Category

Autonomous, Connected, Electric, Shared Vehicles

Jan 04
Last Judgment (Hieronymus Bosch C. 1482)

The Electric Car Isn’t Disruptive Innovation

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Innovation One Comment

Disruptive Innovation

In his 1997 book The Innovator’s Dilemma about how new technologies cause seemingly well-managed companies to fail, author Clayton Christiansen coined a soon-to-become a ubiquitous term: “disruptive innovation.” This catchphrase seems to have gotten a new life over recent years. I frequently participate in client strategy sessions and attend conference presentations where the speaker does not miss an opportunity to frame a new product or service idea as “disruptive.”

Now, disruptive innovation does not mean “cool” or “better than the competition”; it does not even necessity mean “new.” The term, as Christiansen uses it, means a technology that challenges the business status quo by enabling a new and different product or business model that disrupts and shatters the hegemony of market leaders. Read More

Dec 27

Driver Health Monitoring

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Internet of Things (IoT) One Comment

Connected Cars and Driver Health Monitoring

I was working with a client on an Internet of Things (IoT) strategy specific to the connected cars industry. Everybody is on the quest for the next IoT’s “killer app”, hoping to get a piece of a pie that is estimated by some to exceed $40B in less than 5 years.

Among the many possibilities enabled by sensor-rich connected cars is using sensors embedded in the steering wheel and the driver’s seat to detect if the driver is about to have a heart attack or suffer another debilitating medical condition. Below is an excerpt from an article in Auto Connected Car News: Read More

Nov 12

Tesla’s Growing Pains

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Manufacturing One Comment

Tesla, the innovative company that continues to challenge the norms and practices of the traditional automotive industry is finding itself struggling with less glamorous issues that mainstream automakers have tackled and, to a great extent, perfected over more than a century: volume manufacturing.

Building a Supply Chain

According to a recent Bloomberg report, Tesla plans to increase sales by more than 50 percent this year to 35,000 units and accelerate annual production capacity to 100,000 units by the end of next year.

Back in August, during an earnings call, Tesla’s CEO Elon Musk discussed difficulties his company was having meeting market demand. Musk said suppliers are partly to blame because they are unable to fill Tesla’s orders: “some suppliers thought we wouldn’t be around, so they didn’t tool up for the production we actually experienced.”

Meeting Global Market Needs

While U.S. sales are responsible for about half of Tesla’s sales, its global business is healthy and growing, with strong sales in Norway (thanks to strong government incentives), followed by China. Japan, with the highest adoption of electric vehicles (EVs) and plug-in electric vehicles (PEVs), should also be a strong market for Tesla, although the company opened its sales operations in Tokyo’s swanky Aoyama district only in September.

Tesla’s challenge isn’t mere production capacity. Tesla’s factory in Fremont, California, which was previously a joint venture between General Motors and Toyota, has a capacity of over half a million units per year.

Sustained success in global auto markets requires major design changes such as right-hand driving for countries like Japan, or expanding the back seat legroom for cars sold in China where target customers employ chauffeurs. Furthermore, different markets have different preferences of options, trims and accessories.  Accommodating regional differences adds significant complexity to manufacturing lines and supply chains, and, if not managed diligently, may also result in larger inventories and excessive quality spills and warranty expenses.

Tesla’s Growing Pains

Transitioning from small production series based on preorders with very long lead time to volume manufacturing is going to challenge Tesla’s manufacturing and logistics operations.

Tesla’s current manufacturing model will not be able to scale to meet global demand, especially in Europe. Currently, cars are built and tested in Fremont, California, then are partially disassembled and shipped to Tilburg, in the Netherlands, where the cars are reassembled and shipped to their final destination.

Tesla will have to be more accurate in forecasting market demand, and work with key suppliers to build a resilient and lean global supplier network. But given the still small market for Tesla cars this may prove harder and more expensive than Musk would have liked.

As the market for EVs mature and grows so will the demand for greater variety of styles and sizes. Here, Tesla has the right platform strategy in place: Model X crossover, a utility van and cabriolet are expected to be based on the second generation platform shared with the Model S. The partnership with Toyota, another company with a solid platform design strategy and strong reuse culture, will also help.

 

Jan 28

Tesla: to Recall or Not to Recall?

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Service Lifecycle Management (SLM) No Comments

NHTSA issues a recall for Tesla Model S. Elon Musk: “the word ‘recall’ needs to be recalled.”

The back and forth between Elon Musk and NHTSA about Tesla Model S fire incidents and other safety related issues continues. Musk maintains that the recent software update to change the Tesla Model S ground clearance in order to reduce the likelihood of debris damage, of the type that might have led to battery damage and fire, is not a “recall.” Tesla initiated the software update voluntarily, before NHTSA completed its investigation and ruled in on this issue. At some point during NHTSA’s investigation, Musk twitted: “the word ‘recall’ needs to be recalled.”

Musk is, of course, correct that Tesla is able to reduce the headache to consumers and the cost that are associated by recall campaigns by updating the vehicles software over the air, an technique referred to as firmware-over-the-air, or FOTA.

However, a campaign (this is NHTSA’s formal term for ‘recall’) to rectify a design flaw or a quality defect is still a recall, especially if required by NHTSA and is subject to the TRAED Act of 2002.

On January 13, NHTSA issued a recall order number 14V006000t to address overheating charging plugs in Model S. Tesla will issue an over-the-air update to reduce the charging current, and will mail owners a replacement charging adapter equipped with an internal thermal fuse.

Again, Tesla is demonstrating the use of technology to improve the efficiency and efficacy of archaic practices used in the automotive industry. But a recall is still a recall, and even Tesla isn’t immune against design and quality issues that might require a recall campaign from time to time.

Dec 31

Electric Vehicles Sales in 2040: Meager 2%

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Manufacturing No Comments
By 2040, Sales of electric and plug-in hybrid vehicles will amount to a meager 2% of overall car sales

Source: U.S. Energy Information Administration Annual Energy Outlook 2014 (Early Release Overview)

By 2040, Sales of electric vehicles and plug-in hybrid vehicles will amount to a meager 2% of overall car sales, according to a new forecasting model from U.S. Energy Information Administration. Main reasons: falling energy price and improved fuel economy and cleanliness of gasoline engines, which will further improve by micro-hybridization in nearly 50% of vehicles sold in 2040.