Matt Grantham:

I thought that I would send this one through and add a couple of comments based on the last podcast for things to think about for the second part.

I am not sure if I mentioned it with in Asymcar 16 but one of the reasons that people are so excited about solar (especially in Australia and other sunny parts of the world) is that with the roof top option you completely take the need grid infrastructure out of the equation. Which in Australia is about half the cost of your bill and as panel costs come down the economics of this are just going to get stronger. I agree that wind prices are also going down but all other technologies have the disadvantage that they are not able to be distributed around the grid.

To highlight this point here is an article which really shows the system challenge for energy based looking at the distributed vs centralised model

http://reneweconomy.com.au/2014/even-coal-free-couldnt-compete-rooftop-solar-88808

It is relevant to mention that you can also have large PV solar plants as well that face the same challenges as wind, coal and geothermal if they are grid connected.

In the podcast I did I forgot to mention one crucial element that could really help push EV’s and that was electricity tariff reform because if you can start to see one of the what at the moment is one of the problems for the grid ie over supply and as a result cheap energy and combine that with tariff reforms that encourage EV users to suck up this cheap energy then what was a problem for the grid is now a competitive advantage for EVs as long as you get the market structure right. I think good energy market structures are the key.

Also another concept that we have thrashed about on our show from time to time is the idea of variability VS intermittency with regards to clean energy and if you have got a real time market and smart devices like EV’s then they can add to the overall stability of a grid. Solar now we are calling “predictably variable” because even though it is not there at night and you can get clouds from time to time when you look at the system input across a city on a daily basis you do get a very predictable output from it on a day to day basis and modern weather forecasting is helping to refine this even further.

Here are some other EV articles I stumbled across recently that you might be interested in.

http://reneweconomy.com.au/2014/why-evs-will-make-solar-viable-without-subsidies-91738

http://reneweconomy.com.au/2014/makes-sense-pair-solar-evs-14517

Steve Crandall joins us to discuss hydrogen fuel cells vs. lithium batteries. The two alternatives to post-internal-combustion motoring are far harder to assess than it might seem. Both require systems analysis and the systems themselves need to be weighed against the incumbent infrastructure and jobs to be done.

We begin with Toyota’s fuel cell sedan announcement and recall Honda’s Clarity. The conversation leads to the observation that technical merit is not always sufficient or even necessary to market adoption success. We note that Toyota supported the Prius through years of low volume. Steve compares this to AT&T’s abandonment of a cell service in the 1990’s.

Steve compares the energy performance of hydrogen and gasoline and shares a look at the economic conditions necessary for a successful hydrogen fuel cell launch.

28mb mp3 about 58 minutes.

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Notes:

Steve Crandall:

Energy & Clothes Drying

Where EV’s are doing very well

Coal is Still King

United States Department of Energy Study: Hydrogen Fuel Cell Vehicles Advancing Rapidly Fuel Cell Technologies Office United States Hydrogen Policy

Walkable City Book

Top Gear: Honda Clarity Honda’s website How the Clarity FCEV works

Toyota Fuel Cell Sedan Toyota Japan

Tailpipe emissions

Sustainable Energy

Fuel cell expert says Tesla is promising more than it can deliver

Matt Grantham joins us to discuss electric vehicles, renewable energy, smarter software, solar opportunities and economics. Matt introduces us to Solar X, the solar car challenge. He reflects on these emerging technologies in light of Australia’s nearly extinct auto manufacturing sector.

We explore the concept of a car as the home power source and consider possible EV disruption of traditional power generation and distribution concerns. The potential business models arising from these emerging technologies makes us pause in light of solar firm’s stock performance.

25mb mp3 about 52 minutes.

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Notes:

Utility “Death Spiral” Pro & Con

Barclays Downgrades Electric Utility Bonds, Sees Viable Solar Competition

Australian coal industry facing some home truths

Suntech says solar PV costs to match coal in China by 2016

Utility seeks “fixed price” hike on smaller customers

Bringing Solar Power to Scale

John Wood discusses UltraBattery

SolarX: Australia’s first solar electric hybrid sports car

Interviews with both winners of the World solar car challenge.

Green Tea Party Energy Platform

The Big Roads by Earl Swift

Bradley GT Electric Kit Car (photo above) Carbuzz.

Buying into solar power, no roof access necessary.

An interview with Ossi Oikarinen, Technical Director at Team Rosberg, a 30-year veteran of motorsport, Formula One TV presenter and deep insider.

