Speed of Change in Electric Mobility

The underestimated enemy for car manufacturers is the Speed of Change towards electric mobility.

My post about the conversion of an ICE classic car to a BEV caused extensive exchange. What began as one of my early morning posts in a grumpy pre-coffee mood with the intension of giving an impulse for the day ended in my first LinkedIn post exceeding 100'000 Views. What?

Exchange with those asking to connect and with existing connections showed there is much interest in conversions. Not only for classic cars but even more so for the vehicles in daily use – from scooters over buses to special vehicles. Conversions actively fight climate change, they reduce operating costs, and reduce dependency on (expensive, imported) fossil fuels. Sensible move.

Some direct mails and responses puzzled me: I was accused being “blunt” (Spoiler: the post was meant to be blunt), “insensitive” (regarding what and towards whom?), and plain “wrong” > since the change towards electric mobility will not happen that quickly and conversions being very stupid considering the slow change towards electric mobility.

Technological changes happen much faster than expected. Always.

Based on my experiences since 1995 with projects in digital change and technological change, they have one fact in common: the speed of such profound changes – the disruption – always is underestimated. The best and most recent example is electric mobility. The last ICE car in Norway will be sold already in late 2022: “This is much earlier even the most optimistic electric car enthusiasts have expected.” states Egil Braadland of NAF, the Norwegian Regulatory Authority. And he added: “Within 20 years we will see very few ICE cars on our roads.”

This is what I am talking about: use Norway as an example to understand how fast the change most probably will happen in Europe, and many other places worldwide, soon. This is neither unlikely to happen, nor is it a new phenomenon – it will happen, and after a well-known scheme. Buckle-up.

The change in Norway from ICE to BEV follows the concept of the “adoption of new technologies in five steps” after Everett Rogers. First, the Innovators among the customers buy a new technology – 2.5% of the potential customers. Following, the Early Adopters (about 13.5%) come in and soon after the Early Majority (about 1/3 of the potential). The latter being crucial for the success of technologies and products since in total we talk about 50% of the market potential.

In Germany, we are at the beginning of this phase. Sales figures of BEVs are increasing steadily and their share in new car registrations in December 2021 was well above 20%. Delay of delivery with most BEVs is between half a year and 18 months underlining the fact the change would even be speedier if manufacturers could answer to the rising demand. This opens the door for new brands and new models, many of the being targeted at the next customer group, the Late Majority. Speed of change increases again and as a result will see a 50% market share in new registrations of BEVs in Germany in 2025 – or even earlier. Following this rule, the last ICE car will be sold in Germany way before 2030. Do the math for your country, but do not blame me for the shivers down your spine.

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Disruption outperforms inertia

The question always is whether a business, company, and country can adapt to the disruption. Often, they are not able – which leaves the market open to those being brave, innovative, quick, well-funded, and flexible. Nokia and Kodak can tell a story about speed of disruption. It is vital for incumbent vehicle manufacturers to overcome inertia – not an easy task given the size and tradition of these companies. This can be observed for instance with Volkswagen massively increasing activities and headcount in software programming, some of its competitors heavily investing in the development of own electric motors. While many people inside and outside the incumbent companies request less speed in change to allow them to adopt. Particularly unions demand for an “agreeable speed in disruption”. Bad news: disruption is not a person; disruption is an event with thousands of players and much dedication among them.

Either you are with it at speed, or you are out.