Featured Post

This is the Kodak Moment for the Auto Industry

Plug-In Drivers Not Missin' the Piston Electric vehicles are here to stay. Their market acceptance is currently small but growing...

Friday, November 19, 2021

Se7en Ways Legacy Automakers Need To Be Like Tesla To Survive in the 21st Century

53v3n W4y5 l364cy 4u70m4k3r5 N33d 70 B3 l1k3 735l4 70 5urv1v3 1n 7h3 2157 C3n7ury

Let's say you are the CEO of a car company (big or small). How can you lead your company to play a pivotal role in the next evolution of personal transportation? How can you take advantage of your existing strengths while developing the prowess and skills that you need in this new age? How do you augment the acumen and managerial skills you already have to become a market leader? How can you help not just your company, but the broader society meet the challenges posed by this massive transition? How do you address issues related to climate, privacy, employment, income equality, and general well-being, among others — while still ensuring success for your enterprise? We'll explore this and more in our list of seven things leaders should think about. 

  1. Become accustomed to disruption - The auto industry has always been competitive, but disruption means that plans that have been years in the work may become irrelevant. Automakers are going to have to become agile. Don't fall into the sunk cost fallacy (I'm looking at you hydrogen). 

  2. Software is eating the world - Automobiles are/will be software-driven, whether it's the anti-lock brakes, motors controllers, battery management system, entertainment, or the user interface, it's software-controlled. And you need a full-time dedicated software development team to add more features, fix bugs, and improve things. Today, software is almost an afterthought for most auto OEMs. It is sadly apparent that the software in most cars is piecemeal and outsourced. This needs to be completely flipped on its head. The components of the car need to exist to serve the software and the user experience. Use software-first design! 

  3. Raise your technological acumen - Software is just one of the technologies that legacy automakers are sorely missing. It's time to grow a battery chemistry team, a battery management team, an energy efficiency HVAC team... Just depending on suppliers for these advancements means you'll have no competitive advantage. P.S. If you haven't partnered with an autonomous drive company already (or started your own), you're behind. 

  4. Innovate rapidly and openly - Traditionally automakers build behind closed doors until the big reveal day. This limits the ability to receive feedback. It leads to years of secretive work on a product that no one is interested in unless you spend millions on marketing to create demand. Instead, see which ideas capture customer/public interest and drive their own buzz. These are the products that will have word-of-mouth marketing. Your budget is better spent on engineering (items 2 and 3) than marketing yesterday's products!

  5. Collect data and learn from it - Your products need to become connected and you need to collect the wealth of data that they generate. How are your products being used, how are they failing, how can they be improved... everything from the most commonly used features and how many user actions (clicks, words, gestures...) are needed to (en/de) activate them. It's time to open an Amazon AWS account. Tap into the telemetry stream!

  6. Adopt innovative capital models - Get creative. Maybe, rather than just starting an internal EV line, spin out an EV start-up. Maintain a controlling interest and supplier sharing contracts, but give them the freedom to operate outside of your overbearing corporate governance. Something like Saturn (but with a better ending). An IPO could help kick start or accelerate the EV effort. You might even end up owning a cool new brand. 

  7. Focus on purpose and people, not product - A mission-driven company is something that people can fall in love with. Don't talk about what you will do, instead talk about what you have done and how this lays the foundation for better days ahead for all. This gets you fans, not just customers. The clean slate that #6 provides might be required to wash off that oily past. Sure you must drive to be a profitable company, but profits should be the secondary effect to fulling the bigger purpose, not the first-order goal.  
The world is not the slow-moving place that it once was. It's adapt or die time. We still take photos, just not with a Kodak camera. We still watch movies, just not from Blockbuster. During this transportation transition, which brands or companies that we know today, that seem indelible, will fall to Death's scythe and fade into the annals of history?

Major transitions are not easy:
How many typewriter companies are now making laptops? 
How many flip phone companies are now making smartphones? 
How many movie rental stores launched successful streaming services?
How many legacy automakers will master EVs, software, connected cars, and AI?
How many legacy automakers will exist in 2040? 

Monday, November 1, 2021

15 Years Electric

We started our journey to move to a renewably-powered life 15 years ago. We've made great strides and still have more to go. Here's our journey so far.

Part I: The Wake Up Call - You Will Be Held To Account

2007 was my "wake up" year. This was the year that our then-toddler started talking. It dawned on me that one day I'd be asked what I did to prevent the climate calamity that would likely be the harsh reality of their young adult life. Sadly, with the heat waves and wildfires of 2021, which have become an annual event, this prediction has apparently come to be, but let's get back to 2007.

Considering the political leaders that we had in the White House in 2007, it was clear that no political solution was forthcoming. I had to do something. So, what did that leave me with? I would have to do what I could within my own nexus of control*. 

Part II: Tailpipe-Ectomy 

The first step was to get an EV. This was not easy to do in 2007. I was lucky and found an electric truck (yes, there were electric trucks before Rivian R1T and the Tesla Cybertruck). 

This was not a conversion. It was a factory-made EV from General Motors; a rare find at that time. This truck was one of just 492 built in 1997 and 1998. Like its cousin, the GM EV1 from the same era, most of these trucks were taken from their owners (lessees) and crushed. Luckily a few of the trucks (about 60) were saved from the crusher because some fleet managers insisted on buying the vehicle instead of leasing them. Mine was one of these lucky few survivors.

This little electric truck only had about 40 miles of range at this stage of its life with 18-year-old batteries, but this was perfect for commuting and errands. I was amazed at how much of my driving fit within this limited range. And we still had our Prius for longer drives.

Plugging in to "fuel up," caused me to start looking upstream.

