A long time ago when my grandmother was a girl growing up in my hometown, it boasted a car company – the Rayfield. This was not unusual – from 1900 to 1919 there were about 2000 companies making cars at some time or other. The reason was simple – the cars were simple.
The name of America’s first car manufacturing company – the Duryea Motor Wagon Company - suggests how straightforward the technology was. There were few parts beyond the ability of a good machinist and contemporary machine tools.
Something similar is happening with EVs. One quick note: from now on I will try to refer to battery powered vehicles as BEVs. It’s becoming the standard acronym to differentiate between hybrids and cars with no internal combustion engine (ICE).
We may be about to duplicate the conditions that allow for small companies to compete with the dominant auto behemoths like Toyota or GM. BEV’s are comparatively simple to build, with estimates varying up to 85% fewer parts. When considering the powertrain alone the number of components comparison is even more stark.
The bodies and interiors are widely different, but BEV chassis are essentially comprised of a battery, controller, and motor. Consequently, the technology threshold and manufacturing machinery are less prohibitive to new entrants. Starting with Tesla, of course, there are dozens of BEV startups like:
- Bollinger
- Atlis
- Fisker
- Canoo
- Arrival
- Aptera...
and many more, especially in China, the largest manufacturer of BEVs.
Many, if not most of these startups will fail, but their sheer number will chip away at the dominance of major car companies. This industry disruption will also present an opportunity to re-examine what I consider one of the most questionable regulations in the US (after the Jones Act, of course). I am talking about state laws forbidding direct sales by manufacturers to consumers. The dealer sales laws may have had an important purpose at one time, but technology has a way of finding alternatives.
Deploying increasingly sophisticated and powerful websites to sell simpler machines, BEV car companies will challenge not just established car makers, but the need for arguably outdated regulations.
