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One of the quoted experts opines that while some of the big established car manufacturers will survive, most “are running an uphill race with a parachute behind

One of the quoted experts opines that while some of the big established car manufacturers will survive, most “are running an uphill race with a parachute behind them while EV-first firms are sledding downhill.” I think they have a point – existing manufacturers will have to spend a lot of time and energy divesting themselves of all the plants and workforce that will become useless, and/or converting and retooling facilities and retraining staff as they abandon the manufacturing of internal combustion engines and navigate the transition. All of that necessarily involves looking backwards and takes mental energy away from future-forward product development. Companies that don't have to invest a significant part of their management resources in dealing with legacy have a potential advantage.

ZeroGravitas 5y ago
I don't think the transition itself is that hard, but they've not really shown any enthusiasm for it so far, so you have to gamble that they even try before they hit a wall and go bust. So it's more a human problem. Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor. The Ford investing in Rivian thing also reminds me how Yahoo stumbled on for years as a zombie company, basically living off an investment they made in upcoming Chinese tech.
- Hermitian909 5y ago
  Disclaimer, I work for Toyota, opinions my own. > Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor. You might get rich transforming the company, but you certainly will make a lot of enemies. Everyone at these car companies know that as the focus changes to EVs anyone with skills related to the combustion side of things will see a reduction in status and probably pay. Few of those people are anxious to this transition happen during their career and they will not be happy with people who expedite. This is true to a lesser extent with people whose skills are transferable to EV but work in combustion now. To progress a career you generally need to lead new projects and those projects require resources. So to keep skilled people running your combustion business you need to offer them the resources to run these kinds of projects to progress their career even if the money would be better spent on EV development. These people will also fight against money being allocated to EV development rather than their own projects. EV companies don't have these problems. They have piles of cash and a mandate to get it out the door as fast as possible. Inside the company, everyone's career trajectory is more or less aligned with the company's and so there's no foot dragging.
  - bell-cot 5y ago
    This seems a decent explanation for Honda's plans to (possibly) expand into producing rocket engines & rockets. At least at more-junior levels of combustion engineering.
  - Clockface12 5y ago
    Exactly. It's surely significant that Tesla has overtaken all the incumbents and now has the greatest market share in plug-in electric vehicles (i.e. plug-in hybrids and battery-electric vehicles combined): https://www.statista.com/statistics/541390/global-sales-of-plug-in-electric-vehicle-manufacturers/ https://www.statista.com/statistics/541390/global-sales-of-p... Not long ago, the incumbents ridiculed Tesla and did their best to publicise various teething problems at Tesla .. production delays, fit-and-finish issues, etc. That's a human reaction from people who've invested their whole careers into building IC engines. But it's precisely indicative of foot dragging: rather than focusing on leveraging their greater manufacturing expertise in the fight for EV market share, they underestimated the challenge coming their way.
    - Hermitian909 5y ago
      > Rather than focusing on leveraging their greater manufacturing expertise in the fight for EV market share, they underestimated the challenge coming their way. I think this phrasing paints people at these companies as being dumber or less perceptive than they are. People are simply acting in their own best interest rather than the company's. People absolutely downplay the EV threat beyond what they believe in order to further their own interests. I would also say some of the foot dragging is just leadership not having limited capacity to think about different things. Leadership needs to keep an eye on all the existing supply chain and manufacturing stuff while also managing the EV side closely enough to be able to understand the benefits of different initiatives.
      - Clockface12 5y ago
        You're right about people simply acting in a way they think will serve their personal interests, and it's a nice distinction. Thank you. Another aspect of legacy holding companies back.
- theluketaylor 5y ago
  Enthusiasm for actually building EVs has been pretty mixed among the established players Dieselgate may end up being the best thing that could have happened to Volkswagen as they were all in on extending combustion as far as possible before they got caught cheating. They have made an excellent pivot to BEVs in a pretty short time for such a large company, with MEB designed to produce profitable vehicles not just compliance cars. Ford is also really embracing electrification, with their two most valuable nameplates already getting EVs in F-150 and Mustang (even if it is a crossover and not a pony car). I'd like to see them have more aggressive plans for ramping up production, but announcing doubling their plans for 2024 recently was a good start. On the other hand, Toyota looks poised to be dragged kicking and screaming into a BEV, Honda's response has been pretty underwhelming (even if I'd camp at a Honda dealer to get an e if they brought it to north america), and Nissan has completely squandered any early lead they could have built from Leaf. Everyone else is somewhere in-between, with GM making some interesting moves in Volt and Bolt (terribly confusing names) but lacking a strategic vision, Stellantis seems content to dabble (but that's true of their ICE plans as well), and JLR is planning BEV Defender and Range Rover which done well could be real hits for them. *edit: totally forgot the Koreans. Kia/Hyundai are in the enthusiastic group, with the new e-gmp platform using 800V batteries and the ionic 5 being the best looking car you can get right now.
bni 5y ago
I think some established will do just fine. Volkswagen and their sub-brands seems to be doing fine here in Europe. They are quite competitive with Teslas more "affordable" options. Super cheap EVs from Chinas companies will for sure disrupt in the lower end but not everyone will want something like that.
- mullingitover 5y ago
  Disruption at the lower end doesn't stay there. Just ask the American auto industry about their experience ignoring the super cheap Japanese cars in the 70s.
bmitc 5y ago
Kia and Hyundai are already proving that that isn't the case.

