tag:theconversation.com,2011:/id/topics/bmw-18864/articlesBMW – The Conversation2023-04-05T17:25:45Ztag:theconversation.com,2011:article/2031732023-04-05T17:25:45Z2023-04-05T17:25:45ZCarmakers are mistaken if they think chip shortages are over – they need to reinvent themselves while there’s time<figure><img src="https://images.theconversation.com/files/519045/original/file-20230403-24-d3ec2v.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The chips are down. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/blurry-highway-background-hand-man-holding-1956308611">Ju Jae-Young</a></span></figcaption></figure><p>Finally, carmakers got a break. Those in the UK boosted their output <a href="https://www.imeche.org/news/news-article/uk-car-production-up-13-as-semiconductor-shortage-eases">by over 13%</a> in February as supply-chain pressures subsided, especially the persistent global shortage in microchips, also known as semiconductors. This “signals an industry on the road to recovery”, declared <a href="http://imeche.org/news/news-article/uk-car-production-up-13-as-semiconductor-shortage-eases">UK motoring trade association</a> the SMMT. Well, up to a point. </p>
<p>Early in the pandemic, carmakers slashed sales forecasts as <a href="https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-the-automotive-industry-is-accelerating-out-of-the-turn">demand for cars evaporated</a>, falling 47% in US and 80% in Europe in the first couple of months of lockdowns. Carmakers couldn’t see how sales could rebound quickly, which was a reasonable assumption at the time. In an industry where everyone has their own version of <a href="https://www.techtarget.com/searcherp/definition/lean-production#:%7E:text=Lean%20manufacturing%20is%20a%20methodology,not%20willing%20to%20pay%20for.">lean</a> or <a href="https://www.planview.com/resources/guide/what-is-lean-manufacturing/just-in-time-manufacturing/">just-in-time</a> manufacturing, where unsold inventories are seen as tantamount to incompetence, they quickly scaled back orders from their supply chain. </p>
<p>Car parts suppliers such as Bosch and Continental reacted by scaling back their production – and naturally, their own suppliers, such as NXP and Infineon, also reduced their forecasts. These second-order effects went deep into the supply chain, eventually converging on the great and mighty semiconductor manufacturer in Taiwan, TSMC (Taiwan Semiconductor Manufacturing Company).</p>
<p>A modern car can easily contain more than <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">3,000 microchips</a>. These control brakes, doors, airbags and windscreen wipers; they even support advanced functions like driver assistance and navigation control. <a href="https://en.wikipedia.org/wiki/Chipset">Chipsets</a> are like golden screws.</p>
<p>Yet obviously, many other industries depend on chips too. At the same time as carmakers were reducing their orders, manufacturers of gadgets such as games consoles, TVs and home appliances were seeing orders surging as consumers were forced to stay at home. They increased their chip requirements, and TSMC was more than happy to oblige.</p>
<p>It then became apparent to carmakers later in 2020 that they had overreacted. But by the time they woke up to this and ramped up orders, it was too late. TSMC was running all of its factories at maximum capacity to meet the surge in gadget demand, and there were no more chips available for carmakers.</p>
<p>As a result of this global semiconductor scarcity, worldwide vehicle production was <a href="https://www.statista.com/statistics/1288308/automotive-production-reduction-semiconductor-shortage/">approximately 11 million</a> units, or about 12%, lower in 2021 than it would otherwise have been.</p>
<h2>What carmakers got wrong</h2>
<p>No one could have predicted the outbreak of COVID. Nor could anyone have foreseen the ramifications on the supply chain as the virus receded. Still, every executive in the car industry knows the importance of computing power in a modern car. A car is a supercomputer on wheels, they’ll say. And yet they didn’t treat chipsets as a critical area. In other words, they were happy to let their suppliers worry about chip requirements and not have any direct involvement with chipmakers. </p>
<p>Why? Because chips don’t involve mechanical engineering. From the boardroom to the shop floor, carmakers generally focus on final assembly. Chipset design and fabrication is one of many things that gets outsourced. </p>
<p>So during the pandemic, most carmakers had little choice but to perfect the art of triaging their chips: for example, <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">General Motors</a> hoarded them for expensive models, temporarily shutting down factories that produce lower-priced sedans. </p>
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<a href="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="BMW on a snowy road" src="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The flagship BMW X3: now with reduced capabilities.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/moscow-russia-february-05-2022-bmw-2233469243">Rising Star</a></span>
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<p>Others instead removed features from vehicles that rely on microprocessors. <a href="https://www.automoblog.net/will-chip-shortage-end-in-2023/">BMW did away</a> with parking assistance and even touchscreen capabilities in various models. It also withdrew semi-autonomous driving functionality from the X3, its top-selling model. <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">Mercedes-Benz</a> eliminated features such as high-end audio and wireless phone-charging from a number of vehicles. </p>
<h2>The future threat</h2>
<p>Car production is now increasing as the high pandemic demand for chips for household gadgets has <a href="https://www.globaltimes.cn/page/202302/1285931.shtml">fallen away</a>. Still, it would be unwise to conclude that things are back to normal. Demand for chips is likely to look so different in future as we see the rollout of technologies like AI, the internet of things, and 5G/6G. </p>
<p>Major chipmakers are <a href="https://www.reuters.com/technology/tsmc-q4-profit-up-78-beats-market-expectations-2023-01-12/">boosting capacity</a> to meet this extra demand, with big new US facilities in the offing, for example. Yet it will take time for this to come on stream, and it’s still difficult to predict whether it will meet demand.</p>
<p>New product categories can appear unexpectedly, in a similar way to how bitcoin mining suddenly led to unforeseen chip demand. As <a href="https://fortune.com/2023/03/11/chips-and-science-act-semiconductor-shortage-rakesh-kumar/">Professor Rakesh Kumar</a> in the Electrical and Computer Engineering department at the University of Illinois observes: “The exact nature, speed and magnitude of the increase in demand is still unknown.” </p>
<p>As we saw during the pandemic, chip factories also typically run close to maximum capacity, leaving production extremely susceptible to disruptions. Natural disasters like earthquakes and floods can cause problems, as can accidents such as fires and power outages. In March 2021, for instance, <a href="https://www.reuters.com/article/us-usa-semiconductors-idUSKBN2BO4TV">a fire</a> at a Renesas Electronics chip factory in Japan caused a significant disruption to supplies over and above the pandemic-related problems. Geopolitical or military tensions, including those between the US and China, could also affect production in future.<br>
The implication is clear: carmakers must cultivate in-house expertise in this area. Rather than relying on suppliers or their sub-suppliers for semiconductors, they need to directly engage with chipmakers and do the relevant designs in-house. For example, <a href="https://www.cnbc.com/2021/11/18/ford-partners-with-globalfoundries-to-increase-chip-supplies.html#:%7E:text=Ford%20plans%20to%20increase%20its,chips%20to%20Ford%20from%20GlobalFoundries.">Ford announced</a> a collaboration with US chipmaker GlobalFoundries in 2021 to create chips for its vehicles while exploring the prospect of expanding domestic chip production. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Engineer working on a Ford car in a factory" src="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Ford is trying to get ahead of the curve.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/turkey-december-172014-ford-car-factory-502840735">OVKNHR</a></span>
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<p>This approach is already common practice among newer, more self-sufficient carmakers such as Tesla and China’s BYD and NIO, who all have extensive operations dedicated to designing or even producing their own chipsets. </p>
<p>These changes will not be easy. Yet the cost of clinging to the status quo will far outweigh the difficulties in the transition. For any company dependent on semiconductors, their resilience and future success hinge on getting this right. The correct response to the end of the pandemic is not to say “back to normal” but “never again”.</p><img src="https://counter.theconversation.com/content/203173/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Howard Yu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The car industry is celebrating an increase in production as the chip shortage subsides, but it could be short-lived.Howard Yu, Professor of Management and Innovation, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1869132022-07-18T04:57:39Z2022-07-18T04:57:39ZA heated steering wheel for $20 a month? What’s driving the subscriptions economy<figure><img src="https://images.theconversation.com/files/474496/original/file-20220718-68563-uz3gl1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> </figcaption></figure><p>From gym memberships to music and movies, to razors, toilet paper, meal kits and clothes, there’s seemingly no place the subscription economy can’t go. </p>
