One of the things I stress whenever I in casual conversations or presentations is that motor vehicles are right on the cusp of a period of whiplash-inducing change. As you can imagine, I strongly agree with an article posted the other day by Newsweek, Why Traditional Hybrid Cars Are Becoming Obsolete:

To most of us, Toyota’s snazzy Prius hybrid still seems like the cutting edge of cool, the latest and greatest technology in cars. But nine years after the Prius was introduced in the United States, some are calling it obsolete. “The hybrid is yesterday’s technology,” says San Francisco Mayor and recently announced California gubernatorial candidate Gavin Newsom. To be sure, Newsom has a political ax to grind—he’s trying to lure electric-car makers to the Bay Area, which already is home to Tesla Motors, maker of a sexy electric roadster, and Better Place, another startup focused on greentech transportation. But Newsom has a point. A new generation of carmakers is shunning the traditional hybrid format in favor of pure electric powertrains (driven completely by batteries) or “plug-in hybrids.” Indeed, the auto industry is being disrupted by rapid waves of new technology, a phenomenon that feels normal for the folks in Silicon Valley but is perhaps unfamiliar for the folks in Detroit. “We are on the cusp of a period of technical innovation like the automobile industry has never seen,” says Mike Jackson, CEO of AutoNation, the largest U.S. auto retailer. “There will be more change in the next five to 10 years than there was in the last 100.”

When I talk to a group about such things, I tell them that cars are about to change more in the next decade than telephones (including, but not limited to, cell phones) have in the last decade.[1][2] Hybrids, plug-in hybrids, EVs; gasoline, ethanol, diesel, biodiesel; spark ignition, diesel, HCCI, turbo charged, supercharged; nickel-metal hydride; lithium ion, something else. The choices will be staggering.

It won’t stay this way, of course. Pretty quickly the competing technologies will sort themselves out, and most of those options will disappear, a few in as little as one car generation (four to six years). In some cases that will leave owners with a real problem when it comes time to trade in or sell their vehicle that’s perceived as being based on a werid, failed technology. This is one reason why I bought my Scion xA in 2003; I wanted something that would get acceptable mileage but without a large dollar investment. I’m pretty confident in my ability to analyze technology trends, but only a fool would make an unnecessarily large bet in the approaching automotive maelstrom.

Right now, my hunch is that we’re headed for a mix of EVs and PHEVs with various size battery packs. The PHEVs will use the most flexible on board engine technology that’s mainstreamble, such as a “will burn almost anything” HCCI that can take gasoline, ethanol biodiesel, etc. I expect to see car companies offering a larger battery pack on new vehicles and as a post-purchase upgrade. The economic model and product line experimentation won’t be as dramatic as the technological changes, but it will be just as important.

So, fasten your seat belt, things are just about to get interesting.

[1] Credit for this choice of analogy goes to my wife. When preparing for a presentation some time back, I was going to draw a parallel to TV’s and the rise of HD, but she thought phones would be more accessible, since only the TV geeks really get all the change that product category has seen. Yet more proof that I married better than she did.

[2] At the presentation mentioned in the prior note, I noticed a cluster of college students sitting (of course) in the back of the room. I addressed them directly and told them that once upon a time many years ago, a telephone was this big plastic thing that sat on a desk. You picked up part of it to communicate, and that part was attached to the base with a wire(!), and the base was attached to the wall with another wire(!!!). Astonishingly enough, the telephone didn’t take pictures, it didn’t record sound or play your music, it didn’t make or play movies, you couldn’t text with it, it didn’t have a clock, and it had one ring tone that went “RING RING RING”. All you could do was talk to people in far-off places, and we, simple folk that we were, thought that was cool.



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