A decade on, the lights never went out and the internal combustion engine is still the backbone of the automotive industry. But, that is changing. As Volvo announced it will cease production of internal combustion engine-only cars in 2019, an arms race has started for every manufacturer to move to electric powertrains or risk being left behind by new entrants and going the way of Kodak, Blockbuster and Nokia.
The automotive world believes that next step disruption lies in electrification and self-driving cars. The latter is going to be the most disruptive in terms of having the potential to have new entrants like Uber and Google push out old favourites like Ford or BMW. If you think that’s slightly dramatic, only 12% of Fortune 500 firms from 60 years ago exist today. And, estimates predict 40% of firms on there today will be gone in 10 years time. It’s rapid innovation leading to rapid disruption of traditional markets.
But as well as connectivity, software and sensor innovations - trends seen widely in most industries - the automotive world is beginning its biggest transformation in hardware to date, as it embraces the electric powertrain. For me, 2017 marks the beginning of the end for the faithful and era-defining internal combustion engine.
What’s most surprising, however, is that it’s not supply and demand that’s driving this huge engineering change, as Peak Oil Theory suggested, but instead the catalyst is a social and cultural one. Every manufacturer is producing hybrids and quickly developing electric vehicles in anticipation of a social change that is going to be driven by policy as much as environment awareness.
Who’d have thought, in these fractured times, politicians and the public actually agreeing on something for once.
