Reinventing mobility
We need to think not in terms of products, but electric mobility solutions.
In an editorial for the French business magazine "Challenges", our Partner Max Blanchet predicts that electric cars will only take off if they reinvent mobility.
Since the financial crisis, electric cars have become the latest craze in the media and among politicians, as if they were a miracle cure for all the sector's problems: saving Heuliez, reducing CO2 emissions, creating start-up opportunities (Better Place, etc.) or bringing on new players (Bolloré, BYD), reviving demand, etc. They have even been the subject of industrial espionage! This loud enthusiasm does at least have the advantage that it has put the subject back on the table.
Let's look at the lessons from the boom of 2000: the Internet took off much more slowly than expected and only the most skilled players prevailed, most being existing companies (bricks and mortar). The best startups were created well before 2000 (Google, Yahoo, etc.). And finally, the Internet enabled business models to emerge that no-one imagined in 2000 (Wikipedia, social networks, eBay, etc.). It may be that electric mobility is following this trend. It brings a number of factors together: awareness of the need to become less dependent on oil, green trends, stricter legislation on CO2 emissions in the future, more mature battery technology (lithium ion) and, above all, more willingness among politicians: offering subsidies of up to EUR 5,000 in France and launching projects such as the Autolib' car-sharing scheme. This is encouraging car makers like Renault and PSA to jump in, offering models by the end of 2011. These are already extremely popular among customers, so they might even be in short supply in the first few years.
Since the financial crisis, electric cars have become the latest craze in the media and among politicians, as if they were a miracle cure for all the sector's problems: saving Heuliez, reducing CO2 emissions, creating start-up opportunities (Better Place, etc.) or bringing on new players (Bolloré, BYD), reviving demand, etc. They have even been the subject of industrial espionage! This loud enthusiasm does at least have the advantage that it has put the subject back on the table.
Let's look at the lessons from the boom of 2000: the Internet took off much more slowly than expected and only the most skilled players prevailed, most being existing companies (bricks and mortar). The best startups were created well before 2000 (Google, Yahoo, etc.). And finally, the Internet enabled business models to emerge that no-one imagined in 2000 (Wikipedia, social networks, eBay, etc.). It may be that electric mobility is following this trend. It brings a number of factors together: awareness of the need to become less dependent on oil, green trends, stricter legislation on CO2 emissions in the future, more mature battery technology (lithium ion) and, above all, more willingness among politicians: offering subsidies of up to EUR 5,000 in France and launching projects such as the Autolib' car-sharing scheme. This is encouraging car makers like Renault and PSA to jump in, offering models by the end of 2011. These are already extremely popular among customers, so they might even be in short supply in the first few years.
Are electric cars the answer to these issues? They do not emit much less CO2 than properly tuned conventional vehicles, given how many coal-fired power stations are generating the electricity they run on in China, Germany and elsewhere. France is doing well, with its nuclear program. On the other hand, electric cars reduce pollution in towns and are much more user-friendly to drive (less vibration and noise). In terms of use, compared directly with a good conventional vehicle, electric cars are the losers. Their range is limited to around 150 km, and that isn't likely to change any time soon; and that range may vary, depending on a number of factors such as driving style, use of air-conditioning, speed, road conditions and bumps. Their batteries make them much more expensive, with additional costs of EUR 10,000 – 15,000, depending on how powerful they are. Their resale value is uncertain, to say the least, because they are more liable to become obsolete, like any product with a high electrical/electronic content, and their battery life is variable (like our computers). And future generations of conventional fossil fuel vehicles will be much less so, thanks to improvements in engine technology (smaller capacity, supercharging, controlling heat loss) but also thanks to part/full hybrid vehicles that are establishing themselves in some segments, such as premium vehicles).
Looked at this way, electric cars seem to have got off to a bad start, which is a great shame, given that 85% of all French people themselves say they drive less than 20 km a day: what a waste of independence! To really take off, electric mobility must provide innovative solutions that our current solutions cannot compete with, just like eBay, Wikipedia, Google Maps and iTunes have done.
Looked at this way, electric cars seem to have got off to a bad start, which is a great shame, given that 85% of all French people themselves say they drive less than 20 km a day: what a waste of independence! To really take off, electric mobility must provide innovative solutions that our current solutions cannot compete with, just like eBay, Wikipedia, Google Maps and iTunes have done.
For this, we need to think not in terms of products, but electric mobility solutions. That is, a mobility "ecosystem" combining specific use, targeted customers, tailored products and associated services (intelligent GPS, recharging, batteries, etc.). And then many ecosystems may emerge: electric taxi fleets with battery replacement stations, last mile delivery systems (pizzas, parcels, etc.), car-sharing schemes for commuters (who make the same home to work journey between two towns every day), Autolib', company breakdown car pools, etc. As things now stand, electric cars are too expensive to be sold as products in their own right. So some makers, like Renault, are offering very keen pricing, offering electric cars at the same price as their diesel equivalents plus a monthly mobility allowance comparable to several full tanks of fuel based on the vehicle's life cycle. PSA is offering the same monthly mobility allowance in an all-in package. Electric cars are speeding up the process of cars becoming services rather than just products; but on such new terms that they will only take off gradually, accounting for just around 5% of new car sales by 2020.
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