July 14, 2015

SUPPLY MEETS DEMAND:

The Electric Car (Geoff Ralston, 7/13/15)

The electric car is going to take over the world.  Soon.  Let me explain.

75% of US consumers and over 85% of US millennials own smartphones.  Perhaps more amazing is that 1/4 of people in the world use a smartphone today.  Ten years ago a prediction that this would be the future would have been met with scorn or laughter. In fact, in 2005 few if any of the futurists would have even been able to imagine the kind of device most of us now depend upon.  Naturally, the release of the iPhone in 2007 changed everything, but it is likely that the smartphone era was inevitable. Steve Jobs just ushered it in a few years early.

In June of 2012 Tesla released the Model S and the results will be equally transformative.   Current predictions of the future of electric cars are as wrong as any predictions about the future of mobile phones made in 2005.  It is likely that electric car penetration, at least in the US, will take off at an exponential rate over the next 5-10 years rendering laughable the paltry predictions of future electric car sales being made today [1].  

These predictions are so wrong because they misunderstand the pertinent forcing function. Their assumption is that electric car sales will slowly increase as the technology gets marginally better, and as more and more customers choose to forsake a better product (the gasoline car) for a worse, yet  "greener" version. This view of the future is, simply, wrong. The reason electric cars will take over our roads is because consumers will DEMAND them.  Electric cars will be better than any alternative, including the loud, inconvenient, gas-powered jalopy. The iPhone demonstrated that smartphones are infinitely better than the feature phones which dominated the world in 2007. The Tesla Model S has demonstrated that a well made, well designed electric car is far superior to anything else on the road. This has changed everything.  

Posted by at July 14, 2015 5:47 PM
  

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