The 1-2-3’s of EV market share in the US

My article on the 1-2-3’s of electric vehicle adoption in the U.S. went up on GreenCarReports on the weekend. The commentary went through a title change – a procedure familiar to many famous writers, and many more of us unknown mediocrities. :)

About fifteen years after a publisher’s first impression of Jane Austen’s First Impressions was as negative as its heroine Elizabeth Bennet’s first impression of Mr. Darcy, she rewrote the title (and, oh yeah, parts of the book) in the trochaic verse style, giving us Pride and Prejudice. Which is not to be confused with the similarly-titled literary masterpiece, Pride and Prejudice and Zombies.  :)

The article involved breaking U.S. vehicle sales in 2013 by make and model, done by Tim Cain at GoodCarBadCar.net, then looking up manufacturer’s suggested retail price for each and every one – done by me. After that, it was a straight-forward (albeit time-consuming) matter of making macros to do my bidding – in this case, slicing up the sales statistics by price point and vehicle type.

The 1-2-3 in my original title referred to the fact that, if one excluded trucks and crossovers/SUV’s (since the Toyota RAV4 EV is the only electric vehicle offered in those categories, and then only in California) then electric vehicle market share turned out to be:

– about 1% of passenger cars (again, excluding trucks and x-overs/SUV’s)

– about 2% of passenger cars with a base MSRP of $20,000 or more

– about 3% of passenger cars with a base MSRP of $25,000 or more

And way up in the nosebleed section of the luxury car market – where “high” might not just refer to the prices* – Tesla got about 17% of the passenger car market among vehicles costing $62,400 and up. (Tesla’s Model S costs $62,400 after U.S. federal incentives.)

Name-dropping Edwards Deming

One fun aspect of the article was that I was able to weave in references to W. Edwards Deming, the Godfather of statistical quality control. It’s the latest addition to my list of occasionally-Canadian cross-references, including:

– the Innovator’s Dilemma and Kleiber’s Law (both from this article)

– GM’s old philosophy of “a car for every purse and purpose” (here)

– Canada’s on-again/off-again aspirations to annex Turks and Caicos (here)

– and Wayne Gretzky getting traded to the Los Angeles Kings (here)

And the writer’s cut

Verbose babbler that I am – Scrabble players and spelling bee champions alike might say I verge on “logorrhea” — I came in a couple hundred words over target. Or, as I like to think of it, “overachieved”. :)

As a result, the following was originally present just before the Slimming Down U.S. Sales heading.

– – – – – –

As is so often the case for plug-ins, hybrid vehicles offer an apt comparison. In 2012, hybrids claimed about 3.1 percent of the U.S. auto market, and 1.5 percent of the worldwide auto market. (1.2 million of 81.8 million vehicles.)

On the surface, this looks grim – fifteen years after the Prius premiered, hybrids remain in the low single-digit percentages. But better context comes when we focus on Toyota: in 2012, their third-generation hybrid technology was in a full 16 percent of their sales – almost one in every six cars they sold!

This added context helps us understand that bureaucracy, not technology, kept hybrid vehicles marginal: if corporate priorities had been different, there’d be far more hybrids on the roads today.

– – – – –

Fortunately, content is highly recyclable (as many a plagiarist and plagiarism victim is aware) so hopefully I’ll have a chance to deploy the above when I wind up 122 or so words short on an article. :)

– – – – – –

* being a lefty, I’m predictably happy about the fact that the U.S. seems to be easing up on its War on Drugs, which as Matt Taibbi recently noted, is a war waged mainly against the non-wealthy and the non-white.

But it was probably predictable that this would happen, because the winners of the past four Presidential elections were the candidates who’d done cocaine in their youth. (Obama wrote about it in his autobiography, and GWB has avoided making outright denials and was allegedly arrested for possession in 1972.)

The last time someone who’d never used the drug was elected President, Microsoft was king of the world, and Apple was almost bankrupt. Oh, how things change…

If Republicans and Democrats alike have been willing to fund-raise, campaign and vote for candidates who’d done hard drugs, it’s hard to imagine their attitudes towards drugs and drug users wouldn’t soften. And maybe, just maybe, that can lead to legal priorities more focused on prevention/rehabilitation, than on punishment.

Heck, if the U.S. can close enough jails currently crowded with non-violent drug offenders, that might give them a good excuse for that perennially popular bipartisan American activity, lowering taxes! :)

December: a podcast premiere

The nice folks at http://www.thisweekinenergy.tv/ (TWiE) invited me to guest on their podcast on their late November episode, Good News, Bad News, Ugly News. While most of their guests are leading experts in their fields, and I’m just a talkative and reasonably-knowledgeable former fuel cell engineer, I heeded Gore Vidal’s wisdom and agreed. :)

It being the first time my comments were being recorded for posterity (well… outside NSA headquarters, that is) I spent a few hours doing homework, researching the backgrounds of the energy stories we were scheduled to discuss, and refining / rehearsing a few talking points.

