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.
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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The scenario is made even more exciting by the prospect of self-driving cars. Their arrival en masse after 2020 (Google’s target date) is by no means a certainty, unlike the transition to evs; the doubt is more over the cost than the technology. But if it happens, it will make the model of household car ownership, and all the Mr. Toad psychology round it, obsolete. We will rent driverless transport. So there is a disruptive threat coming up behind Tesla.
Driverless cars will change the world. Tesla’s (not so) secretively investing in that technology as well.
And, that automatically self-extending charging cable they demoed recently — it exactly fits into a future where cars drive and charge themselves. Other than tires and brakes — zero maintenance.
I thought Tesla, like Audi etc, is investing in incremental driver assistance. Personally I’m convinced by the argument of the Google engineer featured here recently: assistance programs just don’t get used intensively enough to generate enough feedback for rapid improvement. Self-driving cars take hundreds of decisions a second.
Yes, their autopilot mode will come first. That should roll out shortly.
But he’s also been talking about fully self-driving cars. Here’s one post: http://www.usatoday.com/story/money/cars/2015/06/09/elon-musk-tesla-self-driving/28766805/
Though, the real leak came a few weeks ago in their quarterly conference call, when an analyst asked him about Teslas being used as self-driving taxis, and he called it a “perceptive question”, and said it was better not to answer.
http://techvoize.com/future-tech/2015/08/12/tesla-may-get-into-self-driving-taxi-business/
Mr. Toad . . . Wind in the Willows . . . self-destructive auto-obsession . . .
Excellent!
Just for the record, the Kodak analogy is not applicable to cars. Kodak sold film. Digital cameras don’t need film. The analogous situation would be not car makers but *gas (petrol) sellers*. Canon, Minolta, and Nikon made cameras before and they still make cameras. But they don’t need film.
I know everyone has a camera on their phone, but those are *awful* cameras – even the iPhone’s. They replace the *awful* disposable cameras made by the likes of Kodak, not the good cameras sold by Canon and Nikon.
On the other point, I wish with the greatest of intensity battery prices were falling quickly. Their prices are hardly moving at all and I am getting more impatient every time I have to fill up with gas. Falling quickly would be dropping in price 50% every 2 years, not the current 8%/year. And that is why car makers aren’t coming up with the wonderful BEV cars we all wish for. The batteries cost too much. Ford lives or dies on the sales of the Ford F-150 in it’s many incarnations. Everything else is a sideshow for them. When batteries get to where they can power an F-150 for 200 miles, Ford will make them. Battery technology isn’t there yet, as much as I wish it were.
BTW, Kodak is still around, just much smaller.
And guess who invented the digital camera. Take a wild guess. 🙂
Kodak, like most companies, was terrified to obsolete its own product because it would have meant completely disrupting the market where they made a living, by pushing a competing technology it invented. So, instead, others did it for them.
Gas/oil companies are, perhaps, a better analogy, I agree. However car companies that aren’t innovating in the electric space are likely to suffer similar problems when the transition to electric gets into full swing.
Obsolete your own products, or others will do it for you.
What should Kodak have made to substitute for film?
Digital cameras.
That’s where the market went.
Later on, over a decade later, very large scale photography moved to cell phones but that was a long time after Kodak augered in.
Existing camera cos. like Canon and Nikon made that switch easily because people bought them for their lenses and overall quality. Kodak made disposable cameras to sell film. They had no expertise in lenses and their reputation in cameras was a big negative to people who buy good cameras. They tried to sell digital cameras but no one could think of a reason to buy their overpriced junk when Nikon was on the same shelf.
What you are proposing would be the equivalent of Shell or Exxon making BEVs, except that they have enough money to just buy a car co.
Here are Kodak Digital Cameras
http://www.amazon.com/Digital-Cameras-Kodak-Photo/b?ie=UTF8&node=493696
Michael, when in a hole just put down the shovel and quit digging.
Kodak was in the digital camera business.
Kodak dropped out of the digital cameara business and stayed with film.
Kodak went bankrupt.
I agree the analogy is not perfect, as phineasjw has already said. You are nitpicking that point to death. He just meant to reference an example of large companies failing to see disruptive change, let alone respond to it.
“What you are proposing would be the equivalent of Shell or Exxon making BEVs, except that they have enough money to just buy a car co.”
Thank you for opening the barn door here. This one is ssssooo easy:
The most profitable industry in the history of humans should be investing a lot of their huge wealth and political power in Wind, Solar PV, Storage (i.e. batteries), and even EVs…
…OBVIOUSLY.
They should be trying to transition to the technology that is going to disrupt them instead of trying to hold on to their strangle hold on energy prices. Greed kills.
