Change We Can Believe In – Reinventing the US Auto Industry: Open Source the Chevy Volt

This article in the NY Times about China’s thinking strategically about electric cars was a poignant contrast to our struggles in the U.S. with the auto bailout. It reminded me about the adage, “when you’re up to your neck in alligators, the last thing you remember is that you were supposed to drain the swamp.” Memo to Washington – weren’t we were to be the country innovating here?

Normally I’ll keep my posts to subjects on which I have domain expertise. However:

1. The clock is ticking on General Motors
2. The auto industry is desperate for some new thinking and reinvention as a 21st century enterprise
3. The administration has the opportunity to think like entrepreneurs not just bankers – by creating something new, innovative and valuable
4. An industry gasping for its last breath is least likely to continue to invest in new products that won’t pay the bills for another decade (regardless of whether its in the national interest.)
5. I’ve shared this with Obama’s Energy and EPA team

The auto industry bailout ought to have four goals (you can put them in your own order.)

1. Jobs
2. Keeping an Auto Industry as a strategic national resource
3. Energy Independence
4. Clean Energy

I proposed that in exchange for the GM bailout we spin out the Chevy Volt into an open source electric car platform.

Any automaker who builds the car in the U.S. will be able to build on the Volt Platform, but all drivetrain improvements are open source.

The first 10,000 units would be royalty free. After that, other automakers would pay GM some per/car royalty.

Since it’s in the government’s interest to facilitate goals 1-4, they will subsidize the cost of the initial units so that they are affordable. Economies of scale will drop component costs (read batteries) over time.

(I will admit that taking a concept such as “open source” from the software business and applying it to the auto industry and Washington D.C. was somewhat incomprehensible at first to the Energy and EPA team. But they’re smart, let’s see what happens.)

The reality is that independent electric vehicle startups will win over time (closer to the customer, more agile, etc.) over a national platform. As part of this spin out I’d make sure the Government also supports the nascent U.S. electric car industry and ensures it gets its share of the bailout largesse. But the two together will kick start a new industry and save a dying one.

As I said, I am far from an expert in the auto industry, government bailouts or other related big “businesses”. But I think it’s time we take the out-of-the-box thinking that created new businesses in high tech – the concept of open source, for instance − and apply it in creative and powerful ways to reinvent floundering, older industries.

If anyone has a better idea, I would love to see it here.

Source : steveblank.com, 15/04/09