And in retrospect, maybe I should’ve gotten some vocal coaching instead. Listening to the podcast after the fact, I was struck by how high my voice sounded. I sounded a bit like Preston Manning, the high-talker who led Canada’s Reform Party (or, as he said it, the Re-foooorm Party) out of the political wilderness and into… well, I guess he led them around in the wilderness for awhile. :)

Fun fact: Preston is the son of long-time Alberta Premier Ernest Manning, who – in a twist that would have given Christopher Hitchens an aneurism – led the province six days a week, then spent Sundays leading the most popular radio show in Alberta: “Back to the Bible Hour”.

Manning may have set the precedent that former professional wrestler and Minnesota Governor (yes, Minnesota Governor) Jesse “the Body” Ventura followed back in 1999 when he guest-refereed a WWF match at their Summerslam pay-per-view while Governor. Ventura dismissed the backlash, arguing to the effect of “I work six days a week; what I do on Sundays is my own business”.

Another thing I discovered while listening the podcast was that the care I took to carefully compose my sentences meant that I wound up speaking those sentences. Clause by clause. Just like Captain Kirk used to do. On the old TV series. Never shall I mock. William Shatner. Again!

GCR

I had a couple pieces go up in GreenCarReports in December – the first being the usual monthly assessment of the Canadian EV market. While these pieces are generally about as exciting to read (and write) as financial statements, I was able to weave in a reference to the fact that – hitting a very rough patch after a string of gold and platinum records in the 1970’s – one of the members of Chicago suggested sarcastically that a recent album had gone “aluminum, maybe plywood”.

Henceforth, I’ll be trying to award an aluminum/plywood medal to the lowest-selling electric vehicle in Canada each month. Maybe one day they can add it as an 8th-place medal to the Olympics. That way, the athletes not in the running for the regular medals can have something to shoot for. :)

Speaking of last place finishes, the gold-o-phile Klippenstein investment account sank like lead this past year. Ah, if only I could shrink our life’s other problems half as effectively… ;)

It was classic: just like last time (late 2008/early 2009) I ran out of investible cash before the market ran out of “down”. There’s probably a lesson to be had somewhere in there, but I haven’t the patience to learn it. :)

My other GreenCarReports article featured some data that Waterloo-based MyCarma had passed along, about the effect of winter temperature on electric vehicle range. (It’s also the most popular thing I’ve written for them — at almost 8,000 page views, it’s as if the entire population of the French island of St. Pierre et Miquelon had read it. Canadians may know it as “that tiny island France owns just off Newfoundland”.)

This was awesomely cool to write, as it gave me the chance to shape the messaging around fairly new data about how EV range suffers in cold weather. Keeping with the Seinfeld references, I termed the phenomenon “range shrinkage”. :)

CT

Lastly, I wrote a piece for CleanTechnica on Ontario KO’ing coal, which earned a re-tweet from Canadian Green Party Leader Elizabeth May. (And a few other folks who don’t merit their own Wikipedia entries. ;) )

On the topic of KO’s, in 2013 Canada’s Liberal Party somehow recovered from Michael Ignatieff’s self-inflicted knockout punch, and ended the year leading in the polls, surpassing both the Conservatives and New Democrats. (The average of recent polls is currently running at 34-27-23.)

And considering how many “please-donate” mailings the Liberals are sending me (a former donor) I’ve got to think they’re for real. Only a few years ago, I practically had to pull a Fry to find out where to address a cheque.

While Stephen Harper’s character-assassins did a fine job on the prior two Liberal leaders, Trudeau is proving a harder target. As Spike Lee might say, “it’s gotta be the hair”. Worse yet for the Prime Minister, the Liberal leader has a well-known charity boxing record: if challenged on his plans to reform the Senate, the son of Trudeau could always turn around and quip:

“Look, I beat Patrick Brazeau into a bloody pulp [in the boxing match]. You think anyone else in the Senate is going to pull any shit after that?”

Heck, given how loose-lipped he is… he just might! ;)

November EV (and FCV) musings

It’s been a busy month — busy enough that though one in seven Canadians crossed the border for Black Friday, I wasn’t one of them. (Like a further one in three Canadians, I did my shopping online. Bought me some books — and by books, I mean books so nerdy Aya will despair for Leo’s future social skills.  ;)  )

Seriously, more Canadians expected to participate in Black Friday, than voted in the last federal election. This is how dark ages begin!!  ;)

On the EV side, I wrote a few pieces for GreenCarReports, though I wasn’t able to write something on BMW’s i3, which made me rethink fuel cell vehicles.

Basically, the i3 is an electric car with a 30-horsepower (25 kW) motorcycle engine strapped to it, to provide a bit more range.

If someone were to design a fuel cell car with a big enough battery to soak up all the relevant incentives, and strap on a 25 kW fuel cell stack for extra range, I wonder if that would be a way to drive FCV adoption?

