Prometheus Project — Selling Cars Without a Factory!
The Prometheus Project — “No factory, yet they’re already selling cars!”
This was the most common criticism leveled at Lightning Bolt, the company that had fearlessly jumped into the finished-vehicle market. It wasn’t entirely wrong. Their factories were still nothing more than paper plans, after all. Still, it wasn’t as if they had no business model at all. Korea’s housing market had long operated on the same principle: sell multimillion-dollar apartments first, then build them later.
In any case, the Lightning Bolt lineup unveiled at IDDC 2005 consisted of four models. There was the flagship supercar-class Superfast, the six-seater luxury family SUV Vulcan, the compact four-seater sedan Neuro, and the fifteen-seater minibus Universe. Compared to major players in the finished-vehicle market like GM or Hyundai, the selection looked thin. Yet for an electric-vehicle maker that had only just decided to begin mass production, it was an impressively full-fledged lineup.
What all of Lightning Bolt’s vehicles had in common was a guaranteed range of 300 kilometers on a full charge. Though power outputs differed, and therefore battery capacities and performance varied as well, every model could comfortably cover 300 kilometers nonstop when starting with 100 percent energy remaining. The number of battery packs installed in each model, however, was different.
A battery pack was a long, stick-like bundle of 18650 lithium-ion cells connected in parallel. The compact four-seater sedan Neuro used two packs, the Vulcan used three, the Superfast used four, and the highest-output fifteen-seater Universe required six. Because the Universe was effectively a Jeju Island-only model, the vehicles available for order in the United States and Korea numbered only three. Moreover, since the supercar-class Superfast was a limited-production vehicle, most consumers faced just two practical choices: the compact sedan Neuro or the family SUV Vulcan.
Power management had also been finalized as a battery-swapping system. When a fully charged battery ran low, drivers simply pulled into a nearby swapping station and exchanged it for a fresh pack in seconds. An emergency plug-in charging function was provided as well, but at 220 volts it was painfully slow—taking a full eight hours to reach a complete charge. The plug was intended only for emergency top-ups: just enough power to limp a stranded electric vehicle to the nearest swapping station after sudden cold snaps or breakdowns caused unexpected discharge.
Because of these characteristics, Bolt’s master plan for Lightning Bolt revolved around two pillars: manufacturing finished vehicles and expanding the battery-swapping station network.
— Two completed-vehicle factories would be the optimal starting point.
Bolt’s voice rang with enthusiasm through the video-conferencing system of ID Talk.
“Excellent,” Yoo Jae-won replied.
According to the report, they would begin with two plants, monitor order volume, then either build additional factories in other regions or simply expand the existing ones. The two facilities would produce 50,000 vehicles per month—600,000 annually. That was modest compared to the millions churned out by major automakers, but starting somewhere was what mattered. Besides, even without a single factory yet built, advance orders had already surpassed 200,000 units. Since customers had to deposit a non-trivial $10,000 as a down payment to reserve a car, phantom orders were impossible. Despite that significant barrier, reservations were pouring in.
The impact of the self-driving F2 that had been revealed on Real Camera two years earlier had been enormous. The technology had since advanced to an entirely new level. When combined with smart features and the artificial intelligence assistant Gold, the synergy was astonishing. A smartphone’s Bluetooth could now replace a physical key. Drivers could control navigation and autonomous driving through Gold. Convenience had skyrocketed. Self-driving capability had also been strengthened; given the right environment, auto-valet parking was now possible. The car would drop the driver off at the entrance, park itself, and return to the entrance when summoned—an absolute revolution.
“Autonomous driving really is the decisive factor, isn’t it?”
As Bolt said, the price was equally decisive. The compact four-seater sedan Neuro was priced at $25,000. Even for a gasoline car that would feel remarkably cheap. For a self-driving electric vehicle, it was practically a steal. The reason such a low price was possible wasn’t because they had used inferior parts. On the contrary, the components in the Neuro were equivalent to those found in mid-size gasoline cars or better. The secret lay in the fact that Lightning Bolt itself would bear the cost of the single most expensive and critical component in an electric vehicle—the battery.
