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I love the idea of EVs but find the entire movement intriguing. Like a lot of things of the current era, this movement seems to be built on emotion rather than facts. I thought about penning my thoughts on the challenges for the EV movement to stop becoming a copy of the solar or wind power movement, fail to deliver the promise!
Industries that have grown rapidly have one element in common; commoditised and proven technology as the backbone.
Broadband has made a plethora of industries possible, from OTT, video conferencing, e-commerce etc. Plenty of pioneers are coming up with ideas of how they can use the technology to build their business. The base broadband technology is now a robust platform and commoditised as well.
Similarly, the digital image sensor made wonders possible in the imaging industry. The growth of digital imaging has spurred the growth of not just imaging but a whole host of innovative concepts built on imaging; TikTok, youtube, Instagram, etc. The possibilities thrown up are immense. Sensor technology is cheap and almost a commodity.
The IC engine based auto industry evolved in a similar manner, built on the internal combustion engine and powered by oil. Both are commodities today (and always have been even during the early days) and have been the backbone of the growth of the sector.
In each of these cases, the patterns have been familiar; there is a technology breakthrough or invention that can be scaled up and soon becomes a large scale/commodity/utility. Pioneers then build innovative solutions using this technology and other very smart people build a scale out of these ideas. You can read at length about this from Simon Wardley
Unfortunately not every sector has tried to evolve based on this formula. The solar power sector is one such example; before solar panel technology became robust, the industry was hailed and to date, it hasn’t created the impact. It’s not clear when panels will become a reliable commodity.
Similar is the story with wind power. The industry continues to be custom-built. With no commodity element involved.
The EV industry is going through a similar phase. The energy source is in the pioneering stage and needs to scale up first as a viable business (the battery business is not yet viable without subsidies and something like hydrogen is still a POC), before it becomes a commodity around which all other innovations can happen. Meanwhile, the drive goes on, fuelled by environmental sustainability and global warming fears.
If environmental sustainability and global warming fears are the real drivers, could there be different strategies? Rather than spend billions in experimental vehicles that suck investor money red, shouldn’t funding go into developing better batteries?
As of now, Ola will build a million scooters a month, the batteries of which will be unrecyclable in a few years. It will utilize power from inefficient power utilities and the viability will in part be funded by subsidies from the government. Not a very green solution is it?
Maybe the alternate is to establish public transport that runs on electricity, put an electric motor in the bus and have overhead cable supply power using a pantograph. This will avoid the huge cost of batteries and make electric buses viable. In India, there is a spillover benefit, buses will stick to lanes!
Do we abandon the EV sector? Certainly not, but the optimism is misplaced. Rather than investing in the vehicle manufacturers, invest in energy source start-ups; people working on more efficient and green batteries and alternative power sources that have the potential to become commodities (and not rely on rare minerals that are available in limited geography).
Do you have a plan to innovate and be disruptive?
If you would like to discuss the topic of innovation, do get in touch with me. You can book a free 60 min one on one discussion here: https://bit.ly/3eLCLGz
Krishnan Naganathan
Krishnan is a leading innovation consultant and focuses on helping people and organizations innovate and build capabilities for innovation. He brings over 25 years of experience in the industry and consulting. You can reach him by phone / WhatsApp: +919791033967 or email: krishnan@thinkhorizonconsulting.com