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The Roundup May 19

Didn’t I say this would be how Car 2.0 would work? Huh? Didn’t I?

The deal marks a further bet on battery-powered cars by the maker of Mercedes-Benz luxury vehicles and a vote of confidence in Tesla. The electric car pioneer has struggled to raise funds and realise expansion plans during the credit crunch. . . .

In March Daimler began a venture with Evonik Industries to develop new-generation lithium-ion car batteries. From 2012 it plans to equip its electric cars with them. It aims to introduce next year the first battery-powered car under its Mercedes-Benz luxury brand.

(“Daimler buys stake in electric car maker,” Financial Times, May 19) One of the very first posts on the very first day this blog launched, “One more reason to let the auto companies fail,” I said: 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 . . . The parts of a car would be like the parts and software of a computer. The major manufacturers would be something more like Dell (which simply assembles stuff it buys from other folks) and the market potential of innovations would be driven on their own merit.” I am absolutely convinced that the auto industry is going to look more like the computer industry in about ten years time (although, it seems, I’m the only one on the planet who thinks so). Well, the Daimler-Tesla alliance looks like proof-of-concept to me, don’t it?

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