Who's The More Likely EV Race Winner? The Tortoise Or The Hare...
Roger Atkins
LinkedIn TOP VOICE for EV ??, Event MC, ??? The Electric & Eclectic Podcast Show Host, ?? Documentary Maker, Board Advisor, Harmonica Player, Business Consultant & Investor -Founder Electric Vehicles Outlook Ltd
The Tortoise aka BIG Auto with the Hare as START-UP challenger - a few of those now lining up for what appears to be an epic race - Tesla, Waymo, NEXTEV, Faraday Future, Lucid Motors, Future Mobility Corp, Uber, Lyft, Lynk & Co, Didi Chuxing, Baidu, Delphi etc.
Before I dive into my race 'commentary' - here's an amusing prediction of the shape of things to come as seen back in 1903...
“ The horse is here to stay but the automobile is only a novelty – a fad .”
President of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Company.
Stairway to Heaven or Hell?
OK I know you know the result of the original story - but I'm suggesting a re-run.
Let's set a hypothetical 'finish line' at 2027 - just over 10 years hence.
Let's imagine a world 'filling up' with connected-autonomous-shared electric vehicles!
Yipee!
I'll avoid a punt on a specific % of annual auto sales for now...
Oh OK then! - 50%ish - which would equate to about 50 million units - at today's mix of buying-owning-driving, so systemic changes might skew that considerably downward.
Let's imagine a bunch of stuff happens between now and then that accelerates adoption much faster than anyone had imagined possible. Like the tiddly wink numbers the experts forecasted for mobile phone adoption back in the day... holy moly they were way way off on that!
So, who wins the race to 'Mobility Nirvana'? What would 'Mobility Nirvana' be?
My definition:-
- Maximum ROI for the operator(s),
- Minimum carbon footprint and emissions (tailpipe / energy source / WTW)
- Maximum asset utilisation and operational efficiency
- Full connectivity to the emerging *eco-system.
- 'Democratised' mass market mobility choice not foist
*That would be - crucially and fundamentally - renewable energy, as well as myriad communication products of course.
Please note I ranked Return On Investment as the prime mover for the shift. Without that...nothing much will be created and sustained. Identifying what that return might be is the key question. To date, much of the brave new world we all crave so much ain't squirrelling the cash away folks!
Meanwhile back at the race!
The Hare is busting to set off - looking fit, fine, and feisty - and often super fast from the get-go.
They've farmed the top talent from BIG auto, Motorsport, Academia, Robotics, Telco and elsewhere.
They are South African
They are Chinese
They are American
They are German
They are British
They are all of us...
Each new enterprise has much in common in regards to ambition - including the inevitability of operating mostly as non-profit organisations for some time, but that's not the long-term business plan of course!
For sure they all plan to make money - and lots of it...
In the meantime, they are spending lots of money
Now hear this!
Thus far - for all the crystal clear clarity of the so called Car 3.0 proposition - what the actual business plan ROI will turn out to be is perhaps a bit more fuzzy. Don't get me wrong, there's plenty of logic to it all, and I'm 100% convinced what we've started so we'll 'finish' - but to cross the line we need to construct and deliver a recurring revenue proposition. Mining and extracting the embedded value in our woefully inefficient world is where we are heading - and just like the 20th Century drillers and miners - prospecting and defining where the best field/seam is will be the name of the game.
To make sense spending money there has to be a sense of how to ultimately make money. Profit is the lifeblood of fulfilled ambition.
Chopping out friction parts from the value chain may well be an inexorable inevitability - but it makes the business of building 'mobile smart phones' a bit tricky.
Unless.
Unless you replace one recurring revenue item for another.
Electrons and Data and Miles as 'commodities' spring to mind. Lot's of 'em. Trillions & Trillions. Everyday, Everywhere, with Everyone. The Business binary code...
01010000 01110010 01101111 01100110 01101001 01110100
As I've suggested before on these pages, every mile travelled could become the recurring revenue as opposed to what we've had in one form or another for 100 years or so. Sales & Parts Margins, Finance Commissions, and Volume Bonuses to manage wayward inventory.
Maybe the 'new way' will be a far better and more profitable way of doing business.
For sure I sense a number of Chinese Internet Billionaires have rumbled that.
Meanwhile, back at the race!
The Sound Of The Crowd is Deafening. The Interweb is popping and fizzing with with multi-media messages - The Hare is tearing along...
BIG Auto aka The Tortoise takes to the track!
Now here's the thing.
Some people say The Tortoise doesn't really want to race at all - what's the motivation if you don't know what the prize is?
Some say why shift your butt if all is fine and dandy in the garden of Eden?
Some say why bet the farm on what might turn out to be a fanciful notion?
And for sure, how do you judge innovations 'end-game' - which could be critical in avoiding mid product cycle obsolescence or ruinous residual values.
What will you do with the 'protective shell' you've nurtured and lived inside for almost 100 years - and if you are fully fixed to the past - can you really plug into a finer future?
Hey! If it ain't broke - don't fix it!
All of the considerations above are exercising minds right here right now, so, if you thought joining 'the race' was simply a question of challenging and mitigating man-made accelerated climate change - then think again my friend.