You’d save money because the stack would be a lot smaller, and you could use one hydrogen fuel tank instead of two. (Since the super-high-pressure fuel tank is about the only component that isn’t used in other fuel cell applications, I’m guessing it’s a cost barrier.) Better still, the stack wouldn’t have to last nearly as long (maybe 2000 hours instead of 5000 hours) because it’d only be in use part of the time, which allows it to become cheaper still. (Adding durability costs money.)

The fact that you’d run 50%+ of the time on electricity would also circumvent the hydrogen infrastructure issue. If there are only a handful of hydrogen stations in town, and you know you’d have to refuel every couple weeks, you might be reluctant to buy a fuel cell car because of the inconvenience.

But if you mainly run off electricity, you might only need to refuel your hydrogen tank every couple months — and taking an occasional detour to refuel six times a year, probably isn’t that big of a deal for most people. That’s once per season, and maybe the dealership tops you up when you go in for your twice-yearly checkup.

So, in a word, I think a fuel-cell based i3 type vehicle (mainly electric, but using the fuel cell as a range extender) would accelerate adoption. As it turns out, the French postal service is investigating just such a fuel cell “range extender” solution.

Ah, it’s nice to be able to muse about these things, now that I’m not in danger of spilling any confidential info. Heck, I can even poke around patent records in exactly the way I was discouraged from doing!  ;)

As for my GreenCarReports contributions:

– I had a chance to practise my French a bit (and practise using Google Translate a lot more) when summarizing how the Quebec government really raised the bar in support of electric vehicles. Nice what you can achieve with minority governments who’re rather desperate to stay in power. ;)

– I did a boilerplate Canadian sales stats piece, and a more interesting one on WWF Canada’s take on the country’s electric vehicle progress.

– I also had a chance to write up some nifty apps — one from a cool Waterloo company — which can help people save money on gas, and/or choose more fuel efficient cars. Next time any of you buy a new car, ask if the dealership has the MyCarma dongle!

Note: they didn’t pay me to say that, but on the subject of getting paid, the Paypal transaction for my articles ran into the… double digits. Yep, there’re a lot more zeroes in engineering paycheques…  :)

Lastly, I saw my first reference to Fox News’ annual post-Thanksgiving “War on Christmas” coverage the other day, so put together a little post explaining how the first people to write Christmas as Xmas were, well, medieval Christians. And they did so because in Greek, Christ is spelled with an “X” (it provides the “Ch” sound). If anything, the use of Xmas points that faith’s faithful back to those first Greek-speaking communities who heard the Christian gospel preached — and I would imagine that would be a positive, not a negative thing. *

It all reminds me of a time in the mists of fuel cell years past, when I asked a colleague to give me a refresher on a particular piece of equipment. He was strangely reluctant, so I popped back to my desk and printed up the work instructions — only to find that I’d actually written them, years before.  :)

– – – – – –

* amusingly enough, abbreviations are actually a key tool for establishing that, while it took about 350 years for Christians to agree on what books went into the New Testament, the eventual winners of the battle-royal between Christian sects pretty much used the same edition after about 150 AD. (The ecumentically curious can go here for further reading.)

The person who composed this edition used a very particular set of abbreviations for key words — God, Jesus, etc. — which were faithfully copied in pretty much every orthodox text thereafter. These abbreviations don’t appear in the scraps of heretical texts we’ve found, so we know those texts belonged to different groups of worshippers.

Sadly, we only have scraps of those texts, because soon after the canon was officially settled, disapproved writings were put to use as kindling, as they so often are. And while that represents a literary / philosophical / theological loss, as an engineer who really loves curating and standardizing documentation sets, a very, very small part of me kind of knows where those book-burners were coming from…  ;)

Putting the “X” back in Xmas

Xtians began using “Xmas” 500 years ago, since in Greek, X is the “Ch” in Christ

Around the holidays, some people (not to name names or anything) urge modern society to put the “Christ” back in Christmas. There’s much to criticize about the hollow vacuousness of consumer culture, after all. Most of us can buy into the idea of better treasuring time with family and friends; and who’d oppose charity and compassion for the less-fortunate? (Well, apart from that strangest of philosophical tribes, the Objectivists, that is…)

Heck, the leftists among us might even be open to the Christian idea of a 100% marginal tax rate, on assets — that whole “tithing” thing is so Old Testament ;) – which is backed up by the fact that Jesus’ early followers were basically communists! (Admittedly, it’s easy to give up private property rights when you think the world’s about to end…)

Unfortunately, some misguided folks want to put the “Christ” back in Christmas, because they think “Xmas” is a part of some sort of secular war on Christmas. If there’s any upside to this, it’s that secular humanists are the new scapegoats of Christian demagogues. After nineteen hundred years, the Jews finally, finally catch a break! Hallelujah!  :)

In Greek, “Christ” is spelled with an X

This is all very strange, since it was Christians who started using “Xmas” in the first place. Five hundred years ago. And followers of the faith used X (and/or Xp) as an abbreviation for Christ, an additional twelve hundred years before that.