At first they had planned to include the price of the installed battery in the vehicle’s base cost. But after questioning whether that was truly necessary, the idea was put on hold. Lightning Bolt’s electric cars used a swappable battery system. To emphasize that fact, they concluded it would be better for Lightning Bolt to retain ownership of the batteries and simply lease them to customers. Of course they couldn’t give them away for free, so they decided to charge only a minimal security deposit to guarantee battery quality. The resulting advantage was the astonishingly low sticker price of $25,000. While the supercar-class Superfast easily exceeded $100,000, both the Vulcan and Neuro were dramatically cheaper than comparable gasoline vehicles.
The battery-swapping system offered another crucial benefit. Building swapping stations nationwide required overwhelming capital. The infrastructure itself became an insurmountable entry barrier, blocking new competitors at the source. Naturally, the key was to build the stations densely enough that Lightning Bolt owners never felt inconvenienced—an investment that would drive up costs. Yet for Yoo Jae-won, who possessed both an unshakable vision that only electric vehicles would survive and the deep pockets to make it happen, the burden was negligible.
There was also something that greatly eased his financial load.
“Chevron has expressed strong support for establishing a joint venture.”
The biggest obstacle to the electric-vehicle business had always been the oil majors. Among them, Chevron’s opposition had been particularly fierce. With other oil giants, one could simply ignore their snorts of derision; their business domains were so different that direct conflict was rare unless it involved the auto industry itself. Chevron, however, was an exception. Because of his marriage to Tiffany, Yoo Jae-won had become entangled with the company, and he could not simply dismiss the words of its owner, Frederick.
Yet even Frederick had been forced to acknowledge that the world was changing. Artificial intelligence had gone mainstream. Feature phones had vanished as though they had never existed, and no one was without a smartphone. The word “smart,” once a trendy buzzword, now felt as natural as air. The same was true for self-driving electric cars. So Frederick changed his thinking: if he could not reject them, he would embrace them instead.
Chevron operated gas stations across North America and around the world. By adding Lightning Bolt battery-swapping stations to those locations, they would gain a foothold in the electric-vehicle market. They were not merely renting out space; they were taking an equity stake. It was the clearest proof that Frederick’s attitude toward electric vehicles had turned genuinely positive. Moreover, the decision had not been made purely out of goodwill toward his granddaughter’s husband. The battery-swapping business was highly profitable on its own.
A single battery-pack swap was priced at eight dollars—roughly 8,000 Korean won. For the Neuro, which used two packs, a full charge cost 16,000 won. It felt a little expensive, but in terms of efficiency it was still cheaper than gasoline. First-time buyers also received free swap vouchers, the number varying by model. Neuro owners got 100 free swaps, while Superfast customers received 300.
Power for operating the swapping stations and charging the batteries would come from thorium reactors. One was already under construction in the Mojave Desert. Once its safe operation had been proven, additional reactors would be built in the central and eastern regions. Ultimately, Yoo Jae-won’s future energy plan was to replace every outdated nuclear reactor on Earth with thorium reactors, then upgrade those to room-temperature fusion reactors.
In any case, operating battery-swapping stations in partnership with Chevron was essentially free money. Since Yoo Jae-won could leverage Chevron’s dense distribution network, the ability to construct a massive number of stations at once was an enormous advantage. The situation in Korea was similar. Chevron’s network there operated under the name Caltex. Installing swapping stations at Caltex locations would instantly cover the entire Korean peninsula. Korea had no thorium reactor plans yet, so the necessary electricity would have to come from KEPCO. Unlike the United States, the power-generation market had not been privatized. Even so, using industrial rates would drastically reduce the electricity cost burden.
— This is the first-phase coverage area achievable by early next year.
Bolt projected a map of North America and the Korean peninsula overlaid with translucent red circles. The dots marked where actual stations would be built. The total number of red dots exceeded three thousand. Three hundred were in Korea; the remaining 2,700 were concentrated across the North American continent. Even so, because North America was so vast, the 2,700 stations left many visible gaps.
“There are some empty spots, but if you overlay them with a population-density map, you’ll see there’s no major problem. The blanks are in regions with extremely low population density. Meanwhile, high-density areas—Los Angeles and San Francisco in the West, New York and Boston in the East—are covered densely. It’s a thoroughly satisfying plan.”
