Beware Ye’ Olde Paradigm Shift
Ford CEO sees electric vehicle price war as EV costs decline is the headline on a recent AP article, in which Ford’s CEO says he expects the cost of building electric vehicles to fall dramatically, targeting $25,000 electric vehicles (EV). Sounds good to me! Is there a downside? Depends on where you are in the supply chain!
The article states that today an EV SUV costs about $25,000 more than a comparable gas SUV, noting that the battery costs $18,000 and the charger adds another $3,000. “Big cost reductions are coming with new battery chemistries that use fewer expensive and scarce precious metals such as nickel and cobalt… Plus, EVs will take less time and labor to build saving more money.”
Ford plans to copy Tesla and cut distributions costs, $2000 per vehicle, by eliminating supply on dealer lots. Ford may not have to buy advertising to sell EVs, which now amounts to $500 to $600 per vehicle.
“Half of the fixtures, half the workstations, half the welds, 20% less fasteners…”
Sounds good for the consumer and Ford shareholders – how about the employee? How about for the supply chain partners?
· What is the impact of “less time and labor to build saving more money?”
· What if you are a car dealer as they eliminate distribution?
· How about the advertisement department and the media that sells ad time?
· What if you manufacture fixtures, workstations, welders, and fasteners?
· What if you own, manage, or work for a nickel or cobalt mine or processor?
I wonder if the car dealerships are aware of the existential wave of change coming their way and are they actively re-inventing themselves OR are they confident that “things will return to how they always were.” Hmmm – I am wondering if there are life analogies here?
The article goes on to explain Ford’s restructuring into 2 distinct businesses – Ford Blue for combustion engines and Ford Model e for electric vehicles. Ford’s CEO adds that Ford is refitting old factories to build EVs and building 3 new battery plants and one new assembly plant. Which business unit team do YOU want to be on?
A question for you: Are EVs a paradigm shift or just normal product evolution?
Vocabulary.com defines Paradigm as “a new way of thinking or doing something.” I see EVs as a new way of doing something, so I am going with Paradigm Shift.
I will offer up another article, from qz.com, for your consideration and leave it to you to see if this is all positive:
John Deere’s autonomous tractor will usher in a new era of farming
…the company plans to start shipping its first fully autonomous tractor later this year. Deere also recently unveiled a crop sprayer aided my machine learning. Thirty-six cameras mounted on a track can sweep up to 2,000 square feet per second... Deere says its high-tech machinery serves a noble purpose: feeding the world.
…competition within the agricultural industry could be altered if some farmers have the technology to produce more yield while others do not. But with time, more production and cheaper technology, the machines could just be a glimpse into what the future of farming looks like.
I am curious, what jumps out at you in this snippet? Sounds positive – noble even. Bear in mind, based on 2020 USDA data, that agriculture and its related industries contribute $1.055 trillion to the US GDP and 19.7 million full- and part-time jobs, 10.3% of total US employment.
How about you? Are you working in an area facing paradigm shifts and if so, how are you addressing these upcoming changes? Or, do these upcoming paradigm shifts provide new opportunities for you and how can you be best prepared to take advantage?
I will leave you with a quote from Rumi, a 13th-century Persian poet:
“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.”