Ever heard the phrase “Koch brother’s coal empire”? Same goes for the Koch brothers and coal. They are wasting their wealth on losing battle. Blind greed.
Why would an oil co. which is making pots of money start in a new business like EVs or PVs where almost no one is making money? They have boatloads of cash and can just buy a co. after the dust has cleared and they can see which cos. and techs are successful. Maybe Shell will buy Tesla. Bothers ones sense of justice but welcome to capitalism.
My complaint is about the complaint – “somehow car cos will be left behind and go the way of Kodak if they don’t do *something*” (I’m not sure what). All the major car cos have some sort of BEV or PHEV product which are big money-losing experiments. Electric cars aren’t hard to make. I think standard car cos. will go the way of Canon and Nikon. Who are doing fine.
And the Koch Bros., have a lot of cos. besides coal. They are into almost everything – even fiber optics: Here’s a list:
http://www.dailykos.com/story/2014/04/01/1288957/-Sign-the-pledge-Don-t-buy-these-Koch-products
“All the major car cos have some sort of BEV or PHEV product which are big money-losing experiments.”
That’s a fair point. It’s a tough game. Nobody gets promised a rose garden in this life. (Well most don’t.) They need to gamble hard and figure out how to make a profit on this transition. This is why the Kodaks of the world disappear and startups replace them. As I read once: “you need luck, pluck, and guts” to succeed with a startup. Big companies have the culture of a secure established business. They could do different, but they won’t.
“They have boatloads of cash and can just buy a co. after the dust has cleared and they can see which cos. and techs ones are successful. Maybe Shell will buy Tesla.”
Sure and we’ll see some of that, but we’ll also see a lot of big companies tank. Why would Tesla want to sell after they’ve become established as a major auto manufacturer? How will Shell afford this when they start tanking? Timing is everything and they can’t just sit and wait forever. Also, the money the oil and coal companies are spending to fight renewables is largely wasted. If they jumped in earlier to the new market… but that is largely not going to happen, for the same reasons Kodak had.
Look, it’s actually really really simple. Why would you continue to invest funds that will not produce for 10 or 15 years into oil sands or arctic oil drilling, when you could invest in Solar PV, Wind, Batteries, or EVs? The latter are going to have a far greater up side, especially in 10 to 15 years. Blind greed. At a very minimum I would be splitting my investments. Stupid, but such is the psychology of humans …and psychologists have shown that the human mind really doesn’t grasp the concept of exponential growth. That has everything to do with why disruptive transitions are always so surprising to the vast majority.
You describe capitalism. Those quick, smart, and lucky thrive. The others perish.
The big question in my mind as I read this article is “Why do we even *care* whether the next gen cars are made by established cos. or start-ups?” (Or reborn cos. like GM). Someone will make them. The technology compels it.
Tesla might get bought because it is unable to survive or because the BEV market is so mature Musk wants to move on to to other things. Also hostile takeovers happen.
Yes, capitalism.
I don’t see where the author says we need to care. He is just pointing out incumbent auto manufactures need to do more or they will quickly be facing their own “Kodak moment”.
“Tesla might get bought because it is unable to survive”
Yes, that could happen if they stumble. As I said it’s all about timing.
“..or because the BEV market is so mature Musk wants to move on to to other things. Also hostile takeovers happen.”
I don’t really see those happening. If they are successful they are going to be too big for that.
Do you realize your staunch beliefs that battery costs aren’t falling fast enough and EVs aren’t going to sell fast enough, soon enough, are a very good illustration of the large company auto producer mentality …i.e. rationalization?
They would be rationalization if that is what I wanted to happen. It isn’t. I want the ICE to go in the “dust bin of history” now, now, now. I am realistic in saying I don’t see it happening very fast, and I desperately want it to happen “yesterday”. I have been following PVs and EVs since I was in HS – when they were NASA and very experimental. The pace has been maddeningly slow and all the time everyone has been saying “real soon now”.
I see most people on this site indulging in wishful thinking and then castigating cos. for not making it happen faster – as if Toyota could make batteries 50% cheaper by just building a BEV.
It will come when it comes.
No rationalization is what the car cos are doing. I think you’re doing this because you can’t believe it till it’s already happened. I don’t agree. I think it has already happened. We’re just at the beginning. That’s why I put up the plot. A linear decline in cost of batteries, even at only 8%, means an explosive exponential growth in sales is going to happen.
I’m not really castigating the auto companies. I was pissed at GM and Ford 10 years ago for saying HEVs could not be done or sold profitably, so I bought a Prius. Now I’m pissed at Toyota for the same reason, only now it’s EV production. I’ll probably buy a Nissan Leaf, or GM Bolt this time …maybe a Ford EREV. I’m just saying they’re stupid and I can vote with my paycheck. Also, I agree with the author: we’re witnessing some “Kodak moments” in this industry right now.
