A car for everyone
Model T is no doubt revolutionary from 1908 as Henry Ford said: “it will be so low in price that no man making a good salary will be unable to own one”. Since that, engines released houses to carry civilization forward. Later Mini was born from a crisis & soaring oil price in 1957. Sir Leonard Lord & his team reinvent a car, Mini built for everyone & raised to be a cultural phenomenon with a lot of fun. As Tesla Model 3 opened the era of the EV mass adoption. What are the innovations needed to bring Electric Vehicles (EVs) to everyone, and maybe also make EVs a bit more fun too?
In 2022, instead of introducing a $25K EV, Tesla has many better things to do. Which opens a window of opportunity for others to democratize EV. So that, motors may release engines to carry civilization forward in a cleaner way. Even though how is too early to tell, I’m pretty sure a few disruptive innovations will be needed in the course.
An EV for everyone
GM CEO, Mary Barra has the vision to win the EV long game. On Jun. 1, 2022, GM announces an 18% price cut on Chevrolet Bolt EV, starting from $27K. +1 GM for a good & early start indeed. One more thing is sure, Nissan must be very busy to cut something out of $28K as the 2023 Leaf seems pricy now. At the same time, Ford CEO, Jim Farley also reckons about the upcoming EV price war. Even the Ford EV for everyone is to be designed, Farley’s insight on 100% online & direct sales makes sense. What a good chance to build a better brand by taking the direct ownership of the long-term customer relationship.
But, there could be another way, a bottom-up style. Emerging from the east, Wuling Hong Guang Mini EV(50 Mini EV) has been outselling Tesla in China. It only costs $5K, less than Bolt’s $6K price cut. 50 Mini EV is actually more like “MINI” than 2023 MINI Electric.
Sure, mini EV may not be very appealing to the US drivers because of the car-size arms race. If you ever drive a car beside a SUV or pick up, you can feel the insecurity. And in the US, Crossover + Pickup accounts 64% market share, not only much bigger than 18% on Small-Midsize cars in 2021. But also, the gap is growing. Maybe not even for the majority of current drivers. However, disruptors may make EVs more affordable for more drivers by taking a few inspirations from them.
New mobility for new worlds
Mini EV will be a critical piece to accelerating EV adoption, especially in the fast-growing economies, such as India, Vietnam, etc. With 2B cars on the road in 2040, the world will be better off with more EVs. While Low-profit margin is a big deal-breaker for the existing car makers for sure. There may be craze ideas & business opportunities for disruptors, e.g.
- Battery swapping may make energy subscriptions or usage plans a good recurring business. Even Tesla learned battery swapping was not for its customers in 2014, but it’s big in China. Gogoro has made it works for scooters in Taiwan. Without the battery cost, EVs can be cheaper to acquire. After all, drivers need electricity, not the battery. Psst Ford, there may be a long game to play with Mustang Mach-E starting from $27K = 45K — 18K (the battery cost).
- With the build-to-order becoming more appealing, why not add fun to make more modules & choices for drivers to build their own minis? The “Dell for EV” may be fun. BTW, the accessory & upgrade module businesses may be lucrative & a longer game.
- Americans really like to drive through everything. So what if all EVs have the 5G data connection, and can be moving hotspots. An EV can be moving key & wallet to many thing. What kind of drive-through experience can be enabled?
So new carmakers, what are you waiting for?
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert.