In Peter Lyon’s June 29th article in Forbes: Record Layoffs Loom In Shadow Of Industry Push For Electrification And Self-Driving. In the article he discusses the current state of employment contraction for a number of global OEMs. The article describes an auto sector at a crossroads. He also references how the market share for electric vehicles has largely underperformed many earlier projections. The article cites certain undisputable facts but unfortunately doesn’t present a full picture of the evolving breadth of the industry. The reality of today’s “auto sector” is that while the legacy sector goes up and down, investment into the future is exploding in the areas of product, technology and application advances.
Conflicting market messages alongside a fascinatingly relentless march toward a complete overhaul of the automotive sector makes it very hard to provide simple explanations of the industry. It’s important to get this right and understand what is now an extraordinarily complex industry that is better described as about “mobility” more generally – and not as had been the case for decades about the production and assembly of products that are of largely proven technology. This isn’t any longer your grandfather’s car production industry, but rather a maze of technology and business model plays that together will yield a very different paradigm. It’s not a matter of exactly how quickly the take-up has been for electric vehicles over the past decade or so, the focus should be on the huge investments being made in propulsion, powertrain, autonomy, active safety and connected vehicle technologies.
This is important as we’re moving from what has been a traditional model of the largest and most complicated supply chain system in the world, to something that is exponentially more. Going forward, it’s not only/mainly about producing the parts and components that are assembled into cars and trucks, instead it’s about weaving a range of technologies together in a manner that yields new platforms for human mobility. In many cases, this will yield physical products that largely look and act like traditional vehicles, and in other cases the end product won’t at all look or act as a traditional product. In other cases still, the result won’t be a product for purchase, but rather a service without a tangible physical product for purchase.
When we read citations of record layoffs on the auto sector, we don’t reflect near a fulsome reflection of the reality of what is occurring in the newly recognized mobility sector. Yes, in the nearer-term there may be sales highs and lows of OEM vehicles, reflecting economic cycles and consumer confidence, etc. but past the next few years, the future is quite dynamic for the new auto sector technology.