From Automobile Magazine:
Bill Reinert, Toyota’s in-house energy guru and resident contrarian, looks like he’s just taken a whiff of a long-expired container of milk.
Reinert is serving on a future-of-the-car panel at a high-powered green-think conference sponsored by Fortune magazine and featuring heavyweights such as President Bill Clinton and Bill Ford. Although the symposium is being held in a button-down bastion of Orange County, the ambience is totally Silicon Valley, all iPhones and Aeron chairs, with lots of clever but undercapitalized tech entrepreneurs sniffing around for angel investors. At the moment, Shai Agassi, the charismatic founder of Better Place, is making a dynamic pitch for creating vast networks of battery-charging stations to support electric vehicles that will, he claims, be cheaper than the equivalent gasoline-powered cars. While executives from Ford, BMW, and Fisker Automotive listen with polite smiles, Reinert squirms in his seat, crosses and recrosses his legs, and generally behaves like a schoolkid who can’t wait for the bell to ring so he can escape for recess.
When it’s his turn to speak, Reinert bites his tongue. He mildly questions the viability of Agassi’s wildly improbable plan to create battery-swapping stations for the coming wave of EVs. He lobs a few gentle barbs in the direction of the ethanol lobby, which he privately regards with unalloyed scorn. He outlines his genuinely radical vision of a future where publicly owned and shared cars are used to complete urban mass-transit systems. But by and large, he’s on his best behavior, showing the benevolent public face of the world’s greenest car company. Until the mics are turned off.
“That’s the first law of Disney at work–wishing will make it so,” he mutters shortly after bolting out of the conference room and yanking off his tie. “Using ethanol for fuel is like electing the dumbest kid in school as class president. As for plug-in electrics, they’re just not plausible right now. Lithium-ion batteries are too expensive by at least an order of magnitude. They’re not energy-dense enough. And we generate a lot of our electricity from coal. I don’t think Shai is being disingenuous. I think he really believes what he’s saying. I see it all the time from those Palo Alto types. They think the whole world is like a computer company, and they’re always trying to recreate the dot-com economy. You see exactly the same mind-set with Tesla. It’s all going to work out. It worked out with eBay. It worked out with SAP. But transportation is a different world. I mean, Shai’s bragging about driving an electric RAV4 with a seventy-mile range. How many of your friends are going to buy that car?”
Full Article
Filed under: Automotive , Automotive, Cars, Consumer, Energy, Future, Gasoline, Innovation, Technology
November 25, 2008 • 4:07 am
Joe White at the Wall Street Journal reports on the fact that Americans drove less and starting switching into more fuel efficient vehicles as gas prices rose to close to $4 a gallon over the summer.
The article covers several points, two of which we want to address here: The similarity to the oil crisis of the late 1970’s and the short term versus long term choice consumers make.
In the late 70’s when oil prices rose, interest in electric vehicles, solar panels and windmills rose dramatically, as the crisis was mitigated by conservation and new discoveries interest faded fast and consumers bought what they always had – big performance based vehicles. The same will probably happen now, unless there is a restructuring of the financial underpinnings of the major automakers, that allows them to significantly retool their factories and realign worker skill and get ready for the alternative fuel economy that is hopefully coming.
And on the short-term vs long-term issue: Two weeks ago, when a client of ours pointed out that gasoline was now less than $2 in their area at most stations and that no one cared for the hybrids all of a sudden, we knew that we would soon see what we saw in the 70’s: A quick reversal back to larger more powerful vehicles. We also spoke to a young family that had just bought a small sedan. They looked at all the hybrids for ideological reasons, but argued that they hoped to buy a new car within 5 years, so the additional cost of a hybrid could not be recouped at $2 or $3 a gallon.
Consumers memory is terribly short and the future is almost always anticipated to be brighter. The economy is still in the tanker, but at least gasoline is cheap (and probably will be for a while is the reasoning). We’ll see how it all shakes out, tomorrow and the next day millions of American’s will get back on the road and enjoy “normal” gas prices again.
Filed under: Automotive, Market Research, Marketing , Cars, Consumers, Driving, Gasoline, Research
September 29, 2008 • 3:49 am
A couple of years ago (actually four) we visited with a potential automotive client, and during our conversations argued that they needed to speed up their small car programs and get to market faster. Normally the product development cycle is at least six years, but in this case the client had vehicles around the world that would fit the North American market well with minor tweaks easily accomplished over a 12-24 month period. The client did not take our advice as seriously as we wanted (they did not hire us at the time).
I met with them again last week, to talk about something else – namely: “How do you help consumers imagine a future that is vastly different than today?” During that meeting the most senior person on their team brought up the meeting four years earlier and said: “I remember four years ago you pointed out that we should focus more on small cars – how did you have that foresight?” It is always nice when clients (and potential clients) commend you for past predictions that have played out as you said they would.
So after saying “thank you!” I explained that the reason small cars made sense then (and now) is that, as American’s go from having 2.1 vehicles per household to closer to three, that third vehicle will be a smaller commuter, grocery, soccer practice (if you do not carpool), and/or dinner date kind of car. It is not only because of gasoline prices that small cars make sense. There is actually great utility in them when you have already covered your other needs with the two other cars in your garage.
Gasoline prices will continue to fluctuate, and probably upward more than downward, and so the small vehicles in the carpool will be used more, and the big cars are still needed… but they just will be driven a little less. Overall mileage will continue to increase. American driving habits over the long run will not change – we still need to get around.
Filed under: Automotive, Information, Market Research , Cars, Clients, Gasoline, Research
