Rapid advances in consumer technology have led some observers to expect a similar pace of improvement in other areas of industry. But for car manufacturers, many barriers stand between today's business reality and a smarter, more sustainable future.
The car is often a family's second largest expense after the home, and the resulting cautious buying behavior has forced carmakers to become risk averse. Complex legislation stretches development cycles and keeps engineering costs high, and to complicate matters further, requirements vary considerably from market to market. Once a car is sold, it may be expected to stay on the road for decades. All of this makes clear that there will be few quick fixes in the car market.
"In the long term, business models will have to adapt," admitted Mike Bell, global director for connected cars at Jaguar Land Rover, the U.K.-based maker of luxury sedans and SUVs. "I recently saw a survey of 21-year-old U.S. adults, who, given the choice, would rather own a smartphone than a car. That creates a challenge for companies like ours. Carmakers will be dragged forward whether we like it or not, as behaviors change over the next 10 to 15 years."
Bell spoke at VERGE London, a conference organized by GreenBiz to examine the convergence of new sustainability technologies in energy, transportation, the built environment and information technology.
Bell shared a platform at the conference with Ian Allen, manager for environmental strategy and the Ampera electric car at Vauxhall Motors. The Ampera is a European version of the Chevrolet Volt, and Vauxhall is a U.K. brand owned by General Motors.
Allen noted that progress in sustainability often runs counter to a carmaker's core business. "Car clubs and car sharing go against what some people might consider the grain," he said. "We have to sell cars and sharing means fewer people buy them."
The lithium-ion batteries that underpin electric cars like the Ampera and Volt provide another example. "We get asked, why should I buy an EV now, why not wait a few years until the batteries are better and cheaper? And that's a barrier to sale for us," Allen said.
The wait-for-version-2.0 tendency is frustrating and naive, Allen argued. "What is the timescale for improvement?" he asked. "Everyone understands the smartphone lifecycle, but we won't see big improvements in battery chemistry overnight."
Misguided or not, the anticipation of better products tomorrow, coupled with the high cost of batteries today, has translated into slow sales for pioneering vehicles like the Volt.