Category Archives: Economics

We Handed Them the Market

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Related video: Range Anxiety — The Unreal Reality

I’ve been involved with EV power and propulsion for much of the last 30 years. My latest stint was at Wolfspeed, developing SiC power modules for EVs and fast chargers. When the EV market stalled and the company went into Chapter 11, I was among the people who lost their jobs.

I still think EVs are the right direction. I don’t own one. That’s not a contradiction, it’s the actual story, and the video above is where I work through it.

The short version: range anxiety was always overblown for most drivers, and the auto makers never built the product mix that met the needs of the broad market. Now the industry is driving hard away from EVs, especially in the US, and that’s just wrong-headed. The video closes on that but doesn’t dig into why. This post does.

The Part That Stings

While the US was arguing about mandates and turning the issue into clickbait, China was engineering.

BYD is selling comfortable, adequate-range EVs in the $15–20K range. That’s the vehicle that moves the majority of buyers. Not the Cybertruck, not the F-150 Lightning, not the Rivian. A practical car at a price most people can actually consider.

We handed them that market. Not through malice or conspiracy, but through a combination of policy that optimized for the wrong things and an industry that focused on protecting its margins.

The policy pushed hard for EV adoption with mandates, subsidies, timelines. Some of that pressure was probably warranted. The market would have gotten there on its own, but the question of when and at whose expense was real. The intervention accelerated some things. What it didn’t do was direct the industry toward the product that would actually move the needle for most buyers.

The industry copied Tesla’s playbook; premium vehicles, long range, performance, high price points. That was the wrong lesson. Tesla used that model to fund the manufacturing and infrastructure investment that actually mattered. Everyone else just took the margin and stopped there.

The charger network made the same error I described in a previous video: build for the metric that looks good in the grant report, not the outcome that matters to the driver. 97% uptime. 71% charging success rate. Two different measurements, only one of which tells you whether the thing worked.

Why Big Auto Isn’t Saving Itself

I always loathed the heavy-handed government push on EVs and what I read as gaslighting on the rationale. Mandates handed down by people who had never looked at a cost model. Timelines written by committees that had no idea what it actually takes to retool a supply chain or build an infrastructure.

At the same time, I think some intervention was warranted. Not because the market was wrong about EVs, but because the market was optimizing for the next quarter. And the externalities of the status quo were landing on people who weren’t in the pricing model.

Intervention at scale creates dependencies. The industry made bets premised on the government backstop continuing. When the political environment shifted, those bets didn’t just look bad, they collapsed. And the response has been to drive hard back toward gasoline, as if that solves anything.

US old-line auto companies have been struggling for decades, and the reasons are structural. They’re trapped by regulatory capture and built-in costs that make adaptation nearly impossible.

Start at the sales end. Their dealer networks are regulated state by state, which makes wholesale change all but impossible. Safety regulations run through a system where insurers push regulators to require improvements that the industry develops partly because those improvements push up vehicle margins. Manufacturing plants are at their core decades old, and the capital they represent sits on the books, write it down and you impair the balance sheet. Design is path dependent by habit and incentive: most changes are incremental tweaks to last year’s platform because that’s easy, cheap, and legible to accounting.

And the margin structure makes it worse. Bill-of-material cost for a vehicle increases slowly with size and content. Market value is largely bling-dependent. So the incentive always points toward large, well-fitted vehicles where the spread is widest, and away from the small practical vehicle where there’s almost none.

Meanwhile, the manufacturing model has already been cracked. A new generation of EV makers proved you can build at scale in the US, turn a profit, and drive down the cost curve without the legacy overhead strangling the old players. Big Auto is watching that happen and still can’t follow, because the legacy network isn’t just a cost problem, it’s a constraint on every decision they make.

Moving back to gasoline doesn’t fix any of this. It may help sales volume near-term, but fewer and fewer buyers are willing to pay up for big iron, and as the recent spike in gas prices reminded everyone, the cost of operating a gas vehicle is not as predictable as it felt a few years ago.

The wholesale abandonment of EVs is as wrong-headed as the mandates-first push that preceded it. You’re walking away from the future as it’s getting its feet under it, and you’re not fixing your actual problems in the process.

Different direction, same failure mode: optimizing for the political moment rather than the real problem.

What I Expect to Happen

The market will keep sorting this out despite the policy environment, not because of it.

