October 2, 2015
Disruption comes in many forms, but the steps leading to the descriptor often requires investing in new ideas and process. Even if Local Motors’ primary goal is not disrupting the automotive they are creating a paradigm shift. They developed the first 3D printed cars, open-sourced designs, new manufacturing approaches, and produced a vehicle with enough wow factor to be featured in a Transformers movie.
Next week at Celebrate, Local Motors CEO and Co-Founder Jay Rogers will join us for a fireside chat to discuss how they are changing the automotive industry and manufacturing as a whole. At the conference Rogers will dig into local manufacturing, bringing quality jobs to American communities, and “enfranchising people to do great things with their life without the four year degree.” On top of this, they are even differentiating themselves from their initial public persona of a 3D printed car manufacture, and redirecting energy towards being a company that does not constrain creativity, embraces customizations, and improves sustainability.
Innovation With a Helping of Disruption
According to Rogers, innovation at Local Motors is directly tied to low volume manufacturing. The largest automotive manufacturers produce cars at high volumes allowing them to keep costs down; however, by using open-sourced designs, 3D printed parts, and pre-selling vehicles, they too can reduce costs.
Rather than using numerous materials, these complex machines are being created with the same or similar materials. “There are no tooling costs now,” said Rogers. The biggest liberating factor is that they can be more efficient by using cheaper materials.
As explorers of new technology, they also run into surprises along the way. “We’re doing a lot of work that has not been done before,” said Rogers. Recently they placed bluetooth outside of the car, but it ended up interfering with other functionality. Experimenting and testing consumes a lot of what they do. Further, crash testing costs also become very meaningful, as related costs can run high for product lines running under a million units. For the type of work they’re doing having access to special facilities are necessary, but they’ve also strategically launched their manufacturing factories within a proximity of them.
Microfactories Creating Local Jobs
When launching into a new city or location, Local Motors will occasionally test the market with a Mobifactory. Built from shipping containers, Mobifactories are essentially the minimal viable product (MVP) test for a community with a goal of having a smaller scale mico-factory that can be shipped globally and allows communities to rapidly prototype low quantity products.
According to Rogers these are a cost effective way of testing the local community and their needs. From there, Local Motors will create a microfactory, which is home to the development of the Rally Fighter, Racer, and Verrado drift bike. More importantly, it’s an advanced makerspace where soon-to-be vehicle owners will work directly with the Local Motors team members to build their ride. These facilities are the culmination of the co-creation cycle, specifically designed to embrace innovation and develop new concepts. Over the next 10 years, Local Motors plans to launch 100 microfactories around the world.
Navigating New Automotive Sales Channels
When buying a new car you typically only have a few options: dealerships, previous owners, importing the vehicle, and if you’re Tesla trying to sell direct to consumers. For Local Motors, the traditional sales channels don’t necessarily fit as they create low volume products. Nissan, Honda, and the other traditional automotive manufacturers produce enough vehicles to display at your local dealership, but for Local Motors’ upcoming line of 3D printed cars it doesn’t make sense.
Starting in 2016, Local Motors will be creating an Indiegogo campaign with various cars that were produced from their co-creation communities. These are the same types of individuals and teams that have in the past combined their brain power to create the Rally Fighter and the new Project Redacted. “We’re always trying to get the right price point, the price elasticity of demand,” said Rogers. “The single best way to pay off investors is to know you are going to sell a lot of product, and the single best way is to already have sold the product.”
Starting at about $50K, Project Redacted will be highway drivable, with lower-speed models ranging from $18K-$30K. According to Rogers there will be other vehicle options in the crowdfunding campaign as well.
“Everyone focuses on the tech, but you have to be as disruptive on selling,” said Rogers.
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