<p>Having conquered the software market – where it gets its own acronym, SaaS (Software as a Service) – the subscription model is now moving into hardware.</p>
<p>Car makers are among the first cabs off the rank, using software to turn on and off optional extras.</p>
<p>German auto maker BMW is offering “<a href="https://www.theverge.com/2022/7/12/23204950/bmw-subscriptions-microtransactions-heated-seats-feature">in-car microtransactions</a>” to access options for car buyers in Britain, Korea, Germany, New Zealand and South Africa. A heated steering wheel, for example, has a monthly cost of NZ$20 in New Zealand, and £10 in the UK.</p>
<p>Other markets <a href="https://www.drive.com.au/news/bmw-australia-monthly-subscriptions-detailed/">including Australia</a> will soon follow.</p>
<p>In the UK, seven of 13 “digital services” – from heated seats to automatic high beam and driving assistance – are now available in subscription form.</p>
<p>“Welcome to microtransaction hell” is how <a href="https://www.pcgamer.com/welcome-to-microtransaction-hell-buy-a-bmw-pay-monthly-for-the-cars-features/">one headline</a> put it. </p>
<p>But that’s probably overselling the onset of a corporate dystopia where “you will own nothing”. BMW’s motives are pretty straightforward – as is most of what’s driving the subscription economy.</p>
<h2>What is the subscription model?</h2>
<p>The subscription model means paying a fee for periodical access to a service or product. Until a decade or so ago, it was largely confined to a few select industries, such as the delivery of milk, newspapers and magazines. </p>
<figure class="align-center ">
<img alt="From milk and magazines, subscription services have proliferated with digital technology." src="https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474494/original/file-20220718-68552-hvzp5p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">From milk and magazines, subscription services have proliferated with digital technology.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>Other business models had similarities – such as rental businesses – but the point of the subscription model was different. </p>
<p>It was not about meeting a demand for a service someone only wanted to use temporarily or could not afford to own outright. It was about locking in a continuing relationship, to maximise “customer lifetime value”. </p>
<p>As <a href="https://www.investopedia.com/ask/answers/042715/how-do-subscription-business-models-work.asp">Investopedia puts it</a>, the subscription model’s focus is on customer retention over customer acquisition:</p>
<blockquote>
<p>In essence, subscription business models focus on the way revenue is made so that a single customer pays multiple payments for prolonged access to a good or service instead of a large upfront one-time price. </p>
</blockquote>
<p>This in large part explains why subscription services are now being adopted in markets outside their more obvious fit for things such as streaming news and entertainment. </p>
<p>In a broad sense, consumers can now be divided into two groups. One group comprises the “transactional shopper”, who interacts with the vendor once or twice, then disappears. </p>
<p>The other group comprises customers whose connection and “investment” in the brand is maintained through their subscriptions. </p>
<figure class="align-center ">
<img alt="The subscriptions model emphasises customer retention over customer acquisition." src="https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474211/original/file-20220715-24-eopgdo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The subscriptions model emphasises customer retention over customer acquisition.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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</figure>
<h2>E-commerce and access</h2>
<p>Part of the growth in the subscription economy has come from companies riding the e-commerce wave, delivering goods such as meal kits, wine, coffee, baby supplies, pet food, cleaning products, razors and toilet paper. </p>
<p>Consultant firm McKinsey has estimated the subscription e-commerce market is <a href="https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/thinking-inside-the-subscription-box-new-research-on-ecommerce-consumers">doubling in value</a> every year – though that was before the pandemic. It could be well be more now.</p>
<p>The other part of the market is represented by BMW’s approach, offering extra features to customers that can only be accessed for a fee. </p>
<p>In some cases this may involve standard “upsell” techniques. For example, when you buy a new Peloton exercise bike you’ll be enticed with <a href="https://www.onepeloton.com.au/membership">subscription offers</a>, such as virtual classes and “customised” training programs, to “reach your goals”.</p>
<p>Or increasingly, as with BMW’s heated seats and steering wheels, it can be done with software turning actual bits of hardware on or off.</p>
<h2>What is BMW’s game?</h2>
<p>Is BMW’s purpose to gouge its customers for more money through getting them to pay an ongoing fee for something instead of owning it outright? </p>
<p>This is not what its subscription structure indicates. The opposite, in fact.</p>
<p>Customers can still buy these options outright. A heated steering wheel in the UK, for example, costs <a href="https://www.bmw.co.uk/en/shop/ls/dp/Steering_Wheel_Heating_SFA_gb">£200</a>, and in New Zealand <a href="https://www.bmw.co.nz/en/shop/ls/dp/Steering_Wheel_Heating_SFA_nz">NZ$350</a>. But now they can also pay a subscription – for three years (£150, NZ$250), annually (£100, NZ$250) or monthly (£10, NZ$20). </p>
<p>These prices represent a strong signal – that the cost of outright ownership is the most economical. It’s unlikely BMW expects anyone to sign up for the annual or three-yearly options. These are probably just to make the outright cost look more attractive. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-decoy-effect-how-you-are-influenced-to-choose-without-really-knowing-it-111259">The decoy effect: how you are influenced to choose without really knowing it</a>
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<p>The monthly offering, on the other hand, may lure owners to try out a feature they would otherwise have rejected buying outright at the time of purchase. </p>
<p>Indeed, car makers argue the reason they offer so many options as extras is because most owners don’t want them. So this mostly looks like BMW offering a “try before you buy” option. </p>
<h2>The pitfalls of over-subscribing</h2>
<p>That said, companies don’t need to have sinister motives for us to have concerns about the spread of the subscription model. </p>
<p>The more things we pay for with “micro-payments”, the harder it becomes to keep track of payments. </p>
<p>Many of us continue to pay for products and services we don’t use. A survey of 1,000 Australian adults in 2021, for example, found about a third wasted money on unused subscriptions or memberships – losing an average of about <a href="https://www.savings.com.au/savings-accounts/unused-lockdown-subscriptions-are-costing-aussies-200-a-year">A$200 a year</a>. </p>
<p>Deep psychological associations can influence these decisions. Experiments by US marketing professors Jennifer Savary and Ravi Dhar suggests people with lower “<a href="https://academic.oup.com/jcr/article-abstract/46/5/887/5498871">self-concept</a>” are less likely to sign up for subscriptions – but also less likely to cancel subscriptions they are not using.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/what-makes-us-sign-up-to-subscription-boxes-87938">What makes us sign up to subscription boxes</a>
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<p>We may see the subscription model increasingly used in other sectors – including the health and justice systems. </p>
<p>For example, a subscription payment may provide a better level of nutritious food for a resident in an aged care facility, or a hospital or even a prison. This is not dissimilar to the way private health insurance premiums are managed, but still presents important justice and equity concerns.</p>
<p>So while there’s no reason to exaggerate the dangers of the subscription economy, it’s also prudent for consumers, advocacy groups and governments to ask “What next?”.</p><img src="https://counter.theconversation.com/content/186913/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Louise Grimmer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Customers fear the subscription model is meant to gouge them, but that’s not really the end game for sellers.Louise Grimmer, Senior Lecturer in Retail Marketing and Associate Head Research Performance, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1175792019-06-03T21:13:39Z2019-06-03T21:13:39ZHow youth influenced the EU election – and could do the same in Canada<figure><img src="https://images.theconversation.com/files/276621/original/file-20190527-193540-17php9z.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5649%2C3760&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A demonstrator holds a sign outside the Portuguese parliament in Lisbon during a climate strike of school students as part of the Fridays for Future movements on Friday, May 24, 2019. </span> <span class="attribution"><span class="source"> (AP Photo/Armando Franca)</span></span></figcaption></figure><p>With major votes occurring within the span of five months this year, the European Union and Canadian federal elections are critical in deciding our planet’s future.</p>