We cover Formula One and DTM touring car racing from the point of view of business models, jobs to be done and technical innovations. We touch on many other fine points.

This is a good one.

27mb mp3 about 56 minutes.

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Notes:

• Kinetic Energy Recovery System: wikipedia
• Jim Hall Chaparral Cars
• Team Rosberg
• Keke Rosberg
• The Film 1

On continental road trips, joys of rear wheel drive, diesel engines and autobahn speeds, pilgrimage to Porsche and BMW’s brand meccas.

How to understand the world through toy cars, from Matchbox to Hot Wheels, Siku, Majorette to Tomica.

Jim returns to the business of car distribution with an Alfred Sloan quote:

“Between 1923–29 the leveling of demand for new cars logically resulted in a change of emphasis in the industry from production to distribution. On the sales end that meant a change from easy selling to hard selling. Dealer problems of an entirely new nature began to arise.”

We consider car dealer data and discuss the “channel stuffing” origins of state franchise regulation. Horace reminds us that the current auto industry is constructed around production and distribution.

We close by reflecting on Apple’s routing around now defunct computer retail channels via its highly successful stores, just 13 years ago.

27mb mp3 about 60 minutes.

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Notes:

Hot Wheels Majorette Matchbox Solido Tomica

NADA: 2013 State of the Industry Report

WardsAuto 2014 US “MegaDealer 100”

Polk Auto Industry Dashboard

Francine Lafontaine and Fiona Scott Morton: State Franchise Laws, Dealer Terminations, and the Auto Crisis.

Tim Cook:

(Inventory) is “fundamentally evil,” and he has been known to observe that it declines in value by 1% to 2% a week in normal times, faster in tough times like the present.

“You kind of want to manage it like you’re in the dairy business,” he has said. “If it gets past its freshness date, you have a problem.” This logistical discipline has given Apple inventory management comparable with Dell’s, then as now the gold standard for computer-manufacturing efficiency.

Panoramic View

From time to time at Asymcar, we have discussed the Henry Ford production system, made plain via River Rouge.

“In 1932 Edsel Ford, the son of Henry Ford and president of the car company that bears the family name, and William Valentiner, the director of the Detroit Institute of Arts, commissioned Rivera to paint two murals for the museum’s Garden Court.

Soon thereafter Rivera and his wife, painter Frida Kahlo, arrived in Detroit and began studying and photographing the Ford automotive plant on the Rouge River. The factory so fascinated and inspired Rivera that he soon suggested painting all four walls of the Garden Court. Ford and Valentier agreed and soon Rivera’s commission was expanded.”

Don Gonyea: Detroit Industry: The Murals of Diego Rivera

Diego Rivera’s Detroit Industry Murals

Wikipedia: Detroit Industry Murals.

Wikipedia: River Rouge.

A Detroit visitor will enjoy a slow walk through the Institute of Arts and nearby Greenfield Village.

The emerging electric car supply chain looks rather different.

We explore the strategic and tactical considerations behind BMW’s i sub-brand. Why did BMW attach a new BMW sub-brand to a new powertrain rather than using another brand, like Mini? The answer helps explain how innovations and brands inter-relate and how incumbents can attempt to absorb what is potentially non-sustaining.

We consider the pros and cons of innovation within an operating business – “intrepreneurship” – compared with creating an autonomous enterprise for the “new new thing”. Horace contrasts BMW i with General Motors’ failed Saturn experiment and notes that today, GM offers a mainstream plug-in car through the long serving Chevrolet brand and sales channel.

We consider the burden that regulation, girth, cycle times, legacy practices, financialization and strategy taxes place on incumbents.

Finally, we look at what it takes to cross over the line which separates the device-based nice-to-have infotainment options from the must-have driver and ownership assistants that will inevitably find home in these devices.

32mb mp3 about 64 minutes.

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The i3 Long Bet

Saturn

intrepreneurship

The “new new thing”

BMW i Philosophy

Chevrolet Volt

Nissan Leaf

Long bets have always fascinated me.

I considered BMW’s long bet while driving the i3 recently. The car’s dynamics such as acceleration and handling are in a different league from the Prius, which I have sampled as a rental and taxi mule. Crucially, BMW has preserved their traditional 50/50 weight distribution. The car seemed to be well built, though it does exhibit a few “1.0” indicators *.

