5 comments

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  Tom

  1 year ago

  I'm skeptical of the notion that car manufacturers would stand to lose anything by building cars that last longer for a few reasons:
  
  1) Cars have consistently improved in reliability, and manufacturers compete on those reputations. Even cars with a "cheap" reputation like Hyundai do what they can to build reliability into their brand (like by offering a 10 year warranty). With the boom of Japanese cars many years ago, consumers demonstrated that they have no tolerance for it, and car manufacturers have adapted.
  
  2) If you're making money on leases and trade-ins having more reliable cars that last longer should help your revenue stream via the higher resale value, potentially allowing you to offer better lease deals, lower maintenance costs during the lease, etc.
  
  3) I have no numbers to support this theory, but I wonder what percentage of car owners actually hold on to one car until the end of it's useful lifetime? Or, more to the point, if a car could last 20 years, how many owners would want to drive the same vehicle for 2 decades? My guess is that we hit a point at which a car's useful lifetime doesn't substantively affect the pace at which new cars are purchased.
  
  I *love* the idea of a car as a platform for services though. To some extent with OnStar and satellite radio those things are happening, but if someone really wanted to re-invent the model by coming up with more creative services (like wi-fi) things could get really exciting.
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  matt_winn

  1 year ago

  Tom:
  
  Great points, all. I'll add a couple additional thoughts in waters that, admittedly, I'm new to considering. My initial thoughts, I believe, undervalued the deleterious effect of electric cars on automakers' distribution mechanism, dealerships, which rely upon service revenue as a significant portion of their overall top line (see recent article highlighting service's importance to dealerships here - http://louisville.bizjournals.com/louisville/st...). If electric cars do usher in a lower maintenance era, dealerships are in trouble and automakers will have to rethink their partnerships.
  
  I agree completely that consumers desire, and purchase, new cars, irrespective of function. The purchase, however, is substantial (a durable good, in economics lingo) and I believe folks would welcome the notion of a "platform" or "shell" for which upgrades were more easily integrated, something I believe the electric car might ultimately accomplish.
  
  Best,
  Matt
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  Jim K.

  1 year ago

  You know, there's already an electric car battery that's "good enough". It's the Nickel Metal Hydride EV-95, the same battery used in GM's EV-1 and Toyota's RAV4-EV. It gets over 100 miles per charge and after 100,000 miles is still in use by the City of Santa Monica and some of Southern California Edison's RAV4-EV fleet. That's the battery that should be mated with the Prius as the first practical "plug in hybrid". Battery technology will improve, but WHY WAIT?
  
  Why hasn't more been said about this battery? The media talks about the negatives of the Lithium Ion battery (cost and safety), but totally ignores the proven EV-95! Could it be there are strong incentives (threatened loss of advertising revenue from auto and oil companies) to keep this Chevron (Cobasys) owned solution from being talked about?
  
  About a month ago a client of mine drove up in her RAV4-EV, one of the few electric cars sold (not leased) in 2002. She says she understands why the auto dealers hate this car... in the five years she's owned it, the only service it has needed is a set of new tires! Just think of all the things you could do with money saved on gas, service and replacing unreliable automobiles!
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  patrick

  1 year ago

  Watched "Who Killed the Electric Car" recently, great documentary, yay for progress!
  
  I noticed some similarities between the oil industry and the tobacco industry: They both exploit people's addictions (nicotine in tobacco, the convenience of gas). Also, both industries have stifled better alternatives (not smoking is healthier than smoking, not using gas pollutes less). People have successfully resisted tobacco companies...
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  Traveller_Adventure

  3 weeks ago

  Great post, really help me alot. Thanks.
  
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  reply