ZeroGravitas 5y ago

I don't think the transition itself is that hard, but they've not really shown any enthusiasm for it so far, so you have to gamble that they even try before they hit a wall and go bust. So it's more a human problem. Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor. The Ford investing in Rivian thing also reminds me how Yahoo stumbled on for years as a zombie company, basically living off an investment they made in upcoming Chinese tech.

Hermitian909 5y ago
Disclaimer, I work for Toyota, opinions my own. > Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor. You might get rich transforming the company, but you certainly will make a lot of enemies. Everyone at these car companies know that as the focus changes to EVs anyone with skills related to the combustion side of things will see a reduction in status and probably pay. Few of those people are anxious to this transition happen during their career and they will not be happy with people who expedite. This is true to a lesser extent with people whose skills are transferable to EV but work in combustion now. To progress a career you generally need to lead new projects and those projects require resources. So to keep skilled people running your combustion business you need to offer them the resources to run these kinds of projects to progress their career even if the money would be better spent on EV development. These people will also fight against money being allocated to EV development rather than their own projects. EV companies don't have these problems. They have piles of cash and a mandate to get it out the door as fast as possible. Inside the company, everyone's career trajectory is more or less aligned with the company's and so there's no foot dragging.
- bell-cot 5y ago
  This seems a decent explanation for Honda's plans to (possibly) expand into producing rocket engines & rockets. At least at more-junior levels of combustion engineering.
- Clockface12 5y ago
  Exactly. It's surely significant that Tesla has overtaken all the incumbents and now has the greatest market share in plug-in electric vehicles (i.e. plug-in hybrids and battery-electric vehicles combined): https://www.statista.com/statistics/541390/global-sales-of-plug-in-electric-vehicle-manufacturers/ https://www.statista.com/statistics/541390/global-sales-of-p... Not long ago, the incumbents ridiculed Tesla and did their best to publicise various teething problems at Tesla .. production delays, fit-and-finish issues, etc. That's a human reaction from people who've invested their whole careers into building IC engines. But it's precisely indicative of foot dragging: rather than focusing on leveraging their greater manufacturing expertise in the fight for EV market share, they underestimated the challenge coming their way.
  - Hermitian909 5y ago
    > Rather than focusing on leveraging their greater manufacturing expertise in the fight for EV market share, they underestimated the challenge coming their way. I think this phrasing paints people at these companies as being dumber or less perceptive than they are. People are simply acting in their own best interest rather than the company's. People absolutely downplay the EV threat beyond what they believe in order to further their own interests. I would also say some of the foot dragging is just leadership not having limited capacity to think about different things. Leadership needs to keep an eye on all the existing supply chain and manufacturing stuff while also managing the EV side closely enough to be able to understand the benefits of different initiatives.
    - Clockface12 5y ago
      You're right about people simply acting in a way they think will serve their personal interests, and it's a nice distinction. Thank you. Another aspect of legacy holding companies back.
theluketaylor 5y ago
Enthusiasm for actually building EVs has been pretty mixed among the established players Dieselgate may end up being the best thing that could have happened to Volkswagen as they were all in on extending combustion as far as possible before they got caught cheating. They have made an excellent pivot to BEVs in a pretty short time for such a large company, with MEB designed to produce profitable vehicles not just compliance cars. Ford is also really embracing electrification, with their two most valuable nameplates already getting EVs in F-150 and Mustang (even if it is a crossover and not a pony car). I'd like to see them have more aggressive plans for ramping up production, but announcing doubling their plans for 2024 recently was a good start. On the other hand, Toyota looks poised to be dragged kicking and screaming into a BEV, Honda's response has been pretty underwhelming (even if I'd camp at a Honda dealer to get an e if they brought it to north america), and Nissan has completely squandered any early lead they could have built from Leaf. Everyone else is somewhere in-between, with GM making some interesting moves in Volt and Bolt (terribly confusing names) but lacking a strategic vision, Stellantis seems content to dabble (but that's true of their ICE plans as well), and JLR is planning BEV Defender and Range Rover which done well could be real hits for them. *edit: totally forgot the Koreans. Kia/Hyundai are in the enthusiastic group, with the new e-gmp platform using 800V batteries and the ionic 5 being the best looking car you can get right now.

bni 5y ago

I think some established will do just fine. Volkswagen and their sub-brands seems to be doing fine here in Europe. They are quite competitive with Teslas more "affordable" options. Super cheap EVs from Chinas companies will for sure disrupt in the lower end but not everyone will want something like that.

mullingitover 5y ago
Disruption at the lower end doesn't stay there. Just ask the American auto industry about their experience ignoring the super cheap Japanese cars in the 70s.

bmitc 5y ago

Kia and Hyundai are already proving that that isn't the case.