Wednesday, November 17, 2010

The Chevy Volt: Crossing The Chasm

Yesterday's announcement that the Chevy Volt won Motor Trend's "Car of the Year" Award is not just a bit of Motor City hype. It is the beginning of a palpable solution to climate change.

There is no way to materially reduce greenhouse gas emissions without electric vehicles connected to a smart grid--that is, smart enough to charge batteries with power taken from renewable sources like hydro, sun and wind. But there is no incentive for power companies to make the enormous investments in such grids unless, first, the cost of oil and gas threatens to rise, and, second, electric vehicles are common enough, and concentrated enough in urban areas, to threaten neighborhood brownouts. The first condition is pretty much guaranteed by demand from China, India, Brazil, etc. And what of the second?

THIS IS MORE complicated, for it depends on electric vehicles being accepted, finally, by the mainstream market--not thousands of vehicles, but millions. As Geoffrey Moore put it, wonderfully, in his famous 1991 book about Silicon Valley, Crossing The Chasm, you can always get "innovators" and "early adopters"--you know, Wired, then Brad and Angelina--to try a technology, but to get to the larger market, the "early majority," you need to offer ordinary customers a strong value proposition: business-school jargon for making them an offer they can't refuse.

The Web would not have developed as quickly, if at all, if the personal computer had not been ubiquitous. But this depended--not on the promise of the Web, which ordinary customers could not fathom--but on the magical way computers allowed us, then and there, to avoid retyping documents or crunch columns of numbers one at a time--also on the deep pleasures of graphical interfaces. Word, Excel, Windows 95, etc. were "killer apps" that, inadvertently, laid the ground for the internet. What is the killer app for the smart grid?

THE CHEVY VOLT is, and Motor Trend's award is its certificate of fitness. Because the Volt gives ordinary customers, here and now, the serious benefits of electric mobility without requiring the revolutionary changes in infrastructure that electric vehicles will ultimately occasion. On the contrary, the widespread adoption of vehicles like the Volt will force those changes.

What benefits? In a nutshell, the cost of running an electric car is attractive: about 1-2 cents a mile as compared with 15-18 cents a mile for a gas-powered vehicle; cheaper maintenance; the chance to feel cool about oneself. Moreover, the Volt will allow 80% of customers to run on electricity alone for about 80% of the time, etc. The sticker price is still comparatively high for Gen 1, but remember when cell phones were $600?  But most important, the Volt uses the existing gasoline infrastructure to extend the range of the vehicle to what gasoline-powered vehicles get: about 300-350 miles. (I laid this out in this space here and here. The longer version, again, was a year ago in Inc. Magazine here.)

Industry insiders report that the Volt is about to win other awards, too. The 2011 Automobile Magazine "Car of the Year." The 2010 Popular Science "Best of What's New" Award. The 2011 Car and Driver "Ten Best Cars" distinction. This is a big f**cking deal, to recall a quote from a senior member of the administration.

And while we're on the subject. It has become so fashionable these days to belittle the achievements of the Obama administration, which has been judicious and successful in so many ways, that I know I risk being anything but cool by saying that its handling of the auto industry was inspired. Obama's investments in GM, his demand for a reworked business plan which showcased Volt technology, his change in company leadership, his "stimulus" investments in batteries and the grid--all of these--suggest a proper role for the commonwealth.

Obama did not just save "manufacturing" jobs; he put federal dollars underneath a technology that will prove as critical to green industries as the iPad will to publishing. It would be good to hear some praise for a change.

4 comments:

Potter said...

And while we're on the subject. It has become so fashionable these days to belittle the achievements of the Obama administration, which has been judicious and successful in so many ways, that I know I risk being anything but cool by saying that its handling of the auto industry was inspired.

I don't read or indulge in every criticism but I take exception to belittling some serious and deserved criticism by calling it "fashionable". The fact is that Obama has been seen increasingly as weak: prematurely compromising, unable or unwilling to fight, not using the considerable power that he has been given, nor the force of his personality ( which we have seen that he has). This is not the fault of his critics on the left. Nor is his "shellacking" the fault of those critics. I respect your defense of Obama and his achievements but I think it's fair to say that mostly Obama has not been strong enough in defending his own achievements, his part in this particular case and in general as well. Obama lost control of the narrative in the last election ( and indeed in the last two years) and lost incrementally the enthusiasm of those who voted for him. Why else would Sarah Palin be saying that she now thinks she can beat Obama in 2012?

Potter said...

For instance, I cannot tell you how angered I am to see Obama giving away such gifts to get a 90 day moratorium which outrageously even excludes East Jerusalem. These are gifts that should come after a peace agreement, if any gifts are so necessary for Israel to do what it should do.

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