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The Osborne Effect On The Auto Industry

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#EV vs #FossilCars

The Coming Car Recession — As Bad As The Great Recession Of 2008?

Fantastic @cleantechnica article by Maarten Vinkhuyzen @Tanstaafl54

#EndOfFossilCars

https://cleantechnica.com/2019/02/25/the-osborne-effect-on-the-auto-industry/

A perfect storm is brewing above the automotive industry. Three hardly grasped phenomena are working together. Just like a real storm, when the conditions align in the best/worst way, we get a devastating superstorm.

These phenomena (or events) are the Osborne effect of delayed demand, the technology (cost) curve of battery prices and other technology, and the S-curve that describes market acceptance of new technologies.

Each of these 3 can cause disruption of an industry, like the S-curve that hit the mobile phone industry when Apple launched its smartphone. All 3 working together, amplifying each other, is what is going to happen in a couple of years to the auto industry with the advance of #EV

At some point relatively soon, the car market will move from having about a dozen viable electric cars to one in which there will be three dozen of them. Most of the new cars will be a better value proposition than what is now on the market.

The effect will likely be that BEV will not just be something that only the nerds & very early adopters know about. It will become real for a large portion of the public. Realizing that far better cars are just around the corner, they just have to wait a few more moments for them

The next generation of fully electric vehicles with larger batteries is a far superior generation of products than any vehicle burning fossil fuels in an internal combustion engine.

For many products/functionalities, there is a technology curve. For energy storage, the curve is not as elegant as Moore’s computing power curve. What is the same is the indifference to the actual technology used at a point in time.

When the Tesla Gigafactory has reached its economies of scale and the production processes are optimized at the end of the learning curve, the battery price will not stabilize. It will keep declining according to its technology curve.

The S-curve shows the slow start new technologies have, with the very first early adopters getting to the tech before the mass market can name it, then gaining market share up to an inflection point, and eventually taking over the bulk of the market.

Looking at this graph, it is clear that in 2010 Nissan could not compete in the C-segment with its Leaf, but in 2012, Tesla was able to compete in the F-segment with its Model S.

Regarding today, it explains why Tesla can tackle the D-segment with the Model 3, and why GM was just too early and too expensive to have a chance in the C-segment with its Bolt, available a year earlier.

All of these cars will be shown to family, friends, neighbors, and colleagues, creating a growing awareness about what real, modern electric cars are capable of.

The quiet, the ease, the torque, and the ample range are aspects not realized by most people until they drive in an electric car, and most people have not driven in an electric car.

This is the mouth-to-mouth chain reaction the EV community is expecting and has been waiting for. Now, what many critics have called vaporware will have a bigger influence (...) The public feeling will be: “If not today or tomorrow, at least the day after tomorrow.”

These public impressions can spread as fast as a wildfire, and be just as destructive to long-planted trees (or OEMs). That is the S-curve of market disruption going almost straight up after years of apparent flat-lining.

It is triggered by the public interest in new affordable models, made possible by the technology curve pushing down battery prices.

The result will be that people are no longer interested in buying #FossilCars.

They will start looking for the BEV they envision for themselves and they will find that that EV is not yet on the market. People will be postponing their next car purchase as a result. They will be waiting until the model or brand they prefer has something (...) they can afford.

Up until now, there is no Osborne effect — not enough people realize what electric cars can do for them. But the moment people start waiting for their new cars, which are right around the corner, there is unmet demand.

This time, stimulating demand or providing incentives for buying a car won’t help. It is not a scared public not wanting to spent the money. It is carmakers not having the product for which there is demand.