"Our new car, the Super-Duper Electric 101, with 300 miles of range, is $39,999 and is shipping TODAY." -- Said no auto executive at a launch event, ever.
NEW YORK (TheStreet) -- No, the auto industry is not Steve Jobs introducing the next iPhone. Typically, a car company (1) shows a prototype two years before the car hits the showroom and then (2) shows the final production car in the form of a "formal introduction" one year before the showroom date.
In other words, the standard operating procedure in the car world is to be two years ahead in terms of communicating with the consumer. Occasionally, they skip the first stage and it's down to one year. But that's it in most cases -- one year, normally two.
In contrast, in the smartphone/computer business, companies such as Google (GOOG - Get Report) and Apple (AAPL - Get Report) nowadays either have zero lag, or no more than two weeks, from announcement to the product shipping. In fact, the entire product development cycle fits inside the last automotive launch stage of one year!
In other words, the differences couldn't be more stark. We will never see the automotive industry do what Steve Jobs pioneered at Apple: "Our new product, .... shipping today!"
Or will we?
I think the industry is about to see some path-breaking surprises, and they're in the area of electric cars. Let me first describe a little bit of history so you can see the contrast.
Let's start with the Chevrolet Volt. This car started development as a concept car in 2006, which was shown in January 2007. The plan got green-lighted right thereafter, yielding the "final production version" being shown in September 2008.
General Motors (GM - Get Report) promised the Volt would enter production in November 2010, and it did. In this case, the lead time to production was unusual -- almost four years. It was almost as if the public had a transparent view into the development from start to finish.
Why did GM announce the Volt so dramatically far in advance? Some would say it needed a bailout, and the Volt as "halo project" would help. That doesn't explain the January 2007 prototype or all the work leading up to the September 2008 "final production version," however.
A more likely theory is that this was GM's first mass-produced electric car, and it would take almost no sales from other GM products. GM rightly assumed that 95% of Volt buyers were coming from a non-GM car. Therefore, almost nobody would postpone the purchase of an existing GM product in order to wait for the Volt.
Yet, at the same time, the Volt was so "out there" that GM somehow didn't think the competition would be awakened to go down a similar road. The market for plug-in electrics was effectively zero until the Tesla (TSLA - Get Report) Roadster in 2008 and the Volt and Nissan Leaf in December 2010. Sounds far-fetched today, but it was what our world looked like 2007-09.
The Volt has now been in production for over three years. Typically, the work on a new car is started at least a few months before the old one enters production. In the case of the Chevy Volt, that would have meant 2010.
However, since the Volt was such a dramatically all-new car, and the development was rushed to an unprecedented degree, I think we can assume that the work on the Volt 2.0 didn't start until 2011. Using conventional metrics, we can assume that the Volt 2.0 won't enter into production until some time around the middle of 2015, presumably as a 2016 model.
So what's different with the Volt development this time?
For starters, we don't know anything about it. Nothing. Unlike the last time around, GM has not shown a prototype, not a "final production design," not talked about it at all except in generalities so vague so as to be meaningless: "A future Volt will be better in every dimension we can" is how you'd summarize anything reliable GM has said.
The most specific information came from former CEO Dan Akerson, and those comments were so all over the place one that wonders whether they were deliberately misleading, mysteriously uninformed (by the CEO nonetheless) or whether he was outright drunk when he made them. I guess the only thing that was 100% believable was that it was going to be cost-reduced so GM could finally start to make money on the car. In this case, cost-reduced doesn't necessarily mean "price-reduced."
So why is GM so secretive this time, when it wasn't last time around, 2007-2010? The answer is twofold:
1. There is a Volt 1.0 GM needs to sell. If you haven't been paying attention, the Volt 1.0 hasn't exactly been flying out of dealerships. GM has been selling 23,000 per year in the U.S., and not that many more internationally. If GM told us about the Volt 2.0, sales of the Volt 1.0 would likely collapse.
2. Unlike 2007-2010, the competitive environment for electric cars has suddenly intensified. Back then, there was a bit of kumbaya around the whole thing. Most importantly, Tesla has laid its cards on the table: A 2017 pure electric car that will cost $40,000 or less and will yield 200 miles.
Which brings us to the mirror image of this comparative case study: Tesla. Tesla's plan is to add a sub-$40,000 all-electric car in 2017 that yields 200 miles, as I said above. Now why on God's green earth does Tesla telegraph this intent several years in advance? As I recall it, this talk started already in or around 2011, perhaps even 2010 -- before even its current car, the Model S, began shipping.
Tesla has handled all tactical and strategic decisions brilliantly to date. Essentially everything has gone right, and it's gone right in just the right way. Basically, they nailed it. But this? For the life of me, I don't see what Tesla has to gain by being so specific about a 2017 car. Tesla could simply have said that the next car (after the Model X) would be less expensive and left it at that. That's pretty much all you need to know. It's not surprising, and wouldn't detract from current sales or sales in 2015 or 2016.
Saying that your next electric car would be less expensive is about as surprising as saying the next PC will have a faster and cheaper CPU. The competition wouldn't have something to work with.
As it stands, Tesla has put a huge target on its back. Whether Nissan, GM, BMW or VW/Audi, they now know what to target. It's become a challenge, whereas previously they might have passed or under-shot.
Take Nissan, for example. Its luxury division Infiniti showed a luxury electric car prototype two years ago. When Tesla started to narrow down the info on its 2017 car (which was then thought to be a 2016 or even 2015 car), Nissan canned this Infiniti and went back to the drawing board. Thank you for warning us!
How many people do you know who would have bought a Model S but are now saying, "I can wait to the $40,000 (some say $30,000) Tesla is out in 2017?" I know several. This just seems so unwise from Tesla's perspective: Giving away the secrets to the competition while telling your customers to wait at least three years instead of buying sometime before.
What can we expect? I think that, going forward, electric cars such as the Volt 2.0 and whatever Nissan next has in mind will be launched with a minimum of warning. Perhaps six months, perhaps even less. Certainly no more than a year ahead of deliveries. I'm guessing four months.
I can't recall a time when the automotive landscape has seen the kind of competitive upheaval I am forecasting on this issue. The way the industry launches cars is about to change a lot, and I wonder if Tesla didn't make a big mistake in terms of letting the whole world know about its future model way too soon.
And now that Dan Akerson isn't at GM anymore, perhaps GM is ready to launch the Chevy Volt 2.0 in full Steve Jobs style: "... and it's shipping... tomorrow!"
At the time of publication the author was long AAPL.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.