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Tesla’s disruptive innovation heralds a new era in automobile industry.

Updated on December 31, 2016

In this rampantly hedonistic world, where people increasingly turn materialistic, letting them pursue their pleasures without harming the mother earth is a major challenge. People in the developed world introduced and popularized the car culture, and their teeming peers in the third world are now trying to follow suit. The public transportation in the developing countries, especially in India, is very ill-managed and people don’t want to put their trust in it any longer. They want to acquire their own vehicles to meet their mobility requirements. In the third world, where poverty is omnipresent, owning a car gives people an opportunity to flash it around and brag about their elite status. However, the car culture is here to stay and more and more people, who graduate themselves up the economic ladder, start laying their hands on their own four-wheelers, which occupy the prime space on the roads edging out the carless to the fringe.

Here the moot point is, will the world, which is already chocking on smog, be able to absorb the innumerable number of cars that hit the roads every day? The answer is a big no. The continuous use of hydrocarbon fuels is highly unsustainable and switching over to alternative fuels is the need of the hour. The recent incidents suggest that the vehicles powered by the fossil fuels are on the verge of becoming an endangered species in the developed world, especially in the Europe. The parliament of Germany, known as Bundesrat, has passed a resolution to ban the internal combustion engine, which has been instrumental in fueling demand for petroleum products, from 2030 onwards. This resolution, though not binding, is a revolutionary one by a country which is home to one of the largest automobile manufacturing industries in the world.

According to the International Energy Agency’s World Energy Outlook 2016, “in the longer-term, investment in oil and gas remain essential to meet demand and replace declining production, but the growth in renewables and energy efficiency lessens the call on oil and gas imports in many countries”.

In this backdrop, the success story of a company that produces electric cars has been consistently making headlines for some years and assumed a lot of significance. Tesla Motors, an American automaker, which has been carrying out path-breaking research on lithium-ion batteries and AC induction motors, attracted the world’s attention. Its disruptive innovations on electric car could be compared with the other inventions in the annals of human history, which brought about revolutionary changes in human lives. Tesla Motors’ innovations are poised to replace the internal combustion engines, which are notorious for their emissions of air pollutants, with AC motors powered by lithium-ion batteries that boast of zero emissions. Efforts are on to install the required infrastructure in place, especially the electric car charging centers, all across the US to power these cars.

After Tesla’s success, even the other automakers woke up from their slumber and are joining forces with each other to come up with their own versions of efficient electric cars. This rapidly intensifying competition is expected to bring about revolutionary changes in the passenger car industry. As of now, the electric cars are prohibitively expensive for the middle-income people in the third world. However, as the R&D activities gain pace it is probable that these vehicles become progressively cheaper and come within the reach of a wider section of the population. Tesla’s model 3, which is slated to hit the market in the year 2017, is expected to be priced at $35,000.

What will be the impact of this path breaking innovation on the global community? It will, without an iota of doubt, will cut the carbon emissions and make this earth more livable. People all across the world, who are experiencing a deterioration in their quality of life and are gasping for breath, may find the advent of the electric cars a welcome respite. Moreover, the surge in demand for Lithium-ion batteries is expected to bring a windfall to the economies of African nations. The continent of Africa, which is full of underdeveloped nations, has so far been deprived of the economic benefits enjoyed by the people elsewhere. Its natural resource advantage, especially its huge reserves of cobalt, manganese, nickel and titanium, which are the essential components of lithium-ion batteries, may prove to be a boon to the continent. However, it is hard to predict how long will it take for the world to graduate from the conventional cars to the electric cars. Irrespective of the fact whether it will be excruciatingly slow or lightning fast, the change is imminent.

If we feel that this disruptive innovation is only going to have a positive impact on the humanity, we are gravely mistaken. The emergence of electric cars may also have a profound negative impact on the geopolitical environment in the world. The OPEC nations, especially the Middle Eastern countries, whose economies are largely dependent on oil money, will slip into recession if they don’t ready themselves for a post-oil era. They need to invest in re-skilling their human resources for alternative careers and diversify their economies to withstand the impending shock of oil obsolescence. If they don’t become future ready, the resultant recession may fuel political instability, which may ultimately trigger widespread unrest. Such an eventuality will herald trouble for the increasingly globalized world.

To conclude, the electric cars that are on the verge of storming the roads, herald a new era in the automobile industry. However, these cars will trigger an enormous surge in demand for electric power, and feeding the energy intensive manufacturing and operation of these cars requires a manifold increase in electric power generation. And, to meet the demand we need to depend on renewable energy sources instead of falling back on fossil energy such as coal. Otherwise, the very purpose of introducing electric cars will be defeated.


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