By John D. Stoll
Electric vehicles have long posed a chicken-or-egg conundrum for
Buyers too often find them to be pricey, ugly, limited on range
or unavailable. Car companies won't invest because we aren't
interested in buying. We aren't interested because there's little
to choose from. So, thirsty SUVs and pickups, powered by cheap
gasoline, keep driving the U.S. car market.
Yet, American business can't stop talking about electric
vehicles in 2020. Manufacturers are introducing battery-powered
versions of nearly anything that moves, and EV startups are
standing in line to go public. This past week Volvo Group
introduced an electric Mack garbage truck and Ford Motor Co. broke
ground on a factory to make electric F-150 pickups. Next month
General Motors Corp. unveils a battery-powered Hummer.
It would be easy to credit the hype to Tesla Inc. Chief
Executive Elon Musk. He's brilliant and enigmatic. His cars are
well-designed and fun. His company is thriving and has spawned
aspiring copycats -- including Nikola Inc., which is facing
government scrutiny -- that have attracted billions from
What's powering the buzz now is there are buyers. Not individual
gear heads and technophiles shelling out big bucks for a Tesla,
electric Jaguar or e-Porsche, but companies committing to hundreds
of thousands of sturdy, affordable, workaday electric cars and
Widespread use by big fleets theoretically leads to lower
battery costs and a better charging network, two of the biggest
impediments facing EVs. Uber Technologies Inc. Chief Executive Dara
Khosrowshahi told me recently that bulk buyers like ride-hailing
firms or delivery and e-commerce services can "provide that shock
to the system and then start creating the flywheel moving in the
This is somewhat akin to how Microsoft Corp. came to dominate
(Windows on every office desktop), and why companies like Zoom
Video Communications Inc., Snowflake Inc. and Slack Technologies
Inc. are so attractive. Investors couldn't care less if little old
me uses a gadget or app; they're far more interested in whether
that gadget or app appeals to businesses that drive rapid and mass
Ride-hailing rivals Uber and Lyft Inc. this summer launched
initiatives aimed at getting millions of their contract drivers to
tool around in electric vehicles. Amazon.com Inc. made similar
waves last summer when it ordered 100,000 electric vans from Rivian
Tech titans aren't only ones diving in. United Parcel Service
Inc., Republic Services Inc., and Anheuser-Busch have made splashy
commitments to buy zero-emission vehicles in various configurations
and in large volume.
"What we need to do is move EV investments beyond shiny PR
announcements to core ways of doing business," Mr. Khosrowshahi
These orders are critical for EV companies large and small,
Republic Services' president, Jon Vander Ark, told me last month.
The garbage company's desire to go electric is expediting
innovation in heavy trucking, he said. "You've got to have a
It's best if that trumpet is made of gold. Uber is committing
$800 million on EV-related programs through 2025, for instance.
Amazon pumped a nearly $700 million investment into Rivian.
Thomas Healy, the CEO of electric- and hybrid-truck startup
Hyliion Inc., told me last week the company's outlook brightened
when it received an order for up to 1,000 electric 18-wheelers from
Agility Global Integrated Logistics. The Kuwait-based Agility ships
goods for big producers.
The order, announced in June, corresponded with Hyliion's
announcement it is pursuing a listing on the New York Stock
Exchange this autumn. The company already has sold trucks and
services, but the Agility deal bolsters the business case.
"Having that customer order is the light at the end of the
tunnel that says 'Yes, people want this, this is the right
product,'" Mr. Healy said. "But then, it puts an extra layer of
pressure on us. We've got to go execute."
Auto makers spanning Detroit to Wolfsburg to Tokyo have promised
a load of new EVs, but we've heard it before. In 2009 -- with
gasoline prices above $4 a gallon nationally and GM and other auto
companies seeking government bailouts -- industry executives
promised to electrify fleets.
Will they carry through this time with gas averaging $2.18 a
gallon? A broader look at how innovation works teaches us that
these companies can only kick the can down the road for so
In 1975, Steven Sasson invented the digital camera in Eastman
Kodak's laboratory shortly after graduating from engineering
school. Instead of finding ways to fast-track the technology, Kodak
questioned its viability.
"What's an electronic photo album going to look like?" he was
asked during an early presentation. "When is this actually going to
be practical." Fifteen years? Twenty?
Kodak stuck to film while competitors exploited its bright idea
and buyers warmed up to it. On a 1998 family vacation to
Yellowstone, Mr. Sasson stood at Old Faithful as many of the people
wanting to take pictures pulled out digital cameras.
Not long after, digital cameras started showing up in mobile
phones. The eggs were scrambled, the chickens fried and Kodak had
missed its moment.
Write to John D. Stoll at email@example.com
(END) Dow Jones Newswires
September 18, 2020 15:45 ET (19:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.