Why the traditional automotive industry is running out of road
The car industry’s historic leaders are now beginning to realize that having delayed the inevitable evolution towards electric vehicles, some of them now face financial problems that are threatening their very future.
For the first time in its 88-year history, the United Auto Workers is bringing out the combined workforce of Ford, GM and Stellantis on strike in pursuit of wage demands. It is estimated that a ten-day stoppage would generate losses of $5 billion, although the walkout could last several weeks, which will surely force the big three to raise the price of their vehicles.
What’s going on? It’s called disruption. Tesla is having the same effect on the automotive industry that Apple had on Nokia two decades ago. No matter how hard they try, traditional players cannot compete with a company that has broken all the rules and that is now a market leader in half the world, pulling steadily ahead of diesel and petrol models.
The phenomenon has three extremely interesting components:
- Internal combustion engines may be a feat of engineering, but they are expensive to make and maintain. In contrast, Tesla’s are cheaper to make thanks to having fewer parts, and offer better performance in all respects — greater acceleration and brilliance, lower weight, much…
