, Chevron and Royal Dutch Shell PLC — have since 2000 taken on ventures in wind, biofuels and geothermal. All took big positions in solar, sometimes more than once. They were positioned to compete or even dominate.Now, as solar is gaining market momentum like never before, the oil majors are nowhere to be found.Analysts who cover the industry say it isn’t that oil and gas companies want to kill their brood of adopted low-carbon children, or that they even perceive them as a threat. They have a straightforward answer: The oil business is changing, and times are tough. Projects that made sky-high profits are a little lower in the sky.“It’s not their strong suit to be spending a lot of money and time on [renewables] when they are definitely challenged in their core industry,” said Lysle Brinker, an oil and gas equity analyst at IHS.Even those depressed profits tower over the margins earned in renewables, where projects are slow, bureaucratic and hard-won. If there are any profits to be had, they are too meager to impress an oil executive.But there is yet another explanation.An executive who has worked with both Chevron and the solar industry says that although the oil company was happy to nurture solar power with seed money, it lost interest when the investment began to require real money — real money for a business that, at its heart, it didn’t understand.>>

Quick Oil Change Retail Stores:

Their market will shrink and there will be a shake out of the players as that occurs


California’s goal is to produce one third of its electricity from renewable sources by 2020.  Large solar power plants have started to come on stream (see  the Topaz plant, 550MW below):


But the supply of power is going to shift from power plants to homes, hospitals, hotels, manufacturing facilities, public buidings, shopping centers because the cost of converting photons to electrons to electricity at your home or facility will be lower than the transmission and distribution costs from a central generating station. How long it will take for buildings to disconnect from the grid is an unknown but it will happen and even the facilities like Topaz in CA will be mothballed.

The demand for transmission and distribution of electricity will drop and those companies who manufacture the transmission towers and copper cable will be forced to close their doors.

Wrap Up:

Here’s more on Tony Seba’s background.

Clean Disruption requires many companies in many industries address their Innovation Gap….Now!:

At Value Innovations, we have a Process that is simple, proven, scalable and repeatable that is ideally suited to address this Gap.  And, you will start to make progress in weeks, not months or years.

Want to up your innovation game? Want to up your organization’s innovation game? Attending one of our Mastering Value Innovation Workshops is a great place to start. In 2016 we are going to change our approach. We will work with you to develop your own custom workshop that addresses your problems and you define the length and location. More information can be found in the Workshop Brochure.

5 Responses

  1. I think that is among the such a lot vital info for me. And i am satisfied studying your article. However want to statement on few normal things, The site style is perfect, the articles is really excellent : D. Just right job, cheers

    • Dick Lee

      Thanks for your feedback on our website. It is humbling for us to hear that you are deriving value from our blogs. Many thanks, Dick

  2. باتری یو پی اس

    hi thanks for this articals.

    • Dick Lee

      Diaz, thank you for your thanks. We look forward to seeing you back in the future, Dick