by David Johnson
President & CEO, Achates Power, Inc.
Yesterday, The Green Car Reports, published an article called “Plug-In Hybrids Are The Best Competitors To Fuel-Cell Vehicles: Here’s Why.” This immediately grabbed my attention and the article made some interesting points, but also got me thinking. What is the true definition of “Best Competitors” in this space?
The Green Car Reports article seems to focus on vehicles that are easier to use (long driving range between refueling stops and short refueling stops at refueling stations that are already available), so it takes a functional view of the products on offer or that will be offered, but it doesn’t take into account cost, price or any other financial/economic measure. That’s missing the mark (at least in the real world).
I think “Best Competitors” are those that best meet or exceed all the real world needs of all customers. And we usually judge these in the marketplace by sales volume and profitability in the long run (anyone can boost sales volume for some period of time by giving away their product. IE: see price cuts on the Ford Focus EV of ~$10,000 since it was first launched and let’s see what it does to their sales volume in the coming months and years).
What are all the real world needs of customers? Well that is indeed a trillion dollar question (about 80 million vehicles sold per year worldwide at let’s say about $15,000 per vehicle = $1.2 Trillion annually, if I’m keeping track of my zeros and commas successfully) that every vehicle manufacturer is striving to answer every day. Well, I won’t be the one to make “the list” and declare that my list is “the correct and definitive list” but I will argue that if this list excludes the cost for the average consumer to purchase the vehicle, it is missing a HUGE part of the real world customer needs.
Most customers cannot afford EVs, PHEVs, Natural Gas vehicles nor FCEV’s- they just cost too much. Even with price cuts and government incentives, they are not an affordable option for the majority of consumers. Additionally, current prices are already too low for manufacturers to make money on these products, not making them a real viable option for manufactures. Therefore, none of these technologies are the “best competitors.” None of these sell in high volumes… none of these will sell in high volumes unless and/or until costs are reduced.
The world needs, we need, clean, efficient, durable, reliable, safe, fun-to-drive, good looking, highly useful vehicles that can be afforded by 80 million buyers around the world each and every year. The product that fits this description relies on a clean and efficient internal combustion engine. And I’d be pleased to suggest that the best IC engine for all future transportation needs is the Achates Power engine.