Amazon is sponsoring the Slate, a small electric truck aimed squarely at the price point where the volume is. Ford is talking about smaller, value-forward platforms. The product mix gaps are starting to fill in, and the players doing it understand they have to meet buyers where they are, which is around $20K for a vehicle that’s good enough and built around what EVs actually do well.

BYD is a harder question. It was built on the back of Chinese state support and practices that wouldn’t survive scrutiny elsewhere, but that doesn’t change what it demonstrates: a level of technical maturity across product fit, design, and manufacturing that very few other automakers can match. Tariffs and regulatory barriers will slow it down. They won’t hold permanently. Some form of that capability will find its way into the US market, and when it does it will accelerate the shakeout that’s already coming for Big Auto.

Charging infrastructure will improve in the corridors where the economics support it and stay thin everywhere else, and that’s how it should work. Where it’s thin, the economics will eventually pull in local investors, the same way any other service infrastructure fills in. It won’t be fast, but it will happen.

The transition will come, just slower and more expensively than it had to be. The destination is probably the same. The cost of getting there is substantially higher, and much of the value being created will go to manufacturers who aren’t American. That’s the envelope effect of all the intervention and counter-intervention stacked on top of each other.

The engineers mostly knew it was going to be complicated. Technical change at a social scale always is. The complicated part is rarely the technology.

Mark Harris is a systems and mechanical engineer, recovering from a career in EV power electronics, and the author of Stranded in the Stars (Book One, The Sea of Suns Trilogy). He writes about engineering, technology, and the creative life at This World and Others. The Unretired Engineer is on YouTube at https://www.youtube.com/@Scifiengineer-09

Dismantling Silos: A Path to Agile Engineering

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Boundaries are necessary. That’s not the argument.

Every engineering project starts with bounding — what you’re solving, what the solution has to do, what’s out of scope. Without that, you’re not engineering, you’re wandering. The boundary is how you make the problem solvable.

The modern corporation learned the same lesson at scale. Adam Smith’s insight wasn’t complicated: split work into elements, run them in parallel, and you can deliver what no individual craftsman ever could. From Renaissance capital markets to the factory floor to the aerospace prime contractor, that logic held. Boundaries enabled scale.

When I joined the workforce in 1982, the logic was still holding — and you could feel why. I had a notebook and an HP calculator. A shared secretary supported the division manager, and before any report left the building it needed sign-off from both my branch manager and his. Not bureaucratic obstruction — that was the information architecture. Reports were dense, slow, and gatekept because they had to be. Management structure existed in large part to curate that flow — to compress what mattered, pass it up the chain, and keep the organization pointed in the right direction. The stovepipe wasn’t a bug. It was load-bearing.

Between 1982 and 2002 two things happened simultaneously that should have changed the equation. First, information handling exploded. The PC, networks, sensors — generating and moving information became cheap and fast. Second, process culture arrived. The US had watched the Japanese manufacturing renaissance and brought back a set of ideas about quality and process that got bolted onto the existing corporate hierarchy. At exactly the moment when individual engineers could span across an organization and get at information directly, the process culture locked the structure down harder.

The result in many companies: more capability to move information, less permission to use it. The stovepipes stayed. The rationale quietly expired.

I ran three programs across my career that show the delta. At SatCon on the AIPM program — Advanced Integrated Power Module, a DOE/Navy cost-share — I was simultaneously program manager and lead engineer, spanning manufacturing, electrical design, mechanical design, and simulation. We went from concept to demonstrated production-ready modules in three years on a modest budget. That approach, the sub-module test-before-integrate architecture we developed, is now standard inside automotive power electronics. Tesla uses a version of it.

At DRS, working with Allison Transmission on an integrated generator for military vehicles, we built a successful solution and demonstrated it to the Army. General officers asked why they couldn’t have more. It took ten years for the technology to gain traction — not because the engineering was wrong, but because the organizational and procurement structure couldn’t move.

At Wolfspeed, deep stovepipes. Marketing, sales, test engineering, module design, device fabrication — separate organizations, separate priorities, separate permission structures. Getting a new product from concept to release meant handing information off at each boundary and then jawboning it forward, because you couldn’t do their job for them and they had to queue the work against their own priorities. Fifteen products out the door. Every one of them harder than it needed to be.

The stovepipes were there to protect quality. They also stopped momentum.

