August 12, 2009

The electric car industry mimics the internet era

Back in the mid 90s, I attended the first Internet World trade show at the LA convention center. I’d been working in high-tech for many years then, and I didn’t know what to expect. I remember the feel of the show was unlike the typical high-tech trade shows of the time (remember the loud music, and the dancers and the clowns at COMDEX?). This show had a quiet atmosphere. The show floor was dotted with small booths attended by youngish lads and very techie IT types. These people were super excited by the internet and its possibilities: graphics, photos, and large files moving around and residing on servers accessible by all. Streaming videos, advertising, and mass online retail were unthinkable at the time. This is back in the dial-up days. The infrastructure for internet as we know it was non-existent, and major high-tech companies were merely watching the market.

Two to three years later at the same show, none other than Microsoft, IBM, AT&T, MCI, Adobe, and a slew of other blue-chip companies edged out those geeky looking guys with their huge booths and displays of the next best pipelines and content “delivered to your home!”

Last night I was invited by an ex-colleague to attend the plug-in trade show in Long Beach. Again, I had no idea what to expect. And as I walked into the show floor, I experienced a major flashback to my first Internet trade show. Same quietness and sparse look to the show floor, same techie feel, same enthusiastic crowd.

True, there have been problems with batteries in the past, but major advances have been made over the last few years with lighter and much more efficient batteries developed by the likes of NEC and Nissan. True the infrastructure for mass scale “refueling” of electric cars is somewhat non-existent, but several manufacturers of refueling stations have already made installations in parking lots around town. And of course those solar panels will come in handy.

And the cars no longer look toyish, and are becoming increasingly affordable. They display respectable performance and acceleration, and in the words of one of the panel speakers, are “sexy” and “cool!”

Most importantly, the government’s stimulus money is fueling this sector. The cash for clunkers program has already generated 250,000 fuel efficient vehicle sales, and the administration has set aside billions of dollars in various forms of stimulus to increase investments in this sector (through matched investments for R&D, tax rebates for buyers, etc).

And the industry players are starting to play. Yesterday GM announced that Chevrolet Volt will get 230MPG rating from the EPA, and not to be outdone, Nissan responded that the same calculation will yield 367MPG for its Leaf car. The industry expects 12-18 additional model introductions soon. And there are myriads of solutions to convert hybrid gas/electric cars to pure electric cars with much better mileage.

Whether or not the traditional MPG numbers make sense for electric cars is another story. The real story is this: the electric car is here and it’s getting serious traction. Is the technology perfect? No. Are all the players here to stay? No. Is the infrastructure ready now? No. But the real players haven’t fully started playing yet, and the unknown players of the future are being formed. Once they do, the pieces of the puzzle will naturally fall into place.

I have a hunch this will happen sooner than later. In 5 years, will we wonder why we even questioned the validity of this market? I believe the bell shape of market adoption for electric cars is beginning to experience the up movement of its left side. Though the rest of us may view this as a mere experiment, the early adopters are feeling the move. And it feels real.

In a few years, I envision the trade show attended by BMW, Toyota, Ford, and other major auto industry players joining forces with utility companies, solar panel players, and unknowns of the future edging out those nerdy guys with their massive displays for electric infrastructure and sexy electric cars “delivered to your home!”

1 comment:

  1. Kat,

    You present an insightful observation of what the future may hold for electric vehicles; however, my opinion is that the oil companies would put up a big fight – they have a powerful lobby in Washington. Tearing down and rebuilding infrastructure in the cyberspace is much easier than tearing down and rebuilding the oil legacy infrastructure that the oil companies have invest in in discovering, pumping, shipping and transporting, purifying, and distributing… of oil.

    I see the electric car evolution more like when electricity was first discovered in the late 1900s. There is going to be a push-pull phenomenon taking place over a long time – may be a couple of decades – before the electric car becomes common. There is one more caveat that America should be very mindful of and that is that the emerging countries may adapt much easier to this revolution as they are not as invested as America. As a consequence, they may become the innovative leaders in the field.

    Let’s observe and see what happens.