Electric vehicle industry busy innovating, will traditional automakers do the same to compete against upstarts?
Last month I wrote about a simple model to help explain energy transitions. Central to my thinking about energy technology diffusion is competition between emerging and dominant technologies, as illustrated by our Friday news story about Shell’s high mileage, high efficiency internal combustion concept car.
The graphic at right goes a long way to explaining how new technologies – including energy technologies – spread through economies. There are many, many variables that influence the pace at which they’re adopted, including price, value, public policy, culture, and general economic conditions.
But all technologies go through some version of the process illustrated by that graphic – slowly gaining a toehold in the market because they offer some rudimentary value to Innovators (who love their gadgets), then accelerating as the technology gets better and better and offers more and more value.
The current fossil fuels versus clean energy debate is really all about pace. Can the diffusion process be goosed by governments and happen in 10 or 15 years (as eco-activists would have us believe) or will the process take the 50 to 75 years that is usual for new tech? Or 100 years given the size and complexity of global energy systems and related technologies?
The answer to that question partly depends on how much of a fight is put up by the old tech. In this case, internal combustion engines and traditional automakers and their allies, the oil industry.
From the American Energy News story: Shell says “it could take decades before EVs help arrest a rise in exhaust emissions, and that its concept car – which it has no intention of mass producing – demonstrates what can be done now.”
Shell has no intention of manufacturing the car, if for no other reason than the company is not in that business. Rather, the concept vehicle is a “a thought-leadership paper on wheels,” according to Shell manager Bob Mainwaring.
“This project aims to see just how good we can be with something manufactured today,” said Andrew Hepher, vice president of lubricant technology at Shell.
Why is this important? Because EV manufacturers are busy innovating with the idea of electrified transport, coming up with local and regional designs that solve real world problems.
Like traffic congestion in modern mega-cities. This is the driving force behind the Solo, a single occupant, three-wheeled EV designed by Electra Meccanica of Vancouver that will go into commercial production in a month or two. The British Columbia lower mainland has some of the worst traffic in North America. Electra Meccanica is betting that a commuter EV able to drive in the HOV lane and more quickly get busy professionals to and from downtown office towers in comfort and style will be a big hit.
But the Solo isn’t cheap at $19,999. Consumers can buy a lower end family car from a reputable automaker like Toyota for less than that price.
Which is why the Shell researchers have seized upon one of the principal advantages of the internal combustion engine vehicle: They are much less expensive to manufacture than electric vehicles.
Shell’s concept car represents a response to the innovation going on in the EV world. Elon Musk and his Tesla Model 3, with it’s 300,000 pre-orders, may get all the headlines, but the battle for the highways and byways of the world will likely be fought in Asian markets against EVs like the Solo by ICE cars like Shell’s.
That’s why Shell’s concept car is significant. Not because it will ever be built, but because it indicates the fossil fuel-oriented industry is already innovating to compete with the electrified interloper.
If this early indicator turns into a trend within the auto industry, then expect EVs – and other alternate fuels technology, such as the hydrogen fuel cells favored by Toyota – to take longer to penetrate the market.
At the very least, longer than clean energy slash EV boosters are predicting. Because in the real world, where markets and consumers matter, technologies have to compete and the status quo doesn’t always give in easily.