Tesla & Electric Vehicles: Disruption Usually Takes Much Longer Than We Think

The Box is a great book that I read after Bill Gates recommended it a couple years ago. It is the story of how container shipping took over the world.

One of the lessons I learned from the book is that it takes far longer for a disruptive technology to take over than people think. The more capital intensive the industry, the longer it will take.

The shipping industry is extremely capital intensive. Although the huge cost savings of container shipping were pretty much evident right from the start, it took a really long time, decades, for container shipping to completely take over. New ships, ports, and containers all had to be built to meet the rising demand.

An industry starting to see some disruption is the car industry with ride-sharing apps, self-driving cars, and the shift away from internal combustion engines to alternative power sources like all electric vehicles.

The car industry is another capital intensive industry. The disruption of the car industry will take far longer than we’re expecting. Matthew Lewis in the following “tweetstorm” about car use and the climate hits on a couple of reasons why EV adoption rates will be lower than some expectations.

We, people as a whole, are really good at creating expectations that far exceed precedents. If the past disruption of other capital intensive industries provides any lessons, it’s we’re grossly overestimating how quickly the car industry will be disrupted. Especially when it comes to replacing the internal combustion engine with alternatively powered cars like Electric Vehicles.