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Maybe. A few thoughts: 1) Automobile efficiency has moved dramatically since the 70's and that's due to government regulation. That regulation continues to p

by redm 9y ago

Maybe. A few thoughts: 1) Automobile efficiency has moved dramatically since the 70's and that's due to government regulation. That regulation continues to push the industry as a whole. 2) The regulation goes beyond automobiles, were moving to alternative fuels as a people. Auto's will be drug along with that shift. 3) Automobiles and selling cars, in general, are a lot more than JUST the drivetrain. All that was really talking about with electric is a drivetrain. It's not clear to me yet that everything about a car has to be rethought to simply make it electric.

trhway 9y ago
>It's not clear to me yet that everything about a car has to be rethought to simply make it electric. it isn't "has", it is an opportunity to rethink what hasn't changed in the last 100 years. Google/Apple (and probably Uber) can attach drivetrain to their platform while Ford/GM just aren't capable of producing a platform to attach to their drivetrains. Tesla is an intermediate step in that direction and it looks like a good [though far from sure] candidate to make it successfully into the future of electric connected self-driving cars.
btilly 9y ago
The problem that those books focus on is the difficulty in switching from an existing superior technology that meets the needs of an existing market to a new inferior technology that will some day meet the needs of an existing market, but does not yet. The problem is that the initial markets for the new technology are marginal ones that established companies do not easily get motivated to deliver to. And by the time that a mainstream audience is potentially interested, new companies have sprung up for these marginal markets that happily undercut the profit margins that established companies depend on. So everyone naturally migrates up market and this continues until established companies have such a small slice of market that they go bankrupt. In the case of cars the key performance characteristics that we need are ability to accelerate into freeway traffic, braking ability, range, and recharge time. Electric is naturally worse than gas on all of these characteristics at the same price point, however battery technology is improving at a predictable rate and it will eventually meet the characteristics that people need for daily life. At which point pure electric becomes viable for all of us. Therefore the prediction from 20 years ago was that the pure electric cars would likely to come from something that perhaps looks like a glorified golf cart, which will eat out the car market from the bottom up. Tesla doesn't look like this because Elon pursued an unexpected angle. He found that he could produce acceptable high performance electric cars long before the initial projection, because the profit margins on gasoline cars in that category were high enough to absorb the insane cost of the batteries. As battery technology improves, he is able to move down the quality curve. But to do so, he has to keep thin profit margins. Traditional manufacturers still face the traditional problem. They can't afford to offer an equivalent electric car at an equivalent price because their cost structures are too rich. But he's moving down the value chain and broadening, and not moving up. By the time he can offer a mass market car, he'll have an unbeatable edge. Of course even if Tesla's plan doesn't work, don't count out large electric golf cart companies moving up market into automobiles like Marshell Electric Vehicle Co Ltd, EZ-GO, Xiamen Dalle Electric Car Co. LTD and Polaris. Just as was predicted 20 years ago. Either way, I do not think it likely that most established automobile companies will survive the electric transition. If they do, it will be the first case that I know of where established brands are successful in switching to an inferior technology.

by redm 9y ago

trhway 9y ago

>It's not clear to me yet that everything about a car has to be rethought to simply make it electric. it isn't "has", it is an opportunity to rethink what hasn't changed in the last 100 years. Google/Apple (and probably Uber) can attach drivetrain to their platform while Ford/GM just aren't capable of producing a platform to attach to their drivetrains. Tesla is an intermediate step in that direction and it looks like a good [though far from sure] candidate to make it successfully into the future of electric connected self-driving cars.

btilly 9y ago

The problem that those books focus on is the difficulty in switching from an existing superior technology that meets the needs of an existing market to a new inferior technology that will some day meet the needs of an existing market, but does not yet. The problem is that the initial markets for the new technology are marginal ones that established companies do not easily get motivated to deliver to. And by the time that a mainstream audience is potentially interested, new companies have sprung up for these marginal markets that happily undercut the profit margins that established companies depend on. So everyone naturally migrates up market and this continues until established companies have such a small slice of market that they go bankrupt. In the case of cars the key performance characteristics that we need are ability to accelerate into freeway traffic, braking ability, range, and recharge time. Electric is naturally worse than gas on all of these characteristics at the same price point, however battery technology is improving at a predictable rate and it will eventually meet the characteristics that people need for daily life. At which point pure electric becomes viable for all of us. Therefore the prediction from 20 years ago was that the pure electric cars would likely to come from something that perhaps looks like a glorified golf cart, which will eat out the car market from the bottom up. Tesla doesn't look like this because Elon pursued an unexpected angle. He found that he could produce acceptable high performance electric cars long before the initial projection, because the profit margins on gasoline cars in that category were high enough to absorb the insane cost of the batteries. As battery technology improves, he is able to move down the quality curve. But to do so, he has to keep thin profit margins. Traditional manufacturers still face the traditional problem. They can't afford to offer an equivalent electric car at an equivalent price because their cost structures are too rich. But he's moving down the value chain and broadening, and not moving up. By the time he can offer a mass market car, he'll have an unbeatable edge. Of course even if Tesla's plan doesn't work, don't count out large electric golf cart companies moving up market into automobiles like Marshell Electric Vehicle Co Ltd, EZ-GO, Xiamen Dalle Electric Car Co. LTD and Polaris. Just as was predicted 20 years ago. Either way, I do not think it likely that most established automobile companies will survive the electric transition. If they do, it will be the first case that I know of where established brands are successful in switching to an inferior technology.