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Posts Tagged ‘transformation’

Electric vehicles – toys of a few for several years, EVs have become main stream with Tesla producing them by the thousands, and many other manufacturers getting ready to join the fun next year. Electric vehicles are in fact incredible (if they work, but I won’t harp on that again…), fun to drive, they make you feel good and they make you the center of attention wherever you go. Infrastructure was an issue at first but more and more charging stations, free and fee-based, are going up around the world making it easier to use your car to go wherever you want to go. Even the charging times are much reduced: a Tesla takes about half an hour at a “super charger” to replenish its battery to over 80%. Few places can afford to ignore the trend these days and preferred parking for EVs is now quite common, at least in the main markets along the West- and East Coast of the USA.

EV ParkingAlas, this picture of a happy family casually strolling back to their electric vehicle after a pleasant shopping experience will soon be history (image: Schneider Electronics). The number of EVs and plug-in hybrids is growing much faster than the number of parking spaces offered. Inevitably, bad manners take over and the once happy community of pioneers sees itself confronted with a growing number of bullies:

  • EVs get unplugged by people who feel they need the power more.
  • EVs get unplugged by pranksters just because.
  • EV parking spaces get taken by EVs and Plug-Ins that aren’t charging (but the spaces are free)
  • Drivers of internal combustion engine (ICE) powered cars occupy EV parking spaces and chargers
  • Free “customer only” parking spaces get used by non-customers.

These, unfortunately, are symptoms of an idealistic world meeting the reality of daily life and its multi faceted annoyances of egocentricity and envy. Some EV drivers report about incidents in online forums, and the number of occurrences is increasing. They fight valiantly by placing notes (friendly and not) under windshield wipers; they confront perpetrators, report them…. to little avail. Special problems arise for people utilizing airport charging spaces: their cars are fully charged long before their return, after which they are unnecessarily blocking a valuable charger-equipped parking space.

These events may in fact be uncovering a major flaw in any kind of “plug-in” vehicle concept: a divided society, Gas versus Electric. Studies suggest that the transformation to electric will take a very long time. EVs will need another decade to even build a noticeable footprint in the automobile market. The complete transformation, which is inevitable, will take until 2070. Until then, how will the two camps coexist? Without a surplus of EV charging stations consumers will be deterred to make the switch. An increasing number of EV reserved parking spaces will, on the other hand, reduce the available conventional parking spaces. Conflicts are inevitable.

I have a feeling that the only way to resolve this will be to uncouple the process of charging from the “act” of parking. The two are asynchronous and should not be connected. Be it by way of ultra-quick chargers that will allow drivers to “refill” their EVs in the amount of time to refuel a conventional car (i.e. by way of battery-swapping as proposed by Tesla and Better Place), or to abandon the concept of lithium ion batteries altogether in favor of hydrogen fuel cells right away.

Future will tell – I am afraid, though, that this issue will turn out to be a major and unexpected roadblock in the proliferation of EV technology.

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IMG_4368As fortune would have it I was able to spend much time on two of my favorite things recently: innovative technology and cars. The two have met, the world of cars is transforming in a big way, and my not-so-new-anymore writing charter for KITCO News allowed me to study it up front and close. In the process, I believe to have unraveled the mystery of where the industry, and we as frequent users of cars, are going. After many hours of conversations with people from all camps, and after even more hours of visiting events and reading online material, here is my prediction on what the next twenty or so years will look like:

