Earlier this year I was invited by IBM to an event in Munich. There were a bunch of automotive firms there, talking about the future. At dinner, I was lucky enough sit a table with folks from some of these companies. It was a real eye opener – what struck me was that everyone from the major German car companies fully realises that Tesla is an existential threat. I expected some dissembling, or some dismissive attitudes, but none were forthcoming. Tesla is a real threat. We had a great conversation about the future – about cities, manufacturing industries, the simplicity of electric cars versus the complexity of German supply chains and value of engineering.
I remembered this dinner today when I saw a great thread on electric cars by Michael Liebreich – one of the foremost global thinkers on the future of energy.
Car companies are falling over each other to catch the electric drive train. All of them. https://t.co/1imChHryKz
— Michael Liebreich (@MLiebreich) November 14, 2017
Michael is absolutely right. There is not a car company on the planet that isn’t currently facing an existential crisis. But don’t take an energy nerd’s word for it. Bob Lutz, former GM vice chairman of GM, recently wrote a fascinating article Kiss The Good Times Goodbye, in which he argued that structural changes in economies mean that within some tipping point in the near future
“Everyone will have 5 years to get their car off the road or sell it for scrap”
Uber and Lyft and others are driving a sea change in terms of transportation models, but Tesla is driving the change right now, from a competitive perspective, in the high performance car market. Some years ago I wrote a post about the profound impact of open source on proprietary technology, using the analogy of a personal trainer. I think that’s true of Tesla too.
Tesla of course isn’t just making electric cars, it has begun to live in the future, delivering battery storage technologies to start smoothing out electricity grid consumption, allowing for more effective demand response. It may be that Tesla’s money runs out. Perhaps it won’t be able to win in so many markets, entrenched as they are. But in many respects Tesla has already won. It has shown a better way. Electric cars are coming, and they’re going to come fast. Elon Musk is the car industry’s personal trainer, forcing cars to become more efficient, and car companies to radically rethink their futures. Even if Tesla fails, it has already won.