Decent article, but it makes a couple of factual errors (Samsung vs Panasonic as battery partner) and doesn't understand the importance of the Supercharger network to EV adoption. But otherwise a good read. Thanks for posting the link.
The unfortunate part of it all is that by the time most automakers realize that their business is dying, it'll potentially be too late. I'm going to go ahead and list a couple once-great companies that have experienced this exact phenomenon due to disruptive innovation:
In short, the Innovator's Dilemma is a real problematic scenario for any company, especially in industries where innovation hasn't occurred in a real long time.
- Kodak (digital camera)
- Blackberry (smartphone)
- Radio Shack & Sears (Amazon and online shopping)
- Blockbuster (Netflix)
- Borders Books (Amazon, again)
- Myspace (Facebook, Twitter, every other social site basically)
The Autowende has begun25 November 2015
Luxury car companies such as Volvo, Jaguar, Lincoln, etc. are on the brink of bankruptcy.
@farzyness, thanks for posting the link. Makes me want to buy even more Tesla shares!
The "disruption" analogy is once again wrongly wrangled upon the car sector imho:
The car sector is changing much slower than other sectors and examples listed above. There simply won't be a sudden disruption (especially because of battery production limits as well as possibly low oil prices). Also, longer-range PHEVs (real-world range of 30-50 miles) coming before 2020 could slow down the adoption of "pure" BEVs for years.
No major car maker or supplier is sitting like a duck (the only exception is maybe Fiat-Chrysler, but both brands have a history of poor financial and other strategic guidance for decades before the merger...) and not seeing that the car industry is changing to electric/electrified, more autonomous and digital/connected cars.
But over-investing in EVs today or since 2010 is not the magic solution (see market leader Nissan-Renault, lots of losses and write-downs on their early EV programs since 2011).
The main point is getting there profitably and seeing the right timeframe (which is coupled to changing regulation, customer demand and technology/infrastructure improvements).
And who can garantuee that Tesla isn't the next Blackberry or MySpace of the EV market once the dust settles in 2025 or 2035 and we know who "won" the race to the new personal mobility world in terms of market share and profitability?
PS: A similar article in my opinion makes similar mistakes in terms of timing (using 60 months instead of 120 or 240 months):
The Autowende has begun | Fastned
(Also small errors in mixing cell and module/battery pack prices when discussing the upcoming GM Bolt vs other EVs, but that's not the main point).
While many new PHEVs and EVs are coming to market by 2020, the combined market-share of "pure" EVs will still be in the single digits by 2020. That's not a disruption or revolution. The transition to electrified vehicles will be an evolution in my opinion and it will last 1-2 decades (not just 5 years).
PPS: The real and only "disruption" in the car market in my opinion is the adoption of more autonomous or even fully autonomous vehicles (changes in ownership structure etc.), much more so than the upcoming changes in propulsion systems. But that too is probably decades away, at least for fully autonomous vehicles on a global scale.
This is a great point - however the argument I would make is that Tesla is going to be able to make changes to car sector at a considerably faster pace than usual, due to the fact that building EVs is a fundamentally easier tasks than building an ICE due to a) lower number of suppliers providing parts and b) inherently less parts in an EV.
I think we can add to this:
- the same basic skateboard design can be used in a lot of different applications with only minor tweaks.
- Tesla already stated they're working on reducing the gap between design and production from 2 years that is common in the industry now. I wouldn't bet against them on this one.
- Tail winds from improving batteries that have exponential cascading effects on cost and other critical parameters of EVs
- Self driving will reduce vehicle count by about an order of magnitude
- Combine that with 1M mile drivetrain and who's making ANY money in this business then?