Electric vehicles are evolutionary, not revolutionary, says Baker Institute expert
Tesla will disrupt the automotive industry only if it is able to achieve scale, according to a new issue brief by an expert in the Center for Energy Studies at Rice University’s Baker Institute for Public Policy.
“Ford vs. Tesla: What Does a Transformational Automobile Scale-up Look Like?” is authored by Gabriel Collins, the Baker Botts Fellow in Energy and Environmental Regulatory Affairs at the Baker Institute.
Ford and Tesla both earned their reputations through what Collins describes as a “revolutionary vehicle type” — the Model T and Model S-X-3 suite, respectively — and as market makers. Comparing their sales growth trajectories, Collins hypothesizes, can offer insights on how electric vehicle (EV) sales are scaling up as well as how EVs can reshape automobile and oil markets.
The modern world, saturated with automobiles, provides a different battle for Tesla than Ford faced. For Tesla, scalability is essential and “holds the keys to lasting structural change in the energy and transportation spaces,” Collins wrote. Without scale, he says, Tesla cannot compete with the legacy brands that have built off of Ford’s vision for decades. Scale would allow EVs to create the operational infrastructure that can support pure-battery EVs and become more affordable, Collins says.
So can EVs reach market-transforming scale within the next decade?
“Possibly,” Collins wrote. “One overwhelming reality leaps forth from the past decade of data and anecdotal evidence alike: at the global level, EVs have thus far been evolutionary, not revolutionary, factors in the transportation sector.
“Tesla has been ‘evolutionary’ in that the changes they have introduced to the car market to date are thus far incremental …” Collins writes. “A ‘revolutionary’ change, such as the introduction of the Model T, would cause palpable shifts on even a short-term basis. … EVs are not yet impacting the market with sufficient mass to trigger that compounding, deep, high-velocity change necessary for a revolution.”
Collins conducts a range of globally focused commodity market, energy, water and environmental research. He focuses on legal, environmental and economic issues relating to water — including the food-water-energy nexus — as well as unconventional oil and gas development, and the intersection between global commodity markets and a range of environmental, legal and national security issues.
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Founded in 1993, Rice University’s Baker Institute ranks as the No. 2 university-affiliated think tank in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog.
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