1) automakers have very little control over their product any more. They rely heavy on Tier 1 suppliers for major component development and production so they ship hodgepodge product
2) they look at a car as a product that is shipped and forgotten. They never have looked at it as a platform for continuous future improvement. This similar to the iPhone vs feature phone analogy-- cars from legacy manufactures are the best they will ever be the day they leave the manufacturing line.
Without changing these fundamental mindsets, they are in deep trouble.
Disclaimer up front: I work for GM, but not on vehicle development.
For #1, what would you do? Ship a much simpler product or ship a worse product?
In the current system Tier 1 supplier can concentrate expertise in a single area and spread development costs across many OEMs. A single OEM cannot effectively compete with this cost structure.
Tesla is notable for many things; one of them being its vertical integration. So far Tesla has been able to compete by both building simple cars (excluding the X, which is another story entirely) and charging quite a lot of money. They have also had serious quality issues, probably relating to their vertical integration. These quality issues may be resolved, but by that time either they or their competitors will have developed a new product, and then they will have to go through the development and refinement cycle again, at huge cost.
Regarding #2: the iPhone came out in 2007. Since then, there have been about 7 development cycles. For most automobile platforms there have been 3 or fewer development cycles since 2007. Before the iPhone, there was no real concept of remote update of mobile devices.
Automakers have caught onto the trend and you will see more mainstream OEMs doing remote updates pretty soon.
I think your #1 is especially true. Almost every car company seems to be nothing but Branding + Internal Combustion Engine expertise. Almost everything else gets farmed out (brakes, steering wheels, seats, windows, most of the car).
Until recently every electric car they made and sold would be at the expense of an ICE car they were not selling, while devaluing their ICE expertise and team. I can understand the reluctance, though I don't like the end result.
That is changing as Tesla and others are (hopefully) eating into ICE sales and they have more, um, incentive to get into the electric pipeline.
Aside but the US could help push this along by increasing the gas tax, since the gov hasn't done that since 1993. It would be cheaper than continuing the subsidy, but hopefully help future tech. (And I guess it wouldn't hurt to maybe fund some infrastructure.)
ad 2)
You mean when new model comes out next update makes your model slower?
Thank you but no thank you. I don't want have EULA for a car and one more entity trying to track everything I do and pretending I own the car while actually they do.
Continuous future improvement is wet dream of locking car owner (in your world it should read "car user") into paying more.
The decision makers in big auto are around 10y from their retirement. Reluctance makes sense for them. It's similar to the consulting project I had at uni with an O&G company: everyone knows they should pivot for the sake of the next generation. On the other hand, upper echelons just want to simplify their life.
Now it's the labor unions that are pushing german auto makers over the EV cliff. Ironically, they have the greatest incentives to innovate/follow.
It's bothering though, that redundancies will be massive no matter what exactly they do about EVs. Can anyone offer a growth perspective for that sector (=not some kind of UBI vision)? My initial thoughts were space. But this is not really were to retool design prowess and factories either.
> Reluctance makes sense for them. It's similar to the consulting project I had at uni with an O&G company: everyone knows they should pivot for the sake of the next generation.
Honestly, I think the issue is that auto execs and the general public have very different views of the world.
From an executives perspective, EVs are an over-saturated, incredibly niche market that's nearly impossible to make money on. They already spend a ton of money investing in EVs and the general public doesn't care about their EV offerings and they barely sell.
The general public seem to hold Telsa up on this pedestal of innovation and point to them as an example of how automakers need to be if they don't want to be seen as dinosaurs. But I bet if you talked to Mark Fields, he'd say something along the lines of, "Nobody is going to buy an $80,000 Ford EV."
The general public is clearly not interested in actually buying EVs right now. Heck, they don't even like hybrids. Instead Americans are happily buying pickup trucks and crossovers, then complaining about about a company's lack of innovation.
Ford has the biggest lineup of EVs (with a sedan, van, and compact hatchback offering) and probably the best availability of EVs in the USA, yet they only moved 24,000 EVs this year. Telsa moved about 38,000 Models S & X in the same time period. Total USA EVs sales were a hair over 133,000. This is in a country where pickup trucks easily sell over a half-million units a year and a beige family sedan will move 200,000.
So I don't feel like the large automakers are reluctant to adopt EVs for any other reason besides the fact that the market needs decades of double-digit percent grow in order to support more than two key players.
Batteries I'd say. Electronics - I'd imagine the complexity is comparable to a normal care roughly speaking so don't foresee any major power shift based on that from the status quo.
Second edit: seems that the rest of the world is leading electric car adoption way ahead of the U.S. . Electric cars still represent a tiny fraction of the overall market (1/300th of the world's car sales). Surprisingly, it's China that leads the way.
I didn't enjoy driving until I got an elecrtic car, a Fiat 500e. That was enough fun for me to blow a hugely unnecessary amount of cash on a fun ICE car, a BMW m235i. I enjoy every day I spend in it, but I doubt I'll ever buy another gas car, as this one will bridge me to the future. I may take it to the track if I ever find the time and the right people, but it's unnecessary.
