Every automaker is building an electric car right now. So who’s going to build the world’s most popular?
It won’t necessarily be the automaker with the best battery, or the first model on the road, says Anil K. Gupta and Haiyan Wang at Spiegel Online.
They say pundits are making two mistakes when talking about who wins the electric car race.
The first: Just because you make a killer battery doesn’t mean you’ll make a killer car. Right now there’s a heavy emphasis on battery technology. Chinese company BYD is a great battery company, so many people think it will be a great car company. Not so says Gupta and Wang:
BYD’s ambitions to beat Toyota and become the world’s largest car company by 2025 appear to rest on the core premise that leadership in battery technology will automatically or easily translate into leadership in the car business. If so, this is a very precarious assumption. In fact, we deem it all too likely that Warren Buffett, who has made a big investment in BYD, may actually be betting on BYD’s future as a leading battery supplier than as a leading car company.
…Simply put, a car is much more than just an engine or a stack of batteries. Winning or losing in the car business depends on many factors: performance, safety, reliability, comfort, styling, dealership network, service quality, and price, to name just a few. Yes, engine (or battery) technology is important, but it’s just one of many factors.
The second: First mover advantage is meaningless. There’s a rush from car makers like BYD to be the first to put out an electric car. That will help in the short term, but in the long run, car makers can catch up.
The rosiest of projections has 20% of cars being electric in 2020. In the next 10 years, automakers can refine their electric offers to suit customer needs. Further, componet costs will be high for the next few years, and charging stations will be scarce.
While componet prices sink, and charging becomes more accepted, a great manufacturer can build a car that will topple whoever comes out of the gate with the first popular electric car.
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