Earlier this month I was a guest of the UK’s Department of International Trade on a low-carbon vehicle trade mission to California and Mexico.
With several days in LA to start the trip, the city of dreams inevitably set the tone. It’s hard not be smacked around the face by this extraordinary place. The real positivity, the relentless politeness, the universally terrible coffee, the ubiquitous fast food, the homelessness, the vast wealth spilling over the Hollywood hills. But most of all the traffic. The extraordinary levels of it, spread uniformly across the expanse of this vast urban sprawl.
This is a city with no centre. Arteries don’t run into and out of a metropolitan heart as they do in older cities. LA is a giant grid which people criss-cross 24/7: more than in probably any other western city the population works around the clock, servicing everything from the entertainment business to the fast food industry. Property prices and wealth inequality mean that people often live a very long way from where they work – even for relatively low-paid jobs they commute, say, 30 miles, and they drive it, which can take a couple of hours. Hardly anyone uses what public transport there is. The nearest anyone from the professional classes gets to public transport is Uber. It’s a default option which only adds to the traffic: effectively a single-occupant car, usually with a large internal combustion engine. Uber and Lyft are simply increasing the car dependency.
So in spite of California’s environmental commitments LA is very definitely not the cool low-carbon city of electric vehicle advocates it’s sometimes painted as. Yes, there are plenty of Tesla’s Model S around (although few Model Xs, and I saw just one Model 3) and a good sprinkling of Chevvy Bolts. But pure EVs and hybrids like Toyota’s Prius are vastly outnumbered by giant gasoline-driven SUVs, ancient V8s, V12-touting Lamborghinis and Rolls-Royces, let alone the humdrum everyday transport of ordinary folk: if you want to spot Hyundais, this is the place to come. LA is a city in love with the motor car. Any car.
It’s simply not realistic to change this mindset. This isn’t Silicon Valley, where utopian business ideas are dreamt up in people’s garages and grow into multi-billion-dollar global disruptives. Currently LA is really the old model, a glittering outpost of Detroit. We visited the LA motor show and its eco off-shoot, Automobility LA, and they echoed echoed this: the latter was, at best, work in progress, the former much like any other motor show (but with more old-school gas-guzzling models). Where were the disruptors? Lucid? Faraday? Nio? Fisker?
The major car manufacturers don’t want the mindset changed – yet. They know that their existing business model is approaching the end of its life, but it’s fine while it still works and until legislation necessitates the change; mass market demand only ever comes into the equation late on. Meantime the carmakers don’t provide attractive low-carbon options. Why should they? EVs are expensive to engineer, mean disruption to manufacturing and retail processes, and offer reduced margins.
It’s in this context that those involved in the low-carbon trade mission can be a factor – smaller companies and start-ups, technologists and innovators, suppliers and integrators. While the major carmakers have a vested interest in slowing things down, these other businesses can be catalysts, forcing change from the bottom up.
Los Angeles can play a big part in this. It’s a bridge straddling the lets-change-the-world optimism of Silicon Valley, San Diego’s low-carbon commitment and the pragmatic ability of Baja Mexico to productionise low-carbon tech. And it’s got a huge potential customer base, vast wealth and international influence.
LA is also quite possibly the model for a major modern city struggling to eschew old ways and acquire new, more sustainable habits. Yes, it’s more extreme than New York, Paris or London, but most of the problems are the basically the same: too much road traffic, unattractive public transport, very little low-carbon choice. If LA can do it then so can others. We should all keep watching.
Asia is key, so expect to see the vehicles being manufactured there. That may mean partnerships with Chinese businesses, which would reduce the huge financial risk. What that in turn means for the brand – British, daring, challenging, idiosyncratic, innovative – is another question.
But they can also fail spectacularly. In April, when he described the forthcoming Tesla Model 3 compact car as “the most compelling product launch on earth” he wasn’t aware that this month’s launch of one of his SpaceX rockets would be dramatically more compelling. The Falcon 9 failed explosively and extremely publicly, made worse by the fact that in its payload was a Facebook satellite for bringing broadband to parts of Africa. It was a PR-loaded fireball and could have been a metaphor for his aim of taking on the established carmakers.
It’s been a bad year. Yet Tesla faces new, fundamental challenges and risks, and rather than provide welcome relief the Model 3 breakthrough car is the heart of it. Yes, the Model will alter the dynamics of the electric vehicle market if, as claimed, it comes to market in 2017 at a base price of $35,000, able to carry five people well over 200 miles and on to the high ground.
But the real battleground is not the vehicles themselves – it’s how they’re powered. So if anything is going to be the Tesla gamechanger it’s the company’s giant Gigafactory battery plant, not the Model 3. It needs to be: around 375,000 people have placed orders for the 3, equivalent to a likely $16bn in sales. Musk says the 3 will propel Tesla from an annual volume of 50,000 vehicles in 2015 to 500,000 by 2018 to meet demand.
So you hope that, for Musk, cars are a way to create the momentum, goodwill and change of mindset for a wider energy brand and a new kind of grid – translating Tesla’s vertical integration into a world where EVs power not just themselves but our homes, are part of the internet of things and a smarter world. Otherwise his efforts may go the way of that Falcon 9.
Mark Carbery 