<p>The results of the EU election — in which each European country elects an allotted number of representatives to the EU parliament — have already resulted in big changes, largely due to youth getting involved in politics.</p>
<p>Young people around the world are demonstrating a thorough understanding of the larger economic and environmental threats that are endangering not only individual freedom, but the very survival of our own species and more than <a href="https://www.cbc.ca/news/technology/canada-biodiversity-1.5125108">a million others</a>.</p>
<p>Around the world, youth protest movements like #FridaysForFuture have been growing steadily. Student protesters recently turned out in <a href="https://www.thestar.com/news/gta/2019/05/24/student-protesters-hope-bay-st-march-will-wake-up-government-and-corporations-to-climate-crisis.html">120 countries and 1,700 cities</a> to demand action on climate change just days before the EU elections on May 26. The next global student strike has already been announced for Sept. 20 and is expected to draw even bigger numbers.</p>
<p>It’s clear that young voters are bringing critical issues to the fore.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/276617/original/file-20190527-193544-upar1i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Young people protest ahead of the European elections during a climate strike of school students as part of the Fridays for Future movement in front of the European Central Bank in Frankfurt, Germany.</span>
<span class="attribution"><span class="source">(Boris Roessler/dpa via AP)</span></span>
</figcaption>
</figure>
<p>As Europeans headed to the polls to elect a new European Parliament, the notion of a European “Green New Deal” was a big campaign issue. The German Green Party made history by coming in second place with <a href="https://www.bundeswahlleiter.de/info/presse/mitteilungen/europawahl-2019/35_19_vorlaeufiges-ergebnis.html">20.5 per cent thanks in part to the increased voter turnout in Germany (61.4 per cent)</a>.</p>
<p>The shift was due mostly to many first-time voters casting their ballots for the Greens, who won <a href="https://www.zeit.de/politik/deutschland/2019-05/europawahlergebnis-klimapolitik-fridays-for-future-protestwahl-gruene">the highest support in the 18-to-24 cohort — 34 per cent — and 27 per cent in the 25-to-35 age group.</a>.</p>
<h2>European Green New Deal</h2>
<p>There was a renewed brawl pitting democratic eco-socialists and liberals against conservatives and far-right parties, as Europeans witnessed most strikingly in the <a href="https://www.thenewfederalist.eu/the-maastricht-debate-insight-into-candidates-for-european-commission">first debate</a> of the lead candidates of the pan-European parties.</p>
<p>The debate focused on “digital Europe,” “sustainable Europe” and the future of Europe. </p>
<p>The prospect of a European Green New Deal — popular among young voters — has been increasingly paired with renewed discussions about democratizing the European Union not just politically, but also economically. </p>
<p>Yanis Varoufakis’s transnational party <a href="https://europeanspring.net/">European Spring</a> included a Green New Deal in its platform, with the following pledges: <a href="https://diem25.org/manifesto-long/">“To dismantle the habitual domination of corporate power over the will of citizens; to re-politicize the rules that govern our single market and common currency.”</a> </p>
<p>The party only marginally missed the threshold for securing seats in Germany and Greece, <a href="https://diem25.org/green-new-deal-gathers-more-than-1-4-million-votes-across-europe/">but more than 1.4 millions Europeans</a> voted for a Green New Deal. In Spain, the Socialist Party (PSOE) won <a href="https://theconversation.com/the-green-new-deal-is-going-global-115961">on a Green New Deal platform</a>.</p>
<p>As World Economic Forum writer <a href="https://www.weforum.org/agenda/2019/05/this-is-what-a-green-new-deal-for-europe-could-look-like/">Katie Whiting explained, a European Green New Deal would</a> invest “at least five per cent of Europe’s GDP in emissions-free transportation infrastructure, renewable energies and innovative technologies, while creating jobs and transitioning Europe to zero-emissions — all without raising taxes.” </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-green-new-deal-is-going-global-115961">The Green New Deal is going global</a>
</strong>
</em>
</p>
<hr>
<p>The European Greens, with <a href="http://www.europarl.europa.eu/news/en/headlines/eu-affairs/20190523STO52402/elections-2019-highest-turnout-in-20-years">69 projected MEPs</a> in the European Parliament, will certainly need to respond to calls from the Left Bloc (38 seats) and the Socialists and Democrats (153 seats) to work together on making Europe environmentally green and socially just.</p>
<p>They’ll have to do so while dealing with MEPs from pan-European parties like Volt Europa who want to <a href="https://www.volteuropa.org/vision">democratize the European Union</a> as far-right parties like <a href="https://theconversation.com/far-right-groe-but-heres-what-they-all-have-in-common-101919">Alternative für Deutschland (AfD)</a> embrace increasingly nationalist and isolationist views.</p>
<p>The EU environmental agenda is also being shaped by particular national New Green debates. For example, in Germany, there is talk of reappropriating apartment units and car manufacturers to alleviate inequality and establish a <a href="http://www.taz.de/Debatte-Kevin-Kuehnert-zu-Enteignung/!5590059/">more sustainable Europe.</a> </p>
<h2>Nationalize BMW?</h2>
<p>Soon after discussions about nationalizing real estate properties emerged in the state of Berlin, Kevin Kühnert, the head of the 80,000-member-strong youth movement of the Social Democratic Party of Germany (SPD), was recently in the news for <a href="https://www.telegraph.co.uk/news/2019/05/02/german-politician-calls-bmw-put-collective-ownership/">public remarks</a> calling for the nationalization of corporations like BMW as well. </p>
<p>BMW is in the spotlight due to allegations it “breached EU antitrust rules from 2006 to 2014,” according to the <a href="http://europa.eu/rapid/press-release_IP-19-2008_en.htm">European Commission</a>. It’s being investigated for allegedly using illegal defeat devices to cheat regulatory emissions tests.</p>
<p>It’s not just young people making the case for abolishing private ownership of some entities. These daring remarks by young people, sometimes considered taboo, have inspired older generations too. As Germany celebrates the 70th anniversary of the Federal Republic and its German Basic Law, even Baby Boomers are reminding the public about the law’s Article 15 that allows the <a href="https://www.vorwaerts.de/artikel/enteignungen-steht-grundgesetz">nationalization of private property</a>. </p>
<p>Demands for action on climate change are growing louder every day. British parliament recently declared a <a href="https://www.theguardian.com/environment/2019/may/01/declare-formal-climate-emergency-before-its-too-late-corbyn-warns">climate emergency</a> due in part to ongoing protests organized by the Extinction Rebellion movement, which has also been supported by #FridaysForFuture student activist <a href="https://twitter.com/GretaThunberg">Greta Thunberg</a>.</p>
<h2>Growing movement?</h2>
<p>The strong representation of Democratic Socialists federally in Germany, including young socialists up to the age of 35, is beginning to take hold across the Atlantic, where the Democratic Socialists of America, whose membership stands at 60,000, have also amassed more than 200,000 followers on <a href="https://twitter.com/DemSocialists?ref_src=twsrc%5Egogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">Twitter</a>.</p>
<p>While Canada seems to be lagging behind when compared to the European youth activism, voter turnout for those aged 18-24 <a href="https://bdp.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/2016104E#a6">increased by 18 percentage points from the 2011 federal election to 57.1 per cent in 2015</a></p>
<p>And although provincial elections in Alberta and Prince Edward Island resulted in Progressive Conservative governments, the Green Party of P.E.I. are the first Greens in Canada to become the official opposition. </p>
<p>The progress is happening as many young Europeans and Canadians look up to young leaders like Germany’s Kühnert and Alexandria Ocasio-Cortez in the United States as they advocate Green New Deals. It’s time for young people in Canada to get more involved politically if they want to have a shot at saving the planet. For now, #FridaysForFuture may be a good way to start.</p><img src="https://counter.theconversation.com/content/117579/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tobias Wilczek receives funding for his doctoral research from the Canadian Social Sciences and Humanities Research Council (SSHRC).</span></em></p>It’s clear that young voters are bringing critical issues to the fore as they did in the recent EU elections. Will they do so in Canada too?Tobias Wilczek, University Instructor in German Studies, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/908922018-01-31T15:42:01Z2018-01-31T15:42:01ZDiesel monkey tests: can harmful corporate research ever be justified?<figure><img src="https://images.theconversation.com/files/204253/original/file-20180131-131744-hrdtsx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/animal-testing-94008682?src=mRaHt26UlMrfSsspmzaWDA-1-78">Shutterstock</a></span></figcaption></figure><p>The <a href="https://www.nytimes.com/2018/01/25/world/europe/volkswagen-diesel-emissions-monkeys.html">recent allegations</a> that researchers funded by the German car industry tested the effects of diesel fumes on humans and monkeys has raised serious questions about research ethics in the corporate world. </p>