Gas cars can be fun, but if you look at what's actually sold, nearly none of them are fun. Those who love driving will continue to be a small minority, just as they are now.
Edit: I recently had the chance to drive the autobahn, and the most fun car I could get was a BMW 420d. It wasn't nearly as enjoyable as the skiing that it brought me to. So maybe I'm not that big of a driving fan after all.
Virtually everyone I know in tech loves cars. Most fellow sysadmins I know still insist on manual transmission cars, in fact. Most of my fellow car club members and performance driving instructors/enthusiasts are techies.
I plan to go straight from manual transmissions to electrics; I don't see why I'd ever buy an automatic. I don't see electrics taking away from the fun, at least not necessarily. I've driven lots of fun electric cars. My last purchase wasn't electric-suitable (wanted AWD, range, etc). But my next one will be.
I've always worked in west coast tech hubs, but never "in the city", where all the car-hating hipsters live.
I don't think you are alone. It seems most people on HN live in hub cities and don't, understandably so, like the commute in the cities they live in. So this is a means to remove that pain point. It should also drastically lower accident rates which seems to not get as much attention. If you have a self driving car who should pay for the liability insurance and if it passes enough safety tests shouldn't the premium be much lower??
That being said I absolutely love the idea of self driving cars for my aging parents!
You are misunderstanding the situation here. I personally love something like a nice road trip, prefer manual transmissions, and whatnot. I just hate commuting everyday by car. It's completely inefficient and has negative impacts on health. Are you suggesting you enjoy driving in traffic as well?
I'm amused by the dissonance here between developing US policy w.r.t. subsidization and development of electric-first transportation and international investing houses willingness to invest.
I imagine they see it as a major opportunity to force better terms on companies developing these solutions for the US market. Which is probably exactly the goal in the first place.
98% of what makes a good car has nothing to do with software, which is Google's core expertise. (And to be pedantic, Google's core expertise is cloud infrastructure.)
The fact that people love to complain about car software is testament to the fact that the rest of their car works really bloody well.
Tesla is absolutely not beating the big players of the industry. They have serious quality problems, they have a hard time scaling up manufacturing, and they aren't building affordable cars. ($35,000 MSRP Model 3s - the price of a Mercedes C - is not what most of America thinks of when you say 'affordable'. It's low-end luxury.)
They are successful, in the sense that they sell a premium EV with a long range. How much competition have they had in this market, to date?
If they were building ICE vehicles, premium or otherwise, they'd have been eviscerated by both consumers, and their competitors.
Google and presumably Apple have decided not to build their own cars (most likely electric). Two companies that easily have the resources to do it if they thought it made sense for themselves.
[+] [-] noahmbarr|9 years ago|reply
1) automakers have very little control over their product any more. They rely heavy on Tier 1 suppliers for major component development and production so they ship hodgepodge product
2) they look at a car as a product that is shipped and forgotten. They never have looked at it as a platform for continuous future improvement. This similar to the iPhone vs feature phone analogy-- cars from legacy manufactures are the best they will ever be the day they leave the manufacturing line.
Without changing these fundamental mindsets, they are in deep trouble.
[+] [-] csours|9 years ago|reply
For #1, what would you do? Ship a much simpler product or ship a worse product?
In the current system Tier 1 supplier can concentrate expertise in a single area and spread development costs across many OEMs. A single OEM cannot effectively compete with this cost structure.
Tesla is notable for many things; one of them being its vertical integration. So far Tesla has been able to compete by both building simple cars (excluding the X, which is another story entirely) and charging quite a lot of money. They have also had serious quality issues, probably relating to their vertical integration. These quality issues may be resolved, but by that time either they or their competitors will have developed a new product, and then they will have to go through the development and refinement cycle again, at huge cost.
Regarding #2: the iPhone came out in 2007. Since then, there have been about 7 development cycles. For most automobile platforms there have been 3 or fewer development cycles since 2007. Before the iPhone, there was no real concept of remote update of mobile devices.
Automakers have caught onto the trend and you will see more mainstream OEMs doing remote updates pretty soon.
[+] [-] simonsarris|9 years ago|reply
Until recently every electric car they made and sold would be at the expense of an ICE car they were not selling, while devaluing their ICE expertise and team. I can understand the reluctance, though I don't like the end result.
That is changing as Tesla and others are (hopefully) eating into ICE sales and they have more, um, incentive to get into the electric pipeline.
Aside but the US could help push this along by increasing the gas tax, since the gov hasn't done that since 1993. It would be cheaper than continuing the subsidy, but hopefully help future tech. (And I guess it wouldn't hurt to maybe fund some infrastructure.)
[+] [-] llukas|9 years ago|reply
Thank you but no thank you. I don't want have EULA for a car and one more entity trying to track everything I do and pretending I own the car while actually they do.
Continuous future improvement is wet dream of locking car owner (in your world it should read "car user") into paying more.
