Luis Alvarez of Alvarez Technology Group Talks the Future of Tech
We’ve had electric vehicles for a long time, but Tesla revived it after early attempts with the Leaf car and other little electric cars that did not match up well with more competitive vehicles — even the Prius didn’t make as large of an impact as it could have.
Luis Alvarez of Salinas-based Alvarez Technology Group notes that pretty much every car manufacturer has basically said that between now and the end of this decade, they’re going to get out of the business of building cars with internal combustion engines and move completely into electric vehicles. Tesla and other electric car manufacturers are going to focus on electric cars from now on; they’re going to forget about diesel engines and relying on fossil fuels to power cars. This should lead to a more zero-carbon footprint across the auto industry. While the initial cost for an electric car has been an obstacle to the purchase of these vehicles, the cost of production is steadily falling, which is another signal of the fall of conventional gasoline and diesel power.
When you think about it, it’s astonishing how long it took for the electric car market to hit its tipping point, but we may have just arrived there. What exactly is that tipping point? We must think about the company that Elon Musk built. He has over 250,000 customers who own his cars, which are Tesla, even though they don’t sell anywhere near 250,000 cars. What they think of as the typical customer is somebody who has just paid for a car worth somewhere around $100,000. They’ve put some of their life savings towards a luxury car, and they’re now going to start seriously thinking about the car that they put their money into. These customers are at the first level of owning a car that’s truly fulfilling their personal vision.
What Tesla’s doing is taking a customer starting from zero with their first cars, to creating a whole new business model that is within the budget of that typical customer’s savings. That could be a car that might be too expensive for them at the moment, but if they have the money saved for it, chances are that their first car will be an electric car rather than one that is powered by gas.
Why did it take so long to make the electric car market work, specifically in the space of the auto industry? The rationale for the high cost of electric cars has always been that there wasn’t enough demand out there for them. That’s been part of the difficulty for carmakers because it takes a while to build up enough credibility in the electric car space, where the assumption has been that electric cars don’t measure up to gas cars.
Many traditional car companies have been reluctant to advertise their electric cars to what most would call their target customer. If they can build some credibility in the market, they’ll sell more of their cars, but if they do advertise and sell those cars to the wrong customer, they’re not going to achieve their goal of capturing a demographic.
So Elon Musk is going to continue to promote Tesla cars, knowing that these kinds of electric cars are going to be prevalent now and into the future — which will no doubt rely less than ever on the fossil fuels required to power older vehicles. This step forward to cleaner energy powering travel is a growing trend that many in the technology sector saw coming. Other industries are also being disrupted and re-imagined, all in the effort to be safer for the environment and indicative of more true value for the end-user and the world.