The future of transport will bring new infrastructure opportunities

The future of transport will bring new infrastructure opportunities

AMP Capital

Transport will undergo a series of changes that will have impacts as dramatic and far reaching as the launch of the Model T Ford more than 100 years ago. Change is being driven by the convergence of growing social and environmental pressure along with rapidly evolving technological innovation.

Among these innovations are the emergence of viable electric vehicles and, in the foreseeable future, autonomous vehicles. Electric vehicles, utilising renewable energy, are critical if the transport sector is to be de-carbonised.

The advent of autonomous vehicles could also usher in a new era in public transport. Advocates predict that “within 10 years of regulatory approval of fully autonomous vehicles, 95 percent of all US passenger miles will be served by transport-as-a-service providers who will own and operate fleets of autonomous electric vehicles providing passengers with higher levels of service, faster rides and vastly increased safety at a cost up to 10 times cheaper than today’s individually owned vehicles.”1

A key to achieving this vision is to do more with less. For example, the number of vehicles required to service current transport demand would be dramatically reduced. This is because most vehicles spend the vast majority of their time parked and not being utilised. In addition, on-street parking could be virtually eliminated or, at the least, dramatically reduced. Together with ride sharing and real-time trip optimisation, changes such as these could effectively double the capacity of existing road infrastructure2.

A big unknown is the degree to which reduced transport costs stimulate demand for travel, which may erode some of the benefit of the increased road capacity.

The issues are complex, and some of the obstacles are great, but this is not stopping corporations from investing large sums in research and development in this, or related, concepts.

As an example, Uber’s vision for the future of commuting involves a self-driving electric car picking up a passenger and taking them to a nearby teleport, from which an unmanned air taxi would take them to their destination teleport, where another Uber car would pick them up and take them to their final destination3.

Infrastructure opportunities

Irrespective of whatever model future transport ultimately evolves into, there will be major new infrastructure requirements and investment opportunities. Given that competition will be fierce among technology providers, one strategy for infrastructure investors may be to back the facilities and systems needed to support new transport modes.

For example, de-carbonising the transport sector via electric vehicles, will require massive amplification of renewable energy generation plus expanded electricity transmission and distribution systems.

The development of autonomous vehicles as a new public transport mode would provide an opportunity to minimise the cost of distribution system amplification associated with electric vehicles. To maximise vehicle utilisation, batteries could be swapped out rather than charged in the vehicles. The exhausted batteries would then be recharged during periods of high renewable generation. Battery ownership could be de-coupled from vehicle ownership, providing new leasing opportunities.

Parking stations could be repurposed as electric vehicle charging or battery swapping stations. Shopping malls are particularly attractive locations as they are already often strategically located to best service their local catchment areas.

Finally, the real time management of large fleets of autonomous vehicles will require major amplification of communications networks. Depending on bandwidth and reliability requirements, communications may become integrated into the road system itself.

Ultimately, the rate of change of transport systems will be determined by public acceptance. Previous breakthrough technologies, such as mobile phones, have shown that the public can adopt new technologies very rapidly. The rate of adoption of electric vehicles will largely be dependent on simple cost/benefit considerations by consumers, together with a recognition of the potential environmental benefits. However, the widespread adoption of autonomous vehicles will require establishing a whole new level of public confidence in the technology and, consequently, this development is likely to take longer to be embraced.

However, the potential social, environmental and economic benefits are so great, that we expect governments and technology developers to persist in pursuing these developments despite the inevitable setbacks.


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