When you’re worth several billion dollars and one of the richest people in the United Kingdom, you have the freedom to invest in whatever you want. As the co-founder of Virgin Group, Richard Branson might have one of the most diverse investment portfolios, owning everything from a megastore chain to a commercial space flight company. If you can think of it, Virgin Group is probably involved in it some way or the other. Virgin’s next step may be less radical than space exploration, but it could still prove very interesting. Branson told Bloomberg this week that a Tesla competitor may be just around the corner.
“We have teams of people working on electric cars,” Branson said. “So you never know — you may find Virgin competing with the Tesla in the car business as we do in the space business. We will see what happens.”
It’s not an official announcement by any means, but coming from Branson, it’s a lot more believable than if someone quoted an anonymous source from inside the company. Competing with Elon Musk to sell electric cars isn’t such a wild idea though. SpaceX and Virgin Galactic already compete with each other, and it isn’t hard to imagine that a bit of a rivalry has developed between the two billionaires. When you have the amount of money that the two of them do, why not follow up a competition in outer space with a competition on American roads?
While egos and goodhearted competition may be at play here, Branson is already invested in electric cars – but his are for the track, not the street. Formula E is a Formula One spinoff that uses all-electric racecars, and one of the teams is owned by Virgin.
While teams are required to all compete with the same car currently, Formula E will allow teams to begin modifying their cars next year. Racing has a long history of technology trickling down into road cars, and you can expect the same to happen with electric cars. As Formula E teams invest more money in research and development, they’ll likely discover ways to advance battery and motor technology that will find their way into road cars. With a Formula E team already part of Virgin Racing, it actually makes a good deal of sense for Virgin to branch out into making road cars.
The cost of bringing a new car to market in the United States these days is astronomical, but if anyone has the money to do it, it’s Richard Branson. He loves going big, he loves taking risks, and he loves trying to break world records. Why not try to break into the electric car market?
Much like the early days of the automotive industry, competition breeds innovation. That’s true on the racetrack, and it would also be true on the road. While most automakers are developing electric cars, Tesla may as well own the market. Nissan has seen a lot of success with the electric Leaf, but the Model S offers so much more range and such a vast network of Supercharger stations, it can work as someone’s only car. The Nissan Leaf, on the other hand, needs to be a second car for most people.
It helps that by nearly every standard, the Tesla Model S isn’t just good for an electric car, it’s actually a good car. With the Model X SUV coming soon and the Model 3 sedan coming a little later, Tesla is set to break the electric car market wide open. Right now that looks like a great thing, but without serious competition, it could lead to stagnation. With the tie to Formula E and plenty of money, Richard Branson could offer an alternative to Musk’s Tesla and force both to continually improve, which could only be a positive for the electric car industry as a whole.
Hopefully though, if Branson does decide to develop an electric car, the new venture doesn’t go the way of Fisker Automotive. There are plenty of obstacles to stop companies from bringing a completely new car to market, and even then, there’s no guarantee that the car will sell and be profitable. If Virgin can afford to get into space, then why not the car market as well? Now all Virgin has to do is figure out what they’d call it.
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