They did so because the Greek word for Christ — Χριστος — starts with the Greek letter chi, which happens to look like an “X”. And Greek is the language in which the first Christian scriptures were written, and in which the faith was first widely proselytized. (To be rigorously accurate, some portions – the Lord’s Prayer and various figures of speech – seem to’ve originally been Aramaic.)

So the real question is why these commentators would want to take the “X” out of Xmas; for today’s Christians, its presence would visually affirm a continuity with the Greek-speaking communities where Jesus’ gospel was first preached, two thousand years ago, and where the religion’s scriptures were written. How cool is that?

Orthopraxy vs. orthodoxy

I do wonder of why Buddhists, Hindus and others just don’t seem to get as worked up about these kinds of things. And my impression could just be because I’m less familiar with demagogues from those traditions.

Still, I get the sense that in eastern traditions, anger and outrage are regarded as unhelpful, if not outright harmful. For all the crimes of the Chinese government against Tibetans in the past half-century, exiled Tibetan Buddhist monks don’t seem to have an “anger button”; they tend to express their distress and condemnation in astonishingly measured tones.

One difference between the major western Abrahamic faiths and the big eastern Dharmic faiths, is that the latter tend to be orthopraxies – they emphasize correct practice – while the western ones tend to be orthodoxies, emphasizing correct belief. I can’t help thinking that may have something to do with it.

If one has adopted a set of spiritual beliefs – an orthodoxy – there’s always the risk that new scientific knowledge could undermine them. Learning that the universe is billions and not thousands of years old could cause a fight-or-flight response in some people, leading to the bellicose annoyance and self-righteous indignation so commonly heard in the words of some conservative religious leaders. Especially if they think such beliefs are all that separate us from the nightmare of Hobbesian anarchy – an unending war of all against all.

But if one has adopted a set of spiritual practices – an orthopraxy – then scientific findings which invalidate their rationale and justification, might be inconsequential. If one is becalmed by meditation, and it seems to serve one’s community, so what if the universe is fourteen billion instead of one hundred and fifty five trillion years old?

Even so, there’s no doubt there are Buddhist and Hindu demagogues, just waiting for the chance to corrode the public discourse in their own home countries, as religious conservatives have done over here. ;)

It’s probably safest to say that we in the West have simply been lucky enough not to have heard of them, because a Fox News-type empire hasn’t given their televangelism and/or megatemples a worldwide media platform. Yet.

The quest for the golden meme

https://i0.wp.com/photoinf.com/Golden_Mean/Stuart_Low/The_Golden_Mean/goldenmean.gif

Golden mean image sourced here.

It’s been a pretty good month, in terms of writing. Over at GreenCarReports, I had my piece on September EV sales in Canada, a Canadian Thanksgiving-centric story riffing on the country’s nationwide EV charging network, and discussed what our EV drivers do, to get through Canadian winters.

Topping that off, Corporate Knights will be running a piece of mine, in an upcoming issue!

Innovator’s Dilemma, Toyota edition

Coolest of all, though, was a Jeff Cobb story in HybridCars.com, which referenced my article on Toyota’s Innovator’s Dilemma with Electric Cars (GCR version here, bonus blog notes here).

HybridCars

It’s nice to think you’ve contributed to the public discourse, or helped “frame” the conversation around a topic one cares about. Even though you may well be one of several like-minded people who came up with the idea independently. :)

The surveillance state as an auto-immune disorder

Another example of converging memes — or maybe, just maybe, someone else reading me and liking my talking points — comes from The Guardian, which ran a comment-is-free column which included the line:

“The American body politic is suffering a severe case of auto-immune disease: our defense system is attacking other critical systems of our body.”

One of my mid-summer blog entries — The surveillance state is an autoimmune disorder — used imagery to that effect. To my elation, that piece actually got picked up by a few financial blogs, whose curators thought the metaphor apt.

“In this sense, [the surveillance state’s] behaviour maps to that of an immune system that has been hijacked by an autoimmune disorder, and is treating the body’s own cells as invaders. The main difference is that the surveillance state exists at the societal level, while autoimmune disorders exist at the individual level.”

…and we wrap up in “Bloom” County…

My biggest contribution thus far — the closest I’ve come to a “golden meme” — has been a line from the McKinsey piece I coauthored, which read:

“…an expansive transmission grid dominated by a few central power plants is vulnerable to disruption from both natural phenomena and human malevolence.”

Basically, if you have a few centralized power plants, earthquakes, hurricanes, and other natural disasters can have catastrophic consequences if they strike at the wrong place(s). Ditto if saboteurs were to strike target those key bottlenecks. But if your grid is fed by thousands of locations spread across a wide geography, it’ll be harder to knock it offline, because no single bottleneck or node will be as crucially important as in a centralized system.

Bloom Energy adopted it as one of their key talking points, as evidenced on their website and elsewhere. Which I found annoying as a fuel cell engineer at one of their competitors… but which I found delightful, as a writer! :)

Their business resiliency page mentions natural disasters once, and disruption twice:

Bloom 1

A few select press releases (e.g. March 2012) also leveraged my work. Eagle-eyed readers will note the use of vulnerable … disruptions … human [intervention] … natural [disaster]. The talking point was repeated in numerous media outlets, as a quick Google search revealed.

