Aptera Motors makes EV cars that run on solar. According to the Wall Street Journal: “Aptera Motors needed automotive-grade solar panels that could conform to the sinuous curves of its radical new EV, but the Carlsbad, Calif.-based automaker found there weren’t any good options. So it decided to make its own. In the process, it kicked off a cottage industry of U.S. companies aiming to make everyday vehicles solar-powered.” One of its first customers is Telo Trucks, “maker of a 500-horsepower mini electric truck estimated to ship next year.” The reason that Aptera Motors decided to vertically integrate was:

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Question

Aptera Motors makes EV cars that run on solar. According to the Wall Street Journal: “Aptera Motors needed automotive-grade solar panels that could conform to the sinuous curves of its radical new EV, but the Carlsbad, Calif.-based automaker found there weren’t any good options. So it decided to make its own. In the process, it kicked off a cottage industry of U.S. companies aiming to make everyday vehicles solar-powered.” One of its first customers is Telo Trucks, “maker of a 500-horsepower mini electric truck estimated to ship next year.” The reason that Aptera Motors decided to vertically integrate was: Access PDF Here: Click to open: Download Solar-Powered Cars and Trucks Are Almost Here - WSJ.pdf Manage Alternates单项选择题

A

Develop a market

B

Strategy

C

Create market power

D

Market failure

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BlackTom AI · Accepted Answer

Market failure occurs when private markets fail to supply a good or service at the required quality, quantity, or specification, forcing firms or governments to intervene. Relevant concepts here are vertical integration (a firm bringing upstream or downstream activities in-house), types of market failure (missing suppliers or inadequate product offerings), and transaction-cost considerations (avoiding delays, poor fit, or opportunism by internalizing production).

Step-by-step reasoning:
1. Observation from the WSJ quote: Aptera “needed automotive-grade solar panels that could conform to the sinuous curves” but “found there weren’t any good options.” This is a concrete instance of a missing or inadequate supply in the market.
2. With no supplier meeting the technical requirements, procuring externally would create risks: design incompatibility, long lead times, quality shortfalls, and potential hold-up problems. These are classic transaction-cost and supply-side market-failure issues.
3. Aptera’s decision to “make its own” panels is vertical integration: instead of relying on a functioning market for conformal automotive-grade solar panels, the firm internalized production to secure the needed input.
4. The motive implied is corrective: to remedy the absence of suitable suppliers so their product can be built as designed. That matches the definition of market failure—private markets not delivering a required input.

Why the correct answer is “Market failure”:
Because the primary cause was the absence of suitable products in the market (a supplier-side failure), prompting Aptera to produce the input itself to overcome that gap.

Why other choices are incorrect:
- “Develop a market”: implies purposeful creation of demand or supplier ecosystem; Aptera’s immediate step was to produce the panels, not to cultivate an existing supplier market first.
- “Strategy”: too generic—while vertical integration is a strategic move, the question asks for the reason behind it, not merely naming it a strategy.
- “Create market power”: vertical integration can create market power, but that is a potential consequence, not the stated reason; the WSJ quote emphasizes lack of suppliers, i.e., market failure.