Kodak did make digital cameras. They were not successful.
Correct. Here’s a list of digital cameras produced under the Kodak name.
http://www.dpreview.com/products/kodak/cameras?subcategoryId=cameras
There was even a Kodak branded digital in 2014.
Some of the early Kodak digitals were decent but the decision was made at the top level to not pursue digital photography aggressively.
The digital camera replaced film. Kodak invented the digital camera…
Cloud storage of our digital photos.
My phone got stolen in 2014 and I lost a whole heap of photos and chat history.
What should Kodak have made instead of camera film? Why thin film PV of course!
More than fear, until the very end, just no vision of how digital could be used to build a business.
Certainly better than what they actually ended up with.
The old business (masters of the film universe – rubbing shoulders with Hollywood elite etc.) was better than today’s Kodak?
Is that clearer?
I’m trying to understand your meaning, can’t quite tell if what I wrote above was it, or you were pointing out something that I have missed?
No man, I’m just agreeing with you. Kodak should have overcome the fear and greed effect and had some “vision of how digital could be used to build a business”. They might have still been a smaller business because they would have helped replace their film business, but at least they would have still had some viable business.
The common lesson:
They ended worse off by trying to defend an existing business from a disruptively better alternative. That is a very human response and it is not rational. It cannot work in a reasonable society, with a reasonable economic system.
Michael G is wrong. It works just fine as an analogy.
The analogy holds because Kodak chose to stay with the old technology, only dabbled in the replacement technology, and let other companies dominate the field where Kodak has once held the dominate position.
Kodak produced the first dSLR and held a technological lead early on. GM produced the EV-1. Neither company continued to develop their early lead.
Kodak is around. In comparison, a “still around” GM would be riding mower manufacturer.
—
From everything I can find EV battery prices are moving very fast. Tesla is apparently paying Panasonic something in the $160 to $180/kWh. Some people are still thinking battery prices are $400 to $500/kWh.
Bob, I think part of the issue is that people don’t know the real price of EV battery packs. I can see a chart that shows the real cost for BMV, VW, GM, TESLA for their batteries over the last 5 year, and their projections for next 5. People can guess, but that is it. If they look at the AAAs they by at Walmart doesn’t “feel” like they have come down much. So the change is hidden until all at once it is here.
And yes it appears that many CEO are still playing the, it will not impact our market for another 10 years, we have lots of time to catch up later.
No one cares about AAA batteries – they are too cheap to worry about – probably 80% of their cost is the packaging and shipping.
The movement in prices in BEV cars is at what used to be called “glacial” speeds but now the glaciers are melting too fast for that – how about “geologic” speeds? All I read here is speculation about what Tesla is paying and how great it will be “real soon now”. I ain’t seeing it in any end product.
When I can buy a Corolla BEV comparable in all regards (including range) for the same price as an ICE version, I will see that battery prices have come down. In 5 years the Volt’s range goes from roughly 35 miles to about 50 and the price stays about the same. You call that a fast drop? And they are the best around in their price range.
The problem Kodak had was that they could find no substitute for film. Make memory chips? That is a very low-margin high-tech business dominated by extremely competent giants like Samsung where Kodak had no experience.
If Toyota comes out with a cost competitive BEV or plug-in hybrid that has all the features people want, people will buy it in droves. And Toyota has as much or more expertise in batteries as anyone. They will dominate the market just like they did with hybrids after Honda’s Insight lead the way.
“The problem Kodak had was that they could find no substitute for film. Make memory chips? That is a very low-margin high-tech business dominated by extremely competent giants like Samsung where Kodak had no experience.”
Sensors an digital cameras were not commodities when Kodak decided to stick with film. Kodak gave up what was a lucrative market to other manufactures and rode old fashioned film into the ground.
The timeline for batteries and affordable, long-range EVs has been laid out for years. The Chevy Bolt is supposed to be produced at the end of next year, the Tesla Model 3 not long after that, and a long-range Nissan LEAF or other Nissan around the same time.
“When I can buy a Corolla BEV comparable in all regards (including range) for the same price as an ICE version.”
-Never. You can’t say a BEV is comparable to an ICE car. A BEV has quicker acceleration, a much quieter drive, no tailpipe emissions,the convenience of home charging, and other benefits that ICE cars don’t have. If you are talking about the materials used on the glovebox, who knows, but I hope you don’t think that’s what the mass market will really care about.
