The Reincarnation of Electric Transportation
In the late 1800s, two of the world’s most famous inventors, Thomas Edison and Nikola Tesla, were each engrossed in radical new devices that they hoped would change the lives of everyone living then, and everyone to live subsequently. Edison, the more famous of the two, would go on to be much more successful in this feat than his distant apprentice Tesla. Edison arguably changed the world more than any man before him with his invention of the incandescent light bulb, and while Tesla’s inventions of A/C current and the Tesla coil were indeed revolutionary, they still paled in comparison to Edison’s.
Looking back at that time, many see the two as a rivalry who competed to invent superior products as if they were a 19th-century duo reminiscent of Steve Jobs and Bill Gates. The disputes between the two, however, are much more dramatized than as happened in real life. Nikola Tesla had nothing but unwavering admiration for the world’s most famous inventor and Thomas Edison could not help but admire the uncanny genius and passion of the younger Tesla.
Personal relationship aside, Tesla and Edison had a joining factor among their most important inventions - the use of electricity as a power source which they hoped would expand to all areas of manufacturing and radically change the world. Electricity was responsible for powering Edison’s lightbulb, phonographic machine, and ticker tape, along with Tesla’s coil and radio. As more and more inventions became reliant on the use of electricity, it became apparent that electric power would be the foundation of a new industrial revolution. By the 1890s, the mechanisms had been developed in America to use electricity to power an invention that neither Edison nor Tesla could claim as their own. The automobile.
The first iteration of an automobile could be looked at today as a school science project gone overboard. But at the time of its release, the world saw a revolutionary new replacement for the horse and carriage transportation system that was then the norm. It was only natural to take the power system being used on the smaller devices distributed by Edison’s numerous companies and use a similar mechanism in the automobiles people were becoming increasingly reliant on. In the early 1900s, there were in fact more electric vehicles on the road than there were gas-powered.
Electric vehicles at this time were seen as the future of commuting, set to replace almost all other means of transportation. What halted the wide adoption of these vehicles was mass production and exorbitant costs. When compared to the more efficiently produced gas-powered vehicles of the time, the electric car cost more than 5 times as much, and this price difference would only increase over the next few years. The puzzle of mass production would eventually be solved by another inventor working tirelessly to make a vehicle at a low cost to be driven by the masses, rather than as a luxury reserved for the world’s wealthiest. Running into the same errors as other vehicle makers of the time, the inventor set about focusing on the manufacturing process versus the vehicle, which ended up being central in keeping costs down. After years of trial and error, the inventor eventually succeeded and on October 1, 1908, he shipped his first vehicle, naming it the Ford Model T.
Henry Ford, who in fact worshiped Thomas Edison, saw the future of automobiles being dependent on the ability to manufacture vehicles as efficiently as possible while keeping costs down, which he correctly thought would be made possible by a properly designed moving assembly line. The vehicle that Ford created was most effective with the use of an internal combustion engine and the success of Ford subsequently is impossible to overstate. Over 50% of all the cars on the road in the 1920s were made by Ford Motor Company, and before production of the Model T stopped over 15 million managed to be manufactured and sold. Ford’s dedication and knack for improving processes set the world on a path of automobiles founded upon the Model T’s manufacturing principles, as well as on the use of an internal combustion engine.
The electric-powered automotive world that seemed all too obvious morphed rapidly into a distant dream. Some, though, still saw electricity as the best power source to base a transportation system upon. Thomas Edison, ever the visionary, claimed towards the latter part of his career that
“someday some fellow will invent a way of concentrating and storing sunshine to use instead of this old, absurd Prometheus scheme of fire. I’ll do the trick myself if someone doesn’t get at it…”
The world would have to wait for another century for this premonition to come true.
A fleeting glimpse of a battery-powered world appeared in California in the late 1990s when General Motors did a pilot of a small battery-powered coupe called the EV 1. The car’s visual aspects were far from revolutionary but its propulsion system set it apart from all other automobiles of the time. The car saw a little time in the light and was loved by a small group of forward-thinking consumers, along with a few California A-listers including Tom Hanks and Mel Gibson. As depicted in the popular documentary Who Killed the Electric Car, the EV 1 came about from regulatory pressure in the Golden State to decrease the amount of fog near the ports and across the major cities. Similar to what the world is dealing with now, the difficulties with the EV 1 involved inadequate range, lack of charging stations, and consumers' reluctance to purchase an entirely different mode of transport, and just a few years after the release of the EV 1, General Motors pulled the car from production due to a lack of nationwide demand.
The mantle was then picked back up in 2004 when an entrepreneur born and raised in South Africa purchased a large stake in Tesla Motors. The company up until that point had been run by the two entrepreneurial founders of the company who hoped to develop what would be called the Tesla Roadster. The two were quick to realize, though, that they would need a capital infusion in order to make the company a success, and in 2004 accepted an investment from Elon Musk in exchange for an equity stake and a seat on the board. Shortly after taking over, Elon guided the company on producing the first of a unique line of electric-powered vehicles.
