IMAGE: Alexmit — 123RF

Reimagining the automobile

Enrique Dans
Enrique Dans

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From an economic perspective, a car has always been an absurd acquisition. With a very high depreciation from the moment it is driven out of the showroom, associated costs related to taxes, fuel, insurance and parking, all for something we use on average just 5% if its lifetime, the idea that we need to own one or somehow elevate our social status is crazy, and all the more so if take into account the environmental consequences of the age of the automobile.

But change does seem to be afoot: what would happen if the care ceased to be a consumer item, and became instead a mobility solution? The transition to service models such as ridesharing, carsharing or carpooling, or even using them on flat rate basis, is becoming increasingly attractive, particularly for younger generations. And soon, we may have flying cars… not that anybody in their right mind would want to own one.

Another change: Tesla now offers the owners of its vehicles lifetime insurance that covers not only possible accidents, but also maintenance and eventual breakdowns. Who better than the company itself to work out rates based on the reduced number of accidents its vehicles incur, particularly if they are also connected and so offering timely information to the company on their conditions of use and maintenance?

Tesla broke another important barrier long ago: the idea that a vehicle would remain in the state it left the factory. Its cars can come with sensors and systems that are not in use when purchased but can be updated at any time to incorporate new features, just like an app on our smartphones. The brand has announced that it will not offer owners of its vehicles the option of visiting its factories to incorporate new features, because that would prevent it from maintaining its focus, and that will be carrying out major updates every 12 to 18 months, which suggest that the car as we have known it is about to disappear, to be replaced by a technological device. Automotive brands are now already a regular presence at technology trade fairs.

The car century was a historical mistake. Are we ready to reimagine it?

(En español, aquí)

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)