Design

How Tesla changed the Future of Mobility

When Elon Musk presented the Tesla Model 3 electric car to the public on the 31st of March 2016, the future of mobility changed fundamentally. In the first week after registration opened, customers pre-ordered over 325.000 cars. This not only represents a sales volume of approximately 14 billion dollars for Tesla, but also equals the sum of all electric cars sold in Europe since 2010.

September 12, 2016

tesla model 3

Before the Model 3, electric cars were a niche product, not because the technology was not ready – electric engines are quite simple compared to the more complex combustion engines – but due to a systemic challenge that no manufacturer has been willing to overcome. Sales volumes have been kept low by the lack of charging infrastructure while, conversely, there has been no incentive to develop charging infrastructure because of low sales volumes.

What are the broader technology implications of moving rapidly to an electric fleet?

The System Innovation Finally Happens

Musk has broken through this constraint not only by developing desirable long-range electric cars – with the Model 3 now affordable for a broad customer base – but by rolling out a global charging infrastructure at the same time. As of September 2016, more than 4.300 so called superchargers in 705 stations are operating across North America, Europe, China, Japan and Australia, and Tesla plans to bring this number up to 7.200 by the end of 2017.

In addition to a dense network of charging stations, battery range is a critical factor for electric cars to become a serious and eco-friendly alternative to their fuel and diesel driven counterparts. While the electric models of traditional car manufacturers currently offer ranges of only up to 107 miles, the current Tesla models offer ranges between 200 miles (322 km; Model 3) and 315 miles (507 km; Model S).  

To meet the growing demand for car batteries, Tesla is ramping up the biggest world-wide production of lithium ion batteries in their “Gigafactory” in Nevada to meet a potential demand of 500,000 electric vehicles by 2020. Together with Panasonic, they aim to significantly reduce battery costs by using economies of scale.

Breakthrough of E-Mobility

With massively falling battery prices on the one hand and growing environmental regulations on the other hand, electric cars will become generally cheaper while cars with combustion engines will become generally more expensive. Automotive expert Professor Markus Lienkamp estimates we will see the breakthrough of electric cars between 2020 and 2025.

Bold political decisions may further support this trend. Both Norway and the Netherlands are planning to ban petrol and diesel car sales from 2025 onwards and India is working on a scheme for all its fleet to be electric by 2030.

At the latest since the Model 3 announcement in March, other car manufacturers have been re-aligning their strategies around e-mobility and are finally seriously working on the transformation of their model range. While their deep experience in engineering combustion engines hinders them to embrace a full-hearted e-mobility approach, they can play to their strengths when it comes to mass-production, one area where Tesla still has to prove its worth as Musk plans to boost annual production capacity to 500,000 vehicles by 2018. This is 10 times higher than the 50,000 cars Tesla produced in 2015.

Evolution of the Digital Ecosystem

Innovation in e-mobility does not stop with the question of engine technology, though.

By equipping their cars with huge touchscreen displays and the ability to receive over the air updates, Tesla follows a consequent all-digital approach. As a result, Tesla cars keep evolving after they come off the assembly line, adding new features and enhancing existing ones over time. Indeed, this represents a groundbreaking shift in the car industry.

Previously, cars have been mainly understood as a complex piece of pre-determined hardware and embedded software which could only be updated or fixed through a garage.

Tesla’s approach makes the car a true consumer software device. This step is comparable to and no less significant than the move from traditional cell phones to Apple’s iPhone as the first true smartphone on the market (which took Nokia completely by surprise and consequently led to their demise).

Drivers are now able to customize their car interfaces to individual taste, use third party apps and integrate with online services. Triggering connected home devices (e.g. locks, doors, lights and thermostats) when leaving the driveway is just one example of what is already possible.

Saab-9-X-Air-Concept-digital-display

With autonomous driving, the car’s role will change dramatically. The car becomes the hub of a digital ecosystem with services such as productivity and entertainment baked into the offer. Car designers now have the scope to imagine the full range of consumer services, to be delivered in transit.

Again, Tesla broke new ground when they rolled out “Autopilot” through a software update. Even though drivers are still required to keep their hands on the steering wheel and remain engaged with the traffic, it is impressive how far the technology has already come.

Because of the ability to deliver apps to cars we are also seeing changes in the hardware configuration of cars beyond the center console. Manufactures are starting to incorporate AMOLED displays, invented originally for the smartphone, into their cars. AMOLED displays can be shaped to the car’s interior and used for curved dashboard displays, digital rear-view mirrors and both internal and external lighting. In addition to that, the AMOLED technology allows transparent screens, extending its use to heads up displays that show relevant information directly in the driver’s field of vision on the windshield.

New Opportunities

2016 is the year where e-mobility has left its niche and started to transform the automotive market towards a more sustainable approach providing a clear alternative to burning fossil fuels. Traditional car manufacturers have finally overcome their long resistance to work seriously on alternative engine concepts and are starting to think about mobility in a broader sense than selling car quantities.

By consequently digitalizing the driving experience and pushing the boundaries of autonomous driving, Elon Musk has shown the industry where innovation will have to happen in the coming years. Change will be pervasive – in hardware, displays, battery storage, applications, infrastructures, services and more, bringing with it a new innovation ecosystem.

The expected growth of electric cars provides huge opportunities – for new players like Tesla who have the freedom to completely re-think current solutions, but also for established car manufacturers who can use their deep expertise in mass-production to scale up sales numbers and provide comprehensive mobility services. At the same time, the digitalization of the car will create opportunities for software companies, designers and security specialists to re-define the driving experience through new user interfaces, applications and connected online services.

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