The production of the first Tesla was just a sliver shy of a total disaster. The company’s original plan in manufacturing their electric car was to take a Lotus Elise and, through extensive modification, make the car electric powered using thousands of lithium-ion batteries stored under the floor of the car. It did not take long for the company to realize how faulty its original plan was.
Modifying the car to be powered by an extremely heavy lithium-ion battery pack resulted in massive structural failures. The increased weight of the batteries weakened the structural frame of the car thereby making the car unpassable in regulatory safety tests. Coupled with that was the malfunctioning of the drive-train technology that was expected to be used. The minuscule company then had to redesign almost every aspect of the car to fit the vision of a completely electric vehicle that would be affordable to the consumer as well as friendly to the environment. When all was said and done the final model shared less than 10% of its components with the Lotus Elise on which it was originally based.
Nonetheless, the Tesla Roadster was produced, and between 2008 and 2012 just 2,500 were sold. A laughable number compared to the auto giants at the time, but still serving as an important milestone. The true value that this car brought to Tesla and Elon Musk was not the bottom line figure (which was a number substantially below zero), but rather the recognition that it brought to the notion of everyday vehicles shifting to an all-electric world. It also allowed - and continues to allow - the company to attract a large amount of capital from investors who share the vision on which the company was based. Between 2010 and 2020 the company raised an additional $20 billion through both debt and equity offerings in order to keep the company solvent and growing.
The additional capital allowed the company to pursue multiple different EV models that have not only pushed Tesla to greater heights but have propelled other car makers' shift to electric vehicles in order to maintain their global market share.
Before Tesla’s rise, electric vehicles from major automakers consisted of cars such as the Nissan Leaf or the Prius hybrid, vehicles which the word bleak may be too generous to describe. But the tide has shifted dramatically. In 2020, Ford announced an all-electric SUV sporting the name Mustang Mach-E. Within a year of that release, General Motors announced the revival of their famed Hummer, this one all-electric and with a supposed 1,000 horsepower. In 2021, Volkswagen AG, the world’s largest automaker by sales, announced their ID.4, running continuous advertisements with the simple message that the future is here. Perhaps the biggest news, though, was Ford’s announcement of their Ford F-150 Lightning, a particularly important release as the F-150 is one of the most widely sold vehicles of all time with 35 million being sold over its lifetime, trailing only the Toyota Corolla in units sold.
Governments are not holding back either in their attempt to push consumers to purchase electric vehicles. Norway, with a population of just over 5 million, has set the most ambitious goal of having all new cars produce zero emissions by 2025. The United Kingdom has set a similar goal but with an extended target date of 2035. The United States and Canada, along with multiple countries from the European Union, are providing tax credits to consumers for their purchase of an electric vehicle and have proposed infrastructure bills to increase the availability of charging stations across their respective countries.
The most important news comes from the People’s Republic of China which has set an optimistic goal of being carbon neutral by 2060 and is itself providing stimulus to consumers for purchasing electric vehicles. By a wide margin, China is the world’s largest market for electric vehicles. According to the International Energy Agency, one out of every two electric cars sold worldwide is in China and the country controls almost the entire market for electric two-wheelers and busses. Since 2009 the PRC has held the title of the world’s largest car market and with a population of over 1.4 billion the automotive market is unlikely to slow its growth.
The statistics over the past 10 years paint a clear picture of the rapid transformation the world is going through. In 2010 roughly 170,000 electric cars were on the road, split largely between the U.S., Europe, and China. By 2019, that number had grown to 7.2 million, and the number of charging stations stood at 7.3 million.
Almost as dramatic has been the price drop in the battery pack fitted to electric vehicles. The cost of a battery pack in 2010 hovered around $1,100 per kWh and by 2019 the figure had dropped to $165 per kWh. Given that the battery pack in an electric vehicle makes up roughly 30% of the cost of the car, this 85% drop in price has been a key driver in pushing consumers toward electric vehicles. Despite a global pandemic, over 3 million new electric cars were registered in 2020, and electric vehicles now make up 2.2% of all registered vehicles globally.
Like all major technological transformations, time is the necessary element of wide adoption. However, the momentum of this industry shift has been put in place, and as the world saw with the adoption of the smartphone, once the momentum has built up the adoption of new technology can be so sporadic as to create a future unrecognizable in comparison to our present lives.
The charging stations that EV owners so frequently go on an anxious quest to find will become as commonplace as the parking spot dividers spread throughout every parking lot. Battery pack production for automobiles will be put on the same manufacturing scale as mobile phone batteries, and future generations will look upon gas-powered cars as we look upon all previous transportation methods. An outdated technology, but one that was a necessary step to get to where we are now.
Resources: Tesla Model X Image: Tesla.com, Nikola Tesla Image Energy.gov, Tesla Logo: Wikipedia, EV Market Share Graph: Deloitte, International Energy Agency.