Post #48: The next decade in autos…

will be all about falling battery costs, increased software content and an acceleration in the pace of innovation. This, at least, is according to Tesla.

Post #48: The next decade in autos…

… will be all about falling battery costs, increased software content and an acceleration in the pace of innovation. This, at least, is according to Tesla. Either love or hate the business and its cars, there is no doubting that theirs is a perspective worth listening to when considering how the car of the future may evolve. We were lucky enough to attend a standing-room only presentation from a senior Tesla executive earlier this week in London. Beyond his high-level observation transcribed almost verbatim above, we also learned the following:

1:Electric vehicles are “too expensive.” This was Tesla’s explanation for why such vehicles (EVs) have only enjoyed success of note in countries where governments have provided subsidies to users as an incentive to switch. A fascinating chart presented by Tesla highlighted that a typical EV – regardless of manufacturer – would retail at around $20,000 more than a comparable gas-powered option. However, per Tesla, price reductions alone won’t “cut it” with consumers. In other words, EVs have to offer something more, in terms of, say, improved efficiency (such as miles per kilowatt hour of battery consumption).

2: Competition is good, Tesla believes, within the EV space. More players offering a broader range of electric vehicles will help “validate” the market. Given that EV’s account for less than 2% of the global vehicle market at present, there can clearly be more than one winner. The main challenge is to provide consumers with reasons to switch away from gas-powered equivalents.

3: Increased vehicle autonomy will happen; just not any time soon. Tesla was keen to emphasise that much of the hardware and software required to provide (its) cars with more autonomous functionality was already pre-installed. However, it could only be enabled as and when regulators permit. Put another way, “you can’t model morality.” Until this conundrum is resolved, autonomy should be thought of as a more restricted concept. Nonetheless, Tesla was keen to emphasise that accelerating innovation should mean that the ability for technology to solve a greater number of (regulators’) concerns was evolving in a positive direction. 

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