The car of the future will be electric, connected and, eventually, self-driving. But where does that leave the car industry of the future? In a series of articles this month, Heard on the Street takes a look at how investors should approach the biggest technological disruption the car industry has faced in decades.
A Tesla showroom in San Jose, California (Image: Bloomberg)
Battery-powered electric cars outsold gasoline ones at the dawn of the automotive age. In a decade or so they may well do so again. Investors need to watch out they don’t get caught on the wrong side of history.
Precisely when electric cars leave their current luxury or green-tech niches and—after many false starts—enter the mainstream depends above all on relative cost. On that front, electric vehicles have momentum.
The plummeting cost of batteries is key. The growth of mobile computing has driven massive investment in the area, improving the range of electric cars while reducing their cost. Mercedes-maker Daimler thinks the production cost of engine and battery technology might reach parity in 2025. But the tipping point for consumers, who also factor in subsidies and running costs, will be earlier.
Read more: Wall Street Journal