Over the weekend I watched this interview discussion between Elon Musk and Marques Brownlee. If it doesn’t show up below, you can find the video here.

[youtube https://www.youtube.com/watch?v=MevKTPN4ozw&w=560&h=315]

Elon figures that if Tesla works really hard they could probably come out with a USD 25,000 car in about three years. The key to that affordability is twofold: (1) design & technology improvements and (2) scale. 

So part of the answer is just time. As design and engineering iterations continue to take place, the components will become better and cheaper, just as they have for things like cell phones. Elon estimates that we’re in the 30th iteration of the cell phone today.

But the second factor is simply volume. And that got me thinking about housing production and the similar importance of scale and density. We do a lot to limit volume, despite saying we want more affordable housing.

Bob Lutz is a former vice chairman and head of product development at General Motors. Recently, he had this to say about the future of the auto industry. 

Here are a couple of powerful snippets:

It saddens me to say it, but we are approaching the end of the automotive era.

The auto industry is on an accelerating change curve. For hundreds of years, the horse was the prime mover of humans and for the past 120 years it has been the automobile.

Now we are approaching the end of the line for the automobile because travel will be in standardized modules.

Everyone will have five years to get their car off the road or sell it for scrap or trade it on a module.

Bob is 85 years old. This is somebody who spent his entire life in the auto industry telling us that the old model is now done. 

It reinforces something that I wrote about here, where the “end of the automotive era” was pegged at around 2021. 

And it is part of the mental model that I have started relying on today for decision making.

Photo by Alessio Lin on Unsplash

Over the weekend I watched this interview discussion between Elon Musk and Marques Brownlee. If it doesn’t show up below, you can find the video here.

[youtube https://www.youtube.com/watch?v=MevKTPN4ozw&w=560&h=315]

Elon figures that if Tesla works really hard they could probably come out with a USD 25,000 car in about three years. The key to that affordability is twofold: (1) design & technology improvements and (2) scale. 

So part of the answer is just time. As design and engineering iterations continue to take place, the components will become better and cheaper, just as they have for things like cell phones. Elon estimates that we’re in the 30th iteration of the cell phone today.

But the second factor is simply volume. And that got me thinking about housing production and the similar importance of scale and density. We do a lot to limit volume, despite saying we want more affordable housing.

Bob Lutz is a former vice chairman and head of product development at General Motors. Recently, he had this to say about the future of the auto industry. 

Here are a couple of powerful snippets:

It saddens me to say it, but we are approaching the end of the automotive era.

The auto industry is on an accelerating change curve. For hundreds of years, the horse was the prime mover of humans and for the past 120 years it has been the automobile.

Now we are approaching the end of the line for the automobile because travel will be in standardized modules.

Everyone will have five years to get their car off the road or sell it for scrap or trade it on a module.

Bob is 85 years old. This is somebody who spent his entire life in the auto industry telling us that the old model is now done. 

It reinforces something that I wrote about here, where the “end of the automotive era” was pegged at around 2021. 

And it is part of the mental model that I have started relying on today for decision making.

Photo by Alessio Lin on Unsplash