Is the Big 3 too big to fail, too big to innovate?

Is the Big 3 too big to fail, too big to innovate?: "

Are the Big Three innovative enough to rethink mobility?

Is it easier to maintain the status quo?

Great corporations, at least from a shareholder’s perspective, provide great corporate guidance, enabling them to meet or beat most quarterly expectations. Consequently, it often seems that an in-ordinary amount of corporate attention is focused on quarterly statements rather than the future.

But, is this corporate mindset the best environment for innovation, especially innovations that might lead to very disruptive technologies and business models? Can automakers truly embrace out-of-the-box thinking when it comes to automotive change?

Recently, a report by AutoPOLIS suggested that the future of mobility must be decoupled from GDP. Coming off the heals of a major US government takeover of a huge chunk of the US auto industry, this line of thinking doesn’t seem terribly far-fetched. But that wasn’t even the point of the AutoPOLIS decoupling theory.

Instead, the massive growth predicted for the future of auto sales throughout the world will simply become unsustainable. The world already has a hard enough time managing billions of people, and billions of cars will be even worse according to AutoPOLIS. Thus, a new business model for mobility must be embraced, and the sooner the better.

Of course, Big 3 companies aren’t rushing into China’s exploding auto market to redefine the automobile, they are rushing there for sales – Chinese auto sale’s growth is already written in to next quarter’s guidance, duh.

Unfortunately, with so much focus on sales and guidance, can the Big 3 – as well as most of the rest of the established auto industry – be the driver of new business models, of game-changing disruptive technologies, in the automotive industry?

What game-changing disruptive technologies?

Better Place, for instance, believes the future of the auto-industry could be much more like owning a phone than a car. Rather than owning the costly battery in your plug-in, subscribers simply own an amount of energy or range. According to Better Place, this will be the key to cost-effective electrification.

Why own an expensive battery-powered vehicle? Instead, own a much cheaper vehicle that includes a subscription for just the amount of energy, just the amount of range needed? Need a bigger battery pack for a longer trip? No problem. That’s just an overage on next month’s energy subscription.

Obviously, such a subscription-based automotive model sounds like a ridiculous idea in the US, but in places like China and India, where most have never owned a car nor can they afford to buy as much car as in the US, such an idea has legs, or better yet, wheels. Thus, Better Place’s recent Chinese ventures have become very intriguing.

However, batteries and EVs could be just one facet of this subscription-based mobility idea.

Auto-drive software, for instance, could turn cars into self-driving iPads – let’s call them iMobs. Forget parking, fueling, insurance, etc., with these iMobs such concepts would be so last century. Instead, users will simply subscribe to pickup times for a Mob-shared iMob, or iMob taxi, to transport subscribers to where they need to go. Therefore, rather than a time to drive, mobility becomes a social time, work time, relax time – maybe even a massage time – all at a cost much cheaper than car-ownership.

Ironically, such technologies exist today. But they require extreme out-of-the-box thinking, not just from consumers, but more important, automakers. But I’d bet there is far too much profit on the table for major automakers to consider such a possibility anytime soon, even if it would be the best thing for the environment and for energy security – those issues just aren’t that critical to quarterly corporate guidance.

Ultimately, the future of the auto industry is probably going to be too disruptive to most mainstream automakers – another point AutoPOLIS makes – which means most mainstream automakers will probably try to prevent the future as long as possible. And since the US auto industry seems too big to fail these days, real automotive innovation probably won’t be easy to drive in the US.

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