The increase on the battery range of the Volt is ~43%. That’s considerable, I’d say. But that’s also not the full picture. We’ll see what’s on the market in 2-3 years — I’m sure the products will be much better than today… but I also imagine you may still be complaining. 😀
Kodak had more film processed as motion picture in a day than all still cameras shot in a day.
Kodak was a company for professionals, not amateur snap shotters.
I have no idea how that has any bearing on the discussion.
Kodak’s cine film business is also basically gone. Replaced by digital video cameras and digital projectors. Odds are good that they will cease manufacturing color film in the next few years. They would have already stopped projection but were propped by some deep pocket film enthusiasts.
Kodak is just one of many corporations that failed to change along with technology.
When i saw the Kodak representative at the film lab, he seemed to represent a company on top of the technology. No other company reps in sight.
Sure, Kodak was and probable is on top of film technology (along with FujiFilm).
And the Durant-Dort Carriage Company was the largest carriage manufacturer in the US in the early 1900s.
Do you not understand the conversation?
I don’t know what would please you. All the big car cos. (Ford, GM, Toyota, Nissan) have either a PHEV or a BEV for sale.
Some announce future cars years in advance (and may or may not deliver) some wait until they are ready to put in the local dealer.
What do you want from them?
And as others pointed out, with regard to “The problem Kodak had was that they could find no substitute for film,” Kodak invented digital cameras, which replaced film, and if it had played its cards right, it could have become a top player in the digital camera world.
Steven Sasson, an engineer at Eastman Kodak invented and built the first electronic camera using a charge-coupled device image sensor in 1975. (Wiki)
In 1986 Kodak introduced a 1.4 megapixel sensor making it the first megapixel sensor small enough to fit in a handheld camera.
In 1990 Kodak developed the Photo CD system and proposes the first “ worldwide standard for defining color in the digital environment of computers and computer peripherals.”
In 1991 Kodak released the first professional digital camera system marketed towards journalists. It used a Nikon F-3 camera film body adapted with a 1.3 megapixel Kodak CCD image sensor. It sold for $13,000.
In 1994 SanDisk and Kodak released the first CompactFlash Memory Card. Kodak released a 1 MB version of the card in early 1994 and SanDisk released 2-24 MB versions of the card later that year.
In 1995 Canon and Kodak jointly released the EOS DCS series of digital cameras intended for professional use.
In 1996 Kodak marketed the CD-25, the first camera to use a Compact Flash card for storage.
http://practicalphotographytips.com/Photography-Basics/digital-photography-timeline.html
It made digital cameras. It still makes digital cameras. Here are some:
http://www.amazon.com/Digital-Cameras-Kodak-Photo/b?ie=UTF8&node=493696
They aren’t popular because people didn’t perceive Kodak as a camera co.
“They aren’t popular because people didn’t perceive Kodak as a camera co.” I tried to buy Kodak digital cameras about eight years ago. The prices for some versions made it easy to look at “buying American.” The features and shortcomings made it a very poor choice for me no, matter how diligently I looked for a Kodak branded alternative.
Yep, Apple has never been able to jump into new product lines.
Wrong. Tesla has showed the benefits of falling battery prices multiple times.
The larger Model S 85 kwh battery is much cheaper than the smaller Roadster 56 kwh battery and the 70 kwh Model S gives both more range and more eatures than the 60 kwh hour version for the same selling price.
The Mode 3 will be a long range EV at a mass market price, so that will be another huge decline in battery prices.
Depends what you mean by “prices falling quickly”. To me it means at least 25% / year. Batteries don’t meet that. What is your definition?
Making up your own completely random definition that has nothing to do with the real world is a fail.
From Cheat Sheet: The Price of Electric Car Batteries is Dropping Fast
From Gas2: Battery Prices Falling Faster Than Expected
From GCR: Electric-Car Battery Costs Already Cheaper Than 2020 Predictions
As you can see, the professionals don’t agree with you.
So where do I pick up a BEV with 250 mile range (Corolla has 350 but let’s take pity on the BEV) AND for only $20K (Corolla is $16K but let’s be generous to the BEV)?
I looked at your sources. It is all speculation – “Oooh – maybe Tesla is actually only paying $X/kWh!”
Batteries are too expensive for a mass market car right now folks! I wish it weren’t so but it is – deal with it and quit complaining older car cos. are unable to do what Tesla is also unable to do – make a mass market long range BEV.
I look forward to one in 2020 because I am sick of ICEs and would dearly love to watch the petro-states wither up and die. When the mass market BEVs come, they will come from GM, Toyota, Tesla, Ford, and everyone else. Until then complaining about Toyota doesn’t do anything.
