*Even though the Valley is pursuing its own Detroit Model of industry consolidation, making cars is above its pay grade. According to this guy, anyhow.
(…)
Tesla was going to show us the new electron driven future, Google was going to make cars that drove themselves, and the Apple of the tech world’s eye was going to do nothing less than completely reinvent the automobile, just as it had done with music players and telephones. The push towards self-driving, autonomous cars and trucks was only going to accelerate the ascendancy of Silicon Valley as the new Motor City.
Just because you’re good at one thing, however, doesn’t mean you’re good at another.
The history of business and industry has many examples of successful people and firms that have failed when trying new ventures. Sticking to what you know is sound reasoning in business. You may not be the black swan that you think you are.
Now, while Tesla is still moving forward and slowly expanding its lineup of EVs, the profit it is reporting this quarter is the first black ink the firm’s had in three years, and most of that is attributable to the sale of clean air credits to other automakers, not making and selling Tesla cars. Both Google and Apple have retreated from their ambitious plans to seemingly become automobile manufacturers. As Bill Ford, the great-grandson of one of those guys in early 20th century Detroit put it, “The conversation has really shifted.”
According to Bloomberg, Google co-founder Larry Page told a private meeting earlier this year that he was “heartbroken” by the lack of progress of the company’s autonomous car project, though a Google spokesman denied that Page was disappointed by the project’s accomplishments to date.
Silicon Valley may have bitten off more than it could chew. Besides developing autonomous driving technology, a serious engineering undertaking all on its own, making an automobile is about as complicated a process as manufacturing can get. For each individual car or truck model, between 20,000 and 30,000 parts have to be designed, engineered, tested and mass produced (using almost every material science and manufacturing process known to humanity), and then the assembled whole has to work reliably in a severe environment for ten to twenty years. There is a lot more to making a car than emailing Foxconn some schematics and blueprints….
