What could derail the path of electric vehicles and its flagship brand the Tesla

Recognising that the electric vehicle is a force for good and the democratisation of power the ability to not pollute at the roadside and to control the way that electricity is generated means that we can all hopefully lead better and healthier lives. However there’s just too much at stake.

What worries me is that Tesla seems to be a bit of a lone voice, it’s a very strong but still solitary voice in the innovation of electric vehicles. What we need to see is widespread support and adoption of some of the electric vehicles the technologies and infrastructure so that many manufacturers can also provide cars that suit a variety of different purposes rather than just Tesla offering a handful of cars that right now probably don’t go to the compact size and don’t offer things like utility vehicles,pickups and things of that nature but yet which people would be quite happy to buy if only they could.

The electric Fiat 500 from Fiat (e500). Although its not a money spinner for Fiat...yet.
The electric Fiat 500 from Fiat (e500). Although its not a money spinner for Fiat…yet.

What worries me about Tesla is whether it can actually make money on the Tesla model three that it has been taking a considerable number of preorders for. Executives has admitted to almost 400,000 preorders of its model three which will be delivered in 2017.

Even the Fiat CEO has suggested that Tesla doesn’t actually make any money on this vehicle which could be damaging because the other auto manufacturers are playing the waiting game deciding if they too should dip their toe more fully into the pond and get behind the electric vehicle but if Tesla doesn’t make any money then maybe they will think twice.

powerwall
Can Tesla take the pressure? So much riding on one company.

So I think for Tesla to really drive home electric vehicles, it actually needs to be profitable and I sincerely hope that when 2017 comes around that the vehicle is profitable even just a dollar will do for me. That one dollar profitability what actually signal to the other manufacturers that it’s doable, it’s feasible to produce an electric vehicle at mass scale that consumers want and the consumers desire. However in the meantime there’s a lot of things that can happen, there could be battery fires, battery problems that sometimes have plagued electric vehicle manufacturers. It could be other scandals financial or otherwise come to haunt anyone of his companies involved in the production of electric vehicles.

The electric vehicle is a product that is really only sought after by a few select individuals at the moment – it’s not mass market. These individuals are typically first movers early adopters usually with a relatively high net worth or disposable income. Electric vehicles really need to trickle down to just about every element of society, but look what happened with Apple and its iPhone, we saw there that initially this was a relatively expensive product compared to the Nokia phones costing a couple of hundred pounds or a couple of hundred dollars however it actually seemed to create a market for smart phone something that didn’t exist before. I think with seeing the parallel with Tesla now and so it may not need to trickle down to other elements in society people may get used to the fact that a car that is an electric vehicle may be significantly more expensive to purchase just like people got used to spending more for a smartphone than they did for what is known as a standard feature phone (e.g. Nokia). This is interesting because what we might begin to see is different ownership models coming forward for electric vehicles because if they cost two or three times as much as a standard internal combustion engine car then maybe some innovation in the financial area may help the adoption of the electric car.

Infrastructure is one aspect that all would be electric vehicle owners worry about. They worry about where they can get the juice from how often they can charge how long it takes how many cycles can the batteries withstand before those batteries need to be replaced. How safe are the batteries? How long do the batteries last who owns the batteries? Will I be able to leave my car at the airport for a month while I travel in the batteries still maintain their charge? What happens if I’m stranded without charge? How long will my car last compared to that of a standard combustion engine car?

We’ll gradually see some of these infrastructure issues addressed quite simply because of need. Tesla is creating that marketplace that didn’t exist before is creating a series of roving vehicles that will demand services catered to their own specific needs. Something that worries me and is that with everything riding on one company it could be prone to manipulation, financial technology or manipulation. One company cannot do it all, we need ecosystems and coopetition.

I remember reading what happened to the London electric bus company which existed believe it or not nearly 100 years ago this company was successful at using electric buses around London, these buses had unbelievable reliability and charging these lead acid batteries was done at leisure with exhausted batteries dropped out and replaced with fresh batteries. Such a great technical innovation was undone by financial mismanagement. Often we see some untoward force which acts to somehow break the natural cycle of innovation. What worries me about innovation in the vehicle space is the sheer number of vested interests from oil to traditional manufacturers to financial speculators and plain old chance.