That said, I applaud BMW for making two long product bets:

1. Composites: SAE International and Composite world’s look at the i3 are worth reading.

2. Modular construction: “Life” and “Drive” modules and production process videos: part 1, 2 and 3.

The conception, gestation and launch of BMW’s i models (i3 and i8 have been announced) represents a rather radical change in design and manufacturing from the legacy 1,2,3,4,5,6,7, M and X models. Such initiatives require consistent leadership, vision, great people, capital and ultimately a successful business model.

The transition to modular cars and changing customer experiences will not be simple for the traditional manufacturers.

Asymcar 10 discussed some of the challenges associated with endless line extension (see “BMW Tosses Salesmen for ‘Geniuses’: “Impatient with 20th Century Dealerships”, “physical environment is not capable of handling the product portfolio”) as illustrated below:

Much as the Apple Store redefined the retail experience, Tesla’s direct sales model and the looming growth of car sharing services will ultimately force BMW and others to rethink their traditional dealer franchise business. That is a tall task. That said, some traditional dealers may see the writing on the wall, particularly the implications for their service and parts revenues that simplified e-vehicles hold.

Perhaps it was the Prius that spurred BMW to launch the i models. Maybe Tesla. Possibly cultural changes such as the growing organic food movement, urbanization and the decline in driving. Nevertheless, the scope and scale of the i project is impressive.

* My 1.0 notes (and I do not wish to minimize in any way the technical achievements represented by the i3, particularly the production process):

I did not have an opportunity to try the i3’s iPhone (and Google Play) app. Ideally, the owner should be able to operate all aspects of the car (short of driving) from the app. Further, the “owner” should be able to download the entire driving and service experience and share that with potential buyers along with service representatives.

I’ll digress a bit and suggest that auto manufacturers will rue the day that they decided not to make software experience a core competency. I am not suggesting the the car companies do it all, rather that they focus on the essentials and make the owner’s experience paramount. The software, or metadata interface is the likely path into the game for car sharing and other value extraction services. (see also Ford said to drop Microsoft for Blackberry’s QNX)

BMW’s iDrive joins the i3 party. The interior materials and finish are nicely done and I found the front and back entry/exit door design to be interesting. I then turned my attention to the driver interface.

One can imagine the planning meetings where a variety of interior experience scenarios were discussed, fought, battled and likely not settled. Ulimately, BMW’s iDrive made the cut, perhaps with blood on the floor, which meant bringing along nearly 15 years worth of evolution (some might say “technical debt“) along with a return to more interface buttons. That just does not seem to fit the i3 ethos, particularly in a car that broke the BMW exterior styling mode. Compare the Tesla Model S (admittedly more money) approach (image) and the i3 (image).

I would not be surprised to see a radical change in the 2.0 release.

Skeuomorphism (wikipedia):

The introduction of a “new new thing” presents the creator with a choice, “burn the ships” or bring along some of what users might have known before. In the i3’s case, I found two choices interesting and perhaps unsurprising.

1. The energy input location mimics legacy petrol and diesel cars.

2. Two driver pedals: an accelerator and brake. The accelerator pedal worked well accelerating and braking. (Tesla discussion)

Watching this long bet (7MB PDF) play out will be fascinating and fun.

** Those interested in learning more about the GM EV1 will find Asymcar 8 interesting.

The Transportationist, David Levinson (@trnsprttnst) joins us to discuss the technical, human, environmental and economic factors driving change to the auto-ecosystem.

David helps us smartly survey the landscape via:

1. Human behavior
2. Technology lifecycles
3. Urban transportation evolution
4. Network capitalization
5. Congestion

30mb mp3 about 61 minutes.

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From The Rise & Fall of Infrastructures by Arnulf Grübler:

Steve Crandall brings a new perspective as a guest. Steve’s analysis of complex systems has given him a huge pool of wisdom into which we dip our dainty spoons.

We survey the interlopers seeking to replace many jobs that cars have traditionally done, from horses to bicycles, planes, trains and buses.

We dive deeper into a few earlier Asymcar topics including energy, regulation, infrastructure, power train evolution, societal changes, distribution networks, urbanization and consider the promise of electric bicycles.

Several innovation timing lessons temper our expectations for immediate improvements.

Finally, we revisit the emerging transportation information layer and how such services may change public behavior and the auto-ecosystem.

33mb mp3 about 63 minutes.

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Notes:

• Steve Crandall:  esc (at) mac (dot) com and @tingilinde on Twitter
• “The Big Roads” by Earl Swift
• The Rise & Fall of Infrastructures by Arnulf Grübler

National Geographic Tata Nano Factory Documentary

Why the world’s cheapest car flopped.