Blog Tesla Competition: Culture Eats Strategy!

[Sean Wagner]

There's an entire, vital stratum of the automotive industry missing in this conversation, and that's the suppliers.
Some of them are a lot more far-sighted than others, but many are investing in parts of the electric value chain.

Some very different examples:

Bosch, the world's number one, has a CEO who promised to deliver a decision regarding a big battery factory at the end of 2017. Then at the beginning of 2018. And now, it's moving back again, with more uncertainty mixed into the pronouncements. Nevertheless, Bosch is busy designing vital components for electric vehicles.
Bosch's numbers: 400'000 workers, 78 billion Euros sales, 5.3 B Euros EBIT

A "smaller" German supplier, Scheffler, is investing 1 billion Euros [a very significant amount of money for them] till 2020 towards electric mobility development. See:
Schaeffler: Mit E-Mobilität "so schnell wie möglich" Geld verdienen - ecomento.de

Mahle Kolben [12 billion Euros turnover] started investing very early, causing some wonderment.
Quote form below: "Anders als viele Konkurrenten aber hat Firmenchef Stefan Wolf vorgesorgt. Schon seit mehr als 15 Jahren erforscht ElringKlinger neue Antriebsformen wie Brennstoffzellen und Batteriemodule:"
Folgen der E-Mobilität - Harte Zeiten für die Auto-Zulieferer

Or take GKN from the UK, they're investing in electric motor production in China. See:
eDrive-China | Our Thinking | GKN Driveline | Our Divisions | GKN Group


Missing the supplier link is easier in the US:
Top automotive suppliers 2016 | Statista

 

[Axtrader]

Great article... I can’t wait to see one of the legacy car manufacturers become the next Kodak, Blackberry or Nokia.

 

[ejwu]

I think the only reason why no other companies are doing it is profitability. If they think it's not profitable, they won't do it.

 

[PismoPat]

The article ignores that the Jaguar i-Pace and the Audio e-Tron will be available in 2018 (certainly in Europe) and that Mercedes and Porcshe will come with models in 2019. And at least 3 other brands will release cars one can buy by the end of 2019. When I replace my model S by the end of 2019, given I live in Belgium, where some friends of mine are working in the plant where the Audi e-Tron will be assembled, I'll definitely give that car a serious look ! And I quite liked the Jaguar XF I had prior to my Tesla, so I'll sniff out the i-Pace as well... At this point it looks that the only reason to buy a Tesla might be the AutoPilot and the Supercharger network. Given the other brands now also seem to get serious about building their own Supercharger network by 2020, I sincerely hope that Tesla will evolve the S and X by the end of 2019 (AP functionality, facelift, larger battery, ... )

Without a supercharger network, every other EV is a commuter car. If you can't charge in 20 - 30 minutes and be on your way for the next 200 miles of a trip, you have a commuter car.

 

[mberta74]

Great article... I can’t wait to see one of the legacy car manufacturers become the next Kodak, Blackberry or Nokia.

It's starting..... I just saw this article in Yahoo Finance section

For the first time in Europe, Tesla's Model S has outsold traditional high-end models from established European brands. In 2017, more buyers chose the Model S than a Mercedes-Benz S-Class or a BMW 7-Series, reports Automotive News. Audi was also left behind by the relative newcomer brand. This has happened earlier in the United States, but it's the first occasion when Tesla has topped the sales charts in Europe.

The Model S's yearly European sales rose by 30 percent to 16,132 in 2017, according to market research company JATO Dynamics. The Mercedes S-Slass, which is available electrified but not yet fully electric, managed a 3-percent rise to 13,359. BMW's 7-Series dropped 13 percent to 11,735. In the States, Tesla sold 28,800 Model S models, easily topping Cadillac's 16,275 XTS sales, for example. Quoted by Automotive News, JATO Dynamics analyst Felipe Munoz said, "This is an alarm for the traditional automakers such as Mercedes. It says a smaller but smarter brand such as Tesla can beat them at home."

 

[claudelaval]

The article ignores that the Jaguar i-Pace and the Audio e-Tron will be available in 2018 (certainly in Europe) and that Mercedes and Porcshe will come with models in 2019. And at least 3 other brands will release cars one can buy by the end of 2019. When I replace my model S by the end of 2019, given I live in Belgium, where some friends of mine are working in the plant where the Audi e-Tron will be assembled, I'll definitely give that car a serious look ! And I quite liked the Jaguar XF I had prior to my Tesla, so I'll sniff out the i-Pace as well... At this point it looks that the only reason to buy a Tesla might be the AutoPilot and the Supercharger network. Given the other brands now also seem to get serious about building their own Supercharger network by 2020, I sincerely hope that Tesla will evolve the S and X by the end of 2019 (AP functionality, facelift, larger battery, ... )

''At this point the only reason to buy a Tesla might be AP and the SC network..'' ..Only that? Tesla is the only (serious) EV maker that doesn't rely on anything else than EV. Jaguar? Never has been a reliable car no matter who built it. As far as Porsche yes they will built the Mission-e but Porsche is Porsche and it will be very expensive no matter what. As the SC network I really don't believe it the best they gonna do is put some in their dealership...time will tell

 

[claudelaval]

Without a supercharger network, every other EV is a commuter car. If you can't charge in 20 - 30 minutes and be on your way for the next 200 miles of a trip, you have a commuter car.

