Tesla’s launch announcement for the Model X couldn’t have had better timing in the wake of diesel gate. Elon Musk opined on the future of Tesla cars including 1000km range within 2-3 years
and fully autonomous driving in the same period of time.
A 1,000 km on a single charge is quite a tempting proposition. In fact, it would more than cover a month’s worth of driving for the typical Londoner.
But as McKinsey points out above, the pendulum is swinging away from car ownership. And almost every economist agrees that Uber, Lyft and other sharing mobility platforms make us wealthier.
There is a simple way of thinking about this: is that market segmentation almost always increases consumer welfare. Why? Because the segmentation (different price/utility bundles) allow people who were pay too much for a given bundle pay less; and those who were priced out of the market afford a service they otherwise couldn’t.
🚗 If car ownership is so passé, despite Madison Avenues best efforts for 50 years, one might ask why a super-smart cookie like Elon Musk is producing new vehicles for people to buy. Gavin Sheridan reckons
many of the innovations in the Model X are designed for a future Tesla Mobility
platform (an Uber-like taxi service.) Good hypothesis, worth reading.
This leads to two interesting thoughts.
The first: if Sheridan’s Tesla Mobility hypothesis is correct
, then Tesla is building a vertically-integrated mobility platform where it owns the vehicle, operating system, autonomous navigation, storage and charging. All it needs is to add vehicles to cities and a real-time marketplace for travel before it has a ‘full-stack’ competitor to ride-sharing alternatives. Tesla starts to look increasingly like Apple; with Uber looking, by weak analogy, to Android (dependent on third-party manufacturers, third-party drivers, etc).
The second is that the fossil industry / internal combustion business is a classically fragile system (and not an anti-fragile one in the Taleb sense.) Small shocks to the system (decline in car ownership, reduction in hydrocarbon use, new competition, new mobility models) nick at the system. I’ve got a weak notion forming here about how fragile this system is, but I am sure there is much deeper thinking about this out there.
If you know of something, please recommend it to me.