CARpocalypse, or the second great seismic cultural disruption whose name is "
BEV" (Battery Electric Vehicle).
- IOW: Current ICE (internal combustion engine) car companies will massive declines, some will go bankrupt as they struggle to swtich to BEV.
- When? In as little as 8 years.
- Why? BEV's are simply superior in nearly every metric over ICE, and its remaining weaknesses will diminish over time.
- How? The technology was there, the demand was there, all it needed was a spark.
BEV's existed 100 years ago but it eventually lost out to the ICE, however the demand for battery electric mobility always existed (clue 1, the golf cart). Thanks to California forcing the car companies to go ZEV (zero emission vehicle) GM and Honda did make BEV cars, with the
EV1 being hailed as an amazing car despite its limitations, it was no golf cart! GM felt the market was too small for an EV so foolishly killed the
EV1, but across the Pacific Honda and Toyota did take notice of GM EV prototype and produced a compromise EV, a Gas/Electric Hybrid (HEV), with Toyota's version (
Prius) becoming wildly successful (clue 2).
Nissan was the next to bet big on the BEV gamble (there was others but they were small). Despite mundane performance and initial range less than 100 miles the
LEAF was a solid entry and what one can say was the first succesful EV (clue 3)
After seeing what happened to the
EV1,
in 2003 some pretty smart people came together bit by bit to make a new car company that will make the dream of BEV a reality. Elon Musk joined Tesla a few months after its founding, but did so with gusto and $6.5 million.
Fast forward from 2003 to 2021.
EV technology has surpassed the drive performance of
ICE (internal combustion engine) cars (Model S Plaid is the fastest production car ever made).
Enormous demand for BEV's, car companies that produce them have months of back orders for EV.
BEV is significantly superior over non-Plug-in Hybrids (HEV, not PHEV).
2021 is year when all car makers announced EV plans or introduced an EV vehicle to market.
BEV's now offer on average 200 miles, with some going well past 300 mile range.
Recharging to 80% power is from 15 to 40 minuets, depending on the make (some early designs offer less then 10).
The 900kg gorilla in room is Tesla.
Tesla has been nearly doubling its production rate every year since 2019, now has two new Gigafactory plants in Berlin and Austin set to begin production any day now (as of post date, rumors they are doing test builds) with claimed official for sale production set for 2 Jan 2022. Work has already started to expand those locations, and the China plant, with rumors of another location being selected. Tesla's goal is 20,000,000
cars per year in 2030
Of all the major car companies Volkswagen is producing the most and in several models of BEV, but recently realized and admitted they are slow to switch and are failing behind Tesla in EV production capacity. 2021 Tesla built more BEV than all the other BEVs made in Europe, and that lead is expected to grow.
Other car companies are have only just started with 6 to 18 months to ramp up to full production, and those that have production are encountering quality issues, like
Chevy Bolt EV bursting into flame (a la
Samsung Galaxy Note 7 but not quite as common).
As little as a year ago other car companies did not see Tesla as a threat at all, now many of them recognize Tesla as significant competition.
This is why:
Tesla makes its own batteries. Not on does it have tight control on production schedule, but it also able to develop better batteries that cost less to make and improve car performance, the latest is the
4680 Battery designed to hold more energy and be less expensive to make, resulting in faster price reductions. Conversely the Chevy Bolt battery was made by LG Chem in Korea.
Tesla also makes nearly all the microprocessors used in its cars, so has barely been impacted by the global supply shortage.
Also the car design is made with as few parts as possible, drastically reducing production time.
What Tesla has done is both "
Moore's Law" (
more here), and "Wright's Law".
Wright's Law you wonder?
Theodore Paul Wright, also known as T. P. Wright, worked in aviation industry (I think no relation to the famous brothers) and during his time he discovered this:
While studying airplane manufacturing, Wright determined that for every doubling of airplane production the labor requirement was reduced by 10-15%. In 1936, he detailed his full findings in the paper “Factors Affecting the Costs of Airplanes.” Now known as “Wright’s Law”, or experience curve effects, the paper described that “we learn by doing” and that the cost of each unit produced decreases as a function of the cumulative number of units produced.
Article here.
It is very possible in less than 8 years Tesla cars will be cheaper to buy than comparable ICE cars, in addition cheaper to operate, longer life, and better performance.
Demand for ICE cars will cease practically overnight, car companies slow to transition will vanish as well.
The
ACE card in Tesla's pocket: its charging network is far more reliable, faster, and easier to use.
Non-Tesla stations quite often do not work.
PS: Yes, there is far, far more to this than what I wrote, but the fundamentals point to this happening. 2022 will be the tell for what happens to the future of automotive.
PPS: I do fully expect to see a major upset in traditional auto industry, even if the companies do transition and survive. Also the auto fuel petroleum industry.