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In a Rising Threat, the ‘Osborne Effect’ Confronts Automakers With Potential Obsolescence
Consumers could leave gasoline models unsold, and wait for electrics
In an announcement yesterday, BMW said it will introduce an electric vehicle with a solid-state battery by 2030. The same day, Toyota announced that it’s creating a new EV called the “bz4x,” to be offered for sale the middle of next year, not to mention an electric pickup not long after.
For a year, GM has crowed that it will put 30 EV models on the road by 2025. VW has been just as loud, boasting that it is installing 3,500 EV charging points in the U.S., deploying 30 EV models under its Audi brand alone by 2025, and aiming to cut battery costs by half by the end of the decade. Next year, Ford will start selling an electric F-150 pickup truck, for four decades its best-selling vehicle.
In recent months and years, the world’s major automakers, haunted by the prospect of obsolescence at the hands of Tesla, fast-moving Chinese automakers, or perhaps a legacy rival with some moxie, have been moving at an accelerating pace to go electric. Their target is to more or less get there around 2025, thought to be the tipping point when the plunging sticker price of EVs will reach parity with currently cheaper combustion vehicles.
But the hoopla they are making about their plans — while perhaps heartening to Wall Street and shareholders — is also exceptionally risky. Experts say that every time the automakers signal their intentions, they increase the potential of an assault by the “Osborne Effect,” a commercially deadly phenomenon that could leave them with billions of dollars in losses.
In an Osborne outbreak, consumers are blasted with the advance announcement of a mind-blowing coming breakthrough in a product, like a popular electronic device. The new version is due in six months, a year, or perhaps a bit longer. The consumer, now aware that what’s on the store shelf is going to be outdated, waits to buy the new version. The one on the shelf keeps sitting there, unbought, losing the company a lot of money. In the case of Adam Osborne, a computer pioneer for whom the effect is named, he announced a super-upgrade of his computer in 1983, a year before its actual…
