Is the Tesla S going to turn the fortunes for the electric car?



Full electric vehicles, they haven’t quite lived up to their expectations. Their market share in most markets is negligible. Most electric cars are sold as company cars, to give extra weight to their owners’ green credentials. The private buyer and regular fleet car user are just not interested. Even the tech savvy seem unimpressed with a product that is expensive, and quite frankly, impractical as an every day car. It may be true that most people only drive a 40-odd kilometres a day – well within the range of any electric vehicle – but the fear of running out of charge and the impossibility to make the occasional long trip seem obstacles too big to overcome for most consumers.

In other words, the electric car has not quite overturned the dominance of the combustion engine, as some expected. Three years ago Renault’s boss Carlos Ghosn predicted that by 2020 10% of global vehicles would be full electric vehicles. Now, three years down the line, there is no market (except Norway) where electric vehicles even reach a 1% market share, so that goals seems unrealistic, to put it mildly. Renault and its alliance partner Nissan may see very little return on the massive investments put behind the electric car. The problem of “range anxiety “among target consumers, downplayed by early movers in the industry, has been brutally misjudged. Electric vehicles: “wrong bet” seems a safe conclusion at this stage.

I think it is premature to say that. The Tesla Model S may be the game changer that may give electric cars a more serious place in our societies. In a future not too far away, we may look back on Tesla in similar ways as we see the T-Ford today. Where the T-Ford put us steady on the path towards domination of combustion engine cars, it may be Tesla to have been the first serious contender to undermine that dominant design.

It is a recurrent pattern in emerging industries that early stages are characterised by competing designs and architectures. It is only after various technological alternatives have been explored that an industry settles on a dominant design, and that alternative technologies die out or survive only as niche products. In fact, the automobile industry is the textbook example of this. In the early days of the automobile, cars with combustion engines, steam engines and electric engines existed alongside each other. It took 30 years or so before the dominance of cars with combustion engines was evident. Only in the 1920s alternative propulsion technologies were abandoned.

Now that the car industry has matured, the dominance of combustion engine cars may be challenged from an unexpected direction. Yet again, Palo Alto, California. The Tesla Model S is still expensive, but unlike any earlier electric vehicles, it has a more than decent range. It can do nearly 300 miles on a single charge, where earlier vehicles struggle to get to a range of 100 miles. And an 80kW socket, an infrastructure of which is being laid out in California, can recharge the batteries halfway in just 20 minutes. And last but not least, it is the first electric car that has been very positively received by the motor press, outperforming more expensive luxury segment cars in comfort levels, performance and driving experience.

In our congested, urbanized world, electric cars may eventually just be a superior technology, potentially driving combustion engine cars to the margin, into a niche market of cars for petrol heads and car fanatics. It may be true that electric cars are only as “green” as the electricity generated to power and produce them, yet at the very the least they clean up our urban air, making them a very desirable prospect to increase quality of life in urban environments.

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