Wrong. It’s not speculation. It is what has already happened. You just proved you would fail a 4th grade test in reading comprehension.
The Model 3 range will cover 99% of all driving needs on a single charge and be mass market priced so demand will be huge.
The Bolt will have a similar price and range.
These cars are only about 2 years away. Try and catch up to what is actually happening.
Even at 8% decline we’re going to get there pretty quickly. I think your going to see a more rapid decline than that. Why?
1. Tesla’s giga-factory approach (i.e. giga-scaling to reduce costs)
2. Sakti3 is on record claiming lower cost manufacturing, using solid state approach, will take them to $100/kWh, in about three years. They have a working prototype. ..and Seeo is already selling solid state batteries with 220Wh/kg. There are at least five contenders here that I know of.
3. 24M is also claiming they can reach $100/kWh cost just using improved manufacturing techniques.
4. There are much lower cost battery technologies coming to the market for application to grid energy storage (end-of-grid and source-of-grid). For example Ambri’s LMB. This will take some of the demand pressure off of lithium batteries and help lower the price for EV use.
Of course the proof will be in the pudding, but there’s more that says this will happen, then says it won’t. Also, Zach and others here are correct, 200+ mile EVs will begin to hit the market next year. Cost and Capability trends for EVs are very good and very clear …with no apparent blockades in the development path …and multiple technical options for making it happen.
That we will get “there” I have no doubt. “Quickly” is in the eyes of the beholder. I don’t personally consider 8%/year quickly.
Everything else you say is pure speculation. Good luck.
I have some govt. reports and independent corporate and academic studies from just a very few years back making predictions which are laughably optimistic with the benefit of hindsight. Of course, everyone has forgotten them so the same people can make equally wild projections now without any consequence to their credibility.
Believe whatever gives you hope. I’ll believe it when I see it.
Well, I would say “reasoned prediction” instead of “pure speculation”, but close enough. I haven’t actually made any predictions accept to say I think it’s going to happen faster than the 8% curve. I’m personally not sure how much faster.
Clearly, from your earlier comments, you will not believe in any kind of transition to EVs until it has actually happened. I’m more bullish. I think the trends are clear and the trends do not favor the status quo. The 8% trend gets us there more quickly than most realize. There is good reason to believe this could happen more rapidly.
There absolutely will be a transition to alternate fuel vehicles. “When” is the question. I think it will take longer than most people here want to believe. I hope I am wrong.
I intend to get a Volt in a few years and will rejoice in telling Iran, Exxon, and their like to suck my tailpipe.
I agree “when” is the question. Clearly, I’m more optimistic. Wish I could buy a Volt, but the ground clearance is not enough for me. I’m going to buy an EV this winter. Been driving a Prius. Toyota sucks now. They’ve gone from leader to trailer. Their PHEV only has 13 or 15 mile range in all-electric. Whole point for me is to have daily driving, plus shopping, be all-electric and 15 miles would not even do half that. What a dog! Now there’s a “Kodak moment” for you!
If there was ever an analogy between Kodak and an automotive giant, it would Toyota and their steadfast refusal to market a modern battery EV. Toyota’s expertise with batteries is being banked on by the same NiMH technology as the AAA rechargeables found at Walmart that you’re deriding. And you’re right, in one respect: nobody cares. NiMH battery packs for non-plug-in hybrids are essentially the same as mass market 110 format color film.
They have a PHEV. BEVs in the $30K range aren’t selling. Why would they make something that doesn’t sell?
Battery tech like Li vs NiMH doesn’t really matter. Tesla buys their batteries from a battery co. So can Toyota or anyone else.
Yeh, those digital cameras aren’t really that good yet. …whoops, there goes our market. Toyota sucks. EVs are going to rule.
Underestimating Toyota and Honda is what put GM and Ford into and near bankruptcy, respectively. Toyota will be using Li-Ion batteries as an option in their next PHEV. I would not bet against Toyota.
They are using Li in their current PHEV. They are behind other competitors …and no, it is not that easy to ride in after the fact and retake the market. First in is important.
If “first in” is so important how did Toyota and Honda oust GM, Ford, and Chrysler from their 90% ownership of the car market in the 1980s?
First in for small cars.
Toyota got where it is in the US by making the same thing everyone else made only better. They aren’t competing against Tesla but against Ford and GM. It will be deja vu all over again.
No, small cars first. They did do it better, I’ll give you that.
Deja vu with Toyota winning again? Your language isn’t clear to me. I don’t agree if that’s what you’re saying. Toyota is going to take a hit. It’s not just good quality. It’s also where the market is going …and EVs are going to leave ICEVs behind. EVs have already been invading the market more rapidly than HEVs did. HEVs were never going to beat ICEVs on cost at the dealer, too complicated. EVs will beat ICEVs in cost and then some. Just a question of when.
