Tesla vs. Efacec
by André Marquet, CEO, Productized
In the same way as Petrarch, Fernando Pessoa wrote “Sailing is necessary, to live is optional”, inspired by Pompey, a Roman General, who in the same way had told his sailors who refused to travel during the war. Our economy and entrepreneurs need not be afraid to turn to products, thus improving their business models, marketing innovations all with better margins. With productizing their solutions or existing services at the core.
In my last article What is Startup Innovation in the July/August Edition of Startup Magazine I explained why startups and companies that adopt this type of innovation strategy can be called disruptive innovators and become market leaders. In this edition we approach the process that these companies use to develop fantastic and successful products that people really want.
To define what I mean by “product”: in this context I am talking about products with technological focuses — and the example I am using in this article is the charging of electric cars, not the low-level tech products, nor the artisanal or artistic nature of products.
The Charging of Electric Cars
Take a concrete case, for example, electric mobility is becoming a reality, with the existence of several electric car models on our roads. However, if you want to buy an electric car, one of the first considerations should be, in addition to the battery life, power and comfort, the precise system of charging the battery.
As is well known, electric cars store electricity in batteries that power the motors with direct current (DC), i.e. current that remains at a constant voltage, the battery of a car is at around 400V. To get some perspective, the power of a battery in a smartphone is around 100 times smaller, at approx. 4V. Electrical installations in the home are alternating current (AC), or cyclically alternating current. Domestic tension in Portugal is 220V, alternating polarity cyclically around 50 times per second.
Although all the electric cars can be charged via AC power, which is at virtually every home, the car must then use an internal system that converts AC to DC, which feeds the battery system, considerably prolonging the charging cycle of the battery. This way, several hours are needed to achieve this full charging cycle which is obviously impractical.
Therefore, it is possible to charge the battery through the DC, called “direct current”, which requires a high power loading station, still relatively rare in Portugal.
In addition to this, the fact that most car manufacturers have opted for a DC charging connector, standard type CHAdeMO, and Tesla preferred to develop its own DC connector, which is proprietary, and therefore unique to its own fleet, and those who choose to adopt it must pay royalties to Tesla. What makes the process of consumer choice even more complicated: there are only a select few “petrol pumps” that are compatible each car charging system.
The way that Tesla is operating in this sector may appear paradoxical, to not “play along” in the market and to impose their own rules, but one must understand that Tesla’s business model is different from other car manufacturers. It is part of their competitive advantage and can be a determining factor when buying a new car. Customers of Teslas need only go to a SuperCharger charging station and charge their car. The experience of the product lies within its simplicity.
More recently, Tesla has launched the Powerwall, a wall with a 6.4 KWh capacity that can power all the electricity needed for a family home for a whole night. Apparently Tesla’s business model is to be more than just a car manufacturer, and, like Apple, a one stop-shop ecosystem of products and services linked to mobility, charging and power supply of the car and home.
Efacec and Tesla
One of the world’s leading manufacturers of DC fast chargers is the Portuguese group Efacec, which manufactures a range of charging systems, in particular the EV-QC45 model that is installed in electric charging stations throughout Europe and the USA, and that matches the Tesla Supercharger in terms of power.
Having started my career with an international internship at Efacec, I was allowed to have contact with a company that is engineering first, and where design considerations comes second.
This is a deeply paradigmatic case in the Portuguese industry, many of our companies have excellent technical know-how but are unable to master the manufacture and therefore are chained to a certain inability to “think product” in terms of the components linked to their productization, the design of the user experience, the design of the product not to mention the poor or non-existent product management strategy.
The word “to productize” is an Anglosaxon neologism meaning “to turn into product”. The advanced economies are those whose foundations are built on highly differentiating products and have companies that build products that people really want to buy. The most developed economies are those who know how to “productize” their work.
Thus, it is necessary to produtize because:
- 70% of our GDP comes from selling services, not productizing, that is, when we stop working we stop making money.
- Products, especially those that are intangible, such as software products, or intellectual property have the potential to be very scalable, i.e. to reach thousands or millions of users.
- Products that are well thought out, designed, and managed can have very long life cycles, and generate value-creating eco-systems that allow large investment rates of return, with multiple sources of income.
Despite being a technological marvel, the EV-QC45 product from Efacec is a product designed first, with an engineering vision, but that is exposed to competition, because in addition to the fast charge patents that Efacec owns on the system, their system uses only standard connectors; Efacec has to resell the equipment to car manufacturers or utilities, that incorporate it in their solutions, almost always in a OEM logic.
How fantastic is your product?
Product Thinking
The product concept design or “productizing” service, business model, branding the interaction with the product management: charging a Tesla car is an integrated experience in the global business model of the company. Whereas in other electric car systems, there is a clear separation between the car manufacturer and charging system is a mere extension of the business model of selling the car.
Product Experience
The design of the product user experience, which is where the “plug and forget” Tesla’s Supercharger is impressive. No ID cards, no payments, just load and away you go! The product experience for the Supercharger, although still far from perfect (it still takes 30 mins to charge 80% of the battery) is designed in the entire Tesla eco-system, from the on-board navigation to the system connector owned by the brand.
Product Design
The product design itself, its appearance, shape, color, texture, interaction, content and features. In this respect, Tesla has adopted a unique language for the car to the charging stations, compared with the industrial, heavy and industrial design of the DC fast chargers of Efacec or ABB or Siemens…
Product Management
The product management, its basic functions and additional features throughout the product life cycle, from the control of the brand, the client interaction, and the process of innovation. In this case, Tesla again has a greater range of action because it controls the product roadmap of Superchargers as it sees fit.
Creating stunning products that mix the analog and digital world, as is the case of a DC quick charger is an incredibly difficult task, but knowing your users and incorporating some of the practices of this framework, gives you an advantage.
About Productized Masterclasses
The Productized Masterclasses are 2 days of hands-on masterclasses and insightful keynote speakers. On 27 & 28 May you’ll enjoy 4 masterclasses of your choice, get practical tips, and network with your peers. Come and meet Dan Olsen, Kandis O’Brien, Radhika Dutt, Ken Sandy, or Daniel Zacarias, among many others and get ready to be inspired to learn more about Enterprise Product and Consumer Product! SAVE THE DATE — MAY 27–28 2021
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