Lawrence (Larry) D. Burns, advises organizations on the future of mobility, logistics, manufacturing, energy and innovation. His current clients include Waymo, Goodyear and Kitson & Partners. Larry served as General Motors corporate VP of R&D and Planning from 1998-2009. Between 2010 and 2016, he was professor of engineering practice at the University of Michigan, director of the Program for Sustainable Mobility at Columbia University, and an advisor to several major companies. Larry’s latest book (with Christopher Shulgan) is Autonomy: The Quest To Build The Driverless Car – And How It Will Reshape Our World (Ecco / HarperCollins, 2018).
Twenty-two years ago, when I became head of R&D at General Motors, my boss (then GM CEO Rick Wagoner) asked: “If we were inventing the automobile today instead of a century ago, what would we do different given today’s technology and the issues the auto industry faces?”
Beginning of a new era
The GM team developed the “Autonomy” concept car in response to Rick’s question. We envisioned an all new design DNA for the automobile…one based on electric drive and computer controls. We placed the motors in the wheels and stored the energy in the underlying “skateboard-like” platform. The idea was to dock a wide range of body styles on this platform much like early generation laptop computers connected to docking stations.
We showed Autonomy to the world at the 2002 Detroit Auto Show and it generated a great deal of excitement and interest. Now, two decades later, our vision has become real and the skateboard platform underlying Autonomy is the basis for many of the electric vehicles coming to market.
A commitment to EV growth
EVs have reached a tipping point and their future market dominance appears inevitable. At the end of 2020, Tesla’s value passed $800 billion (more than the combined values of the seven largest traditional automakers), GM announced it will rollout 30 new electric vehicles by 2025, and the electric truck start-up Rivian reached an estimated value of $25 billion before delivering its first truck.
This is a remarkable and exciting moment in the 135-year history of the automobile. For the first time since Karl Benz patented the gasoline powered car and Henry Ford popularized it, auto manufacturers are embracing a new design DNA based on electric motors (in place of combustion engines), electric drive (in place of powertrains), digital controls (in place of mechanical controls) and diverse energy sources (in place of oil). And, they are doing so not just to eliminate tailpipe emissions, but to also create better cars and trucks that are simpler to design and build and offer greater customer value.
Efficiency contributes to power
Albert Einstein said “the best design is the simplest one that works.” Vehicles based on electric skateboards are simpler and work better than those based on combustion vehicles. They have fewer parts, enable compelling performance and offer more spacious interiors. And, they are more capital-efficient because a broad range of market entries can be developed using the same underlying platform.
The collision repair industry should prepare for the inevitability of electric vehicles based on skateboard platforms. This is a big challenge because you need to continue to operate your existing businesses for the nearly 300 million traditional cars and trucks on U.S. roads today, while investing in new capabilities to repair future EVs with quite different designs, parts and materials.
Fortunately, you do not need to “bet the farm” for this disruption because the transition to EVs will not happen overnight. But it will happen and my advice is to get in front of this inevitability. You can do this by having a “seat at the table,” finding some strong cards to play and gaining the insight to, as singer Kenny Rogers famously put it, “know when to hold ’em and know when to fold ’em.” You must learn fast, efficiently and systematically so you can ultimately scale smart when the big money comes in play.
Companies can opt to prepare for potential disruptive change by betting it will either happen sooner or later. If you bet right on timing, no problem. However, the consequences of betting wrong are quite different in the two cases.
Timely preparation is key to winning
If you bet on sooner and it happens later, you would be prepared early. Perhaps you spent some money before it was necessary, but at least you are prepared. But, if you bet on later and it happens sooner, you risk being left behind. Betting that electric vehicles are over-hyped, and behaving as if they remain far in the future, poses significant risk.
A lot of people reject what they don’t understand, so I’m not surprised that many business leaders are cautious about jumping on a bandwagon. The wager you must make when considering EVs is the potential gains if you commit to this future versus the potential losses if you cling to the past. My conclusion is that if you want to be one of the winners and avoid being one of the losers, the prudent strategy is to get in front of the inevitable. Enjoy the ride!
