A123 fail?

[chimpanzee]

"Success is 90% failure"
-- Soichiro Honda


Electric car battery company hits road bumps - CBS News

Then the luxury electric car Fisker Karma failed. It was powered by a faulty A123 battery. "It's low, it's sleek, it's sensuous... it's also broken! " said Consumer Reports.Electric vehicles fall drastically short of Obama's 1 million goalA123 was forced to launch an expensive recall -- its second in four months. With $621 million in net losses since 2009, the company disclosed in SEC filings last month that there was "substantial doubt" about its "ability to continue."A123 has declined further interview requests. As for that battery breakthrough announced this week, many analysts seemed underwhelmed.

Is A123 Electric Battery A Waste of $263 Million in Government Funds? - Forbes

So what is wrong with this picture? There a many good examples of government helping to spur the creation of new industries — with the Defense Advanced Research Projects Administration (DARPA)’s work to create the Internet being among the most compelling.
And the goals of spurring the use of electric vehicles has worthy goals — such a reducing the use of gasoline sourced from politically unstable regions of the world and greenhouse gas production among them.
But the decision to put government money into A123 was missing two fundamental pieces of research that any respectable venture capitalists would do. The most important — by far– is talking to potential customers to determine whether an electric vehicle was a technology in search of a market or the answer to a widely shared and painful unmet need.
Although I have not done this research for electric vehicles, I think it would be worth talking to cross-section of 100 potential customers to ask them whether they see an electric vehicle as a cost-effective means of transportation.
At $40,000 for a car with limited range — given the shortage of charging stations — I would guess that not many people would want to be guinea pigs for these vehicles. In other words, a modest amount of customer research would have thrown cold water on the forecast of a million electronic vehicles sold by 2015.
Meanwhile, I’d guess that the world does not have many people with extensive experience running factories to make them in high volumes. But those who invested in A123 should have anticipated problems resulting from the learning that would be required as production volumes scale.
And a look at what caused the Fisker problems for A123 suggests that its quality control processes leave much to be desired. For example, Crain’s Detroit estimated in April 2012 that A123 was poised to incur nearly $67 million in charges — including a $15 million inventory write-off — due to a Fisker Karma plug-in hybrid fitted with an A123 battery that failed in April during a test byConsumer Reports.

[Jason S]

Sound like a couple articles conflating hybrids, plug-in hybrids and battery electrics.

[VolkerP]

Seriously, do a poll on the future? Why ask 100 people if they would buy an EV? It is commonly accepted that the ones wanting new stuff are a minority. The majority either doesn't want to risk money on a new horse, or doesn't have money at all, or cannot be bothered with anything new.

As Henry Ford put it:

"If I’d asked people what they wanted, they would have asked for a faster horse."

[Doug_G]

Mod note: Thread title spelling fixed.

[Doug_G]

This article was barely researched. A123 batteries aren't just used in the Karma. They're also used in VIA Trucks, for example, which I think could become quite a "big thing".

Also in my experience market research is completely useless for new product categories. The average person - even a sophisticated consumer - doesn't seem to have the imagination to see how they might use a product they've never seen before.

[daniel]

In other words, a modest amount of customer research would have thrown cold water on the forecast of a million electronic vehicles sold by 2015.

"electronic" vehicles???

[dmckinstry]

"electronic" vehicles???

As you know Daniel, hardly any motor vehicle these days doesn't have a great deal of electronics in it. We already have millions of electronic vehicles. Of course, that just emphasizes the ignorance of some reporters, assuming that statement came from a reporter.

[daniel]

As you know Daniel, hardly any motor vehicle these days doesn't have a great deal of electronics in it. We already have millions of electronic vehicles. Of course, that just emphasizes the ignorance of some reporters, assuming that statement came from a reporter.

Precisely my point. You can't really trust a reporter who gets such fundamental things wrong. Many years ago, a local newspaper had a brief item about something I had done. It mentioned my age in passing. Several years later, there was another brief item about me, and they gave me the same age. The reporter had looked up the previous item and neglected to account for the three years that had passed. The news media are notoriously and massively incompetent. The "news" is mostly fiction. Sometimes because a reporter or publisher wants to distort public impressions, but mostly because they are just incompetent. Science and technology reporting is probably the worst because of our abysmal science education. Most people's ideas about science and technology come from watching fantasy programs on TV. (There is no science fiction any more. It's all just fantasy now.)

[rabar10]

Mod note: posts related to the technology adoption life-cycle and "crossing the chasm" have been moved here: Marketing the Electric Car / Crossing the Chasm

[dpeilow]

Don't know why the Mail just picked up on this.

http://ht.ly/2sEjnL