What’s changed now isn’t the human desire to span boundaries — engineers have always wanted to do that. What’s changed is that the tools exist to actually do it. Companies that have built their information architecture from scratch rather than inheriting it — the Teslas, the newer defense tech firms — have demonstrated what happens when low-level actors have access to the full context of what the organization knows. Engineers and technicians can interrogate data, surface patterns, propose action. The information that used to require a management layer to curate is available directly. The span of control moves down the org chart.

For incumbent organizations with data already siloed, this is genuinely hard. The stovepipes aren’t just structural — they’re also where the institutional knowledge lives, and dismantling them requires executives who are willing to accept that the curation function they’ve been performing can be partially replaced. That’s not a technical problem. It’s a political one.

Christensen’s Innovator’s Dilemma describes what happens to incumbents who don’t solve it. A smaller firm with narrower scope but faster movement finds a niche. The niche gets cheaper and easier to serve. The incumbent can’t see it clearly because their whole architecture is optimized for something else. The niche expands. You know the rest.

The boundary isn’t the problem. Bounding a problem is still part of the engineering job. The question is whether, once the problem is bounded and the work begins, you’re working inside a structure that moves — or one that fills up and waits to overflow into the next pipe.

While many organizations are ‘implementing AI’ most are not working through the changes from first principles and often implementing all or nothing. The ones that don’t get around to making sure they break the stovepipes logically are going to run out of time.

This post accompanies the video Why Stovepipe Organizations Stop Working — The Unretired Engineer, April 2026.

Your Charger Was Up. It Just Didn’t Work

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I put together a short take on this — under 60 seconds if you want the headline — and a longer breakdown of the structural issues for those who want the full picture.

▶ Short version (60 sec): https://youtube.com/shorts/zG-VtW2MUDU
▶ Full video: https://youtu.be/KAHuoShGtrs

There’s a number the EV charging industry reports, and there’s a number drivers experience. They’re not the same number, and the gap between them tells you everything about how this program was designed.

Operator-reported uptime: 97–99%. That’s a contractual requirement under the NEVI program — the $5 billion infrastructure buildout funded by the Bipartisan Infrastructure Law. On paper, the chargers are up nearly all the time.

Actual charging success rate: 71%. About a quarter of the time you pull up to a charger, it doesn’t charge your car. In many of those cases, nothing you do will make it work.

These are different measurements. One tells you the charger is technically online. The other tells you whether it did the job. Nobody confused them by accident — the reporting structure was built around the metric that was easiest to meet, not the one that mattered to the driver.

The failure modes are concrete. 60% of failed sessions involve a charger that’s simply out of service — not a user error, not a handshake problem between your car and the network. The unit isn’t working. Hardware degrades, software hangs, payment systems drop, network connections fail. These are expected failure modes for a system like this. The question is whether you’ve built the operations and maintenance infrastructure to catch them quickly. Most of the NEVI deployment didn’t.

New stations run at about 85% success. By year three, the same stations are below 70%. The 2022–2024 installation wave is hitting that curve now. And after year five, operators have no contractual obligation to keep the units running at all — so a lot of that hardware is simply going to disappear.

The regional variation is the tell. Seattle and LA are seeing failure rates around 24–25%. The East South Central region is at 7%. Same national program. The difference is operator discipline — some built real support structures, most didn’t, because the incentive to do so was never in the grant milestones.

This is a solvable problem. The gas station model solved it a century ago: put someone on site, make them responsible for the equipment, give drivers somewhere to wait while they charge. There’s no reason a charging network can’t work the same way. It’s just that the program specification never required it, so it wasn’t built.

Infrastructure problems are always systemic. The hardware is fine. The failure is organizational.

Mark Harris is a systems and mechanical engineer and the author of Stranded in the Stars (Book One, The Sea of Suns Trilogy). He writes about engineering, technology, and the creative life at This World and Others.

Thought for the age

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Governments have no resources. They only have spending power insofar as they can arrogate to themselves a percentage of private production; meaning government spending is a consequence of economic growth rather than an instigator. The same applies to “money.” It’s not wealth; rather it’s an agreement about value that enables the movement of actual wealth. In short, abundantly circulated money is a consequence of production as opposed to an instigator.

Forbes article via RealClearMarkets

OK, if Hornady says it’s so,I guess….

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GunsAmerica’s Digest is a good general guns and ammo site picking up articles and topics from all over. Suggested.

The Truth About Ammo – GunsAmerica Exclusive Interview With Hornady

by JORDAN MICHAELS on JANUARY 23, 2021

The emails and social media messages to Hornady’s customer service team haven’t let up in months;

“Where’s all the ammo?”