  • We will not run out of gas. Yes, more people use gas, but more people use less gas than before. Ironically, the melting ice caps will allow us to drill for oil in even more places.
  • Consequently, the internal combustion engine (ICE) will continue to live on for quite a while.
  • However, since we keep changing climate by living the way we do, there is still an urgent need to implement new technologies that reduce our carbon footprint.
  • These new technologies don’t necessarily have to be “sustainable” in the beginning, but using what is always available instead of continuing to burn up precious resources must be the ultimate goal.
  • The majority of consumers is not in the “pioneer” or “early adopter” camps when it comes to changing.
  • This is bad news for any car that’s battery powered. A large amount of people will remain sympathetic but on the fence for a very long time, especially since there is no immediate need to change.
  • Small battery powered cars will continue to struggle with range for a while, meaning they will mostly be used for commuting only. Their market is further narrowed down by the necessity to keep a second car, so to a lot of people they make no sense economically.
  • Large battery powered cars like the Tesla will continue to be expensive for quite some time. Tesla’s Model S has replaced the Toyota Prius as an avatar to a specific demographic subgroup of society: people with a certain level of education, enough money and an overall “sustainable” and “organic” approach to life. Plus, in some cases, the desire to show it.
  • The majority of car producers will move towards designing new models in ways that will allow for an easy swap of power trains.  Customers will not only be able to select between different conventional engine sizes (gasoline and diesel) but also CNG, hybrid, plug-in hybrid, battery EV and fuel cell EV.
  • This “menu” approach will put them at a distinct cost and acceptance advantage over EV-only concepts like Tesla or the new BMW i-line of cars. In fact, I am ready to predict that unless Tesla keeps pushing the envelope their growth will flatline within a few years. Note that the “new” Tesla X scheduled to come out next year is essentially the same car.

IMG_4316Bold predictions? Perhaps. Except they are not, apart from the last bullet, maybe. The above statements are a -preliminary- assembly of puzzle pieces I gathered as explained in my my opening paragraph. Elon Musk has so far remained elusive to me but I hope to be able to confront him with this scenario one day. As to the other manufacturers, VW, Mercedes-Benz, Nissan, Ford and Toyota are all rolling out “menu” cars already, with other brands close behind. So it isn’t actually a prediction I am making, it’s an observation of what is already happening.

Meaning the future is now, and I like it!

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A Skype interview with some issues in sound quality. Hope you’ll enjoy it, anyway:

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Up front: I am not making fun of a respectable organization or any of its members, and please forgive me for singling you out. But when reading a recent announcement of a conference of the 27th (I had to translate that, they are using Roman numerals – good thing I read Asterix in my youth) Mint Director’s conference in Vienna next year I stumbled on this statement:

“Coins have been with us for over two and a half millennia – they are not about to disappear!”

Statements containing absolutes are per se suspicious. A statement like this for a conference titled “Tradition meets Innovation” justifies at least one raised eyebrow. The reality – and not only in the USA – is that coins as an everyday means of payment are a dying species. Credit and debit cards are in the hands of everyone these days, more and more people use them even for small purchases like soda or candy, and Google is testing a new global micro-payment method relying entirely on your mobile telephone. I, for example, don’t carry any coins except for a couple of Quarters, and solely to stop cashiers from handing me exorbitant amounts of change when paying cash (using bills) on occasion. Many people I watch when bored in supermarket check-out lines do not have wallets. They carry bill folds, a credit card or two, and perhaps some lose change in their pockets. (Which is why you frequently find coins on the floor). My own son hates coins, or any cash for that matter, and pays just about anything with his debit card. Is this just a subjective observation, or is it a trend?

In 2006, five years ago, the U.S. Mint wrote this in their Annual Report:

“Over the past five years, the public’s use of credit and debit cards, ePurses, stored value cards (like phone cards), contactless transaction cards (like EZPass and SpeedPass), and other forms of electronic transactions has increased substantially. This transformation of the economy toward more cash-free transactions might have significant implications for the nation’s demand for circulating coins in the future.”

Statistics of U.S. Coin production confirm that the anticipated new coin circulation will decrease by about 75% from 2010 to 2011. The government is likely to be happy about this as raw material prices are more and more making coin production an unprofitable enterprise. Coins will soon be a boutique /collectors item; even if inflation hits and people rush even more into gold as a safe haven we are not likely to take gold coins to the convenience store. Gold may be good as a stable long term financial reserve but it is neither safe nor convenient to carry.

So where does this leave the coin producing industry? Time to think about some cool new products? How about a high-tech coin that does not only contain a smart chip but also checks my finger print, or connects with a security device in my phone? Time to think about new applications for coins outside the world of payments and collectors? Time to go out of business?

It’s definitely a time for transformation – the world of coins started changing at least 10 years ago and it will not wait for the coin industry to catch up. It is definitely time to think of some radically new business models, it’s time to reconnect with markets, and time to innovate! The future will be exciting if YOU mint it.

 

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