<p>These tests were carried out by scientists on behalf of the now-disbanded European Research Group of Environment and Health in the Transport Sector (EUGT), which was funded by Volkswagen, Daimler and BMW. The aim was to observe and record the pollutant effect of emissions from diesel cars using modern exhaust-cleaning technology.</p>
<p>Yet, even if the aim of the research was to show that diesel fumes are less harmful than previously considered, there still exists <a href="http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2017-0049&language=EN#title2">substantial evidence</a> that diesel fumes are harmful to health. No one, not even car manufacturers, is claiming that diesel exhaust fumes are entirely harmless.</p>
<p>Ethically sound research brings huge benefits to society, saves lives and advances knowledge. But research always comes at a cost, ranging from resources and time used through to the direct risk of harm for subjects. So, the central ethical question is always: are these costs justified by the potential benefits of the research? When these costs become skewed too far, particularly where people have been exposed to unjustifiable harm, we end up with research scandal.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/human-experiments-the-good-the-bad-and-the-ugly-39876">Human experiments – the good, the bad, and the ugly</a>
</strong>
</em>
</p>
<hr>
<p>In the case of the diesel fume tests, the most pressing question is whether exposing monkeys and humans to harm can be justified against the benefits of the research. When administering substances known to be dangerous, the potential benefits would have to be significant in order justify such exposure. This can happen, for example, in cases where the research is therapeutic. Exposing volunteers to <a href="https://theconversation.com/testing-drugs-on-animals-could-soon-be-a-thing-of-the-past-58183">newly developed drugs</a> that might end up hurting them can be justified on the basis that they might also benefit, or that society more generally will.</p>
<p>But in purely <a href="http://annals.org/aim/article-abstract/2023019/corporate-research-ethics-whose-responsibility?doi=10.7326%2fM14-1669">corporate research</a>, these therapeutic aims are often absent. Instead, they often are replaced with a central aim of advancing profits. This does not necessarily mean there are not secondary social benefits in some cases. With diesel fume emissions, developing and testing technologies to reduce harmful emissions might be considered to have these secondary benefits in terms of improving public health and the environment. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/204276/original/file-20180131-157488-yk1qe5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Humans can volunteer. Animals can’t.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-man-testing-breathing-function-by-723861829?src=MJbW5jVcafmD4bWUlTBJ6A-1-4">Shutterstock</a></span>
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<p>The amount of risk and the severity of the potential harm are also important factors. Even a significant future benefit might not offset serious harm. And in the case of the diesel tests, there are <a href="http://www.who.int/ipcs/emergencies/diesel.pdf">very real and severe risks</a> associated with exposure to fumes. </p>
<p>Whether the tests exposed subjects to greater levels of fumes than they might otherwise experience (such as walking down the street in daily life) would be important to know in order to assess these levels of potential harm. A greater than normal exposure requires proportionally greater potential benefits. But given what we know about the harm from diesel fumes, it is unlikely that such extra risk could be justified by a modest potential improvement in public health.</p>
<p>Another way of justifying the exposure to risks and harms in research is to appeal to the <a href="https://ec.europa.eu/research/science-society/document_library/pdf_06/textbook-on-ethics-report_en.pdf">consent given by the research subject</a>. If you volunteer and you are properly informed about the risks then why shouldn’t you take part, despite the potential harm? You might see any payment you receive for volunteering as more valuable than being free from the risk. Or you might simply want to altruistically contribute to a greener world.</p>
<p>Yet in cases where potential harm is particularly severe, we might still want to limit people’s freedom to consent. There may be limits that we think we should not cross in society and that to ask someone to expose themselves to significant risks for the sake of research is a step too far. In corporate research, where participants motivated by <a href="http://onlinelibrary.wiley.com/doi/10.1111/1467-8519.00078/pdf">how much reward</a> they are offered rather than potential therapy or social benefit, allowing people to undergo harm may even be seen as <a href="http://onlinelibrary.wiley.com/doi/10.1111/1467-8519.00136/pdf">devaluing them as human beings</a>.</p>
<p>Corporate research is very demanding upon our system of ethical decision-making because of the lack of focus on benefit to individuals or society. When the research involves substances that are known to be severely dangerous, it is extremely difficult to justify exposing people to them, even with all of the ethical arguments about benefiting the greater good and the right to consent. And because animal subjects can’t give consent, the research would have to have even more worthwhile aims to justify exposing them to risk and harm.</p><img src="https://counter.theconversation.com/content/90892/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Wrigley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Researchers funded by VW, Daimler and BMW are accused of testing diesel fumes on monkeys and humans.Anthony Wrigley, Senior Lecturer in Ethics, Keele UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/761922017-05-25T10:12:40Z2017-05-25T10:12:40ZHow electric car racing could one day challenge the spectacle of Formula One<figure><img src="https://images.theconversation.com/files/170584/original/file-20170523-5782-4mcvzh.jpg?ixlib=rb-1.1.0&rect=45%2C58%2C1971%2C1189&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/53361872@N07/19021891769/in/photolist-uYUaHc-HLC2z1-76Mrkk-dfkExR-dVCJDD-nMsp9q-fnFby-bTFEp6-HNYwJR-qutdpc-cEMdvC-92Sv4S-92Pm1V-dfkFfc-drhN77-bBxmDu-79Yjg4-8UY4dK-8PvrMC-8V8VLf-pQ7E7R-79YzGn-8V5NdV-8V8Rbs-98Kwdc-8V1Qqj-92Pkzv-8UYccR-7arA25-qLTQ5V-pPTMM7-85Vyi4-8V5SW6-8V2dej-8UYjhZ-qJB1Bd-8UY1F2-8V2737-9epHG9-8UYhzV-bTFEgT-5XXkLp-pQ7DoB-pQ7Bcx-8UXQ6e-8UYfa8-77GxS9-8UXR5p-92PmJD-92SgH1">rollingstone64/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>Motor racing’s most glamorous event, the Formula One Grand Prix in the glittering tax haven of Monaco is just around the corner. It is 67 years since drivers first took on the famous, twisty roads through the principality on the south coast of France, but is age starting to creep up on the F1 scene?</p>
<p>Since the earliest Olympic Games, racing has been used to advance wheeled transport. It was in the <a href="http://www.ancient.eu/Olympic_Games/">Tethrippon, Keles and Apene</a> events in Ancient Greece, that chariots were developed and the numbers of horses, foals and mules adjusted to provide optimum power and handling. Centuries later, in 1899, the French Renault brothers understood <a href="https://www.autoevolution.com/renault/">that city-to-city racing</a> could help harness the very different horsepower of their new combustion-engined cars.</p>
<p>Today we use many F1 technologies on the road. Ferrari’s semi-automatic gearbox and the “flappy paddle” transmissions are now standard in many road cars. Shell and Total produced friction-reducing fuel additives, and tyres made by Goodyear, Michelin, Bridgestone and Pirelli have all benefited from F1 research. Williams Advanced Engineering created the technology behind the Kinetic Energy Recovery System (KERS) to be found in <a href="http://bleacherreport.com/articles/1816116">Volvo’s C30 Electric road car</a> and the BMW i3 electric city car is the first to be constructed from carbon fibre-reinforced plastic, a technique pioneered in F1 by McLaren. </p>
<p>But while F1 has driven innovation that has made it to the car showroom, there is a risk it may fall behind by failing to embrace the key evolving trend in road car technologies. Could Formula E (FE), the fully electric vehicle street racing competition, end up being more relevant to the world’s major motor manufacturers?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=411&fit=crop&dpr=1 600w, https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=411&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=411&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=516&fit=crop&dpr=1 754w, https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=516&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/170585/original/file-20170523-5782-j0alk1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=516&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Volvo: plugged in.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/49698805@N06/4985837129/in/photolist-8AzHF8-a1Kbzu-89ULgT-9bdJoK-8CTWqx-9Nrrwf-8MpwbA-9NoEDM-9bdEya-9sfRT7-8AzHGn-9sfRpS-9nDRNr-6fLBbP-84ce6d-8CU2CH-8CX4vW-a1GiYx-8CU1S4-84ccfA-8CX8z3-84cd3J-8zFFa2-8CU3AD-8CTWYx-85FxQ3-oZqLsa-9bipD1-byLJGe-9bdMd8-9Rpxqq-9RbxUV-9Rbxqv-9Rbx9V-9RbxC6-9S3Aqc-8496Gx-9T5qEG-85FxKb-9bgNvu-9SZTJx-9scDvB-9SZTbX-9beTe8-9RbCdn-8zkDMN-9RewFA-8FdSPB-8vwY8A-9eXk6F">One Tonne Life/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<h2>Urban planning</h2>