”Are you still making hunting cartridges?”

“Have you shut down due to COVID?”

“Why are you making T-shirts and not ammunition?”

“Are you hoarding ammunition?

“Are you selling all the ammunition to the government?”

A quick survey of Hornady’s Facebook page reveals of few of these missives.

So I even muttered under my breath, ‘only the Feds have the resources to buy up all the ammo, real people can’t be buying it all.’ Even if I know that’s bat shit crazy.

It was easy to sense the frustration and fatigue in Jason Hornady’s voice when he sat down with GunsAmerica last week. As the vice president of one of the nation’s largest ammunition manufacturers, Hornady has captained the company through the greatest surge in demand in the industry’s history, …

….they increased production by 30 percent last year, when they usually only grow five or ten percent each year. They ran through their entire inventory 18 times in 2020, when a normal year only sees six inventory turnarounds…. “Anything we make yesterday is shipping today,”

“Normally, a guy would buy one or two boxes. Instead, they’re buying cases,” Hornady said.

“Anyone who thinks that ammo companies aren’t trying to make and sell as much as they can, doesn’t understand capitalism,” he said. “We all like money. Nobody wants to ever make less.”

“It’s shipping all the time. We’re all shipping more all the time,” Hornady said. “The biggest thing is, be patient.”

Bottom line? Hornady and other manufacturers are working as hard as they can to meet today’s unprecedented demand.

So there you have it.

There are some supply restrictions on the input side, primer I hear is a big issue. It’s dangerous stuff and a lot is imported because it’s hard to build plant in the US. But even stuff like cardboard boxes are getting hard to get…So…. be patient, soldier on. Don’t burn through your practice stock too fast.

Point to point sub orbital

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Preparing for “Earth to Earth” space travel and a competition with supersonic airliners From NASASpaceFlight.Com an important and fun source on space activity all around the world not just NASA/US

So this seems crazy but in all honesty it has actually been a thing for a long time. It is mentioned in a lot of sixties/seventies SF not focused on space flight. It was seriously studied several times as a sort of replacement for parachute insertion of military force. And like most of those sorts of efforts there was a commercial concept to support the technology since the folks in the defense industry understood that military programs cannot support a robust industry on its own.

Just look at nuclear power, there was a reason that nuclear power stations evolved as the Navy came to realize they wanted nuclear ships. And there is a reason that small aircraft carriers and non nuclear submarines are anathema to certain parts of the Naval establishment. They know that if non nuclear CVs and SSs became common the industry required to support the nuclear fleet would become unaffordable.

https://thehighfrontier.blog/2016/03/20/straight-back-down-to-earth-a-history-of-the-vertical-takeoffvertical-landing-rocket-part-1/

People have already talked about the DoD buying Starships and using them as bombers / hypersonic weapons platforms. This is just turning the model above around.

Back in medieval times freighters and warships were the same thing, they just tacked on some fighting platforms and went at it with bows, crossbows, catapults, swords, etc. Even the Vikings probably started out as traders though always ready to ‘raise the black flag and slit a few throats’ if that looked like the right business strategy.

Anyway…sorry for the side commentary, it’s evening and I had a good dinner so I’m wandering a bit.

So, again anyway…if you look at it, a craft like the Starship, which has the performance as a single stage vehicle to haul 100 tons 10,000 miles in less than an hour has some attraction on its face….but in reality?

  • To my mind the most value dense time sensitive cargo is people but that’s years out at the least.
  • In the meantime are there cargos that are so time sensitive that something like a starship might make sense?
    • Couriered documents. Maybe
    • Mail. Does not seem like it.
    • Medical supplies only if the ship could land almost anywhere and take off again.
    • High value tech like chips? Maybe but 100 tons is overkill.
    • In fact most of the above are not 100 ton class cargos and frequency and flexibility of landing seem critical.

So dead on arrival? No there are customers who might pay for a a limited 100 ton capability. I think it would need to be anywhere in the world which is more than 10,000 miles but is probably within the capability of a modified Starship with more fuel and less cargo…or maybe an extended tank Starship could do 100 tons out to 18,000 miles (my wag of anywhere in the world from anywhere in the world.)

A somewhat smaller starship could do 10 tons 18,000 miles and probably land at just about any port or airfield as long as you can supply LOx and LNG, which is not that uncommon.