Bloom 2

The earliest Bloom Energy story I could find which references the “distributed grid is less vulnerable to terrorist attack / natural disaster” factor is this Dec 2009 story from The Atlantic, titled Who Needs The Grid?

Bloom 3

Since electron-democracy was published in March 2009 — nine months before the article in The Atlantic — and, carrying the McKinsey imprimatur, would likely have been passed along to Bloom, I’m pretty confident that I know where that talking point came from.  :)

It’s possible that Bloom could have simultaneously come up with this phrasing and framing on their own (the meme equivalent of convergent evolution) and I’m okay with the uncertainty. In the end, it allows me to blithely assume that my creation has enjoyed its biggest success, in others’ hands. Kind of like how so many Canadian artists and athletes eventually move to the United States, I suppose. :)

Paging Dr. Freud…

Logged on to desktop-Facebook recently.

Was greeted by these ads.

They were… disturbing.

disturbing facebook ads

I don’t even want to know what photos they used for the female or gay audience!

Perhaps this is some sort of bizarre homage to Renaissance painter Guiseppe Arcimbolo, colloquially known as “that crazy artist who painted people as if they were made of fruit”, as per the portrait below.

488px-Arcimboldovertemnus

More likely, it’s just the latest example of the ubiquity of sex in advertising.

It also leads to the question of whether algorithms can be developed to detect this kind of sexual imagery; one can imagine Facebook would want to prevent such advertising from getting displayed to inappropriate demographics, though some of that might be covered off by stated interests.  (One imagines that the above images wouldn’t be pushed to someone who’s expressed strongly conservative religious interests on FB…)

Wiki-immortality!

APSC150 speech

My August Canadian EV car sales stats update went up recently. Which was cool.

Cooler still, I had a chance to wax poetic about sustainability, and my new-found optimism that we’ll avoid the worst of our dystopian horrors. I was invited to be a guest lecturer for an engineering course at UBC (APSC 150) where I had the privilege to slightly shape the minds of about four hundred first-year students. And show them how, here in the first world, #WeAreWhales. (The cryptic comment is described in the slide deck, here.)

Coolest of all, I’ve achieved a Wiki-immortality of sorts! I’m a Wikipedia footnote in the Tesla Model S article! Or, rather, one of my older GreenCarReports columns is. The one describing the vehicle’s Canadian sales figures for the first half of 2013. :)

Wiki Klippenstein

Of course, Wiki’s being the infinitely editable sites that they are, my fame will well be fleeting. Which brings to mind to Hindu parable of Indra and the ants, whose punchline was once majestically translated as “former Indra’s, all“. :) For all our works and purpose, pride and presence, in time’s great fulness we are all returned into the Void from whence we came.

Passing Gas – EV’s now outnumber gas stations, in America

2012-chevrolt-volt-gas-station-advert_100364597_m

My latest piece is up on GreenCarReports, here. It’s where I sourced the photo from. :)

And yes, putting “Passing Gas” in the title was deliberate. Hey, it’s catchy!

From what I can tell, electric vehicles also outnumber gas stations in Japan as well. Alas, Canadians are somewhat behind our American and Japanese (and no doubt, Norwegian) friends in this regard – from the data I’ve been able to collect in my database, we only have about 2000 plug-in electric vehicles versus about 13,000 gas stations.  You can’t win ’em all.

…but as long as you can win Olympic Gold in ice hockey, by and large, the losses everywhere else are largely tolerable.  ;)

The Innovator’s Dilemma, Toyota edition

280px-1st_Toyota_Prius_--_07-28-2011

This car — yes, this car — has impeded Toyota’s electric efforts

My post on how The Innovator’s Dilemma explains why Toyota lags in electric vehicles — and how Kleiber’s Law explains there’s nothing for them to worry about (yet), is now up on GreenCarReports.

While the Tesla stats were cooler to have dug up, and will probably enjoy a broader readership, this particular piece was more gratifying to write; the Innovator’s Dilemma is a fairly well-known concept in business circles, but there’s a tendency to incorrectly think that all industries get changed and disrupted quickly. To adapt from yesterday’s screed, the world of software changes a lot more quickly than the world of stuff.

And Kleiber’s Law probably (partially) explains why.

The GCR article had to be edited down, and some of the rejected detritus included this little comparison of hybrid and EV adoption rates below. Think of it as rounding out the “complete and unabridged” version of the article.

Note: I thought electric vehicles would have roughly the same adoption rate as early hybrids, figuring that greater sales due to a broader product selection from various manufacturers, would be offset by lower sales due to the higher sticker price. Boy, was I wrong. :)

Though I might claim that gov’t rebates “distorted the market” (in a very positive way, mind you) I’m not so egotistical as to be unable to admit to mistakes, so I’ll file that for future learnings… after taking this quick religious diversion. :)

A quick religious diversion

On the topic of “complete and unabridged” versions, people who peruse the Christian scriptures (the “New Testament”) will notice that the Gospel of Mark is a lot shorter than the Gospels of Matthew and of Luke. This is most likely due to the fact that back in the day, there were two standard scroll lengths: a short one, and a long one. Kind of like how we have letter paper (8.5″ x 11″) and legal paper (8.5″ x 14″) today.

