Blog / Car Insurance
Electric cars. Is Dyson ahead? Maybe…
The complexity of the modern car is obvious to anyone who has taken a peek under the hood. With all that intricate engineering, it is incredible that modern cars are as reliable as they are. You can chalk this down to the fact that companies like Mercedes-Benz have been producing engines since the late 1800s. That’s a heck of a lot of practice.
Now imagine if you could get rid of 90 percent of that complexity.
The trusty Car team at Budget Direct Insurance has looked into the future of cars, and it’s a lot simpler than you may think…
Plenty of companies are relishing the thought of replacing all those camshafts, crankshafts, pistons and poppet valves with a much simpler electric motor.
Car companies vs. new comers
For car companies, the transition should be fairly simple – replace the engine with an electric motor, add a decent battery pack and the job is done.
But with fewer barriers to entry, there are new players eyeing the market.
Tesla is an obvious one, and its market capitalization is at about parity with General Motors – a company that last year made 100 times as many cars as Tesla.
Most of the established car manufacturers have indicated they’re going electric. Jaguar, for example, recently announced all its cars will feature some electrification by 2020, and then committed sacrilege by electrifying a classic E-Type! But the most hype is around the newcomers.
- Dyson – yes, the vacuum cleaner company – has announced it is developing an EV to be launched in 2020. Given its expertise in efficient electric motors and some new, and apparently cheaper, battery technology, it may be one to watch.
- With around 28 million new car sales last year, and a strong push to develop EVs, China is surely going to make an impact. Some would argue it has already done so, with a manufacturer called NIO – a startup valued at about $3 billion, according to The Economist – setting EV lap records at a number of race circuits around the world with its EV9 supercar. It is available in limited numbers for purchase, and is not road-legal, though the company has announced it will have an autonomous EV for sale in the US in 2020.
- And we even have entrants from Singapore. Vanda Electrics has several electric products in the pipeline, from the cheeky Motochimp electric scooter to the 320km/h-plus Dendrobium supercar unveiled at the Geneva Motor Show earlier this year.
Vanda Electrics: Motochimp
Vanda Electrics: Dendrobium
Will we actually want a Dyson?
Imagining that car buyers are going to hanker after a Dyson in the same way they do a Rolls-Royce may be something of a stretch – brand-building takes time. Especially when you want customers to get to the ‘I can’t live without it’ stage.
Existing car companies already have distribution and dealer networks in place – another barrier for new players to overcome. It is sobering to realize that Apple, a company that knows something about manufacturing attractive, high-tech, high-profit consumer products (and is hardly short of cash) has apparently abandoned its plan to make an electric car because of the cost and complexity.
Are we going to see new entrants in the car market as electric cars become more common? Absolutely. Are we going to see ambitious new players realising the car business is costlier and more difficult than they imagined? Most probably.
But you can bet that many entrepreneurs will fight for this lucative future market, or die trying.
For more car reviews and motoring tips, look out for regular posts in this series.
Budget Direct Insurance
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