Major Carmakers and the Automotive X Prize

Let's start with why smaller teams seem to eager for the AXP:

1) Press: prizes and contests generate free press - instead of paying to get your message out, reporters come to you!
2) Structure: the contest makes it much easier to pitch your activity to potential investors and sponsors, because now you have a great story. It also gives you great objectives, milestones and deadlines, which makes you look more serious and also gives you motivation. The importance of this cannot be understated for small teams - most would otherwise be doing literally nothing.
3) Money: the prize money itself, of course. If you're a small team, millions of dollars is a big reward!
4) Opportunity: the opportunity to prove you have something great - vindication, as it were. Also opportunity to startup your own automotive company - make a business of your hobby. It's never going to be easy, but the AXP has made it easier.
5) Do Good: doing the right thing. It's exciting to work on solving some of the world's largest problems (energy crisis, global warming, etc)

Now, if you're a GM, which if any of those matter to you?
#1 is still great. #2 is only necessary if you feel you are not on track already. #3 is insignificant. #4 is likely irrelevant - they already have "opportunity". #5 is famously none of your business, but it might represent a PR opportunity.

Are there other reasons why a GM might enter the contest?
1) Prototyping: for the same reason they make 'concept' cars already - gauge public reaction and prototype new technologies which will eventually make their way into other vehicles. In fact, car companies have a history of sponsoring similar contests, such as the ChallengeX.
2) Competition: if your competitors are in the competition, can you afford not to be? What will the public think of your absence? Are you going to wish you had a vehicle to sell along side your competitors 100 MPG vehicles?

And of course there are reasons why they would not enter:
1) Risk: risk of loosing/looking bad. If you came in 9th place to a bunch of garage teams, that would be a PR disaster.
2) Resources: because of Risk, you need to spent enough money to win, and that may be very expensive and tie up engineers and other employees you need for your regular operations and R&D.
3) Legitimacy: Your very participation in the contest will make the contest more important (more people/press pay attention, the attention is more serious) - and maybe that's a bad thing for your existing products and business.

If you try to tally up these reasons, you can see why it might be a difficult decision. So let's look at a more concrete example.

Mitsubishi iMiEV Electric Car. They are developing this vehicle at speed - who knows why, I guess they think it will be important. They have already built 10 of these vehicles for testing with Tepco, the Tokyo Electric Power Co. The vehicle goes 100 miles on 16 kWh of battery power, which by the AXP rules means it gets 213 MPGe.

If you are Mitsubishi, should you enter this vehicle in the Automotive X Prize? Obviously the Resources consideration is little weight - you are already doing all the work. So there are five things to consider:

Press. Do you want the public to know more about this car? Will it reflect well on your company? Are you planning to sell this car itself, or is it just a vehicle for R&D?
Prototyping. Will the race add anything to the data you are already collecting on test tracks and at various Auto Shows?
Competition. Do you care to be compared to Tesla and Aptera, let alone smaller garage teams? Will your joining precipitate other carmakers to join as well? Do you think your vehicle will sell in the market place?
Risk. If you place badly, will your customers care? Will your employees? Will your investors?
Legitimacy. Is your company going to be OK in a world where customers start demanding 100 MPG vehicles? Can you make a profit on such vehicles? What current products might be negatively impacted?

Now imagine instead the vehicle is the Toyota 1/X, an ultralite vehicle with a very small engine and some hybrid technology. It is pictured above. Toyota does not give a mileage, but it's safe to assume at least double the Prius, and therefore certainly better than 100 MPGe. Now re-read the above five points and see if you think anything different...

I've worked through those questions and I usually come out feeling like it's the Legitimacy issue that really makes you think twice about entering. And that's not a simple analysis. It's quite possible that even without the participation of the major carmakers, the AXP will have a lot of legitimacy in the minds of many consumers. They are going to see vehicles getting 100 MPG, and while some may be radical, others may be quite acceptable. It's also possible that consumers will see the whole lot of competitors as too radical - i.e. interesting concept cars, but never something they would buy even if it will save them money. And the only way to differentiate these two possible outcomes will be to wait and see what various teams are bringing to the race and how people are responding.

Since waiting doesn't cost them anything at this point (assuming they are already working on a suitable vehicle such as the iMiEV or the 1/X), waiting for more information on Legitimacy is clearly the right strategy. A year from now it should be a lot clearer whether the public is responding favorably to the various competitors and their vehicles. So then a decision can be made. In my opinion if even one major carmaker decides they have to be in the AXP, that's going to force the hand of the other companies. Because once the race is seen as legitimate, the negative effects of Legitimacy are already hurting you, and you might as well go for the positives of Press, Prototyping, and Competition.

Also, of course, major carmakers have more options than just entering their own vehicles. They can choose to sponsor other teams, to cherry pick technology via acquisitions after the race, or even to engage in negative PR about the AXP - attempting to make it less legitimate directly rather than indirectly by not competing themselves. I personally think none of these is likely, but I'm sure they are considering them all... do any of these strategies change the factors above in interesting ways?

What's at stake for the rest of us? If the major carmakers do join, we're likely to see 100 MPG vehicles in much larger numbers much quicker, both because they will be making them and because the extra legitimacy they will confer on the race will make it easier for other teams to find sponsors and investors. If they choose not to join, I am concerned that while the AXP itself may be a success (someone wins the prize), the ultimate goal of improving the mileage of our vehicles will not be met. What the world doesn't need is more concept cars and more efficiency challenges which lead nowhere.

GM, Toyota, Honda - I know you're out there listening. Let's make history. Win this AXP and I will buy your vehicle. Loose it or don't compete and I'll be buying from someone else. I am not alone.