Mark, chronologically the first of the three to be written, was written on a short scroll, and Matthew and Luke wrote on the longer ones.

A more interesting case is that of the book, Acts of the Apostles, commonly credited to Luke — whose name almost certainly wasn’t Luke, because people tended to assign famous works, to more famous people. The same tends to happen in our modern era — for instance, this British revocation of the American Declaration of Independence  is commonly attributed to John Cleese, though he didn’t write it.

Acts exists in two commonly-circulated versions, one about 10% longer than the other. While this is less impressive “genetic variation” than one finds in other texts — the Buddhist Dhammapada has more variants, possibly because it was translated into multiple languages early on, before anyone with overarching authority tried to establish a “canonical” version, as happened in Christianity. There, someone identified by scholars as “The Ecclesiastical Redactor” (possibly Polycarp of Smyrna) created a standard edition fairly early on. There are many reasons for hypothesizing this, not the least of which is that essentially all manuscripts available to us share the same abbreviations of key terms (from memory, Theos is abbreviated Ts and Iesous is abbreviated Is).

All of which is a phenomenally long-winded, trivia-filled way of saying that the text appended below would form the “10% longer” version of my GreenCarReports article.  It originally was included before the paragraph “The Innovator’s Dilemma – why Toyota’s tepid on electrics”.

Hybrid history and the plug-in path

Plug-in electric vehicle enthusiasts have exchanged many a high-five over the fact that in the United States and probably elsewhere, plug-in adoption rates have thus far surpassed hybrid adoption rates. Here again, context is valuable.

In the first four years of hybrid availability in the United States (2000-2003) oil was cheap, and consumers could choose between three hybrid vehicles — two small (the Prius and the Civic Hybrid) and one even smaller (the Insight). These were sold by Toyota and Honda, who shared about 17 percent of the automotive market between them.

In retrospect, it’s unsurprising that electric vehicles are being adopted faster, given the greater awareness of our environmental challenges, higher oil prices improving the cost/benefit equation, government incentives, and — perhaps most crucially of all — widespread automaker participation.  

By the four-year anniversary of the Nissan Leaf and Chevy Volt’s December 2010 retail debut, ten carmakers will offering production plug-in electrics stateside: BMW, Daimler (Smart), Ford, GM, Honda, Mitsubishi, Nissan, Tesla, Toyota and VW.  (Fiat is excluded from the preceding list, as the 500e is a compliance car available only in California.)

These automakers control about 75 percent of the US auto market, and by December 2014 their product offerings will range all the way from subcompact commuter cars to SUV‘s. To adapt Alfred Sloan’s old phrase, there’s now a plug-in “for every purse and purpose”. Fierce competition has already resulted in lower prices, which will only accelerate sales volume, which will itself improve economies of scale.

The witless wisdom of Shai Agassi

dunning_kruger_effect by AddAttack

Dunning-Kruger effect graphed by AddAttack on DeviantArt.

LinkedIn has an “opinion leader” piece from Shai Agassi, founder of bankrupt car-battery-switcher Better Place, telling carmakers how they need to respond to Tesla’s success. Who better to give them advice than a guy who raised $850 million for an ignorant, impractical, impossible business model, then drove his company into the ground?

Inviting Agassi to share his clearly-witless wisdom about the auto sector, would have been like inviting André Maginot — architect of the not-so-great wall of France — onto the post-World War II lecture circuit to talk about the future of warfare.

Pre-fisking preface: about Agassi

Before we get to the meatless bones of his commentary, we’ll start with a bit of background about Agassi. From Wiki, he seems to’ve been a very successful software entrepreneur. He may even have been the Michael Jordan of enterprise software — the thing is, Michael Jordan knows that no one wants to hear him talk baseball.

Unfortunately, being so impatient that he didn’t want to wait two more years to become the CEO of SAP, Agassi resigned. Alas, power bends judgment as surely as gravity bends light, and he decided he was destined to remake the auto industry.

Agassi’s clueless enthusiasm — let’s treat Smart cars like smartphones! — makes him a textbook case of the Dunning-Kruger effect, which basically states that:
– people who’re experts at something, know they’re experts;
– people who’re non-experts, know they’re non-experts;
– and people who lack the faintest clue, are so ignorant of their very ignorance that they think they’re experts too.

It boggles the mind that LinkedIn would list a guy who proved himself so catastrophically wrong, as a “thought leader” — what’s next, NPI (new product introduction) advice from Sergio Zyman and Brian Dyson, the men who brought you New Coke?