<p>This year, FE had its own race in Monaco, a fortnight before F1 arrived. According to Jean Todt, President of the Federation Internationale de L’Automobile (FIA), FE is the perfect showcase for new electric vehicle technologies; a device to promote the use of clean engine technology, especially in cities and towns.</p>
<p>It is in those urban settings that pollution is a major problem. Oslo banned diesel road cars for two days to <a href="https://www.theguardian.com/environment/2017/jan/16/oslo-temporarily-bans-diesel-cars-combat-pollution">combat rising air pollution</a> while the Norwegian government intends to ban the sale of fossil fuel-based cars <a href="http://www.independent.co.uk/environment/climate-change/norway-to-ban-the-sale-of-all-fossil-fuel-based-cars-by-2025-and-replace-with-electric-vehicles-a7065616.html">by 2025</a>. </p>
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</figure>
<p>Others have similar intentions. India <a href="http://timesofindia.indiatimes.com/auto/miscellaneous/indias-green-car-plan-prioritises-electric-vehicles-over-hybrids/articleshow/58557589.cms?from=mdr">is considering a draft report</a> recommending that all vehicles should be electric by 2032. China, where pollution in major cities <a href="https://www.theguardian.com/commentisfree/2017/apr/06/air-pollution-beijing-china-smog-britain">can be devastating</a>, is the largest electric vehicle market in the world. BYD Auto sold <a href="https://www.technologyreview.com/s/604335/the-worlds-largest-electric-vehicle-maker-hits-a-speed-bump/">507,000 cars last year</a> and GAC Motor, another of China’s large motor manufacturers, intends to <a href="https://electrek.co/2017/05/09/china-gac-electric-vehicle-industrial-park/">build 200,000 vehicles per year</a>. Unsurprisingly, Alejandro Agag, founder and CEO of FE <a href="https://www.motorsport.com/formula-e/news/formula-e-eyes-shanghai-race-in-season-four-885678/">wants to expand</a> the championship into China.</p>
<p>Agag recognised that the automobile industry’s focus on electric vehicles offered a different direction to most motor sports. He would appear to be right. FE already has an impressive line-up of contributing manufacturers, many of which have been familiar names in F1. </p>
<h2>Brand awareness</h2>
<p>FE cars currently use batteries supplied by <a href="http://www.williamsf1.com/advanced-engineering/about/capabilities/hybrid-and-ev-systems">Williams Advanced Engineering</a>, a subsidiary of the Williams F1 Team. The <a href="http://www.renaultedams.com/?lang=en">Renault e.dams team</a> has allowed Renault to demonstrate its FE pedigree with the all-electric TreZor concept car, which was one of the stars of the 2016 Paris Motor Show. <a href="http://www.fiaformulae.com/en/news/2016/september/mclaren-to-supply-new-formula-e-battery/">McLaren Applied Technologies</a> will supply all the championship’s new batteries from 2018. Jaguar, which was formerly in F1, has backed FE’s <a href="https://www.jaguar.co.uk/jaguar-racing/index.html">Panasonic Jaguar Racing team</a> to showcase its future range of electric cars. </p>
<p>Other manufacturers, including current world F1 championship <a href="http://www.fiaformulae.com/en/news/2016/october/mercedes-takes-option-on-season-five-entry/">winning team Mercedes-Benz</a>, are joining FE soon and even Ferrari, a cornerstone of F1 since the World championship started, <a href="http://www.autoblog.com/2017/04/04/marchionne-hints-at-once-obscene-idea-a-formula-e-electric-fe/">is said to be interested</a>.</p>
<p>BMW, which used to have a prominent position in F1 attained <a href="https://news.bmw.co.uk/article/bmw-increases-involvement-with-formula-e/">“Official Vehicle Partner”</a> status by supplying electric utility vehicles for FE, including Safety Cars, Medical and Support Cars and the official Rescue Car. BMW will get further involved on track in the actual racing when it joins the FE grid in 2018 with the Andretti Team.</p>
<p>In 2017, Audi, which <a href="https://www.audi-mediacenter.com/en/press-releases/emotional-farewell-for-audi-from-the-fia-wec-7061">could have gone to F1</a>, completely realigned its motor sport strategy after being dominant in sportscar racing. It became involved in FE with a factory-backed commitment to The Abt Schaeffler Audi Sport team. This fits Audi’s business strategy to produce new electric vehicles, <a href="https://www.audi-mediacenter.com/en/press-releases/audi-ag-and-faw-group-sign-strategic-growth-plan-for-china-7222">particularly aimed at the Chinese market</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=438&fit=crop&dpr=1 600w, https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=438&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=438&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=551&fit=crop&dpr=1 754w, https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=551&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/170612/original/file-20170523-5763-1uggsvj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=551&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Musk makes baby steps into racing.</span>
<span class="attribution"><span class="source">EPA/PETER FOLEY</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>You might wonder why headline-grabbing US car maker Tesla hasn’t dipped its toe into FE. Well, Elon Musk’s firm has seen its Model S version P85+ chosen as the base car for the world’s <a href="http://www.electricgt.co/testanews">first Electric GT Championship</a>, which starts in a few months time.</p>
<p>So is F1 missing out? Certainly not financially. At the moment, the budgets involved in F1 remain much larger, but that should not be taken for granted if motor manufacturers continue to jump ship. The point has certainly been made that FE is attracting major companies for whom electric technology is becoming increasingly relevant, <a href="http://www.roadandtrack.com/motorsports/a30717/boring-formula-e-has-one-huge-advantage-over-f1-and-indycar/">to the detriment</a> of both F1 and Indycar. </p>
<p>It does seem unlikely that Formula e, as it stands, can truly compete with the decades of history and glamour associated with the combustion-engine machismo of F1. But in 2020, the FIA’s F1 engine rules are due to change and history shows that to justify the substantial investment, this will probably have to be for at least five seasons. The current 1.6-litre V6 600 horsepower hybrid turbo petrol engines, that gain an added 160 horsepower from their electrical recovery systems will be consigned to the scrap heap. </p>
<p>Will the FIA choose another hybrid engine configuration for F1 or could it too go more electric? Perhaps a path might even be laid for a fully electric F1 in later years? In any case, the FIA’s choice will be vital for the future of both F1 and FE. It will also be a strong signal of the pace of change which will dictate the types of cars we will all end up driving to the shops, in China, Norway and beyond.</p><img src="https://counter.theconversation.com/content/76192/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Grant-Braham does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When manufacturers are chasing sales and more and more customers are plugging in, is the writing on the wall for F1?Bruce Grant-Braham, Lecturer in Sport Marketing specialising in motorsport, Bournemouth UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/689582016-11-22T07:43:39Z2016-11-22T07:43:39ZWhy it’s so hard for Europeans to get compensation after Dieselgate<figure><img src="https://images.theconversation.com/files/146802/original/image-20161121-4528-1rbv33w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Volkswagen's headquarters in Wolfsburg, Germany.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/127064847@N02/23238278553/in/photolist-BpufB4-cBbRq3-cBbJKf-cBbzNo-cBbMJY-cBbHY5-cBbMXo-cBbFKh-cBbAVd-cBbQqQ-cBbGw9-cBbNv3-cBbLQC-cBbCoL-cBbQNC-cBbBw5-cBbwRb-cBbHAj-cBbP6S-cBbA2L-cBbvzm-cBbzcb-cBbBEf-cBbQ2E-cBbLoj-cBbNJA-cBbvYq-cBbJmC-cBbR1j-cBby75-cBbM2m-cBbAnC-cBbFUL-cBbDU1-cBbAAN-cBbHqs-cBbDJf-cBbGi5-cBbD3j-cBbKLS-7CXhML-cBbB7o-cBbE5U-cBbSuG-cBbMbC-cBbDdf-cBbQAW-cBckSy-cBbPPj-cBbEyb">Elena Savelyeva</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>More than a year after the <a href="http://fortune.com/2016/11/07/vw-dieselgate-more-bad-news/">Dieselgate scandal</a>, which uncovered cheating by Volkswagen and other car companies in emissions tests, there has been little progress for European consumers. </p>
<p>Most people are unsure of how – or if – they will be compensated. London Mayor Sadiq Khan has written to Volkswagen and asked that <a href="https://www.theguardian.com/business/2016/nov/20/sadiq-khan-demands-vw-compensate-capitals-residents-and-tfl">£2.5 million be reimbursed</a> to Transport for London as compensation for gas emissions affecting the city’s residents. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"800300393142034432"}"></div></p>
<p>The company, which announced <a href="http://fortune.com/2016/11/18/volkswagen-vw-job-cuts/">30,000 job cuts</a> on November 18, has not yet replied.</p>
<p>Why is the compensation process so different in the US, where Volkswagen will reportedly spend up to <a href="http://www.reuters.com/article/us-volkswagen-emissions-idUSKBN13A1VEhttp://example.com/">US$16.5 billion</a> to buy back affected cars? </p>
