Automotive Innovation and Transformation on Wheels
The modern automotive industry is in the midst of a revolution. Motivated initially by the passion, intelligence, and charisma of a few energetic individuals, sweeping disruptions have changed virtually every facet of this market. Automotive innovation has reshaped everything in the space, from relationships between companies to how parts are manufactured.
This shift in power is seen clearly in the new mindset, direction, and strategy the automotive industry has adopted to bring electric vehicles to market. In 2003, a young billionaire named Elon Musk took command of the conversation on clean transportation. He and a small team of Silicon Valley engineers introduced Tesla and a vision to create the “most compelling car company of the twenty-first century.”
The then relative unknown made this bold statement to an industry with more than 100 years of traditions, norms, biases, and processes. As he did, he began to transfer power from city, state and federal officials to himself. And he transferred it to new industry leaders producing electric cars, and to the entities debating the benefits of clean transportation and autonomous technology.
Ushering an Era of Automotive Innovation
Tesla’s non-traditional direction forced the auto industry to change rapidly and dramatically. The number of hybrid electric vehicles sold in the U.S. didn’t break 100,000 until 2005. In 2008, none of the major automotive manufacturers were making electric cars. It wasn’t until Telsa came onto the scene with a sporty, desirable roadster and a masterpiece of marketing did it become cool for the general population to own a “green” car.
Fast forward to 2021. The automotive manufacturing industry has reached a tipping point.
Most of the established mainstream automakers manufacture fully electric and hybrid electric cars. The roadways and gas pumps look different, and the electric vehicle market has exploded. All of the signs point to the fact that consumer preferences have shifted, and the demand for electric vehicles continues to rise.Consumers are willing to pay a premium for an electronic car, knowing that the cost of manufacturing is still higher than combustible engines vehicles.
For now, regulators help bridge pricing gaps with subsidies and tax exemptions. Ever-tightening emission regulations are pressing automotive manufacturers to make electric cars profitable and the industry is embracing the global push to phase out internal combustion engines at large. The result is that carmakers are pushing innovation frontiers farther and focusing their strategies on making electric vehicles cost competitive with traditional internal combustion engine cars. Many have started to explore and include AI in their cars for increased safety, comfort, and increased energy efficiency. The evolution of AI technology for automobiles must also consider changes to existing and future infrastructure. With all of this in mind, major automakers and U.S. members of Congress are discussing how to develop and regulate autonomous vehicles across a broader spectrum of usage.
Transformation Begins with One Visionary
Musk’s future-focused thinking sparked a movement for others to follow and lead. In a few short years, a small group with a vision for a better future of humanity disrupted a staunch industry reluctant to change. His vision and strategy became platforms for debates about and investments in connectivity, shared mobility, electrification, and autonomy.
If an industry with a century of legacy and tradition can disrupt itself, the possibility for transformation is clear. What industry will follow the example of automotive innovation and conversions to accelerate into the future?