"The future of electric vehicles is golf carts, not Tesla."

02/10/2015

According to Thomas Bartman, journalist at Harvard Business Review, people always think of Tesla when they think of electric vehicles. But Bartman states that, if you want to see the future of EVs, it’s important to look elsewhere. "Despite glowing media reports, Tesla is not disruptive, and it will have trouble scaling as it seeks to grow. However, there are disruptive EV companies out there; you just have to know where to look. There are two categories of disruptive EVs: low-speed electric vehicles and electric utility vehicles (EUVs)."

Bartman: "Small format EUVs are increasingly replacing full-size, combustion-powered delivery vehicles in congested cities. Large trucks are difficult to navigate on narrow streets, parking them is almost impossible, and the constant stop/start cycle dramatically shortens the life of critical components, like the starter motor. Further, major cities around the world are beginning to charge congestion taxes for access to city centers. But EUVs are small, which makes navigation and parking easier, they improve their performance in constant stop/start environments, and they are exempted from many congestion taxes because they emit no tailpipe pollution. Meanwhile their short ranges, low speeds and limited payloads don’t detract from their value because the people using these vehicles weren’t traveling very far or very fast or hauling very much to begin with."

"Disruption from electric vehicles is coming, but it won’t announce itself with high-profile product launches or flashy products. Over time, the products will continue to improve and features that would be unthinkable today will be standard in the future."

"The critical limitation preventing EVs from disrupting the lowest end of the traditional auto market is battery performance, but battery costs are declining every day. As battery technology improves and costs continue to decrease, EUVs will rapidly gain on their traditional competitors. Incumbents can’t be certain how or what these manufacturers will add to enter their markets, but they can know with absolute certainty that the disruptors are motivated to."

Article by Thomas Bartman, May 14, 2015, Harvard Business Review