History Lesson: Is Tesla the new Ford?

Looking back at the history of the automobile, Tesla is often compared with the Ford Motor Company - both because of their charismatic chief executives and because of their pioneering products. Ford's Model T pretty much established the modern auto industry, and Tesla’s electric vehicles are expected to usher in a new era of sustainable transportation. Ford’s innovations, including its assembly line and vertical integration, spread far beyond the auto industry to influence many aspects of society. Tesla’s embrace of vehicle autonomy, solar energy and other developing technologies will transform society in ways we can’t yet begin to predict. 

Image: Digital Trends

A recent article and chart in Visual Capitalist makes another interesting comparison - plotting early sales of the Model T against deliveries of Tesla’s vehicles shows that the two track each other closely. If Tesla achieves its ambitious goal of delivering 500,000 vehicles in 2018, it will far surpass Ford’s growth curve - a curve that’s all the more impressive for being a century old. Between 1908 and 1916, Model T production grew to 500,000 units, amazingly fast for an era in which technological change (so we assume) happened much more slowly than it does today.

Source: Visual Capitalist

The Visual Capitalist article goes on to make a more speculative comparison. Early automobiles faced something of a “chicken and egg” problem - the limited road network of the time made intercity auto travel impractical, and the limited number of autos meant that there was little incentive to build roads. “Charging stations will be to Tesla what roads were to Ford,” writes VC’s Chris Matei, implying that a major push by government and/or industry to finance charging infrastructure is needed.

Source: Visual Capitalist

The chicken and egg narrative is one that appears in almost every article about electric vehicles (EVs) in the mainstream press. However, in the EV industry media, there is disagreement about this point. Many (though not all) observers of the EV scene believe that the often-stated need for comprehensive public charging infrastructure is a misconception. A couple of months ago, Wall Street analyst Colin Langan of UBS was roundly ridiculed after he wrote that Tesla would need to build 30,000 Superchargers in order “to match the convenience of the US gas infrastructure.” Regardless, Tesla's stock continues to rise while Ford's falling stock price just led to the ousting of its CEO.

Source: Marketwatch

Perhaps Wall Street analysts (and others) experience a disconnect when trying to understand Tesla using the old paradigm. Every new technology tends to be seen through the lens of its predecessor. Early TV shows were basically radio shows with video, and early web sites looked like magazines. Nobody watching TV in the 1950s could have imagined Game of Thrones, and few of the geeks using internet bulletin boards and Usenet in the 1990s foresaw the potential of Amazon or Facebook (some of those who did got stinking rich). So it’s understandable that people today can’t imagine a car without imagining regular visits to a gas station.

Youtube: Digital Trends

However, most actual EV owners will tell you that they charge their vehicles at home, and seldom or never need to visit a public charger. As the technology advances, longer ranges and higher charging power levels will make public charging even less of a factor. Someday, self-driving vehicles and dynamic wireless charging may free humans from ever thinking about "filling up" at all.

Image: emaze

Of course, public perception is another matter, and many a survey has found that potential EV buyers see a lack of infrastructure as a major roadblock. Furthermore, at the current state of technology, there’s no question that certain types of public charging facilities are needed, including highway fast charging to enable long road trips, and urban street charging to accommodate car owners who do not have parking spaces at their residences. Unfortunately, the dynamics of the market were poorly understood a few years ago, when cities all over the US, supported by federal and state incentives, installed chargers at public locations like city halls and colleges - most of these sit unused, expensive white elephants that EV-haters love to point to.

Source: Visual Capitalist

Whatever your views on chickens and eggs, the fact is that the early lack of roads in the early 20th century was quickly remedied. Between 1907 and 1920, the intercity highway network expanded exponentially, along with Model T sales. While Henry Ford made gifts of land and money for road-building in Michigan, most of the construction, then as now, was financed through gasoline taxes.

Source: Visual Capitalist

It turns out that a similar thing is happening in regards to charging infrastructure. According to Visual Capitalist, the number of public chargers grew by 65% per year between 2011 and 2016. Tesla alone operates 848 Supercharger stations with 5,487 individual chargers around the world, as well as thousands of destination chargers. According to the DOE’s Alternative Fuels Data Center, there are almost 43,000 public charging points in the US. New installations are being announced daily. Perhaps we should stop seeing chickens and eggs as a problem, and start considering how best to prepare them for the table.