Martin Eberhard, the Tesla co-founder who recently stepped down as the CEO, has apparently made some very frank statements about the reasons why some previous electric car companies have failed. In a video interview he is apparently quoted as having said that going against mature car companies to create affordable cars won't work, and that not getting the economies of scale that they do has caused previous affordable electric cars to be "a piece of crap".
The video is unavailable currently, but Auto Blog Green is listing a partial transcript of a video interview, where he is quoted as saying, "In general, it seemed to me that, the way all other people started electric car companies, got in the business, was wrong. They wanted to make a car that would save the world. So, they needed to make a car that everyone could afford and they tried to come in at the bottom end of the market. They try to go up against very, very mature companies in a very, very mature industry. Every single component they buy costs them double what Honda or Hyundai or somebody pays for that same part. So they wind up with a car that's a piece of crap. No one wants to buy it."
He is said to go on to explain that an initial period of exclusivity is normal in many products, particularly technological ones, and that desirable electric cars are no exception. "No other industry does that happen. No other industry do you start in the low end and work your way up. Think about cell phones and flat panel TVs and camcorders and refrigerators and air conditioners. All these things start off as an expensive product and are sold to people who can afford it that are buying it not to save a lot of money but to experience the luxury of this new thing. That allows the companies to develop their technologies, to develop their supply chains and to drive the costs down, step by step as they reach a broader and broader market every time."
I think that this is a very practical point of view. Any other expensive new technology is released as soon as possible, despite costing a fortune. Eventually, economies of scale, improvements in manufacturing and cheaper parts bring the cost of the technology down to the point where the average person could buy it.
OK, I can't afford a Tesla now, but the fact that they are being sold means that they will become cheaper to make. Advancing the technology used in electric cars means that they are more likely to become practical to buy and run. Making a top-of-the-line electric car that costs more than most people make in a year is far from elitist, it's pushing the boundaries of what can be done, and I will personally be grateful when I can buy one, at an affordable price, in many years time. ::Auto Blog Green ::Image Source