<p>There are two main reasons: the influence of the diesel lobby in the EU and with national authorities, and the lack of an EU-wide collective redress system.</p>
<h2>A powerful diesel lobby</h2>
<p>National carmakers have <a href="https://euobserver.com/dieselgate/133235">consistently lobbied national authorities and the EU</a> to gain trust and deal with the fact that most cars <a href="https://www.transportenvironment.org/publications/dieselgate-who-what-how">surpass legal emissions limits</a> under real driving conditions. The car industry spent <a href="https://lobbyfacts.eu/articles/01-09-2016/car-industry-lobby-spending-keeps-growing">more than €18 million</a> on EU lobbying in 2014, making it a powerful force to be reckoned with. </p>
<p>Lobbyists for Volkswagen, Daimler and BMW - as well as VDA and ACEA, the German and European automobile associations - have prevented up-to-date car testing methods and limits from being put in place <a href="http://www.sven-giegold.de/wp-content/uploads/2016/01/Greens_EP_Automotive_Jan-2016_report.pdf">since the first EU regulations in 2007</a>. </p>
<p>The European Commission has promised new onroad tests <a href="https://www.transportenvironment.org/sites/te/files/publications/2015%2007%20RDE%20position%20paper%20FINAL.pdf">since 2012</a>, but these were blocked by the industry. Even after the scandal, in <a href="https://www.theguardian.com/environment/2015/oct/28/eu-emissions-limits-nox-car-manufacturers">October 2015</a>, car-makers weakened EU emissions limits and <a href="https://www.theguardian.com/business/2016/apr/21/all-top-selling-cars-break-emissions-limits-in-real-world-tests">delayed</a> the introduction of the new test methods, now scheduled to start in 2017.</p>
<p>The European Commission was <a href="https://www.ft.com/content/d0d7ba40-6394-11e5-9846-de406ccb37f2">aware</a> of the possibility of defeat devices being used years before the scandal broke. But because only national authorities can test cars in the EU’s <a href="http://www.politico.eu/article/confusion-slows-europes-response-to-vw-scandal/">fragmented system of regulation</a>, the matter was not investigated. </p>
<h2>Protecting national interests</h2>
<p>In Germany, the Transport Ministry was <a href="http://www.spiegel.de/international/business/vw-scandal-exposes-deep-complicity-of-government-a-1061615.html">aware that cheating existed</a> up to five years before the Volkswagen scandal. But although an investigation revealed that <a href="https://www.bmvi.de/SharedDocs/EN/Anlagen/VerkehrUndMobilitaet/Strasse/report-by-the-volkswagen-commission-of-inquiry.pdf?__blob=publicationFile">most carmakers were using defeat devices</a>, it decided in <a href="http://www.bloomberg.com/news/articles/2016-07-06/vw-escapes-cheating-fines-in-germany-as-payout-pressure-mounts">June 2016</a> not to fine any of its manufacturers - as long as they organised voluntary recalls of their vehicles. </p>
<p>However, the German authorities did contact Fiat-Chrysler for questioning about its use of defeat devices. The Italian government argued that its own tests had not found evidence of Fiat cheating and reminded Germany that Italian carmakers were Italy’s responsibility. Meanwhile, in August 2016 the Italian Competition Authority became the first in Europe to fine Volkswagen <a href="http://www.agcm.it/en/newsroom/press-releases/2294-ps10211-the-italian-competition-authority-fines-the-volkswagen-group-for-tampering-with-their-vehicles'-emissions-control-systems.html">€5 million</a> for misleading advertising. </p>
<p>In September 2016, Germany <a href="http://www.reuters.com/article/us-germany-fiat-chrysler-emissions-docum-idUSKCN1174O3">took the matter to the EU</a>, which turned the responsibility for investigation back to Italian authorities. The dispute is still unresolved, but shows how hard transparency can be when national authorities - and the information they provide - are influenced by their national carmakers.</p>
<h2>A patchwork system of collective redress</h2>
<p>But national lobbying alone cannot explain why results for consumers have been so different in the EU and the US. This boils down to the fragmented state of consumer redress (also known as class action) in the EU.</p>
<p>The European Commission <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32013H0396">recommended</a> in 2013 that all countries set up collective redress systems for all areas of consumer policy, but only 16 of its 28 member states currently have such laws. Due to the differences in these laws, it is <a href="http://www.politico.eu/article/european-volkswagen-owners-face-a-bumpy-legal-ride-pan-eu-class-action-lawsuit/">very difficult to bring pan-European class actions</a> to court. </p>
<p>Previous attempts to set up a <a href="http://www.iclg.co.uk/practice-areas/class-and-group-actions/class-and-group-actions-2017/eu-developments-in-relation-to-collective-redress">European collective redress system</a> have failed due to countries’ different legal traditions and the fear of a flood of US-style litigation. Consumers are already at a disadvantage in taking on a deep-pocketed multinational, and limiting class actions to country boundaries makes it even harder for consumers to act.</p>
<p>In the US, known for its tradition of litigation, class action was one of the main responses to the scandal. The district court of San Francisco gave final approval to the first settlement in <a href="https://www.vwcourtsettlement.com/en/">October 2016</a>. US consumers can either sell back their car, or have the car repaired and receive compensation of between US$5,000 and US$10,000 each. On top of this, consumers had already received a <a href="https://www.theguardian.com/business/2015/nov/09/volkswagen-gift-cards-vw-emissions-scandal">US$1,000 “goodwill” gift</a> from VW.</p>
<p>On the other hand, the Italian consumer organisation Altroconsumo <a href="http://www.altroconsumo.it/auto-e-moto/automobili/news/altroconusmo-contro-volkswagen">brought class actions</a> against Volkswagen and Fiat in September 2014, long before the scandal broke. These were <a href="http://europe.autonews.com/article/20160617/ANE/160619890/italian-appeals-court-accepts-class-action-against-vw-report-says">accepted after appeal</a> in 2015 and 2016, and are ongoing. But these actions demand only €500 payback per vehicle, and Volkswagen has made it clear that it has no intention of providing any extra “goodwill” gift to European consumers.</p>
<p><a href="http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/583793/EPRS_BRI(2016)583793_EN.pd">Similar lawsuits</a> are ongoing in several other European countries and are being coordinated by the <a href="http://www.beuc.eu/volkswagen-emission-affairs">European Consumer’s Organisation (BEUC)</a>. But the lack of EU-wide rules mean that even if some consumers do receive remuneration, consumers in countries without collective redress systems will miss out. </p>
<p>These holes in the system leave consumers with less power to place pressure on manufacturers to go beyond the bare minimum - pressure which is vital when national authorities are reluctant to enforce sanctions themselves.</p>
<h2>Looking ahead</h2>
<p>So what prospects are there for consumer compensation in the EU? Progress is still slow, despite pressure from the European Commission and NGOs. </p>
<p>In a belated but welcome first step, Volkswagen recently committed to <a href="https://euobserver.com/dieselgate/135230">creating an action plan</a> to better inform EU consumers and speed up the repair process. The website will only provide information that US consumers have been given since the beginning though, and, so far, there are no plans to compensate EU consumers.</p>
<p>Perhaps the most positive thing to come out of the scandal is that it has created momentum for transparency and raised awareness of the need to introduce EU-wide collective redress.</p>
<p>In an opaque system dominated by industry lobbying, fragmented regulation and responsibility, that can only be a good thing.</p><img src="https://counter.theconversation.com/content/68958/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francesca Colli does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A powerful diesel lobby and fragmented class action laws put EU consumers at a disadvantage.Francesca Colli, Phd Student, KU LeuvenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/569682016-04-04T14:38:16Z2016-04-04T14:38:16ZHow Dyson can offer a challenge to Tesla and the electric car giants<figure><img src="https://images.theconversation.com/files/116817/original/image-20160330-28462-1k12zus.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shockwaves. Momentum is with electric cars.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/seegioo/4233306675/in/photolist-7s5NA8-ghtft-fwrceq-jBQca8-23Xh2H-sFggKR-cNPJyG-i9ZA37-6HKJ5o-ce24FS-ee4q6b-cAyvPE-rnQeE7-pbWqdh-ei2sp6-8LrNgx-8d9TXi-fkxMWj-onHR6k-9NGKrb-dU5Ysv-9NJybd-9LE1CS-cRg1dY-aE9yox-nxCxU6-5yd8Zx-9NH9LR-s2u89Q-9NFVNX-cVkC2s-gDLhsp-9U2LUQ-tB95ry-9NEwpU-8xrZEg-9NJAiA-9famxT-9YwTwP-bKzuZi-o3gDix-ce64Ds-daiUtY-8v9Sdt-oySm2C-4KrpK8-dkxmea-8v9Sfk-nSMyVE-bV2iLV">Sergio Monsalve</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>British vacuum cleaner manufacturer Dyson may be steering into a brand new market. News that the company owned by inventor and entrepreneur, James Dyson, has received UK government research funds <a href="http://www.theguardian.com/environment/2016/mar/23/dyson-developing-electric-car-government-documents">for electric vehicle research</a> sparked excitement shortly before electric car pioneer Elon Musk launched the latest, <a href="http://www.latimes.com/business/autos/la-fi-hy-tesla-model-3-20160331-htmlstory.html">lower-priced model of his Tesla</a> range. The two men are at different ends of the development spectrum, but they face the same stiff challenges against the traditional incumbents.</p>
