February 12, 2016

Electric Vehicles Renewable Energy and Storage News
Tesla Motors Model S

Tesla Motors Model S

Sometimes it is hard to put into perspective what electric vehicles mean to all the industries in transportation.

The gist is that when we talk of a fundamental paradigm shift, we do not mince our words.  It is a complete paradigm shift away from traditional auto business model.

From Old Business Model To New.  If the old business model of designing and manufacturing cars was jealously closed to prying eyes, car companies held all the strings and only had to buy some external technology to fit it into their rolling platforms.  What electric vehicles, EV are doing is shake that foundation and turns car makers into what Apple has been doing this century, integrators and designers.

Fisker And Apple Gets It.  Looking at the new business model, two companies show and prove they not only get it but that the new business model works very well.  Apple has successfully turned away from proprietary, closed-source operating system, OS by embracing Unix and rebundling into a semi-closed system.  What Apple mainly does is design beautiful computers and uses a tweaked version of Unix to make the machines extremely stable and not have to worry about developing the OS.  After all, millions of people develop Unix.  Fisker also gets it.  Why encumber yourself with costly manufacturing plants and even more difficult to negotiate with union labor groups when you can just design a car and have others build it.

Teaching An Old Dog New Tricks.  The next question is what are the chances for those older car companies that were built around the traditional system to survive tomorrow?  At that, traditional companies are at an extreme disadvantage.  Monolithic car companies are notoriously heavy, well settled into the old way of doing business which makes them unable to turn on a dime and adopt a new technologies quickly and efficiently.  Tooling is tweaked for making internal combustion engines, ICE, not integrated electric drive systems.  Worse yet, little have worked on the electric drive, forcing them to actively seek partnership and relinquish much of its stranglehold it kept on the market.

It will not be easy for old dogs to learn new tricks and the only way out is to seek beneficial partnerships.  Another solution is to fully embrace the new business model by offering its manufacturing might to startups such as Fisker Automotive, solely focusing on building, less on designing.  Car companies already have the infrastructure and have much knowledge in making things profitable, at least some of them.

Next, we will look at other implications of EVs, such as energy and transportation.

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