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Henrik Fisker Makes Rosy Prediction "Plug-Ins Will Take Off Like Smartphones"

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On: Wed, Jan 26, 2011 at 3:55PM | By: Chris Weiss


Henrik Fisker Makes Rosy Prediction "Plug-Ins Will Take Off Like Smartphones"

Well, here's a media sound bite that I'm dismissing as complete, investor-befriending positioning. Henrik Fisker was quoted last week as stating that plug-in electric and hybrid vehicles will take off the way that smartphones and flat-panel TVs did. It's a fair comparison in terms of new, cutting-edge technology, but there's one major difference: flat-panel TVs and smartphones were flat-out better than existing devices in every discernible way. Plug-in vehicles, while certainly more efficient and cheaper to own in the long run, are not quite at the same respective level.

Specifically, Fisker is quoted as stating "Look at flat-screen TVs and smartphones. When they first came out, no one said they’d never catch on as they were too expensive. Everyone’s is buying a flat-screen TV and smartphone now and no one who’s done it is going to go back to the old technology. Sure, an old TV may have just as good a picture as a flat-screen but that didn’t stop them taking off. It’s the same with electric cars: if you want one, you will buy one, more people will see them and then everyone will want the latest technology."

He went on to say that electric-vehicle prices will eventually drop and more and more people will adopt them.

I think there's a major problem with this comparison. I'll assume Fisker meant flat-panel TVs and not flat-screen TVs since the latter applies to older, boxier CRT models that use a flat screen, as opposed to the razor-thin sets that have become the technological standard. Flat-panel televisions were a complete, unadulterated improvement upon CRT sets. They're thinner, lighter, more versatile for placement and deliver a first-rate picture. I can't think of a single compelling argument of why you'd choose a CRT over a flat-panel—except, perhaps, for price.

Smartphones are similar to flat-panels. They deliver way more function and possibilities to your mobile phone, allowing you to get all kinds of things done. Save for people who just use a phone just to make calls, the smartphone is a vast improvement over the standard cell phone. In fact, you could make the argument that the smartphone transcended its category—it's basically a small computer as much as it is a phone. Again, price might be the only compelling reason to choose a standard phone over a smartphone.

While price is one obstacle that stands in the way of plug-in vehicle adoption, the situation is more complicated than with the other two technologies Fisker cites. Range anxiety is probably the biggest obstacle to mass electric vehicle acceptance. And while plenty of work is being done to increase ranges and battery efficiency—cutting edge technology (i.e. new, better batteries) tends to cost money, so I think that EV prices will remain high for a while to come.

Also vehicles don't get released at the same frequency as electronics consumer products. We may have a handful of new electrics and plug-ins hit the market during any given year, while we'll see dozens of phones and televisions. Just look at Fisker's own Karma—the car has been delayed for years. The market, therefore, will continue to be dominated by existing gasoline models for years to come, unlike the consumer electronics market in which flat-panel televisions and smartphones began dominating their segments within a few years.

And until plug-ins can compete in every foreseeable way: range, power, versatility, etc., I don't see them taking the market by storm the way that flat panel televisions and smartphones did for their respective markets.

I don't doubt that the green vehicle segment will display healthy growth, but I don't really think it will be the fast, snowball-type growth that Fisker suggests.




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