Oil will not stay below $40/barrel. Saudis can’t afford that for long. They are running a national deficit. It will come back up to $50 or $60 in a couple of years. Above $60 and fracking starts to come back on line. Perfect price. The engines of industry keep running, but the cost is high enough for EVs to win soon.
The misunderstanding is mutual. Which car co. do you think Toyota is so far behind? GM, Ford, Chrysler, Honda? You can’t compare a Camry or Corolla to a Tesla – apples to apples.
EVs will absolutely leave ICEs behind, and I’ll be cheering every minute. But who makes a car in the $16K-$30K Corolla-Camry range that is a leader in BEVs and will eat Toyota’s lunch?
As Zach said, the Volt improved range by 43% – from 35 to 50 – but that is after 4 years. That is 9.4% annually. So to get to 200 miles at the same $33K price point will take over 15 *more* years.
“Real soon now.” Reality bites, doesn’t it?
Range improves by 70% when you get from 35 to 50 (miles or km, doesn’t matter)..
4 more years and another 70% more they are at 85 miles/km.
8 more years and it’s 144 miles/km
12 more years and it’s 245 miles/km
I don’t get your math.
50/35 = 1.43 = 43% improvement.
1.43 X 35 = 50. (2016) How do you get 70%?
Continuing:
1.43 X 50 = 71, (2020) 1.43 X 71 = 102 (2024),
1.43 X 102 = 146 (2028), 1.43 X 146 = 209 (2032)
I hope and expect it will happen more quickly, but that’s the projection of what we’ve seen so far.
I got there by brain-fart.. you’re right. Apologies.
Toyota is behind all of them you mention. Toyota doesn’t make an EV. They don’t even make a reasonable EREV. I can’t imagine what they’re thinking.
I don’t agree with 15 years. We’ll start seeing reasonably priced 200 mile range EVs starting in 2017. The GM Bolt to $30,000 (after tax incentive). The Tesla X for $35,000 (before incentive) in a few years. The GM Volt 2.0 $34,000? (before incentive) is almost out already. Nissan and Volkswagen will probably follow suit with longer range, reasonable cost EVs.
All of them are going to eat Toyota’s lunch, especially Tesla. Tesla giga-factory = $25,000 200-mile EV easily before 2025.
First in is important if the first in keeps running and doesn’t sit down and wait for the other to catch up and pass.
Yes, I realize that Toyota has the Plug In Prius. The first generation ones were so technologically far behind the Volt it wasn’t even funny. But people wanted more than Toyota was willing to build (all these companies have their blind loyalists and Toyota’s seem to be more fanatical than most in the low/mid price range market.) But Toyota simply hates the idea of plug in automobiles. They could have sold far more 1st generation Plug In Prius’ than they made, even if the technology was inferior to the competition’s PHEVs.
The new Plug In Prius actually looks a lot better and I hope for their own sake they won’t make them as hard to get as the 1st generation ones. They may have to actually market it, since they’ve spent far too much time chasing the fuel cell unicorn, thinking that was going to be their way to leapfrog BEVs. But that gamble is obviously not paying off. If Toyota is really going to have a “Kodak movement,” it will be because of they put all their faith in the Mirai.
I suspect Toyota lost money on each one which is why they wanted to limit production. All the PHEVs are pretty pathetic except for the Volt right now and the new one looks even better. GM only made 10,000 Volts the first year (probably to work out the bugs) and seems to have lost a little $ overall on the Volt. It’s early in the development process. It will all work out.
There is also a lot of cross-licensing of technology and every co. buys and tears down every product of every competitor. The differentiation will be in execution not in the tech which is pretty generic: buy battery – connect to electric motor – add cup holders – hire scantily-clad cute girls for auto show – cash checks.
It seems all the older auto cos. think PHEVs are going to be eventually be replaced by hybrid FC-EVs with FC taking the place of the ICE on the Volt idea. I don’t know and I don’t care as long as the ICE dies.
” GM produced the EV-1.”
And just DESTROYED IT TO TINY PEICES and LITERALLY MINCED IT in 2004. I wonder why?
Crushing it was over the top, but it certainly wasn’t economical to produce and market.
“That was then. This is now.”
Now GM is ahead of Toyota.
…of course Tesla is way ahead of GM as the author is correctly pointing out, imo.
GM vs Tesla is apples to oranges. Musk builds the best EV regardless of cost. GM builds the best EV which after tax rebates is affordable for the average new car buyer. Different goals = different cars.