<p>Details around the British venture are sparse – an earlier reference to the development of an actual vehicle was <a href="http://www.independent.co.uk/life-style/gadgets-and-tech/news/dyson-is-making-an-electric-car-government-funding-documents-reveal-a6950591.html">apparently removed</a> from the final document which revealed the funding. But it is clear that the transition from internal combustion engines to electric vehicles will involve the development of a series of services and products – a value chain – which will require the involvement of new players in existing automotive supply networks.</p>
<p>Clearly a firm like Dyson has considerable expertise in relevant areas such as electric motors, charging protocols, storage batteries, energy management software and other relevant technologies to electric vehicles. There are echoes here of China’s main <a href="http://www.byd.com">electric car and bus producer, BYD</a>, which had been primarily a producer of batteries for devices such as laptops and mobile phones. Vehicles were a sideline to this activity – admittedly increasingly important – alongside other new areas such as photovoltaics. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116826/original/image-20160330-28455-18uor24.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The next Musk? James Dyson.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/conservatives/3984486210/in/photolist-9TxVYA-9TxWdC-9Tv4Qa-9Tv762-9TxVfY-9Tv9Rk-9Tv8Ma-9TxX8j-9TxUmW-dW3kpe-dW3kjZ-9TxW75-dW3kUF-dW8Wf3-dW3kdB-dW3kZn-ahjTEp-756wW7-4b2sUW-aUVW2a-aUVUZi-aUWgwi-aUVWE6-aUW6jr-aUVSPH-aUW3HZ-AqFtpz-aUWdZX-fm2nD7-aUVVxe-AZ36iU-77Vmjb-aUWaTk-avrkTo-b3cDa8-7329x-fm2pby-fm2nGA-e6sir2-8RhLbC-BLVrTQ-wzAAGp-E6HCVF-wzAY1g-B19DBj-AonwMd-e6xWA1-8S51oq-299NS9-vNyXUg">Conservatives/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<h2>Shocks to the system</h2>
<p>The move towards electric vehicles is disruptive in many respects and attracts new entrants with, so far, varying degrees of success. While Tesla still seems to be <a href="http://qz.com/648506/after-the-tesla-model-3-launches-this-week-the-world-will-know-if-elon-musk-called-the-electric-car-future-correctly/">going from strength to strength</a> – thanks in no small measure to considerable resources and its charismatic boss – others, <a href="http://www.fisker-automotive.be/">such as Fisker</a>, have been less successful. </p>
<p>Set up by Henrik Fisker, a car designer with an impressive track record in the mainstream internal combustion car industry and in receipt of US government support, it nevertheless <a href="http://www.reuters.com/article/us-fisker-wanxiang-sale-idUSBREA1H1LM20140218">slipped into receivership</a> only to be rescued by Chinese interests to be <a href="http://www.karmaautomotive.com">reborn as Karma Automotive</a>. On the less glamorous supplier side there are also various new entrants from the worlds of information and communications technology and from electronics who are making tentative steps to become automotive suppliers in this newly emerging value chain. </p>
<p>The diversified <a href="http://www.bollore.com/en-us/activities/electricity-storage-and-solutions/electric-vehicles-solutions">French group Bolloré</a> runs shared schemes such as Autolib in Paris. Household names Apple and Google are at an early stage in their electric vehicle development – albeit with more ambitious plans in the pipeline.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/uCezICQNgJU?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Google self-driving car project.</span></figcaption>
</figure>
<p>Innovation and transition academics often assume that technological revolutions are largely driven by new entrants. Such a belief is often implicit in their work. But University of Sussex professor <a href="https://www.project-syndicate.org/commentary/green-innovation-public-funding-by-mariana-mazzucato-2016-03">Mariana Mazzucato has shown</a> that many of the truly innovative activities, which allow genuinely new technologies to be developed and then established are in fact due to visionary policy makers pushing resources in the right direction. Note that the US government <a href="http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA3T0MR20140430">not only supported General Motors</a>, but also Tesla, Fisker and ABC Battery Systems.</p>
<h2>Charged up</h2>
<p>Private players can only enter markets once there is money to be made, which is rarely in the development phase. Also, it should be noted that much of the emerging electric car value chain is still in the hands of the big players from the established, petrol engine world, Tesla’s efforts notwithstanding. The world’s biggest battery electric vehicle producer is <a href="http://evobsession.com/world-electrified-vehicle-sales-2013/">Renault-Nissan</a>, while other significant players include those masters of traditional engine design, BMW, as well as GM, Ford and the <a href="http://www.volkswagen.co.uk/technology/electric-vehicles">Volkswagen Group VAG</a>. Developments at the latter are receiving an <a href="https://theconversation.com/how-volkswagen-got-caught-cheating-emissions-tests-by-a-clean-air-ngo-47951">extra boost since “dieselgate”</a>. </p>
<p>Few now remember that electric cars are not an entirely new technology – to the mainstream carmakers anyway. VW offered the Golf CitySTROMer to paying customers in the 1980s, while BMW showed a number of small electric vehicles, such as the E1, in the 1990s. Peugeot made its own versions in the 1940s, while Japanese minicar and minitruck producer Daihatsu was the word’s largest producer at one stage. Other electric vehicle niches have long existed, for instance the French and Italian quadricycle producers <a href="http://www.aixam.com">Aixam-Mega</a>, <a href="http://www.automobiles-ligier.com">Ligier</a>, <a href="http://www.casalini.eu">Casalini</a> and <a href="http://www.tazzari-zero.com">Tazzari</a>. These products, along with those from <a href="http://www.mahindrareva.com">Reva in India</a> also helped kickstart market penetration in places such as London. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116827/original/image-20160330-28455-xtujq5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Somewhere in a parallel universe …</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/dgeezer/16736052183/in/photolist-ruUDeR-ot3hUY-owZu-bBZvn1-oKfWZi-fDKuGU-bBZuF3-ot369V-3hsKtj-s8ojig-JUbCr-2itqnw-e9HBZu-24F2N-6Y8jTt-idTXya-idTRBG-idUoCs-idUgab-e8YFaE-idU26G-idUfBC-idUoXV-idU4md-ajR67n-idUeof-idUc46-idUhDT-idUfNS-eCGYg-idUsyo-idUje7-idTZZd-idUdjb-idU9Fb-idU6uQ-idUDan-9Y7Du9-idU5sm-2itsAY-idUfaN-9vMTQD-idUrHL-idTMZR-idTSda-idUihM-idUonB-idUk1C-idUbWF-9tDbsP">diamond geezer/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Much of the electric vehicle therefore probably exists already. The inertia and dependencies in the existing automotive “regime” are often underestimated, but <a href="http://www.researchgate.net/publication/256859600_Transition_failure_Understanding_continuity_in_the_automotive_industry">they are very real</a>. If Dyson manages to conjure a valuable addition to the market, then it will face issues such as the lack of a distribution network which present real barriers to new entrants – hence Tesla’s direct sales model. And the economies of scale inherent in mass car production, and the resulting cost penalty for anything produced at a smaller scale, are difficult to overcome. </p>
<p>For this reason, moves to turn basic technologies such as battery packs, motors and controllers into commodities that can be shared by a wide range of assemblers offer real hope to many would-be electric vehicle producers; it is in this kind of area that companies like Dyson could play a role as developer and supplier of key components and sub-assemblies to be used as modules by smaller independent assemblers around the world.</p>
<p>Emerging from all this is the realisation that the core competence of established mass car producers is not so much “metal-bashing” and internal combustion engine development, but rather systems integration; a skill set equally useful for the mass production of electric vehicles. This therefore puts the existing players at a distinct advantage over any newcomers until they can present a genuinely innovative business model in areas where the big boys cannot or will not follow them.</p><img src="https://counter.theconversation.com/content/56968/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Nieuwenhuis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The vacuum cleaner maker faces the same challenges as Elon Musk against the big auto players – so maybe it’s time to try a different road.Paul Nieuwenhuis, Senior Lecturer and Co-Director, Electric Vehicle Centre of Excellence (EVCE), Cardiff UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/450692015-07-29T05:20:17Z2015-07-29T05:20:17ZConsumers in Asia buy luxuries for different reasons to the West<figure><img src="https://images.theconversation.com/files/89375/original/image-20150722-1447-1afiw6v.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Different mindsets: the world does not view luxuries in the same way</span> <span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>From Louis Vuitton to Chanel, Rolls Royce to Johnny Walker, Asian markets have become vital for the growth of luxury brands. Asia turned over some $90bn (£58bn) in luxuries in 2014 according to <a href="http://www.euromonitor.com">Euromonitor</a>, roughly tied with North America and not far behind Western Europe. The region is also forecast to be the main driver for growth among these big markets over the next five years, as the chart below suggests. </p>
