Could Automakers Manufacture Electric Cars Like iPhones?
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Electric cars stand to change the automotive industry in more ways than one. Not only are traditional automakers seeing serious competition crop up in unexpected places like China and California, but they are also seeing the value of their proprietary powertrain technology fade as software, electric motors, lithium batteries and other new tech becomes increasingly important.
Traditional automakers currently have the advantage of production expertise, as evidenced by Tesla’s well-documented production woes, but Chinese electric vehicle startup NIO may provide an interesting glimpse into the future.
NIO does not currently build its own vehicles (they are built as part of a joint venture with state-owned JAC Motors) and it has no plans to. Instead, it will outsource all of its vehicle manufacturing to outside companies – seeing ownership of proprietary EV powertrain tech as more important than having a manufacturing footprint.
NIO ES8 SUV
In a recent interview with Quartz, NIO co-founder Qin Lihong likened this approach to Apple’s agreement with Taiwanese company Foxconn, which manufactures iPhones for the American tech giant.
“Manufacturing is only part of the value chain,” Lihong said. “I don’t think [factory] ownership matters. It’s like Apple has iPhones but it doesn’t make them, yet Apple has the best manufacturing capabilities. Foxconn built factories for them, it has the biggest capacity and manufacturing capability, and quality, [those] who work under you don’t necessarily follow your orders better than a partner.”
Experts don’t seem convinced. According to The Verge, NIO has to pay JAC a fee for every vehicle it makes for the company, and it doesn’t currently sell enough vehicles to justify the added cost. China is also set to pull its subsidy for electric car companies next year and many analysts believe that only a handful of the country’s 500 alleged EVs will survive.
Chevrolet Bolt EV production
While the manufacturing footprints of companies like General Motors have them well-positioned for the immediate future, they may also be a point of weakness. Google’s autonomous car company Waymo was recently valued at $175 billion by Morgan Stanley – more than GM, Ford and Fiat Chrysler combined. This is despite Waymo so far only operating a beta version of its proposed self-driving taxi service. Such a valuation may seem absurd, but making cars requires a massive amount of capital investment that may come back to haunt you should auto sales nosedive. If Waymo can ever crack the self-driving code, however, then it could be pulling Uber-like numbers with relatively little capital, making it a tempting bet that Wall Street can’t resist.
The industry is already attempting to correct for predicted changes in auto sales and consumer habits, with both Ford and GM scaling back manufacturing operations and cutting costs.
GM is currently developing a Bolt-based crossover called the Bolt EUV.
NIO began trading on the NYSE last year and wants to eventually sell cars in the United States. Right now it’s only a tiny blip on GM’s and the rest of Detroit’s radar (a place it could very well remain, given the Chinese auto industry’s current struggles), but it is yet another start-up that appears to have a new approach to the auto industry’s old-fashioned ways.
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Hasn’t Magna been doing this for years in Europe and the US? Mercedes, Audis and BMWs have all been built through contract manufacturing. Most devices from phones to refrigerators, barbecue grills to guitars are built by this method. Most nameplates are just marketing arms with a spec sheet for the different brands.
My iPhone lasts about 2 years before the battery performance makes it unusable.
Hopefully we can do better than that with our cars.
Just swap out the old cell for the new one (a “battery’ is two or more cells in parallel or series), and keep using the iPhone. The 4G service will be around for many years.
General Motors has spent tens of millions in developing super capacitors which suggest the next generation of high performance electric powered vehicles from GM may feature a super capacitor instead of a battery, the biggest benefit of a capacitor is that they can be recharged quickly and would be cheap to replace.
No but automakers could be the MFGs or some of the tech companies that develop products.
This is what Tesla’s major failure was. They developed and marketed well fit have been a total failure in marketing.
GM,Toyota and VW are the only three that can do both.
The major issue is the EV cars will age faster than Ice as improvements will come faster and people will not want an old one. Like an I phone who wants a IPhone 3 or 4?
A major change in charge time or range can render an entire fleet less desirable.
There is much to learn about the future and it will see many changes we have not considered yet. But we will similarities to the cell phones in development and public interest.
Tesla’s failure is that they are the No. 1 selling Luxury Brand in the U.S. without any marketing at all. Tesla has yet to make One TV commercial or print ad or even internet ad. What’s Cadillac’s excuse?
cadillac didn’t get $10K tax incentive freebie.
And demand is drying up quickly at Tesla which is the reason for the 50% drop in stock price.
Old EVs actually are a better deal than old ICEVS, because EVs don’t need much maintenance, except tires and coolant (read the owner manual schedule). So all Chevy Bolts will be great deals after ten years or more. There will be few used Bolts on lots.
don’t forget that depleted battery after 10 years.
GM can recover its EV investments sooner if the U.S. government will do two things:
1. Stop all oil subsidies, making gasoline prices rise, but letting the market competition adjust prices.
2. Making emission limits lower and more regulated, such that all ICEVs will have to pay more to drive, and motivate more EV usage and sales.
All the foreign EV brands are getting help from their governments, so why does the U.S. fall behind? Maybe Congress and the POTUS still depend on oil campaign money.
so since EV’s are expensive, your solution is to make everything else just as expensive.
China controls 90% of the rare earth metals and owns the world’s electronic supply chain. It’s pretty obvious they will take it all. The US has already lost this race.