Old v New
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Sunday December 17, 2017 – Old v New –
Last week I attended the LA Auto show and one thing really highlighted the
transition we are seeing in personal transportation.
As I walked into the South Hall the first thing I saw was the Tesla stand. This is the first year that Tesla has appeared in the main hall representing one more step for Tesla becoming a front line automobile manufacturer. They have already become one of the largest manufacturers in the luxury car market outselling such established names as Cadillac and Lincoln. In their stand at the LA Auto Show was their latest threat to the internal combustion engine powered car, the Model 3. Tesla already has deposits on over 450,000 model 3s and the numbers appear to be growing even though deliveries are still a trickle.
The latest word on the model 3 is
that the issue they were having with battery manufacture has been resolved and
they are now building at a rate close to 1,000 per week. Reports are that
Tesla lots are beginning to fill with Model 3s awaiting delivery and we should
expect a significant jump in cars going out the door when December sales numbers
come in. It looks like Tesla is actually on track to build 20,000 cars per
month by the second quarter of 2018 and this is going to change the perception
of plug-in cars as they start to become more visible on the streets.
I made my way to the Mazda press conference and their sales pitch represented everything that was old in the car industry. The contrast made me imagine what it would have been like when Ford was the cutting edge of technology while some clung to the horse and buggy but, in the end, either adapted or disappeared becoming a footnote in history.
Mazda did have some interesting technology to reveal. They put a lot of money into making the gas engine more efficient and they are continuing this trend with the Skyactive-X compression-ignition engine. Now compared to an electric motor the gas engine is very complex and the Skyactive-X takes this to a whole new level. While it does use compression ignition similar to how a diesel engine works, it does not totally eliminate the spark plug which is needed in certain situations like when the engine is cold. Mazda do claim that this engine gets many of the benefits of diesel, including better fuel economy, without the need for expensive equipment to meet emissions standards. To add to the complexity the engine is also turbo-charged.
While Tesla is leading the way to an electric future. Mazda, in their press conference, showed that they are trying hard to stay with the past. They seem unaware that it doesn't matter if they can wring impressive fuel economy from a gas engine, we just can't afford to keep poisoning our atmosphere by continuing to burn fossil fuels. Mazda appear to be behaving like the carriage makers of the 19th century.
In 1900 there were 7,000 companies building horse drawn carriages in the US. Almost none of them survive today being replaced by upstarts like Henry Ford who moved into the whole new industry, the automobile. One that did survive was the Duran-Dort Carriage Co. After seeing an automobile on a trip to Europe Alexander Brownell Cullen Hardy is said to have told Billy Durant to "get out of the carriage business before the automobile ruins you." Durant didn't act on this dire warning right away but in 1904 he bought a struggling carmaker called Buick, and General Motors was born. Other carriage makers like Studebaker also moved into automobile manufacture but most didn't, at least until it was too late, and went out of business.
Mazda has entered into a joint venture with Toyota to develop electric transportation so they may end up surprising us but that's not how their press conference came across. Tesla on the other hand have already started to expand their product line beyond the Model 3. They showed a Semi-Truck to the press recently and have started taking orders. They also have a new roadster in the works that is going to compete in the Supercar category and they are expected to announce a CUV version of the Model 3 some time next year.
The technology of personal transportation is changing and more countries are looking to ban sales of internal combustion engine powered vehicles. Some companies like GM appear to be adapting while others like Mazda appear to be clinging to the past and new companies are attempting to follow Tesla into the car making business. Who will survive and who will become a footnote in history will be determined over the next 10 years.
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