Go back to the start. If you burn a couple of hundred tons of LOx/LNG what is the cost? Does it make economic sense? Is it safe, is it going to be acceptable?

  • Economics:
    • LOx/LNG are in the same $/ton range as Jet fuel, you are burning a couple of times the fuel since you have to haul up the oxidizer with you and pay for that as well so say 4x the fuel bill.
    • The hull is in line with a modern airline.
    • If you can do a trip a day or so with support costs in the same range as a jet, it would appear to me that for the right cargo you could make it work.
  • Is it safe?
    • Well not right now but once the tech is wrung out ?? I think so.
    • the big difference is much higher energies than a jet.
    • But…your exposure time is a fraction of that of a jet over the same range. Accidents in mid flight are rare but generally lead to complete loss. Exposure time is probably the most important difference…advantage Point to Point
    • Ok so the major threat time is when you are near the ground around take off and landing, Those are shorter for the Point to Pointer.
    • And to me the difference in energy involved is immaterial…dead is dead and most of the time accidents of any magnitude in those phases are not survivable.
    • Accidents on the runway often have survivors but that is eliminated in the Point to Point case…up and down…no in between…
  • Acceptable?
    • Only time will tell, my guess is YES.
    • It will be a bit like the glamor days of the early airliners I would expect point to point for certain segments to be a real elite punch card
    • Especially as near earth space becomes an exotic but achievable location.

Exciting times indeed.

Grid growth and wealth

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A recent article about the impact of electric grid power expansion in India and Africa peaked my interest and so reviewed some of the papers on the topic spanning decades. While I obviously can’t declare definite conclusions they seem to point to problems with base assumptions made by advocates of broad electrification.

The blog post was a quick review of a couple of recent studies discussing the expansion of electric power to villagers in rural India and Kenya. The studies are very different looking for different things. But they both show that the expected economic boost from the build out of the electrical power grid has not arrived, at least not yet, and some of the data indicates a net negative impact.

In general it appears that the cost of the service is too high to pay off for these poor farmers/villagers is modest at best and in some ways is a net negative.

This is contrary the experience in places and times, most specifically the US where rural electrification was a vast boost to the economy.

The situation needs study but the thing that comes to my mind is that the served populace needs a certain amount of wealth to make use of electricity.  On its own electricity does nothing, its what it enables that is the important thing.  Many of the areas that have already electrified were both relatively wealthy and had existing in service infrastructure that could be made more productive powered by electricity rather than the prior human, animal, steam or wind power.

Today the urge is to spread the grid out into the poorest rural areas, these are subsistence farmers not commercial farmers and these people have little or no infrastructure to make more productive. Not to say that they cannot move up the chain with time but the move from subsistence to commercial farming is non trivial. Transportation infrastructure and marketing/sales infrastructure are critical while cell phones are a huge enabler the rest of the picture is still fuzzy at best.

Also one has to wonder if this uplift isn’t facing a very stiff counter wind from the global economy. It is very cheap to move products in bulk across the major transport networks it could be that farmers, selling a local staple product will find it very hard to compete even if the distance to market is relatively short.

Though this is only one data point, it seems to point out that implementation of small scale solar/battery systems for light and telecom are the most important stepping stone for these subsistence farming communities.  That the improvement of transportation infrastructure might be of value before a major build out of electrical grids.

Limitations of Pay Pal and how it’s side stepping them

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I’ve used PayPal for several years now on my iDevices and PC’s, mostly for paying a few monthly subscriptions and moving money between bank and credit union. It also enables me to pay for my minor excesses out of my ‘monthly money’ rather than the family general account. I have bought a couple of big-ticket ‘toy’ items using the credit account and then paying back over a few months, or better saving up then using PP to buy the lusted after item over the net. I think PP is a useful service and I trust it more than I do big bank credit card services though that’s a little player vs. mongo player preference rather than real in-depth analysis.

Pay Pals weakness has been the network effect. In general the more members any network has the more useful it is. While PP is pretty widely spread these days it’s not getting bigger quickly enough and I have continued to use other methods of paying for most things.

PP has solved at least part of this growth problem by moving into the credit card world. Establishing a PayPal Master card in place of its own credit account. This enables users to pay through the immense existing credit card infrastructure but use the PP ‘back office.’

In one sense it’s a bit sad that PP had to just become another credit card. But they do provide a lot of other services and a way to manage and move your money around in the banking system.