Technology is revolutionizing the world from one product at a time. It went from computers to telephones and now to vehicles. This ties into the question “Are electric vehicles disrupting the automotive industry?”. Many automotive companies are changing the way their vehicles are being run from internal computers to lithium batteries. Tesla is a company that mainstreamed electric vehicles. Tesla appeals to the everyday commuter since it is reliable, inexpensive, and eco-friendly car manufacturer. Other automotive companies have and will follow their footsteps in this race toward all-electric vehicles.
According to an article from businessinsider.com, Tesla is not quite disrupting the market in terms of seeing Tesla as a threat but more along the lines of automation and all-electric vehicle competition. GM is assigning Cadillac to be on GM’s forefront for electric vehicles. Also, Ford is developing an all-electric version of the F-150 pickup truck. It seems that Tesla’s competitors are gearing toward an all-electric fleet for the near future. It also appears according to the article that creating an all-electric vehicle is quite simple and that its easier for the competitors to implement these all-electric vehicles into the market quite quickly since they have perfected mass production many years ago.
Alternatively, an article from Forbes has a different stance on the market surrounding electric vehicles. One analyst stated that in the upcoming years these EVs (Electric Vehicles) will become 90% cheaper in terms of, to fuel on a charge and 90% cheaper to maintain. It is crazy to think that in the next two to three years, an economically friendly choice is to purchase an EV to keep your costs very low since you won’t have to maintain the combustion engine that is currently in your car. Next, the article further states that automation and electric vehicles will drastically change the ownership in vehicles over the next five years. What I mean by this is that it’s possible for the consumer to pay only 5,000 dollars over the next five years for transportation using services such as Lift and Uber instead of spending 50,000 dollars on purchasing a new or used vehicle. This will cause a major disruption in the market. First, automotive companies will have to realize this change in the trend that individuals will result in purchasing all-electric vehicles since the cost will dramatically drop. The cost will only drop if regulators will pass a law allowing electric vehicles to become legal for commercial purposes. Then, these companies will have to compete with fleets for market share in the rental business. I feel electric vehicles would drastically change the sources of economic drive in our country when electric vehicles can be used for commercial purposes. In all, it is apparent that automotive companies are changing from combustion engines to all-electric vehicles but it is not occurring at a fast enough rate.
Here is a video explaining margins on electric vehicles:
Sources:
Alsin, Arne. “Inside Tesla -- And What's Really Disrupting the Automotive Industry.” Forbes, Forbes Magazine, 14 Sept. 2017, www.forbes.com/sites/aalsin/2017/09/14/inside-tesla-and-whats-really-disrupting-the-automotive-industry/#1f0c98fe58d7.
DeBord, Matthew. “Everyone Who's Telling You That Tesla Is Influencing the Rest of the Auto Industry Is Completely Wrong.” Business Insider, Business Insider, 18 Jan. 2019, www.businessinsider.com/tesla-influencing-auto-industry-is-wrong-2019-1.
Shankleman, Jess, and Hayley Warren. “How Electric Cars Can Create the Biggest Disruption Since the iPhone.” Bloomberg.com, Bloomberg, 22 Sept. 2017, www.bloomberg.com/news/articles/2017-09-21/how-electric-cars-can-create-the-biggest-disruption-since-iphone.
4 comments:
The electric vehicle was somewhat of a laughing stock before Elon Musk and Tesla came along. The perception of an electric car shifted from that of a road legal golf cart to something aspirational; expensive, attractive and fast. Say what you want about the company’s practices and long-term viability, because Tesla has set in motion an industry shift. Legacy auto makers are now producing their own electric vehicles, from Jaguar to BMW and Aston Martin. The threat of electric vehicles is no longer something on the horizon, a problem for another model year; Tesla has forced the reality of electric travel into the present.
