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The past is often the clearest crystal ball for predicting the future — especially in the automotive world. At Munro & Associates, we’ve seen how history offers striking parallels that can help engineers, investors, and enthusiasts understand where the market is heading. From the horse-drawn carriage era to the age of the internal combustion engine (ICE), and now into the EV revolution, the shifts have been driven by innovation, economics, and societal pressure.
From Horse Manure to Horsepower: The First Automotive Revolution
In the late 19th century, cities faced a “horse pollution crisis.” Publications like the London Times predicted streets buried under nine feet of manure within 50 years. The urgency for a cleaner, faster mode of transport set the stage for EVs and ICE vehicles to compete for dominance.
Early electric vehicles, like the Baker Electric, had a compelling selling point: they were easy to drive. A 1900s-era postcard proudly proclaimed, “We have that big touring car, but I can drive this myself. I learned in an hour.” This accessibility appealed particularly to women, who could avoid the dangerous, physically demanding process of hand-cranking an ICE vehicle.
The turning point came with Charles “Boss” Kettering’s invention of the electric starter in 1912. Coupled with Henry Ford’s moving assembly line, ICE cars became cheaper, more convenient, and faster to produce — a classic paradigm shift that sidelined early EVs for nearly a century.
The Second Paradigm Shift: EVs Re-emerge
Fast forward to the 21st century, and we see another seismic change. Tesla and Volkswagen are leading the charge toward profitable EV manufacturing, with Tesla in particular disrupting industry norms. In 2018, Munro & Associates calculated the cost of a Tesla Model 3 battery pack at $136/kWh; by the Model Y teardown, that figure had dropped to $108/kWh. The tipping point for price parity with ICE vehicles is $100/kWh — a milestone the industry is closing in on.
Cost reductions are being driven by both innovation and economies of scale. Semiconductor components like IGBTs and MOSFETs are dropping in price, while new battery chemistries promise further savings.
Speed as a Competitive Advantage
One of Tesla’s defining advantages is the speed of iteration. Munro observed 13 design changes to a single manifold in under three months — a feat unheard of in traditional automaking, where change boards and long approval cycles dominate. This agility allows Tesla to rapidly implement cost-saving measures, like switching motor windings from copper to aluminum, or introducing massive “megacastings” for vehicle subframes that slash part counts and assembly complexity.
The Economics of EV Survival
While EV prices remain higher than ICE equivalents, industry trends — especially in Europe and Asia — point toward regulatory mandates that will accelerate adoption. Social sentiment, too, is shifting, with older consumers increasingly embracing EVs for environmental reasons. At the same time, traditional single-ownership models are giving way to leasing, subscription, and transportation-as-a-service options, all of which favor EV adoption.
For OEMs, survival will depend on deep investment. The transition from ICE to EV requires rethinking everything from manufacturing footprints to raw material sourcing. Those clinging to ICE-era assets — the metaphorical anchors — risk sinking with them.
ICE in Decline
Regulatory pressure, rising gasoline costs, and shrinking economies of scale are eroding ICE profitability. Engine plants designed for high-volume, multi-shift production can’t operate efficiently at reduced output. Meanwhile, public sentiment is turning sharply against gasoline, making long-term investment in ICE risky.
Lessons from the EV1
GM’s EV1, the first EV Munro & Associates worked on in the early 1990s, hit weight and cost targets but failed on range due to its lead-acid batteries. Without lithium-ion technology, it was doomed despite strong engineering. The lesson is clear — battery innovation is central to EV success.
Benchmarking Against Tesla
Munro’s global comparisons consistently show Tesla leading in range, acceleration, and efficiency. OEMs hoping to compete must recognize that they’re not just playing the same game with different players — they’re playing a different game altogether. Tesla’s combination of vertical integration, bold manufacturing investments, and willingness to license technology positions it not just as a competitor, but as a potential supplier to its rivals.
The Future: Fast Beats Slow
The coming decade will bring rapid drops in battery cost and weight, sweeping changes in manufacturing, and an increasingly competitive EV market. For OEMs, the challenge is not just to be big — it’s to be fast. The companies that can iterate quickly, invest boldly, and adapt their business models will thrive. Those that cling to outdated processes and legacy products will be left behind.
The EV transition is not a distant possibility — it’s happening now. The winners will be those who recognize that innovation is not optional, speed is a strategy, and history’s lessons are there for those willing to learn.
Drive the EV Revolution with Munro Insights
At Munro & Associates, we specialize in uncovering the engineering secrets behind the world’s most advanced electric vehicles. Our expertise spans detailed EV teardown analysis, cost benchmarking, and lean design consulting — helping OEMs, suppliers, and innovators improve performance, reduce costs, and accelerate time to market. For in-depth reports, expert reviews, and actionable engineering insights — or to explore a full library of teardown content — visit Munro & Associates or subscribe to Munro Live.