[+] [-] alex_hirner|9 years ago|reply
Now it's the labor unions that are pushing german auto makers over the EV cliff. Ironically, they have the greatest incentives to innovate/follow.
It's bothering though, that redundancies will be massive no matter what exactly they do about EVs. Can anyone offer a growth perspective for that sector (=not some kind of UBI vision)? My initial thoughts were space. But this is not really were to retool design prowess and factories either.
[+] [-] mywittyname|9 years ago|reply
Honestly, I think the issue is that auto execs and the general public have very different views of the world.
From an executives perspective, EVs are an over-saturated, incredibly niche market that's nearly impossible to make money on. They already spend a ton of money investing in EVs and the general public doesn't care about their EV offerings and they barely sell.
The general public seem to hold Telsa up on this pedestal of innovation and point to them as an example of how automakers need to be if they don't want to be seen as dinosaurs. But I bet if you talked to Mark Fields, he'd say something along the lines of, "Nobody is going to buy an $80,000 Ford EV."
The general public is clearly not interested in actually buying EVs right now. Heck, they don't even like hybrids. Instead Americans are happily buying pickup trucks and crossovers, then complaining about about a company's lack of innovation.
Ford has the biggest lineup of EVs (with a sedan, van, and compact hatchback offering) and probably the best availability of EVs in the USA, yet they only moved 24,000 EVs this year. Telsa moved about 38,000 Models S & X in the same time period. Total USA EVs sales were a hair over 133,000. This is in a country where pickup trucks easily sell over a half-million units a year and a beige family sedan will move 200,000.
So I don't feel like the large automakers are reluctant to adopt EVs for any other reason besides the fact that the market needs decades of double-digit percent grow in order to support more than two key players.
[+] [-] csours|9 years ago|reply
Either western countries such as Germany, USA and Mexico will develop advanced electronics supply chains, or China will own the EV market.
[+] [-] Havoc|9 years ago|reply
Batteries I'd say. Electronics - I'd imagine the complexity is comparable to a normal care roughly speaking so don't foresee any major power shift based on that from the status quo.
[+] [-] Pfhreak|9 years ago|reply
[+] [-] GFischer|9 years ago|reply
http://www.byd.com/la/auto/e6.html
http://www.byd.com/na/
Edit: seems Buffet made a killing
http://www.forbes.com/sites/russellflannery/2016/08/30/warre...
Second edit: seems that the rest of the world is leading electric car adoption way ahead of the U.S. . Electric cars still represent a tiny fraction of the overall market (1/300th of the world's car sales). Surprisingly, it's China that leads the way.
[+] [-] metaprinter|9 years ago|reply
[+] [-] epistasis|9 years ago|reply
Gas cars can be fun, but if you look at what's actually sold, nearly none of them are fun. Those who love driving will continue to be a small minority, just as they are now.
Edit: I recently had the chance to drive the autobahn, and the most fun car I could get was a BMW 420d. It wasn't nearly as enjoyable as the skiing that it brought me to. So maybe I'm not that big of a driving fan after all.
[+] [-] greglindahl|9 years ago|reply
[+] [-] rconti|9 years ago|reply
I plan to go straight from manual transmissions to electrics; I don't see why I'd ever buy an automatic. I don't see electrics taking away from the fun, at least not necessarily. I've driven lots of fun electric cars. My last purchase wasn't electric-suitable (wanted AWD, range, etc). But my next one will be.
I've always worked in west coast tech hubs, but never "in the city", where all the car-hating hipsters live.
[+] [-] DamnYuppie|9 years ago|reply
That being said I absolutely love the idea of self driving cars for my aging parents!
[+] [-] Anasufovic|9 years ago|reply
[+] [-] nfriedly|9 years ago|reply
I didn't really mind driving until I moved to the Bay area...
[+] [-] bjarneh|9 years ago|reply
Driving a Tesla isn't boring either of course
[+] [-] KirinDave|9 years ago|reply
I imagine they see it as a major opportunity to force better terms on companies developing these solutions for the US market. Which is probably exactly the goal in the first place.
[+] [-] unknown|9 years ago|reply
[deleted]
[+] [-] vkou|9 years ago|reply
The fact that people love to complain about car software is testament to the fact that the rest of their car works really bloody well.
Tesla is absolutely not beating the big players of the industry. They have serious quality problems, they have a hard time scaling up manufacturing, and they aren't building affordable cars. ($35,000 MSRP Model 3s - the price of a Mercedes C - is not what most of America thinks of when you say 'affordable'. It's low-end luxury.)
They are successful, in the sense that they sell a premium EV with a long range. How much competition have they had in this market, to date?
If they were building ICE vehicles, premium or otherwise, they'd have been eviscerated by both consumers, and their competitors.
[+] [-] bahmboo|9 years ago|reply
I'm no Tesla hater but cars are not phones.
[+] [-] kfk|9 years ago|reply
[+] [-] andrewtbham|9 years ago|reply
https://medium.com/@andrewt3000/tesla-has-zero-competition-f...