Electric vehicle sales in the U.S. have doubled from 2016 to 2018, from 0.9% of the market to 1.75%. While EVs still occupy a miniscule niche of new car sales, the growth rate is not to be ignored. Over the near to medium term, electric vehicles eclipsing 10% of the market or more may sooner be a reality than far-fetched fantasy. The dawn of premium electric offerings has also highlighted the shortcomings of internal combustion engine cars. The only maintenance required for an electric car are tire changed and wiper fluid. This serves as a stark contrast to the lengthy maintenance requirements for combustion engines, from all engine, transmission and exhaust components plus the associated consumables and simply keeping the thing fueled.
The narrative of the traditional auto industry is as much about servicing existing cars as selling new ones. Electric vehicles serve to upset this established order as well. The extent of the disruption is still muted, but if the rate of EV sales growth continues, manufacturers will be in a difficult situation.
As pollution continues to pose a threat to our environment scientists are in desperate need of environmental solutions. This is why I believe that electric cars are going to spread rapidly. Stopping for gas all the time is not convenient or efficient. It costs time and money. Also the US is forced to rely heavily on other countries for oil. Though there was a lot of negative attention brought to electric cars in early releases, Tesla has the world looking at these cars differently. Elon musk combined the convince of a better powered car with luxury. This appeals to those of high financial status and allowed him to set a hefty price on the cars.
Tesla became a household name extremely quick and the company continues to grow. Battery powered cars are a luxury gadget. In the future I think gas powered cars will effectively be eliminated as they are bad for society as well as the personal consumer. As more car companies continue to manifest this adaptation the cars will only become more capable and therefore attractive to customers. I believe these will be the cars of the future.
I believe that electric vehicles are disrupting the automotive industry. Tesla was one of the first companies to start producing electric cars and after a few years other car companies followed suit. This includes established companies such as Mercedes-Benz and Ford as well as new companies such as Lucid Motors. I believe that if electric cars were not disrupting the industry, these companies would not join it. A very established company like Mercedes-Benz would continue to do fine selling its gas-powered cars, but they understand that the future of cars is electric. Electric cars are becoming more mainstream because of a few reasons. One reason is that they are starting to drop down in price. This is the biggest reason because if they were very expensive, only a small number of people would buy them. A decrease in price allows for more people to obtain one. Another huge reason for more people buying electric cars is because of the recharge time. In the past, companies struggled to put together chargers that could charge the cars in adequate time. It was not convenient for the driver to charge it very often as it took up a lot of time. Major companies like Tesla have worked to fix this issue for years. They have made the charging time quicker as well as added many locations where you can stop and charge your car when you are not home. One final reason why electric cars are disrupting the automotive industry is because of the environment. The public has always wanted to cut down on the pollution that it is producing, and electric cars would help a lot. This is such a huge issue that even Congress is trying to work on deals to help reduce carbon emissions. Due to all of these reasons, electric vehicles are and will continue to disrupt the automotive industry.
Reading your blog was very interesting because it described how Tesla has grown as a company and impacted the rest of the auto industry. In the past, companies such as Apple and Microsoft have pushed the boundaries of innovation, leaving other competitors to catch up. I believe this is what we are seeing in the auto industry today. Tesla has become successful by innovating the electric car and making it a more mainstream and conceivable concept. Now, the other companies realize that the future of the industry will be in electric vehicles and they need to develop them before it is too late. I don’t believe that electric vehicles are disrupting the automotive industry in a negative way, but they are undoubtedly shifting the norm of how cars are made. I believe in the near future, it will be the norm to drive electric vehicles. As an article from the New York Times states: “Between 2025 and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly follow”. This means that very soon, we will be used to seeing electric vehicles on a large scale. This is an exciting thought. The clearest impact is that it is better for the environment by limiting the amount of carbon emissions produced by cars. In addition, it will eliminate the need for people to constantly stop to fill up on gas. This is often a costly and time-consuming process, so many people will be glad to avoid it. I believe that all of these factors will appeal to consumers and make electric cars the way of the future. Therefore, companies are going to start moving away from developing typical cars and focus their energy on creating electric driven cars.
Source: https://www.nytimes.com/2017/07/08/climate/electric-cars-batteries.html
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