Slide 1. Introduction.
The class develops how to avoid the premature obsolescence of electric vehicles in the fleet caused by the constant technological evolution in this market.
Slide 2. Index.
- Premature obsolescence of electric vehicles.
- Implications for fleet management.
Slide 2. Premature obsolescence of electric vehicles.
- Evolution of technology.
There is a downside to technology advancing so fast: there is a good chance that things will quickly become obsolete. It has been happening for years with consumer electronics, especially with cell phones because the top-of-the-line models are systematically overtaken by newer ones in a matter of months.
The point is that cell phones, although more expensive than ever, cost what they cost, while a car is much more expensive and, in the case of electric models and also plug-in hybrids, there is the same problem as with old phones, they quickly become outdated.
It is not programmed obsolescence, it is simply that the technology they use evolves so fast that it becomes outdated. It is obsolescence in the strict sense of the word. And it is a common occurrence with new technologies. The problem is that, taking into account the price of cars, it is inevitable to feel "ripped off" when you see that the brand that launches an update that surpasses your car in everything and even has a more attractive price, also, when a technology evolves it also becomes cheaper.
- Consequences in fleet management.
Technology upgrades can be hardware and/or software.
Software upgrades can be performed remotely, and hardware upgrades must be performed in a workshop.
The consequences of hardware and/or software upgrades on fleet vehicles are as follows.
- Loss of residual value of the vehicle.
The main consequence is a decrease in the residual value of our fleet vehicle, because the same model is sold with more advanced and better technology for the same or lower price.
- Increase in the cost of ownership-TCO.
As the residual value of the vehicle decreases, the cost of ownership increases, increasing costs and requiring more fleet budget.
- Increased performance of the new model.
The new model has more advanced hardware and/or software technology than our fleet vehicle, which has lesser capabilities and functionality. For example, the new model can charge the battery in less time.
- Disruptive technology.
The new model has very disruptive technology such as autonomous driving which is a very big leap from our fleet vehicle.
- Acquisition of vehicles with the latest technology.
If the brand does not offer hardware and/or software updates and we want vehicles with the latest technology, for example in autonomous driving, safety, charging time, etc., we must acquire new vehicles, with the increase in cost that this entails.
- Competitive advantage.
In certain types of leasing or rental fleets it is a competitive advantage to have the most advanced technology on the market.
- Image of our company/organization.
The image of our company/organization is greater if we have the most advanced technology in the market.
It is always recommended to advertise that our company/organization uses the latest technology among our customers, employees or shareholders.
- The case of the Chinese market.
Complaints are one of the repercussions of the prolonged price war and hypercompetitiveness in the Chinese market, where automakers slash prices, offer free features or incentives, or launch new models at a faster pace than in other countries.
In Europe, Japan or the United States, the average commercial life of a car is between six and eight years. In China, however, it is being reduced to four years or less, with new features and upgrades being added every few months to models blurring the line between new and old models.
The extreme competitiveness of Chinese brands, updating and renewing models before they have time to sell them, leaving customers with the feeling that they have been sold a worse car. Complaints and lawsuits for this are becoming more and more numerous and affect both Tesla and Chinese manufacturers and especially BYD.
Tesla shortly after slashing prices by unleashing a price war, saw hundreds of Tesla owners flocking to the brand's dealerships in China, seeking discounts and credits.
Companies that can invest massively in the connected car and artificial intelligence with promises of autonomous driving, such as BYD with its "God's Eye". This autonomous driving system will be present even in €9,000 cars using its own artificial intelligence and DeepSeek in a few months.
BYD's goal is to integrate DeepSeek into its cars, but not in the same way that ChatGPT is integrated into models from Stellantis or Volkswagen, but to encompass functions beyond multimedia, including autonomous driving.
This technology includes functions that, up to this point, have been reserved for high-end cars, such as remote parking via smartphone, or fully autonomous overtaking on the highway.
BYD has developed three levels for "The Eye of God": A, B and C. God's Eye A, which is the most basic, features 12 cameras, radar and ultrasound sensors. The cheapest cars will have this level, including the Seagull, which costs less than 10,000 euros in China and could reach Europe, although not with that price, although it is true that it would still be cheap and that to find cars in our market with the same autonomous driving technology would have to have a much more comfortable budget.
God's Eye B is the intermediate level and adds a LiDAR sensor and more powerful software to improve the perception of driving assistants and make them more accurate.
God's Eye C is reserved for BYD's Yangwang luxury brand cars; in this case, there are three LiDARs, and even more powerful software.
The problem is that these changes and updates to new models happen at a rampant pace, leaving many Chinese consumers unhappy with Chinese brands. For example, complaints against BYD for offering free smart driving features across most of its range have flooded a major Chinese platform with complaints, many from customers claiming to have overpaid for their cars.
One complaint, submitted by an owner of a BYD Seal 06 DM-i plug-in hybrid sedan, sums up the situation nicely. He said he had repeatedly asked the salesman when buying the car whether a newer model would be released this year.
But only half a month after picking up the car, the new model was released with noticeable configuration improvements at the same price, the person said, adding that they wanted free upgrades and other compensation from the company.
- The case of Volvo and Polestar.
