Are EVs the future or merely a niche market?

The automotive industry is in a most difficult period of its history. How can it predict the future?

Technological marvels enabled by digital electronics have periodically emerged as new consumer products and services. And what is most remarkable is how quickly they have become accepted as necessities.

Consider in the past few decades color television, personal computers, flat panel displays, wireless communications, digital photography and image storage, LED light sources, email and internet-based services.

In each case, it took a few years for these innovations to go from start-up to widespread adoption where history is quickly forgotten. Who remembers 35mm film cameras, light bulbs or TV receivers with cathode ray tubes? Or 78rpm records?

A world where such profound innovations become quickly accepted as normal also leads to the anticipation of new markets created by innovations and further anticipation that such markets will be rapidly accepted to the point of creating major new industries.

Betting on such future markets calls for massive amounts of capital and consequent opportunities for great profit—or loss if the market size developments do not meet expectations. The automobile industry now faces this investment challenge.

Industry planners and investors face enormous challenges in planning because the bigger the anticipated market opportunity the greater the capital and engineering investment required.

Industrial planners have been spoiled by historical examples where new electronic products eventually displace 100% of the old ones.

This effectively happened with digital cameras, video displays and lighting devices where prices of new devices dropped as sales volume grew to the point that old products became