EV Manufacturers Need To Understand Disruption vs Technology Transition
Originally published on EV Obsession.
Technology changes fast these days. How many iterations of cell phones or computers have we now lived through? How quickly have music-playing mediums changed? But there’s a big difference between incremental changes in technology and “disruptive” technology shifts. A transition from cassette tapes to CDs was one thing, but a transition to MP3 players was something very different.
Even with a shift to digital cameras, we saw that a giant like Kodak could go under due to a slow reaction to a very fast-changing market… and difficulty capitalizing on the new technology.
In the automobile world, I can’t imagine we will see anything short of a disruptive technology revolution. Electric vehicles simply have too many consumer advantages over gasoline-powered vehicles, including huge ones related to convenience (you “fill up” at home and can leave with a full charge practically every morning) and drive quality (not only with regard to the true joy that comes with instant torque, but also thanks to the quiet and smooth nature of electric cars). As battery costs fall (and they are falling quite fast), the big hurdle of higher upfront costs will continue falling away and the revolution will be underway at full speed.
On the one hand, automakers that try to inch into the EV market with gasoline-powered cars very simplistically turned into electric cars, or with a lineup of minimally electric plug-in hybrids, or with low-range pure electric cars that cost several thousand dollars more than a Nissan LEAF, will have their lunch eaten by Tesla and early movers in the market. Automakers need to be working now to design and manufacture long-range, fully electric, relatively low-cost cars that will be desirable enough to compete with the Tesla Model 3. But there’s even much more to it than that.
Some of Tesla’s huge competitive advantages hardly even concern its cars. For one, it offers very fast and “free” Supercharging across the US and Europe, as well as a growing number of other places. Realizing that the charging network is a critical component of an electric car product has served the company very well, but no other automakers seem to have picked up on the importance of such charging stations being nearly ubiquitous, free, and fast. A piecemeal supplement and potential membership in a tedious charging station network where you need to pay each time just doesn’t cut it — that doesn’t comprehensively tackle the “fuel” issue like Tesla’s Supercharger network, and it will leave many consumers choosing a Tesla vehicle over a comparably priced and attractive EV from another manufacturer.
Another thing Tesla has realized is that improving its consumers’ cars via over-the-air (OTA) software updates is now the most commonsense way to improve their vehicles over time. Tesla’s vehicles get better and better from month to month. Other automakers need to follow suit and put a lot more work into their software development in order to make their tech packages and improvements as exciting as the driving experience itself. With electric vehicles, there’s more opportunity to improve the driving experience over time via OTA updates, but it also requires a solid team of engineers constantly working to improve the cars in significant — not just superfluous — ways.
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No doubt about it — batteries are some of the most critical components of an electric car. They determine a great deal of the cost of the car, and whether it is cost-competitive with market leaders. Being sure to use the most competitive batteries on the market is one thing, but manufacturers also need to work hard now to make sure they secure a massive supply of batteries in order to fulfill consumer demand. Tesla is working on its first “Gigafactory,” and executives at the company have already indicated they are looking into the development of future gigafactories. What do other automakers have? What do they have planned? Is it enough to allow them to scale up as quickly as the market wants it to?
Lastly, for this article at least, the consumer purchase process and customer service are ripe for massive updates as well. Automakers’ entire views of how these things work need to change, but not just change incrementally — transform fundamentally. The car market is at the beginning of a transformation, not just a technology transition. They need to realize this and transform themselves. Otherwise, they may soon have their own “Kodak moments.” Tesla’s intention is to speed up the transition to 100% electric vehicles. Not seeing anyone else leading the way, it decided to become a leader. Now, other automakers have the opportunity to be followers, to perhaps even catch up, or to face an “unimaginable” decline as the world passes them by.
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