The two brands are going to update the hardware of some of the electric cars they sold some time ago to their customers to equip them with the same technology that their most modern models have and it will be completely free of charge.
Volvo and Polestar have decided to remedy this obsolescence. They have updated their customers' cars. Practically all brands already have free periodic updates for their cars, but they are limited to software, exactly like cell phones, however, these two brands go further and, in addition, they will offer hardware updates, that is of the physical components of the car, in this case, its "brain".
This is similar to what many people do with their computers: when time goes by, they change the old RAM memory for a more modern and efficient one, or when they run out of storage, they expand the ROM memory. In this case, however, the brand pays for it.
This is a very interesting way to keep your customers' cars up to date and, incidentally, to build customer loyalty, instead of them getting frustrated because their car has quickly become old and looking for a more modern alternative from another brand.
Best of all, these will also be free upgrades, even though they are not as simple and quick as a software update. All customers will have to do is take their car in for an update, but it's something that can be done when it's time for the regular service.
Volvo is already replacing the Volvo EX90 processor set with the new Nvidia Drive AGX Orin processors, the same ones used in the EX90s currently in production and the same ones that will be used in the Volvo ES90, the electric equivalent of the Volvo S90. As a result, the Volvo EX90s that were sold some time ago will have the same technology as the brand's newest model and the new Volvo EX90 units. Polestar will do the same for the EX90's cousin, the Polestar 3.
The dual NVIDIA DRIVE AGX Orin configuration will also be implemented in EX90 cars, upgrading its current version that includes DRIVE AGX Orin and DRIVE AGX Xavier.
- The Tesla case: not all updates improve vehicle performance.
In 2019, a group of Norwegian owners sued Tesla for the loss of autonomy related to an update that the manufacturer had made without notifying customers. An update that from the brand was justified as protection to the battery, and that also affected the charging power. After being condemned for the first, now justice is giving reason to customers also in the second.
In 2019, alarm bells began to ring among Model S and X owners, whose units had received a remote update that limited the useful capacity of the battery, and with it, their range was reduced between 19 and 48 km.
In some cases, this loss exceeded 10%, and also did so without communication from the company. This provoked the indignation of hundreds of customers around the world, who sued the company and, in the case of the Norwegians, obtained compensation of up to 16,000 euros each.
The Court of Appeal in Borgarting, Norway, has ordered Tesla Norway to pay €4,296 in compensation to customers who experienced a loss of charging power after a software update. In addition, Tesla will have to bear court costs. A total bill of about 41,000 euros at the exchange rate.
According to the evidence conducted and provided in court, the charging power was reduced by up to 30%, lengthening the stops substantially.
For those affected, the compensation agreed by the judges is very small, but it is symbolic as it lays the foundation that the manufacturer cannot do whatever it wants with their vehicles without their consent, and has allowed to create a structure to be able to deal with this type of actions more efficiently.
They also highlight the lack of collaboration of Tesla in this matter, cataloging their behavior as dishonest, denying at all times the problem and that this had something to do with the update released.
The Norwegian consumer association has indicated that companies should not have the opportunity to make a product worse when they update it.
This is a basic consumer right. If this persists, consumers should receive financial compensation. A trader cannot freely change the characteristics of things that have already been delivered.
Slide 4. Implications for fleet management.
- Purchase brands that upgrade hardware and software free of charge.
It is recommended to purchase brands that update hardware and software for free as Volvo and Polestar do.
Most brands update the software, but not the hardware, so the most important thing is to update the hardware, and the most important components such as the Battery Management System-BMS.
- Reach an agreement for hardware and software upgrades.
As most brands do not update the hardware, it is recommended to reach an agreement by paying for the brand to update the hardware and software. The agreement should specify how often, which components, etc.
It must be taken into account that as a fleet, a high number of vehicles are purchased from the same brand, and this purchasing power must be used to reach this agreement, or force the brand to update the hardware and software.
- Loyalty with the vehicle brand.
By reaching hardware and software upgrade agreements with the brands, our company/organization becomes loyal and a long-term agreement can be reached for the acquisition of vehicles in large batches.
- Hardware and software updates.
The brand must always communicate to us all hardware and software updates performed or to be performed.
It may happen, as in the case of Tesla, that they make a software update that worsens the performance of the vehicle, increasing the recharging time and decreasing the autonomy, and that affects us for the provision of the service.
In this case it is necessary to have the option of not updating the software because it affects the service provision.
- Check the updates.
It is necessary to check which is the last version of software the vehicles have, to know if they have been updated, because the brand does not communicate the software updates.
- Financial compensation for the upgrade.
If the update worsens the performance of the vehicle such as recharging time, autonomy, etc. we should receive financial compensation from the vehicle manufacturer.
The problem is that the manufacturer in most cases will deny it, and we will have to go to the courts and prove it, with the cost and time involved.
It is necessary to know if other users of the same vehicle have had the same thing happen to them, in order to group together and claim collectively. It is advisable to search on internet for other similar cases of other users.
Slide 5. Thank you for your time.
The class has developed how to avoid the premature obsolescence of electric vehicles in the fleet caused by the constant technological evolution in this market, see you soon.
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