I don’t agree. Apples to Apples. Same goals, but approaching from different angles. Tesla is kicking but. GM is struggling along. Toyota is going to be eating dust when they finally wake up.
Kodak is not still around, the folks who have the right to operate under the Kodak trade name are though.
“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.” LOL, difficulty capitalizing, they invented the stuff!
I read a very recent interview with Kodak management and employees. The co. had to reorganize under bankruptcy protection, but all the old hands there now are from the glory days in the same location, same buildings.
Thanks, that makes sense.
My issues. Jeff Clark, from Orbitz, named CEO in 2014, market cap now 609 Million, that is an M not a B. Net income 3 M, free cash flow -22 M, employees 60,400 in 1982, rising to a peak of 145,300 employees, while the company hit a revenue peak of over $16 billion and a market capitalization of about $30 billion in the 1990s, now with 7250 employees in 2015, down from a planned 8500 after bankruptcy.
Old hands yes, but “all the old hands?” You would need a lot of seniority to stay with a company that goes from over 145,000 to 7250! I’m thinking some (most) of the “old buildings” have been closed. Even the logo is changed.
I was very careful of my grammar. The old hands that are there *now* – which is not *all* the old hands from the glory days.
Of course Kodak withered and died and is a shadow of it’s former self. I look forward to Exxon, Shell and the other oil cos. going the same path.
I’m not trying to beat this horse, so I’m not going say anything about meanings beyond grammar, perceptions, scale, and exact quotes. I will stand pat with my statement above.
I read something, from years ago, that quoted 80 of the buildings at the Kodak site had been torn down.
Infrastructure wouldn’t support a 50% drop in price of transportation costs/doubling of drivers on the roads but I have no data researched to support this except roads full of pot holes now.
It is the price of the end product that matters to most people. What price are you talking about? It sounds like you agree prices are not falling quickly.
If you’re referring to the US and the roads there.. well, if you put cheap fuel above everything else, no wonder.
For what it’s worth, I’d really really love to see the authors of CleanTechnica, Gas2 and Green Car Reports, and the frequent commenters of these sites to actually buy an EV. This way, in a sense, we can practice what we preach.
Ha, thanks. 😀 I’ve been car-free for 11+ years, but am planning to get a car later this year or early next when I move back to Florida, and it will indeed be 100% electric. PHEVs don’t cut it for me, on several fronts.
In California a lot of public car chargers are appearing in shopping centers and other businesses. However one of the problem I have seen is that most require a key fob or special access card to use. that means you first have to register with the company site and wait for the card or key fob to arrive. Every company is different so one access card from on company may not work with another companies charger. Who wants to carry a bag of key fobs, access cards around for every charger you might run into?
It would be much simpler to replace the special cards and fobs with debit card payment terminals. Most people today have bank debit cards. So most people can use them. Companies that don’t offer easy payment options for non members will probably find there profit will be less than those companies that do.Since I have gotten my volt I have seen about 4 or 5 different charging companies but I have only used one of them. The Free Nissan charger near one restaurant I occasionally visit.
While making EV charging free is ideal keep in mind someone has to pay for the installation, maintenance and electricity for the chargers. Some companies will offer free charging for their customers. However not all businesses can afford the cost. So in the long run we will have a mix of free and pay to charge stations.
Excellent point! Too many point to battery prices. The relative scarcity of charging stations is a huge hindrance. As I found when I looked at availability (because I was thinking of getting a used BEV) they seem to be everywhere but where I want to go. A PHEV will have to do until that is fixed.
Absolutely true regarding RDIF membership cards . . . completely silly. This worked for a very short time in the beginning, when there was only around a thousand EVs in the entire U-S and Blink was the only network. But a lot has happened in the last 5 years. The same debit card I use to buy everything else is what is needed at commercial and public EVSE terminals.
If we’re going with analogies here, one to avoid is Henry Ford’s Fordlandia in Brazil. Not wanting to be subject to the whims of rubber suppliers from Asia, Ford built an entire company town in the Amazon including rubber plantation and rubber processing. It failed because of biology – pure and simple. Rubber plants are fickle and mother nature’s pests are always hungry. Ford had hoped to control rubber production as vertical integration. Technology also impacted the endeavor as synthetics started overtaking natural rubber. We still use natural rubber in tires to some degree. More for airplanes and much less for autos.
I don’t see disruption as anything out of the ordinary. Except it’s used as an expression a lot in Silicon Valley for marketing. Silicon Valley started chiefly with Fairchild Semiconductor – followed by IBM, Xerox, HP, TI, etc. Companies come and go. Fairchild is hardly a household name, but most of the engineers went on to form companies like Intel and also becoming the backbone for companies like Apple, Cisco, Sun Microsystems, etc. Much of the brain trust of Silicon Valley is with companies nobody even heard of. And much of Silicon valley is ITC consulting services. That’s where huge amounts of easy money is made.