Pre-fisking preface: the business world’s Kim Kardashians

Of course, LinkedIn brought Agassi in not because of insight, but eyeballs. Or as the TV world calls it, ratings. LinkedIn’s “thought leaders” don’t need to have a track record of success, they just need to draw traffic to the site. And while LinkedIn might have snagged some deep thinkers, one rather imagines that most successful businesspeople are too busy, you know, running successful businesses, to pen puff pieces.

Which means the content providers will inevitably be attention-hungry, less-successful entrepreneurs: the business world’s equivalent of reality-TV stars. Except that reality-TV stars know they’re not A-list actors, while these entrepreneurial remoras seem to think they’re sharks. Again, Agassi might well be a software shark; but when it comes to cars, he’s chum.

Pre-fisking preface: channelling Tom Friedman

Agassi’s piece is so breathlessly definitive in its vacuousness that it looks to’ve been ghostwritten by Thomas Friedman, the New York Times’ opinion columnist most famous for the book The World Is Flat, written in his signature algorithmically-reproducible writing style.

To his credit, Friedman isn’t just a billionaire’s daughter’s kept husband: he has a unit of time named after him, the six-month-long Friedman unit — “F.U.” for short — for the fact that for two-and-a-half years he insisted Iraq would turn the corner in the “next six months”.

People wanting a cortex cleanse from Friedmanisms (e.g. “suck on this“, “hyperconnected“) are well-advised to read lots and lots of Matt Taibbi of Rolling Stone, whose signature anti-Friedman diatribes are the epic essays Flathead, and Flat N All That, the former of which is the source of the cartoon “The Moustache of Understanding” below. (click to embiggen)

friedman

That done, let’s turn back to Mr. Agassi’s titular wisdom from this LinkedIn post.

Three lessons from a highly ineffective founder

“Some of the most serious reporters concluded that Mr. Musk should throw his doors open and share all his secrets with the current carmaker. Tesla had already partnered with both Toyota and Daimler, so one should assume they shared some secrets with those market leaders.”

No, Tesla didn’t share secrets with Toyota and Daimler; they negotiated contracts to develop the battery systems for the California-only RAV4 EV compliance car, and the Smart Electric Drive. This is readily-available information; it’s taken me longer to type this paragraph, than to look it up!  Can a software guru be Google-illiterate?

“Imagine for a second that car companies are like yachts racing in the ocean. While the entire industry represent yachts jostling for position along a similar course, Tesla’s catamaran diverged from the pack, and all of a sudden seems to be gaining tremendous speed.”

Here’s a perfect Friedmanism – first off, a catamaran is not a yacht. If it’s in the race, then the opening sentence should say “boats racing in the ocean”. Next, the writer tries to express the idea that the Tesla catamaran has “raced ahead of” or “broken from” the pack. But “diverged” implies a detour; a wrong turn; it implies Elon Musk’s ship is accelerating in the wrong direction. What began as a promising simile has crashed on the rocks of impaired grammar. Editor…! — is there an editor in the house??

1. An electric car is an object of desire

All cars are objects of desire! That’s why companies invest so heavily in advertising and branding – to make them into objects of desire! The only person in the auto industry who ever treated cars as commodity products, was the guy who thought he could the manufacturers to build all their vehicles off a generic-enough design template to make it easy for him to switch the batteries!

Instead of deciding on “what environmentalists will be willing to give up to drive electric”— such as having only two seats in the back of an odd shaped car — Tesla decided to build a car that supersedes all buyer’s expectations.

First off, Tesla doesn’t target environmentalists, who frankly aren’t wealthy enough to afford luxury sedans. And “two seats in the back of an odd-shaped car” ? This is a throw-back to the EV1, which was fifteen years ago. That’s so long ago, they didn’t just release a movie about how it got killed, they released a sequel! Two years ago!

There is one (1) two-seater plug-in car available in the US today: the Smart Electric Drive, which looks exactly the same as a regular Smart. Why, it’s the very vehicle that Tesla used to work on with Daimler. (The current Smart Electric Drive is a 100% Daimler product.)

And there are at least nine plug-in cars on the market today that seat four or more people, and all of them look like normal vehicles. Well, except the Mitsubishi i-MiEV, which looks normal in Mitsu’s home market of Japan. One of these normal-looking electric vehicles, the Chevy Volt, has won Consumer Reports’ award for highest customer satisfaction two years in a row, implying that yes, Shai, Olde Economy carmakers know how to meet buyers’ expectations with electric vehicles.

Seriously, claiming that Tesla is the first carmaker to discover that the secret to EV’s is to exceed customer expectations, is as ludicrous Italian Renaissance doctor Realdo Colombo claiming to be the first person to have “discovered” the clitoris in the 16th century — as if it was a faraway continent! How much of a bubble would Agassi have to live in, to think that after a hundred years featuring such iconic zillion-selling vehicles as the Model T, the VW Beetle, and the Toyota Corolla, it took until Tesla for anyone actually, finally get it right?  It’s a statement so stunning in its Valley-centric, navel-gazing ignorance, as to be mockworthy.