<p>But there’s a paradox. The marketing strategies for many luxury brands <a href="http://www.ft.com/cms/s/2/bf783338-ef22-11e4-87dc-00144feab7de.html#axzz3gdbPlrVi">are not</a> producing the desired returns in that part of the world. So what’s the problem – and what can be done about it?</p>
<p>We all buy and consume what we believe offers value. It is one of the fundamental drivers of people’s purchasing decisions. For products that we buy regularly, the value that we perceive is largely a trade-off between what it costs, mainly in terms of price, and the benefits in terms of how useful it is. In other words the more useful a product to us, the higher the price we are willing to pay. </p>
<p>With luxury goods this equation becomes more complex. Here the costs are high and the benefits are not just about utility, but much more about personal pleasure and social status. But what many luxury businesses don’t understand well enough is how this varies between different countries.</p>
<p><strong>Forecast growth in luxuries to 2019</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=271&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=271&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=271&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=340&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=340&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89475/original/image-20150723-22834-6nh8u3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=340&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Euromonitor</span></span>
</figcaption>
</figure>
<p>Many a time on my travels I have seen the same adverts, messages and communications employed by luxury brands across the world to serve vastly different markets. Sure enough, analysts say one key reason why <a href="http://www.ft.com/cms/s/0/b48440c6-3e7d-11e4-adef-00144feabdc0.html#axzz3gdbPlrVi">some luxury brands</a> underperform in Asia is because their owners see Asian and Western markets as homogenous. </p>
<p>It seems many luxury businesses have erred in believing in the universality of their brand’s message. This is baffling when analysts and researchers like me <a href="http://researchonline.gcu.ac.uk/portal/en/publications/comparing-the-importance-of-luxury-value-perceptions-in-crossnational-contexts(24f10e6d-545b-439e-8fbe-adab0f163773)/export.html">tend to</a> emphasise the diversity of individual markets in terms of geography, demography, culture and consumption patterns. To find out more about the distinctions in relation to luxuries, <a href="http://link.springer.com/article/10.1007%2Fs11002-015-9358-x#page-1">my co-authors</a> and I <a href="http://researchonline.gcu.ac.uk/portal/en/publications/comparing-the-importance-of-luxury-value-perceptions-in-crossnational-contexts(24f10e6d-545b-439e-8fbe-adab0f163773)/export.html">asked 900 luxury consumers</a> about how they see the value of such products in the UK and in leading emerging luxury markets including India, China and Indonesia. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89374/original/image-20150722-1423-uygcw3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">‘He who buys Ferrari needs no more good fortune’</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/chrisjunker/5528427560/in/photolist-9qwCUy-e7tuyA-eg9fss-aRMiRV-9FWNmS-t1o8vk-8YWqso-9L7TeE-9waCzG-9hqL8s-9Ceii2-9vL43i-nD4fTH-a48nhx-95YCti-9pUouM-biiCpZ-8Wvh6H-82gvzT-bZwYdo-9cppma-9Wk53s-a9Fjdb-95HKgQ-8TZLtm-9V9GjA-aKWmqB-9cpf1e-9JSexk-9vKaP8-93PejX-dUp2Zz-dZhLz7-8n9CT7-d6s92f-9tbyah-eAoaVT-aFn5Hc-954QoY-8WhrTR-927UQz-9kpjNB-9pV1gv-9udCna-93S6rA-7QEhqc-5Ui4Ve-9xV9yp-7WY8PT-9di8q4">Christian Junker</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>East vs West</h2>
<p>Indian luxury consumers are particularly influenced by what others think of them. They consume to achieve societal acceptance, reflecting the hierarchical nature of the society. They use luxury brands to indicate social status, symbolising achievement, wealth and prestige. Shopping for luxuries is fundamentally not an individual experience. Instead it seems rooted in group decisions, meaning that people’s choices of luxury purchases are directed towards others rather than themselves. </p>
<p>Contrast Indonesia, where the culture revolves around how you judge yourself, not how others see you. Indonesians seek to enhance themselves through consumption. Despite the general perception of the country as a collectivist society where people tend to see themselves as similar, consumers won’t follow the recommendations of others if the choice is distasteful to them. They also value luxuries as an enjoyable experience, and may buy such goods as a distraction from the problems in their lives. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=413&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=413&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=413&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=519&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=519&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89376/original/image-20150722-1479-109w7lq.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=519&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Where to spend it in Jakarta: the Mal Taman Anggrek.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/58847482@N03/6893829009/in/photolist-bvbFbR-nRdDwA-buu4Hm-o8BBeb-bvbE26-3bkrvg-6P7Q4d-32y5bz-oewwYd-qp4si4-f6N1V3-rc5FV3-6r413t-6wBmjK-98tDsc-6ozkMZ-6wFvKj-voNGoW-cgh1As-q1wyME-9Fds8P-cDQCwd-6ozfge-bqU1ct-gKoTmv-brnLZc-9Fgoob-5m84Se-7zZe3U-6HcGMn-6HcHNp-f6N693-3bkmDk-pmjhTR-dkKD1J-bqU2N2-3gWLDZ-2HmCkU-4tbhfy-6ozhRT-5Y8DuN-3gWLPa-2HmW3N-qrNcit-bro5Ya-catuHQ-6obyRw-dy1RU-dy2id-brnMVt">Matthew Tenwrick</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>In China, despite <a href="http://blogs.ft.com/beyond-brics/2012/12/12/chinese-luxury-top-of-the-shoppers/">spending more</a> on luxuries than even the US, the country’s attitude to this market has been strained in recent years. In 2013 luxury advertising on television and radio <a href="http://www.bbc.co.uk/news/world-asia-china-21349722">was banned</a>, which may explain why consumers do not strongly attach such purchases to social status or personal pleasure. Even the country’s premier <a href="http://www.telegraph.co.uk/news/worldnews/asia/china/9851793/China-cracks-down-on-adverts-promoting-luxury-gifts.html">got involved</a>, calling on Chinese officials to refrain from luxury gift giving. </p>
<p>But what we found was still very important to Chinese consumers – and also to a lesser extent those in India and Indonesia – is the quality that luxury brands represent. They are willing to pay a premium price as a result. </p>
<p>In Britain, meanwhile, consumers attach less psychological meaning to luxury goods than in India, China and Indonesia. They are not swayed significantly by the pleasures offered by these brands – which may partly be because many brands have long since gone mass market. Analysts <a href="http://www.euromonitor.com/luxury-losing-its-lustre-in-personal-accessories/report">have observed that</a> the likes of LVMH and Gucci have lost their lustre because they are widely available both in the UK and in other developed markets (the report costs £800 – a sign that luxuries is a valuable business).</p>
<h2>The execution question</h2>
<p>The question for the people who sell luxury brands is how they should be applying these insights in their marketing strategies. Much of it follows logically. Given that consumers in India and the UK care more about what others think of their purchases, for instance, they are likely to be drawn by messages about the product’s social acceptability and by symbolism connected to achievement, prestige and wealth. </p>
<p>In Indonesia, you would want to customise the sales pitch to include some emphasis on how a brand could enhance a consumer’s sense of self and make them feel good about themselves. You would also focus on the experiential aspects of buying and using the brand. </p>
<p>Because of the way the government has been intervening against luxury purchases in China, pursuing consumers requires a far more subtle approach – away from the bans on television and radio, of course. Connecting the idea of buying luxury brands with personal identity and pleasure may be the best strategy. </p>
<p>At the same time it would be important to emphasise quality, not only in China but also in the other three countries too. The fact that consumers in all these markets thought that a product’s functional value was important indicates one area where the same kinds of messages might cut through – pointing to at least some potential for economies of scale. </p>
<p>Aside from this, the clear message is that different countries in East and West perceive luxuries very differently. However much it is convenient to treat the world as one market, it doesn’t fit the reality on the ground.</p><img src="https://counter.theconversation.com/content/45069/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paurav Shukla does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When it comes to advertising luxury brands, marketers tend to see the world as one homogenous lump. It’s time they wised up.Paurav Shukla, Professor of Luxury Brand Marketing, Glasgow Caledonian UniversityLicensed as Creative Commons – attribution, no derivatives.