With 254 million cars and trucks on the road in the US alone I don’t see this revolution happening as quickly as some may hope – unless climate change is so apparent that even the republicans start freaking out. By then we’ll be spending most of our money moving entire cities from coasts so Uber integrating autonomous cars with regular traffic won’t be as essential. At this point in time the only reason there is an EV market beyond early adopters and a cool factor is climate change worries. Not technology superiority. Especially with oil below $40 a barrel and massive market swings for the near future. This makes purchasing choices difficult for the next wave of consumers of new things. Most people look at a car or truck as an appliance. And that’s the market and justification for building the Gigafactory. Just like GE’s giant Kentucky Works for washing machines at whatnots.
Sorry if I sound like a wet blanket. So feel free to tell me why I’m wrong.
You are so right but you are preaching to the BEV choir so don’t expect many positive replies.
You are right on several fronts, but the comment that EVs are not a superior technology is total bunk, imho, and I’d say in the opinion of the large majority of people who have driven them. They are absolutely a better product. Lack of awareness, lack of experience, and typically high upfront cost are the 3 big barriers, imho. All will come down, and I’d guess in exponential fashion.
My bad. EVs are and will be soon more advanced and superior to ICE for those who will pay for that superiority. But simply as a conveyance means not yet for differentiation between a Subaru Forester and EV SUV Brand X for utility and cost.
I agree with jeffhre, you make some fair points. I disagree on the rate of change to expect, see comment & plot above. Similar to Solar PV, a continuing linear drop in cost of batteries/EVs is going to bring an exponentially increasing market for them, imo.
Right now the EVs are superior to ICEVs accept for: initial cost, range, and refueling time. EREVs (like the GM Volt) are superior accept for: initial cost. When battery costs come down more (see comment & plot above), EVs and/or EREVs will take over. Very few people drive longer distances with any regularity, so we’ll see from the market which (EVs or EREVs) will dominate. Right now it’s EVs. EREVs would still provide 90% of the fuel use reduction and CO2 reduction (as compared to EVs), if they replaced all light trucks and cars.
Good points, but I always thought Fairchild was a household name – must be a California thing 🙂 Don’t forget get of the 254 million cars, many are driven very little, sitting up on blocks in the front yard, are in museums and are collectors items. Often it is just a small part of the fleet, the newer ones, that are doing the heavy lifting in terms of most mileage covered.
True. Looking at US Federal Highway Admin data here:
Here’s a cool data set on each state:
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/california.pdf
bottom line about 75 percent of personal travel is driving alone. Yikes.
and the national data on cars and truck travel:
http://www.fhwa.dot.gov/policyinformation/statistics/2013/pdf/vm1.pdf
Light Duty: 184 million; MPG, 23.4
Motorcycles: 8 million; 43.4
Buses: 800,000; 7.2
LD/Long bed: 52 million; 17.2
Trucks single unit: 8.1 million; 7.3
Trucks; dual unit: 2.5 million; 5.8
Total fleet 255.9 million, MPG = 17.6
Total miles driven: 2.988 trillion
Now looking at new autos month of July, 2015 sales:
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Cars (light duty): 669,000
Trucks (light duty): 842,000
Light duty trucks include: pickups, 221,000; SUV, 143,000 and crossovers 404,000
Tesla is correct to focus on crossovers to get US fleet MPG. I’m going to guess crossovers don’t do too much off roading on average so it won’t matter what the conditions are. Our average fleet MPG of 17.6 is probably getting controlled by the sheer number of light duty trucks (SUVs and pickups) that are used for work and play.
If I were king of the world, I’d say to anyone driving a pickup from home to work to Walmart and back to a suburban McMansion to stop doing that. Buy a cheap EV – when they become available.
“When they become available.” Thanks for that.
I even looked at Electric motorcycles. Hardly any available, and very expensive ($9K min – $16K average). None from well known manufacturers.
Yes. On the mileage of pick-ups and SUVs. I saw a critique that makes the argument very easy to visualize.
“Consider the following two scenarios, each involving 12,000 miles of driving per year,” say the researchers. “In the first scenario, an improvement from 40 to 41 mpg yields a reduction of about 7 gallons of fuel per year. In the second scenario, an improvement from 15 to 16 mpg yields a reduction of 50 gallons of fuel per year.”
I’d say that improvements from Prius and Volt mileage would mean nearly nothing, compared to upping pick-up/SUV MPG’s.
“Failed because of biology”, are you saying the people voted like bugs or slugs?