Oh, and one last thing – “supersede” means “to take the place or position of”. Tesla did not build a car that “took the place” of buyer’s expectations. It built a car to “sur-pass” or “ex-ceed” buyers’ expectations. Presumably, the spell-checker caught that sur-ceed wasn’t an actual word and suggested “supersede” instead. Furthermore, all carmakers already exceed their customers’ expectations, though most of them aim for lower price points than Tesla did with the Model S. It’s one of the reasons why they manage to sell so many more vehicles than Tesla does.

The lesson: Design a car that provides car buyers with the possibility of upgrading both battery and software, while retaining the car [over twenty years]. Such a possibility will enhance the resell value of cars, and in doing so could drastically reduce the monthly lease new buyers will face at the dealership.

I’m going to go out on a limb and say that Shai Agassi probably doesn’t drive the same car he’s owned since the first World Trade Center terrorist attack (1993). It’s hard to imagine that someone who tried to be part of the auto industry would be so blissfully oblivious to the fact that people’s car needs change over time. (How many university students buy minivans because they plan to drive their future tween-aged kids around town, twenty years hence??) But then, this is a guy who thought it wouldn’t be a big deal to convince the world’s major automakers to all change their designs, for his benefit.

Batteries are “Exponential Technology” – they benefit from reduced cost, improved storage and longer life with every generation, all of which are compounding year over year. Exponential technology is the most disruptive force that hits incumbent industries.

Every technology improves exponentially, because of a little phenomenon called the experience curve that applies in almost every manufacturing endeavour. Including internal combustion engines. There’s also the fact that batteries improving at 8% per year (at best) are far less disruptive than microprocessors doubling in speed every eighteen months. More broadly, rules from the world of software don’t always apply to the world of stuff. Our author should know this, given that his great success at SAP prepared him for … even greater failure with Better Place.

More broadly still, if he believed batteries were doubling in speed every eight years, what the hell was he doing trying to set up a battery-switching based business model??  The improvements in battery technology would have been a “disruptive force” that would’ve soon torpedoed Better Place, if he hadn’t sunk it himself, first. More likely, he started Better Place because he didn’t believe batteries would progress very fast — and rather than admit he was wrong, he glosses over that point. The reader’s ignorance is his bliss.

So average your future cost estimated down heavily and plan for profits to come after volume goes up the s-curve instead of focusing all your calculations on the first batch of cars.

They already do this!!  Development costs for new vehicles run in the hundred of millions — the Volt topped a billion dollars — so the fact that new product launches don’t bankrupt “Olde Economy” automakers kind of implies they know how to amortize development costs over years’ worth of vehicle sales. It’s the height of arrogance for a man who didn’t know how to price his own auto industry product, to lecture established car manufacturers on how to price theirs. He’s a naked, failed courtier raving about his clothes. (I’d’ve called him an emperor, but he hasn’t enjoyed a modicum of auto-industry success.)

The lesson: If you launch a new category, consider very seriously launching it under a new brand with a whole new experience. Direct sales will allow incumbent carmakers not only to control its brand experience; it also translates into a lower per-unit cost of sales once volume starts to pick up. Ask Apple…when you have a differentiated product, you want a differentiated destination store for people to come and experience it. If you do it right, the retail value per square foot beats the rest of the industry – by a mile!

One wonders if Agassi was using a team of ghostwriters and there was a shift change, because earlier in the article it’s (correctly) noted that “mass-market carmakers should probably never try to repeat Tesla’s model – in making cars or in business model. What works for Tesla will not work for GM, and most likely be value destructive for any mass-market incumbent.”

And yet several paragraphs later, it’s recommended that mass-market carmakers repeat Tesla’s model of direct sales because, “if you do it right, the retail value per square foot beats the rest of the industry – by a mile!”. Did he not proof-read his own article? Does he care? Is this a secret homage to Harry Frankfurt’s classic, On Bullshit?

Mass-market incumbent automakers have a massive advantage over Tesla in their omnipresent bricks-and-mortar stores, which give them direct reach and presence in tens of thousands of locations around the world. No one in their right mind would give this up — but then, no one in their right mind would champion or fund a battery-swapping company for cars. (Tesla’s situation is different, as their proposed swapping stations can be run at a loss – they aren’t a company profit centre. Better Place’s swapping stations were intended to be profit centers.)

The analogy with Apple fails as well; before the Apple Store, there were Apple “store-in-store” locations at Best Buy and other retailers. The automobile analogy would be to have a separate part of a showroom dedicated to a manufacturer’s electric vehicles. Dealers already dedicate different areas of their showrooms to various vehicles, and the sales person’s job is to help people find the vehicles they want. Besides, the showroom model is working pretty damn well for electric cars — Nissan is having trouble maintaining Leaf inventory at dealers, because it’s selling so fast!

In brief…

While LinkedIn may have thought Shai Agassi would make a great auto-sector “thought leader” — he’ll draw readers as surely as Kim Kardashian (somehow still) draws viewers — they would do well to recognize that they didn’t land themselves an automotive Steve Jobs; they got themselves a Steve Ballmer instead.