However, as we almost complete our journey through 2016 - I've become 100% convinced that some - but not all - of the BIG Auto 'tortoise types' now get it! Conceptually, Strategically, Operationally, and getting up in the morning and going to bed in the eveningly get it!
What they get! - is how to begin pivoting the business around Energy and Data - and how to use legacy as a leg-up rather than a hindrance.
Some of them are rapidly and intelligently beginning to re-orientate around mobility and software as a service or whatever trendy turn of phrase you want to call it - not just the binary proposition of product as a sale.
Some of them have been busy 'shopping' too...
So are they all now a bunch of 'Me Too's' 'Copy Cats' or 'Great Pretenders' you might be asking?
It matters not to my mind.
What matters is that they are on the case...
Oh Silly me! I almost forgot to mention a fundamental - the entrance fee for this epic 'race'
You might want to sit down or blink a few times as you look at these numbers...
- €1,000,000,000 just to 'sign up' for it.
- €10,000,000,000 to get fully kitted out and pay for the training course...
- €20,000,000,000 to get the back-up team on track with you, and to ensure you get to the finish line - and then keep on running!
Eye watering amounts - and I might even be under-calling it!
Deep Pockets and Deep Minds are therefore order of the day to get fixed up for this super important race my friends.
However, I have no doubt that the assembled talent that now abounds within start-ups is both ready for the challenge - and well aware of the rough and tumble of it all. Many are seasoned professionals who follow the Musk Mantra as well as writing their own scripts. Yet, I know from bitter experience, cash flow has a habit of biting you very hard on the arse at some point!
So who wins the race?
As I highlight above, funding for sure is a fundamental to that answer of course.
Overall, my considered belief is that we need a consortium of the old and the new, and in that regard I'm sure we will see some epic mergers and acquisitions - we already have of course as the shakedown gets underway, and I have a number of bets-in-play as to who might match up with who in the not too distant...but I'll keep that as a private thought at this time.
What?
You're disappointed I haven't suggested who I'd wager as winner!
OK
At the risk of truly bogging off some very good friends...
Please scroll down the page.
www.electricvehiclesoutlook.com
Thanks for taking time out to read my posts that pop up on your feed this year - I'm always truly chuffed when they hit the spot with you. 2017 starts with some really exciting stuff for me so I'll be be sure to share what I'm up to - please watch this space!
And finally, as it's the season for such things - here's a few more earlier predictions of change to come...
1876: "The Americans have need of the telephone, but we do not. We have plenty of messenger boys." — William Preece, British Post Office.
1889: “Fooling around with alternating current (AC) is just a waste of time. Nobody will use it, ever.” — Thomas Edison
1961: "There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television or radio service inside the United States." — T.A.M. Craven, Federal Communications Commission (FCC) commissioner.
1995: "I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." — Robert Metcalfe, founder of 3Com.
2007: “There’s no chance that the iPhone is going to get any significant market share.” — Steve Ballmer, Microsoft CEO.
Founder of Lifelight Studio
8 年I was interested to read the article and it was a comment that Alan Piper made that also set me thinking. I understand the issues Alan but who is to say that you'd have to rely on an EV with only a quarter charge available? There is a definite movement towards people not actually owning a car. Before people mock that, look at the growth of PCPs. With autonomous vehicles you could theoretically 'call up' a fully charged EV which would arrive at your door ready to whisk you up to your son at University. If you needed to return before that was recharged you then just call up another EV to take you home again. We have the Zipcar scheme here in London which works so well for City dwellers who often use public transport on a daily basis but with a more occasional use for their own vehicle. Why have an unused depreciating asset sitting on the drive - just hire one when required! I think that we may see a move towards personal transport being charged as a service as so many other commodities are moving towards these days. Look at the business model that Riversimple offer. That is very interesting!
Advice for Innovation, AI, DC, Electric Mobility, Smart Infrastructures.
8 年why do stories like this will survive and get read always? Haven't been told yet by everybody. :( I miss the point.
Sustainable Transport & Critical Raw Materials for the Low Carbon Future
8 年Nice reading, thanks Roger! I am more interested how FAST we will go and less interested in who will be "winning", probably mix of old and new (in China there are 200 EV start ups, some very very large funds...), so hare or tortoise I care less but more the time :). OEMs are by now fully aware that the transition will happen but what worries me is that the main focus as I can see it is to try to make the transition as slow as possible (which makes business sense with the current legislation in place) and in the mean time try to make life as difficult as possible for incumbents. As the technology (progress) becomes proven and clear, it is now up to legislators to make sure we transition as fast as possible. For Europe (car industry one of the few remaining large industries...) also an economic question as China has defined its clear manufacturing strategy for the decade to come and has set the target of around 50% new registrations EVs by 2030 (of around 35 million cars).
Li-ion Cell: Process Operations & Technology. Physicist.
8 年I think the Tortoise has a few bucks on the Hare, each way bet, whose to lose?
Li-ion Cell: Process Operations & Technology. Physicist.
8 年I think the the tortoise has a few bucks on the hare, an each way bet