by Mike Gulett –
When I think of Jaguar I think of beautiful sports cars, fast race cars and stylish luxury cars. I also think of technology innovations like disc brakes. Now I must think of electric powered vehicles because Jaguar recently announced they will produce only electric powered vehicles starting in 2025. This is perhaps the earliest date announced by an existing car company – only four years from now. General Motors recently announced they would be all electric in 2035. All existing car companies have either announced their electric plans or are scrambling to do so.
Technology transitions always create opportunities for new companies and risk for existing companies. The transition to electric vehicles will do the same and has already started with a new company, Tesla taking an early market lead.
When new technologies come along the established leaders prefer to delay the transition themselves because they have so much invested in their existing products, manufacturing capability and technologies. Moving to a new technology like electric powered cars presents a risk for the established leaders and even second tier companies. This hesitation to move first into a new market creates the opportunity for a new company that does not have legacy products and technology. Indeed we have seen many start up electric car companies and I suspect we will see more over the coming years.
Even established companies that are not in the automobile business are planning to enter the market. Apple comes to mind and one can expect that an Apple car will have some software and operating system advantages over other manufacturers. The Apple car could be a rolling Apple iPhone or iMac, which may not be thought of as needed but when it arrives I suspect it will be fascinating. The market power of the Apple universe could be compelling on wheels. Remember what Apple did to the cell phone market – the previous markets leaders, Nokia and Motorola are not a factor today (remember Blackberry?).
The technology innovations needed to be a leader in the electric car market are not necessarily automobile related technology; battery life, battery charging time, range on a charge and self-driving capability. Other automobile characteristics will continue to be important such as style, reliability, comfort and of course cost.
We can expect to see price wars – Tesla has already cut prices this year and other electric car companies have to follow. Start ups in general are driven to capture market share and increase unit shipments even at the expense of profits, which means they will be price competitive. The transition to electric automobiles will continue to be a cash drain for years to come on both new companies and established companies.
In any event this transition presents real risks for existing market leaders and opportunities for new automobile market entrants. It should be good for buyers of new electric automobiles because there will be a wide variety of electric vehicles with serious price competition.
As for Jaguar – this transition to electric is a life or death situation that presents risks with the possibility of survival as the reward.
Let us know what you think in the Comments.
The author owns shares in Apple and Tesla.
This will spell the end of the Jaguar brand. People buy a Jaguar because they want a Jaguar, not a Tesla, not a Ghibli, not a Panorama, not a Mercedes. While Jaguar Land Rover had a good year rebouding from huge losses, that occurred because of Land Rover/Range Rover sales, not Jaguar sales. They need to come up with newer sportier reliable models that attract the youger crowd. With this decision, they might as well turn off the lights now.
I agree with Crawford. They should have a full electric in each model
but we still want to hear the snarl of an internal combustion engine. Or a hybrid–that way out in the country we can wind it out but in the city drive oh-so-humbly electric,
It just seems that people are jumping on the bandwagon without considering the basics yet, which to me just seems like a joke for publicity.
Figure out how the infrastructure will be developed, how to dispose of the toxic batteries, etc. and where this new demand for electricity will come from before announcing to the world that they are going to save it.
Things do develop with time and dedication but this is no more than a knee jerk reaction to what at this time is just a fantasy.