EVs fascinate me
By Peter Clark
I am not a car guy. Before buying my Tesla Model 3, I had had two cars in my entire life:
Subaru impreza (for British readers, I mean the American variant, which is a very utilitarian car. ((for American readers, I explain this because in England, the only Subaru Impreza that exists, is what Americans know as the Subaru Impreza WRX. A loud sports car)
I bought a Model 3 because I was starting to do longer drives, and well, in 2018-ish Tesla was the hot product and the more I read about it the more I felt it was a great (fancy) car for people that are not car guys.
I eventually upgraded to a Model Y since I found the Model 3 overly small. As an aside, I personally do not understand why Tesla makes both the 3 and the Y — couldn't they simply sell the Y? Are the people that want the slightly more sporty 3 dynamics not just going to buy a Y if they had no other choice?
I think the Model Y is a near perfect car … but despite not being a car guy, I have always wanted a Land Rover. However —
I am morally opposed to buying an internal combustion engine car.
Land Rovers are not what they used to be. And what they even used to be is a bit debatable since you now sadly have to go back almost half a century to find the glory days of Land Rover.
Old Land Rovers are crazy money, unsafe, and really not practical daily drivers.
Despite historically always wanting a Land Rover — and having zero interest in any competing cars such as Land Cruisers (not a thing in UK), Jeeps (same), etc — I had always said along the lines of "my dream car would be a Land Rover Defender that is electric."
If I simply add an "-esque vehicle" to that sentence:
"my dream car would be a Land Rover Defender-esque vehicle that is electric."
That is basically a Rivian R1S. And it's great! And I have very little to add on the topic as of now.
The future of EVs
But driving my R1S got me thinking about EVs in general — it's clear to me that very quickly it's going to be quite easy to make EVs.
I had previously thought that cars would go the way of the smart phone, and that everyone would buy a Tesla (iPhone, market leader) and everyone else would really struggle in the battle for the long tail of market share (Android, long tail) but it now feels like that won't be the case.
Don't get me wrong, I am sure that Tesla will become the Apple of EVs — the rare manufacturer that has healthy margins, brand appeal and mass volume — but I no longer thing other companies will wither and die.
It feels like there will be two buckets:
Mainstream cars (Tesla, BMW, Toyota, etc)
These will companies that make wide product families of cars that appeal to all sorts. Tesla already ships 4 car types and has the roadster, the truck, the cybertruck, and presumably a cheaper car on the way. You can already see BMW, Volvo, etc doing similar. This feels like it'll become a dirty streetlight real fast.
Niche cars (Rivian, ???)
I think this is a huge opportunity. Rivian makes cars for adventures. They're like the Patagonia of cars. They're able to hone their cars not by significant hardware but by software to really seduce their audience.
The motors and batteries of EVs are going to become trivial to acquire. The starting cost for starting an EV company is also going to plummet. Now that chargers are becoming mainstream (thanks to the Biden infrastructure bill) in a few years (when battery prices fall further) there is nothing to stop someone from starting an EV company for all sorts of niches.
Another important fact is that range anxiety is going away — people are fine with cars being around 250 mile range. It means yet another differentiator is commoditized: no one is going to make a 1,000 mile EV until anyone can. It's physics!
Niche to win?
I think it's possible we see all sorts of Rivian-esque companies. For example a lot of my parent friends love minivans — a minivan EV company could do incredible software to make a family friendly minivan. Imagine a minivan with 300 mile range, sliding doors, 3 row (accessible) seating, and a stack of software specifically for families:
Ability to view into rear facing car seats
Thoughtful kids entertainment
Whitenoise machines in seats
Vertically integrated car seats that connect with the car for safety and occupancy enhancements
None of this is limited by the EV chassis, it's all pretty straight forward software. It's inevitable that the major manufacturers will eventually release a minivan, but with software a startup could really compete and families would have to pick between a Honda Minivan EV or a 20% more expensive incredible startup minivan EV.
Why couldn't this kind of startup exist for all sorts of other functional use cases? Camper vans. Delivery vans. How about an EV that helps people learn to drive and has a marketplace but into it that helps you sell it on in 3 years? Or vans for tradesmen? Don't even get me started about creating a wagon EV…
Ultimately, EVs may well live or die not by their performance, price or even brand — but by their packaging. You've got a 300 mile EV with dual motors, how are you going to wrap that in a bow of software and brand marketing to appeal to a niche?