Let’s start with a reality check. Fortunately for my job security, this blog couldn’t write itself (yet) - and unfortunately for you, your car can’t fully drive itself (yet). But it’s no longer shocking to suggest we’re at the beginning of a generational shift, from driving our own gas-guzzling vehicles to being transported around in fleets of on-demand connected, electric vehicles (EVs).

That’s a big change, so how do we get there? A good, basic framework is that most technologies are built on a key underlying ‘platform’ of the time; Andreessen Horowitz's partner Ben Evans helpfully describes these as an ’S Curve’, with experimentation and slow growth followed by exponential growth, and an eventual plateau - before innovation moves onto the next S Curve. The PC S Curve was followed by the Mobile S Curve, for example. I like this analogy because it’s not mine - so you can’t argue with me about it. Let’s go with it and move on.

How to lose friends and alienate people

We often forget how disruptive the beginning of these curves feel at the time. We all take the smartphone for granted, now – but in 2007 the iPhone was met with criticism and described by some as looking like ‘a kid’s toy’, before it gained sales traction. It wasn’t the first time. In 1876, the Western Union president is rumoured to have dismissed Alexander Graham Bell’s telephone invention as ‘practically worthless... hardly more than a toy’.

So if you’re doing something truly disruptive at the start of an S Curve, you better be prepared to scrap. The barriers will hit harder; the rejections will be firmer; the conversations will take longer. Even big-budget campaigns can fail to successfully launch a new product or service category, if they fall down at the ‘education’ hurdle.

In 2004, P&G launched the Febreeze Scentstories: a device that looked like a CD player and emitted scent through $6 discs. The company recruited singer Shania Twain for its launch, with a promotional ‘album’ that played ‘tracks’ like ‘Shania’s Wishes For Spring’. It was, as this article describes, profoundly weird. The campaign failed to educate consumers, with many of them thinking it also doubled up as a CD player. It didn’t.

If you make it past education, you still can’t shape a new industry alone. In fact, you shouldn't shape it alone. As this not-very-scientific analysis of market forces below shows, it’s good to have competition in primary (materials) and secondary (manufacturing) industries – they drive up investment in ancillary innovations, drive down costs through supporting a new supplier ecosystem and improve the quality of the talent pool, among other benefits.

That’s exactly what we’re seeing happen with connected and electric vehicles. Battery prices are falling dramatically as the supply chain scales up and sales rise. Experts suggest electric cars will cost less than ICE vehicles to manufacture – with no government subsidies – by 2025. A $1,000 car battery in 2010 will cost $73 in 2030. The dials are moving in the right direction.

Tesla is… an example

Tesla is a great example of early industry market challenges. We think of the brand, market cap and category leader position as a pioneer of hybrid and electric vehicles. But we all forget the founders spent a decade on research, education and hacking away at the regulatory environment before the first model was legally on the road. The $3bn in government subsidies didn't hurt, either. 

Tesla is also a terrible example: very few businesses can almost single-handedly stimulate initial market growth, because very few businesses are chaired by billionaire founders who can raise huge sums of capital for a high-risk, loss-leading business model. This chart should clear things up.

All eyes on infrastructure

On the face of it, EVs = burning less fuels = better for the planet, right?

Right. And possibly wrong. It’s complicated. The underlying idea is logical, but when we flip an industry on its head, we need an entirely different value chain. So it’s no wonder that infrastructure dominated a recent invite-only roundtable, which Hotwire hosted alongside Political Intelligence and Philip New, Chair of the UK’s Electric Vehicle (EV) Energy Taskforce.

We could have spent hours just speaking about charging – let alone the rest of the mobility industry’s new value chain. It links to a wider debate around the UK’s energy sector, but also makes clear we must avoid a standards war. Consensus over industry definitions, government grant initiatives and technical standards will all prove crucial in growing a connected mobility industry that benefits consumers.

We'll also need to talk about batteries; more specifically, cobalt. It’s a key component of the batteries currently used for most electric vehicles. Analysts say demand could spike by up to 2,000% - but with over 60% of the global supply coming from Democratic Republic of Congo, and concerns over stability of the region as well as the role of children working in the country’s cobalt mines, are we building the industry on solid foundations?

Luckily, a 96 year-old inventor is in a lab, as I write this, working on a solution – but with more infrastructure issues lying in wait, it’ll take more invention and investment to avoid future scars in the business of building cars.

The end of the beginning

How do you know you’re at the end of an S Curve? Increasingly incremental progress, is usually a clear sign. In the automotive industry, for example, if you’re at the point of having to differentiate through the sound of the vehicle doors when they close – that’s a pretty good sign we’re not far off a more profound set of innovations.

"The Camry's doors close with a hollow, tinny whumma not unlike a wobbly metal shed. The Accord's close with the sturdy, reassuring thud of a luxury car. This as a shopper's first tactile impression of the Camry will not help the Toyota salesforce.”  - MotorTrend car review, 2017

So, mark your calendars for January 1st, 2038. That’s Bloomberg’s best guess for the year connected and electric mobility takes over, and never looks back. Let’s hope we start to see the benefits before my blogs start writing themselves.