The Connected Car

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That said, neither Posawatz nor Duke Energy's Rowand denies that partnership with GridPoint could eventually become rivalry -- that it matters greatly who determines the format and conveyance of the data placed at the door of power companies and, more important, what gets baked into the cars' consoles. I ask Dorfstatter if he can foresee, for example, GridPoint components preloaded onto all Volt-like vehicles in the future. "It is too early to say," he replies warily. For if OnStar will indeed control these standards early on, it might eventually wish to integrate forward to the management of grids, much as Duke Energy -- or makers of power switching equipment like GE or Siemens -- may wish to integrate backward into vehicles.

Corsell embraces the challenge: "We believe there is room for a layer of technology -- and business -- between the various automotive OEMs and the electric companies," he says. "A great many electric companies simply do not have the IT talent to manage end-to-end smart charging solutions. I think we represent a necessary firewall." But is this not something GM can do without you, I ask? "Do automobile companies really want to assume the liability that comes with mishandled load data?" he asks in response. "Just think of the implications for the warranty. And does Toyota really want to be dependent on a software environment owned by General Motors?" This firewall, Corsell knows, could prove thick enough to contain the most valuable and dynamic pieces of what we will mean by an auto industry in a few years, offering enormous opportunities for new entrants. "The horizons of companies like this will expand with each new generation of smart charging," Corsell says. "We could move into cross-power-company billing, so that what you use when you plug in at your office will appear on your home electricity bill. We could gather data valuable to strategic marketing, analyzing traffic and charging patterns the way Google analyzes surfing. I learn from everyone I talk to."

NOT INVENTED FROM SCRATCH

It is important to understand that electric cars like the Volt will benefit from a supplier base already structured like an ecosystem. Had the technologies of multilateral networking not already existed -- Web 2.0 and the like -- the connected car could never be entertained.

It may be hard to remember that, only a generation ago, big car groups like GM were still gargantuan pyramids of specialization, in which production facilities and critical components were controlled, if not owned, by vertically integrated companies: from metal stamping and engine manufacturing to assembly and distribution. Information was also assembled by a kind of pyramid, with marketing data flowing up to the peak and production decisions flowing down. Car companies competed on engineering platforms -- integrated powertrain, chassis, and suspension designs -- onto which they grafted comparatively less expensive bonnets: molded sheet metal, upholstery, and electronics. GM was the first to perfect this approach. When I sold auto parts as a college student in the late 1960s, a Chevy ball joint was a Pontiac ball joint. Marketing gurus focused on skins, manufacturing honchos on guts: You tried to tantalize with the former and reduce the cost of the latter.

Today, however, car companies look less like pyramids and more like hubs and spokes connecting product teams: teams networked across the globe to one another and to myriad suppliers, a little like open-source software designers. By 2000, the most advanced car companies -- Volkswagen Group, for example -- migrated to "modular" design strategies, mandating a sharing of underlying components. Imagine cars built up from so many Lego pieces, which could be shared across the group and much more spontaneously than platforms were. Imagine not having to settle for the prix fixe; rather, order à la carte yet pay the same price for the meal.

What Volkswagen Group put in place, in other words, was an organizational architecture that positioned designers across its brands to network freely with component suppliers working to group standards. It is at this level of the ecosystem -- that of first-tier suppliers and their suppliers -- where economies of scale make sense. The keys to making so much freedom work are brand focus and clarity. GM, alas, did not learn that lesson quickly enough to avoid bankruptcy. Forget health care costs and SUVs. GM simply stuck with too many platforms -- 15 by one count -- and distributed these over a dozen brands. Inevitably, most of its cars became undistinguished while the costs of complexity grew. The Volt portends a new approach. Virtually every component in the Volt not specifically reinvented for an electric powertrain was snatched from existing GM product programs.

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