Part III: Driving on Sunshine 

Now that my daily commute was fueled electrically, I suddenly became much more concerned with how that energy was generated. Perhaps I should have been concerned before this point since we use electricity for so much in our daily life, but, for me, when the energy use was directly attached to how heavy my right foot was feeling that day, this peaked my awareness. So it was time to get renewable electricity.

My local utility has a "green source" option where you pay a little more and you get electricity from the wind farm. If you use this, you are helping the utility fund future green projects, but it was not direct enough for me. Programs like this don't change the grid mix that comes to your house. Apparently, that mattered to me; so we started shopping for solar.

In 2007, solar was significantly more expensive than it is today, and the few incentives that were available back then were capped at a low level. So solar was expensive but worth it.
Solar Panel Installation

We found a local company called Mr. Sun Solar and discussed options. At that time most solar panels were in the 165 to 185 Watt range. There was a new 200 Watt panel but it was back-ordered. We wanted a 4kW system, so twenty of these new panels meant that we'd use less roof space, leaving more room for future expansion, so we waited. Eventually, the panels arrived and before 2007 ended, we were generating enough solar energy to drive our little EV about 16,000 miles per year (we drive far less than that (then and now)). The solar panels were ensuring that our driving and even part of our home energy use was now powered by the sun. 

Part IV: A New LEAF 

In 2011, something exciting happened, an affordable family car electric vehicle came to market. This was the Nissan Leaf! 

Proud owner of a new Nissan Leaf

The Leaf was undoubtedly a breakthrough product at this time. It had twice the range of my EV truck. This was great. I pre-ordered it and received one of the first 2000 delivered to the US. It was a lot of fun the first few years, but ultimately, IMHO it turned out to have an inadequate battery thermal management system that resulted in battery degradation.

Part V: SolarCity 

In 2015 we added more solar onto our rooftop. We added 8kW; this tripled the size of our system. The cost difference for solar from 2007 to 2015 was astounding. Our new system was under a power purchase agreement. This meant that we paid zero out-of-pocket for the system, rather we'd buy the electricity that it generates for about 10% less than we were paying our local utility (and this price was guaranteed not to increase). In addition to zero out-of-pocket, we also qualified for the $6,000 state solar incentive. This means that we were getting paid to buy renewable electricity at a cheaper price! How could we say 'no'?

Part VI: Tesla Time

In 2016 our Prius was totaled. Our first choice to replace it was the Mitsubishi Outlander Plug-in Hybrid. Unfortunately, (or fortunately, as it turned out) this vehicle was not available in the US at that time. The Leaf experience made it clear that a pure electric vehicle was a viable option. However, we needed longer range and a better charging network. Tesla offered both of these.

We traded in our final gasoline-powered vehicle, a Honda Passport, and purchased a Tesla Model X. The X was a blast. It had all the fun of electric plus with the long-range and fast charging network, we could take it on road trips

Our Leaf's range continued to degrade. By this time, its usable range was nearly the same as the old Chevy S10 EV when we sold it. It had to be charged multiple times during the day to fulfill our needs. This meant if we had a mid-day emergency, it might not be up to the task. It was time to upgrade, so in 2018, we traded in the Leaf for a Tesla Model 3 long range. We were now a 100% Tesla household.

Proud Model 3 Owner


Part VII: Charged Up (Home Battery)

The next step in our journey happened on the last day of 2020. We had 3 Tesla Powerwalls installed. This allows us to better utilize our solar when it best helps the grid and reduces our electricity bill. Oh yeah, and it provides us with backup power.

Part IIX: Positive Feedback

One of the fun things that's happened is how well our various steps have all reinforced each other. The solar panels produce more than enough to power the cars. The EVs typically charge overnight, this is off-peak electricity rate time. The solar panels produce during peak rate time. This allowed us to shift to a Time-of-Use electricity rate schedule with our local utility. Instead of paying 10 cents per kWh any time during the day, we pay 4 cents at off-peak and 14 cents at peak. Since the EVs are a big part of our load, paying only 4 cents per kWh is a big saving. A kWh typically gets us about 4 miles of range, so we're paying about 1 cent per mile. You could pay ten times that much for fuel in a gas car. 

The only drawback is that part of the day we could be paying 14 cents per kWh. That's where the batteries kick in. During peak hours, we're not using the grid. Each morning from Sun up, the batteries charge from the solar. Then at 3 PM, when peak time starts, we drain the batteries. So we're not using the grid when it costs the most. Then when 8PM arrives, the prices drop and we go back to normal operation. Typically, the batteries still have a 40% charge after this, so we still have a reserve in case of a power outage. 

Part IX: The Numbers

Over these 15 years, we have gone from a hybrid and an ICE to two long-range EVs.  We've driven about 200,000 sun-powered electric miles. In the US, the typical vehicle is driven about 13,500 miles each year. The average fuel economy is 24.9 MPG. Putting these two together, the average household buys 480 gallons of gasoline each year (per vehicle). AAA says the current national gas price is $3.22. That means, on average, people are paying $1,500 per year (per vehicle) in fuel. 

Using the same 13,500 annual miles, in an EV charged off-peak (meaning 1 cent per mile) works out to just $135. Would you rather pay $1,500 per year or $135?

We have generated over 100,000 kWh of electricity from our roof. This is enough to drive a Model 3 around the planet 14 times. At 10 cents per kWh, that's $10,000 worth of electricity. 

The future will judge us; Mother Nature (and future generations) will hold us accountable. 

* Notes on personal responsibility 
There's an attempt to blame shift from the big polluters to individuals. Yes, we all have a role to play, but that does not mean they are off the hook for decades of polluting and deception.