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Tesla Did it. Ford, Jaguar Land Rover Plug Into Electric Market

Tesla's goal was to accelerate the transition into renewable energy. The announcements by Ford and Jaguar Land Rover to go all electric by 2030 add substance the claim Tesla has achieved its goal.

Tesla’s goal was to accelerate the transition into renewable energy. The announcements by Ford and Jaguar Land Rover to go all electric by 2030 add substance the claim Tesla has achieved its goal.

Aside from being “the company owned by Elon Musk”, and a really expensive family car, Tesla is known for their core mission, to accelerate the transition to renewable energy. 18 years after Martin Eberhard and Marc Tarpenning co-founded Tesla, the steward of its growth is Elon Musk, and no one can doubt its success. From being just another start-up, which almost ran dry of capital on more than one occasion, to consistently missing hard deadlines on Model 3 production, Tesla has had a bumpy ride, which is why this week’s news that Ford and JLR is so rewarding.

Very rarely do start-ups achieve their visions. Some will partially achieve them by integrating their features into market incumbents and some will achieve mergers by acquisition. However, to fundamentally change the business model of every incumbent business is a different achievement altogether. Market moves are determined by more than just a good idea; then are determined by a multitude of factors, and each of those factors have to be materially altered for the incumbents to be forced to change. Think of the automotive sector, yes electric cars have been shown to be luxury and command a market share next to S-Classes and Lexus’ by Tesla, but incumbents have to be certain more than one car can be electrified. There has to be enough potential impact on the supply chain, and consumer habits to warrant a wholesale change. Energy relationships, raw materials and workforces will be displaced, or severely changed due to the market shift. Ultimately profit led businesses do not mind this, as it’s part and parcel of doing business, but it’s a pain which most CEO’s struggle to enact. For various reasons, not least because undergoing a substantial change makes the future of the company uncertain.

The announcement by Ford puts weight behind how substantial a change this is, announcing a $1 billion investment into a German plant dedicated to EU manufacturing of the EV range.

By 2024, the company’s entire commercial vehicle lineup will be “zero-emissions capable, all-electric or plug-in hybrid.” By mid-2026, Ford says “100 percent” of its passenger vehicle lineup will be the same. And by 2030, Ford expects two-thirds of its commercial vehicle sales to be all-electric or plug-in hybrid, while all of its passenger vehicles sold will be pure battery-electric.

The Verge

The Ford announcement was preceded by Jaguar Land Rover who announced a similar trajectory:

Jaguar Land Rover, the UK-based carmaker, will make its Jaguar brand electric-only by 2025 and abandon petrol vehicles entirely in the middle of the next decade as part of a set of sweeping changes brought in by its new chief executive.

The company, which is owned by the Indian conglomerate Tata, will eliminate the internal combustion engine for its struggling Jaguar brand by 2025, as JLR aims to achieve net zero carbon emissions by 2039.Chinese carbuyers help Jaguar Land Rover outpace UK lockdownsRead more

The more profitable Land Rover brand will launch six pure electric cars within the next five years, although it will continue to offer hybrid cars combining internal combustion engines with batteries until about 2036.

The Guardian

For those who ever doubted Tesla, this week is proof crazy start-up visions are not entirely ridiculous, and it’s vindication for the bold founders who knew this direction of travel should be electric.

Sources:

The Verge: https://www.theverge.com/2021/2/17/22287284/ford-electric-vehicles-ev-europe-2030

The Guardian: https://www.theguardian.com/business/2021/feb/15/jlr-to-make-jaguar-brand-electric-only-by-2025

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