Categorized | happenings, seriously smart

The post-gasoline auto industry, part three — Proof of concept

As followers of this blog know, I’ve been covering the decline of the auto industry in view of the future configuration of the auto industry and the opportunities available to far-sighted entrepreneurs here and here. Here’s the main thrust of the argument:

But the current manufacturing structure is best for a world in which the only “operating system” for automobiles is the gasoline internal combustion engine (or some variant thereof, like a hybrid drive train). The assumption is that the post-gasoline and post-carbon automotive world will also be a one (or two) “operating system” world . . .

In a constantly innovating, multiple “operating system” automobile environment, the market would not be trending to a single type of car, but mixing and matching innovations. The top-down, two-billion-dollars-to-develop-a-car manufacturing model may not be right, but a much looser, innovation-based set of small manufacturers. In this kind of world, the major car manufacturers would be something more like clearing houses. All significant research and development would happen among smaller manufacturers; Detroit would just assemble cars to specifications given by the consumer.

Now this CNN Money story about a company in California that makes electric cars:

In a 180-degree turn from where his company, Wrightspeed, was a year ago, Wright has completely abandoned the concept of bringing an electric car to market. Instead, while he waits for the electric vehicle market to mature, Wright is focusing on a more lucrative venture: Wrightspeed will make and sell electric powertrains – the battery pack, software, and other components that generate power to a vehicle – to existing car and truck manufacturer.

That’s the economic and industrial model I’m saying will dominate the industry over the next twenty or thirty years . . . or longer. Car companies look more like Dell; they simply assemble technology innovated and developed elsewhere into the final consumer-ready package. You don’t have “total car innovation,” but piecemeal. Companies like Wrightspeed don’t make cars, they make the “operating system” (the drive train). The industry does not have one operating system (say, electric cars rather than internal combustion cars), but many.

I have a concept to describe how the most successful entrepreneurs and creative people think: I call it “plural” thinking. Where most people see singulars (one type of car or one type of mobile phone or one computer operating system or one way to do social networks), entrepreneurs see the potential for plurals. The problem with the current industrial economics of car production is that it has entrenched “singular” thinking into the system.

Wrightspeed, in my opinion, has inadvertantly moved into a plural way of approaching the problem.

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