Tesla claims it will make Auto Garage Shops obsolete due to zero maintenance. Estimate how many jobs will be impacted in the US in 5 years and 10 years.

USA Population 300 M

Assume life expetancy of 75

Assume 4MN in each age group

Driving Age and Coverate of people in USA

Age group Coverage

0 to 18            0%

18 to 30          60% = 13 * 60% = 7.8 * 4

31 to 50          90% = 20 * 90% = 18 * 4

51 to 60          50% = 10 * 50% = 5 * 4

61 to 75          0%

Around  120 mn cars

for simplicity we assume that car ownership to person ratio is one

Distribution of 120 Mn Cars into 

Peach - Good High Quality Car require maintence once a year

Lemon - Bad Quality Cars require maintenace 4 times a year

In Between - Average Cars which need 2 times maintenace a year

Assuming 20% cars as peach and 20% as lemon and rest in between

Type             Maintenance # in year total cars      total # of maintenance

peach 1                 24                 = 24

lemon 4                 24                 = 96

mid         2                 72              = 144

Total = 264 MN

How many mechanics do we need?

1 mechanic need 1 hr to fix a car

average working hours of a mechanic per year

8 hr a day * 5 days a week * 50 weeks (2 weeks as holiday) = 2000

one mechanic can fix 2000 cars per year

2640 * 100000 /2000 = 2640 * 50 = 1320*100 = 1,32,000 mechanics

similarly we can do it for trucks and other utility vehicles

assuming truck delivers too many goods once

we say number of trucks required will be  for 20 people

15 mn trucks 

repair time 4 hrs

2 per day* 5 * 250 = 2500 per worker per year

150 * 100000 / 2500 = 150 * 40 = 6000 workers

other = 12,000

total = 150,000 workers  

Tesla needs maintenance in 10 years = 1,50,000 / 10 will be new need

displaced workers = 1,50,000 - 15,000 = 1,35,000

but for this tesla or ev needs to have 100 percent market share which seems highly unlikely 

lets say tesla and other evs penetrate 80% in 10 yeas linearly from 0 to 80

then each year we'll have 8% displaced workers or 12,000 workers

and by the end of 5 years we will have 60k displaced workers

and by the end of 10 years we will have 120k displaced workers

Approach:

1. Clarify the question

2. Form calculations, input assumptions and calculate

3. Verify calculations and adjust as necessary

Clarifying Qs

1. Auto garage shops in a specific place, i.e. city, state, country, the whole world? The USA

2. Auto garage shops for consumer cars, trucks or other vehicles? Consumer cars

3. Maintenance is anything gas-powered vehicles require, like oil changes, maintenance checks, inspection? Yes

4. "Jobs impacted" means workers who lost their jobs, were retrained or something else? Workers who lost their jobs

Brainstorming Calculations and Inputting Assumptions/Estimates

Main calculation: (# of auto garage shops in US) (# of workers per shop) (% of workers that lose their jobs every 5 years)

Estimate # of cars in US: 

300M people in US / 3 people per HH = 100M HH

Assume 70% of Americans have 1 car per HH

(100M HH) (70% of Americans who have 1 car per HH) = 70M cars in US

Estimate # of auto garage shops:

Assume each shop can service 100 cars

70M cars in US / 100 cars per shop = 700K shops

Estimate # of workers per shop:

Assume 10 workers per shop

(700K shops) (10 workers per shop) = 7M workers

Estimate % of workers that lose their jobs every 5 years

Assume 50% of workers lose their jobs every 5 years

(7M workers) (50% who lose their jobs in the first 5 years) = 3.5M jobs impacted in first 5 years

(3.5M workers left) (50% of workers who lose their job in the next 5 years) = 1.75M jobs impacted in 10 years

Verify

• The average number of cars per HH is likely two
• The average number of American HH's that own cars might be less than 70%, perhaps 60%
• Estimates for # of workers per shop and # of vehicles each shop can service seem suitable
• The % of workers who lose their jobs every 5 years will vary depending on Tesla's conversion/user acquisition rate
• Auto garage shops might still always be needed to repair flat tires or run inspections to ensure technology and vehicle are operating safely. Perhaps the shops will become car hubs and offer waxings, washes, paint jobs and battery swaps.