“The swapping stations are fine. Where will the most important automobile factories be located?”
“Analysis shows two optimal sites. One is Gunsan, the other is Detroit.”
“Interesting.”
Yoo Jae-won had fully expected Gunsan to be among the candidates. Along with Busan, it was one of Korea’s major ports. The Saemangeum reclamation project offered plenty of space for factories, and numerous automotive third-party suppliers were located nearby, making parts procurement extremely smooth. Detroit had been chosen for similar reasons.
In the short term, the Korea–U.S. Free Trade Agreement was expected to be signed soon. Producing everything in Korea and exporting to the United States would pose no problem. In fact, it would drastically reduce costs. Most major components could be made in Korea, and many others could be sourced from neighboring Japan or China. Yet Yoo Jae-won was thinking long-term.
Even now, complaints that ID Group was “eating everything” were frequently heard in American political circles. The friendly Democrats were manageable. After all, ID Group was creating large numbers of high-paying jobs in California, a Democratic stronghold. But the U.S. political world was not composed solely of Democrats. To Republicans, Yoo Jae-won was a thorn in the side. Although he did not actively make political statements, everyone knew of his close ties to the Democratic Party. His friendship with the current Vice President Al Gore had begun in the early 1990s.
Yoo Jae-won also anticipated that conservative voices in the United States would grow louder by the late 2000s. The 9/11 attacks had happened. Although the Iraq War had been prevented, the situation in the Middle East had grown even more chaotic. Thanks to shale-gas development and thorium reactors, America had largely freed itself from energy worries, yet the wealth gap was widening. The divide between those who had invested in funds and stocks since the late 1990s and those who had not was growing larger by the year.
And a bomb was hidden beneath it all: subprime mortgages. Banks had extended higher-interest loans to people who could not qualify for normal home loans. Financial institutions then bundled those subprime loans into derivatives and sold them to investors. The entire scheme rested on the belief that housing prices would continue to rise forever. With low-interest loans and Wall Street’s bloated capital flooding the housing market, home prices across America had indeed soared. Even people close to credit risks were taking out subprime loans to buy houses.
When that bubble burst, even the current Yoo Jae-won would be unable to handle the fallout. The monthly capital flows involved hundreds of billions of dollars. He had already instructed ID Investment to distribute reports warning of the dangers of subprime mortgages and the housing bubble. Vincent Greenhill was faithfully carrying out those orders and issuing cautionary messages. Yet no one was listening.
Just as Hurricane Katrina had struck the American South a few days earlier, what was destined to happen would happen. The subprime financial crisis seemed likely to erupt toward the end of Al Gore’s presidential term. Even so, there was no need for deep despair. Just as New Orleans had not been submerged when Katrina arrived, the damage would be far more limited than in his previous life. The reason was simple: the state government, flush with money from the Qing Dynasty bond settlement, had reinforced the city’s aging levees. What some had dismissed as wasteful concrete work was now being praised as remarkable foresight.
In the same way, countermeasures against the inevitable subprime crisis had already been prepared. Choosing Detroit as the site of Lightning Bolt’s North American production plant was closely tied to the post-subprime landscape. Detroit was the symbolic heart of the North American auto industry. After the market collapsed under pressure from Japanese, European, and Korean cars, the city had fallen into rapid decline.
Skill mattered. It was well known that Tesla—the electric car made by Elon Musk, who was now pouring his energy into SpaceX—had suffered quality problems for years after launch. The issues had not been fatal; they were basic problems such as panel gaps, fit-and-finish, and paint quality. If they could hire large numbers of veteran autoworkers, those problems could be cleanly resolved.
“Very good.”
Yoo Jae-won’s mind was almost made up on Detroit. Even at 600,000 vehicles per year, Lightning Bolt could not single-handedly revive a giant city like Detroit. But if electric vehicles displaced internal-combustion engines the way smartphones had displaced feature phones, the future would be completely different. The rapid conservative shift in America that had begun in Detroit could very likely be halted.
“I’ll review it further and give you my decision tomorrow.”
“Understood, Chairman.”
Yet Yoo Jae-won did not give Bolt a definitive answer. There was still one more thing he needed to confirm—the result that Gold, running in developer mode, had been diligently calculating at high speed since yesterday.