It is hard to underplay the importance of cars in our lives. If freedom is mobility, then cars are The Symbol, with a capital T, of freedom. With motor vehicles, we can just get in and go. What would life be without cars?
Imagine you are the inventor of the first car. With glowing eyes and a well-crafted deck, you enter a conference room. Future investors are eager to hear about how you will transform society and grab every available seat. It’s standing room only. You pitch the benefits of the car, how it will provide people with the ability to go anywhere, anytime. People are ready to throw money at you and your transformative invention.
There will be (you feel obliged to mention) a few side effects to consider: the average commuter will spend 19 full days a year sitting down and holding the steering wheel of your invention, due to road congestion; the roads rolling under your future car will capture 60% of precious urban space in any large city; 3,000 people will die every day from vehicle crashes; and, the environmental impact of the cars will be alarming as the emissions contribute to a rise in air pollution.
Undoubtedly this last slide in your deck will take the wind out of the sails for your investors. Chairs will start creaking against the wooden floor, as they move uneasily in their seats. Maybe it's best if you rethink your invention.
And yet we love our cars. Attempts made to redefine what a car is, how it is manufactured, bought, serviced, driven and disposed of, have failed in most cases.
This highly utilized, prevalent, devastating, inspiring, murderous, exhilarating, and costly machine, probably the most popular product of our lives, is a stubborn concept in the face of innovation. Making any changes to its DNA is as hard as, well, redesigning DNA.
And yes, we have seen Elon Musk’s Cyber Truck before. We’ve been shown previously what an alternative version of a car could be.
It's a story about a car entrepreneur who went all-in to redefine the auto industry. Many would claim he went a few steps beyond all-in.
John Delorian and his iconic DMC, featured in Back To The Future, was supposed to be "the future". The vision of the DMC-12 was to build an "ethical car." It was meant to be a car that was safe, long-lasting, and sustainable. It was designed to last forever with its stainless steel body. Slick in style, it brought a supercar look at an average price tag. Sounds familiar?
This car was supposed to redefine what a car is. But then it didn't. Producing any machine with moving parts is a complicated task. Manufacturing a machine with moving parts, that’s also moving around the world, takes that complexity to the tenth degree.
Delorean's cars rolled off production, later than planned. Quality problems were abundant. In most likelihood, and like many other new products, with more iterations, the issues could have been resolved. But Delorean didn't have time. He ran out of funding (partly because of a political change in the UK), got involved in a few shady activities, and was out of business. Delorean's story is so over the top that it deserves a Hollywood production. In fact, such a production exists, starring Alec Baldwin.
As Delorean and his dream innovative car sank, you could hear a sigh of relief across the auto manufacturing industry. Because if you consider the innovations in vehicles that relate to any of the problems cars create, you will realize there is very little innovation in cars.
Car companies can make money in three ways: Off the back of vehicle sales, selling parts and accessories, and by financing car sales. The two latter services have the most significant opportunity for creating profits.
To this end, the electric and autonomous cars Musk suggests, or the “ethical car” Delorean conceived, are a revolutionary threat. Musk offers a much more advanced solution then Delorean’s dreams, but there are similarities. Musk's vision offers a once-in-a-century opportunity to hold both ends of the stick. To have mobility and not have pollution. To read while driving and not crashing the car. To get anywhere, with fewer congested roads:
With all of these potential benefits, the type of new thinking the Cyber Truck represents should make more sense.
There were a lot of snarky remarks on social networks about Musk, his presentation, the windows that broke. None of that matters. What Musk is offering is the blueprint of a sustainable, reasonable car that will be bought once in a lifetime. It's a second attempt at Delorian's "ethical car." But there’s still a risk of failure.
We’re already seeing a dip in car sales in the US. When the only innovation offered is new Bluetooth connectivity, and when last year's car drives were just fine, why switch?
The changes that the autonomous car stands to create shake the foundations of the business model of car manufacturing. And here is the catch:
The existing model is not sustainable, and the model that is needed to support fewer car sales, with fewer parts and a lower need for financing, has yet to be proven
Given the opportunity, Delorean could have removed the bugs from his vehicle. The same goes for any bugs in the Cyber Truck. These mechanical failures are not the problem or the risk. The bigger risk is at building an ethical car with a sustainable business model. What is needed is not just a redesign of the vehicle, but a redesign of the business model of car ownership.
Electric cars and autonomous capabilities force the automotive industry to recalculate its course. These are simpler cars that have the potential to last much longer. Once consumers buy into the idea that while they are not using their newly purchased car, it could drive autonomously around town and Uber other none-vehicle-owners around, sales numbers will drop down even further. We can see such early indicators with services like Toro. Fewer cars, lower price tags, less moving parts, and built-to-last design, are all chipping away at today's auto industry business model.
Potential alternative business models are floating around, such as selling cars as a service or ride-sharing. One would never really own a car; instead, we will pay for using it, similar to paying a monthly fee for using the storage on Google Drive. These models have been proven to work for some digital product use cases. Will they work for the icon of hardware?
The Silver Lining In This Story Is That A Solution Must Be Found For "Ethical Cars", Because There Is No Other Choice
Current cars have a business model that works, but that business model is killing us. Vehicles in their current format are not sustainable.
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Alternative solutions that solve for sustainability don't yet have a viable business model. The shift to autonomous and electric will happen. We will need to design cars that last longer and for sharing. The question I will leave with the reader to answer is this: What is the business model that will enable all of these innovations?
I am a serial entrepreneur with expertise driving innovation in both the startup and corporate worlds with an emphasis on IoT. Over the last 20 years, I’ve founded and