There have been some rather bold and interesting investments made by leading VCs in automotive technology companies…but not many can be bolder than entering the business of designing, manufacturing and assembling entire vehicles from scratch. Yes, some companies like the Tesla (here, and here) are basically outsourcing the vehicle completely to the likes of Lotus, it remains to be seen what Fisker will do.
But can a startup put together an automotive assembly line and do a good job at it? I am told Lotus Elise was developed with merely a budget of approx. $7 million, and the Think car is assembled using 700 components (instead of the typical 20,000+) by a staff of 35 people. This remains a question in my mind. How many new car companies have been successful and profitable in the past 40 years?
Anyways – I got this image from a friend that humorously illustrates the core of the issue. Can there be space for an incompatible disruptive forceto shake up the automotive supply chain in a dramatic fashion?
IKEA DISTRIBUTING CARS – DISRUPTIVE INNOVATION