Exactly.

 

[AmpedRealtor]

Culture doesn't trump quality, and that is where Tesla is having some of its biggest problems.

 

[PismoPat]

Culture doesn't trump quality, and that is where Tesla is having some of its biggest problems.

I had not noticed on my 2017 75D. Is it just that you hear about Tesla problems more because of the active social media and T owners are more tech savy? I have no more issues on my S than I had on my Ford Taurus at this point in ownership.

 

[Lucky_Man]

[QUOTE="What happens when everyone in a neighborhood plugs in their Evs and they start blowing out the neighborhood transformers?"[/QUOTE]

Since most residential neighborhoods that currently (pun intended) have Teslas, use 40 amp circuits (a few with dual chargers have 80 amp), the same thing will happen when they all turn on their electric dryers or ranges at the same time. Nothing. Electricity providers (mine included) are already planning upgrades adding additional transmission capacity, in addition to adding 'smart' capabilities with energy storage facilities.

My impression after reading your comment? You don't like Tesla? OK. Don't buy one.

I feel there's more than enough negativity in America today.

 

[dhrivnak]

I have to agree. The Bolt is a great car, but I paid more for a Model 3 because of SuperCharging. There are so few CCS charging stations the Bolt can't take a trip and I do not see that changing any time soon. Where the SuperChargers are already built along the corridors we need.

 

[dandelot]

I suppose everyone here has read these, but the culture aspect gets perhaps its best treatment in Clayton Christensen's book "The Innovator's Dilemma" (1997) and, for the GMs etc firms the advice in "Competing Against Luck" (2016?) suggests how to avoid the trap.

 

[pdq]

That article was written by a self-described EV advocate versus a neutral analyst, therefore his credibility is at question.

Will some existing car companies run into snags in getting EV's into production? Heck yeah!!! I just hope that those snags aren't as profound as the ones that Tesla is currently grappling with. The worst mistake that anyone in a form of competition (sports, politics, business) can make is to convince themselves that they have no competition.

Don't wait on autopilot getting remarkably better, as Tesla doesn't make it. That software is made by an Israeli company that sells it to any company that wants to buy it and they all works the same, beauty marks and warts combined. I've recently driven in a 2014 MB, a 2018 Volvo, and about 3 or 4 other late-model high end cars and it all works the same. This applies also to Adaptive Cruise Control, which MB calls Distronic. Distronic even has the same knob on the end of the control stalk with 7 positions to adjust how much of a gap you want to make -- this isn't a Tesla innovation.

Similarly, the problem I've had with my 2015 P90D since day 1 of the back-up camera not shutting off when you go from R to P? Guess what, my 2014 MB E class does the same thing. It's all the same stuff, versus Tesla specific.

I hope that Tesla succeeds, but if they go around convincing themselves that no other car company on the planet can compete with them, then they are doomed, the same way as Kodak, thinking that no one would want digital cameras over film.

 

[Peter Lucas]

That article was written by a self-described EV advocate versus a neutral analyst, therefore his credibility is at question.

Will some existing car companies run into snags in getting EV's into production? Heck yeah!!! I just hope that those snags aren't as profound as the ones that Tesla is currently grappling with. The worst mistake that anyone in a form of competition (sports, politics, business) can make is to convince themselves that they have no competition.

Don't wait on autopilot getting remarkably better, as Tesla doesn't make it. That software is made by an Israeli company that sells it to any company that wants to buy it and they all works the same, beauty marks and warts combined. I've recently driven in a 2014 MB, a 2018 Volvo, and about 3 or 4 other late-model high end cars and it all works the same. This applies also to Adaptive Cruise Control, which MB calls Distronic. Distronic even has the same knob on the end of the control stalk with 7 positions to adjust how much of a gap you want to make -- this isn't a Tesla innovation.

Similarly, the problem I've had with my 2015 P90D since day 1 of the back-up camera not shutting off when you go from R to P? Guess what, my 2014 MB E class does the same thing. It's all the same stuff, versus Tesla specific.

I hope that Tesla succeeds, but if they go around convincing themselves that no other car company on the planet can compete with them, then they are doomed, the same way as Kodak, thinking that no one would want digital cameras over film.

Interesting about the widespread use of "autopilot" on other cars. That is good.
Tesla does NOT think that they will escape solid competition. Musks self stated mission is get other car makers moving in this direction. But Tesla has a huge head start. Particularly with the supercharging network. Without that, all other electric cars are considerably less marketable.

 

[mrbulk]

I'm thinking the Osborne Effect might have something to do with their odd, in-the-near-future advertising wording as well. You cannot really say that your new electric cars are coming out for sure and that you'll be making them by a specific date, because that could cause potential buyers to wait and thus the ambiguous wording.
Yet if these legacy automakers Do Not make competitive EV's, their market share will inevitably shrink; even if not here in the U.S., then definitely in EV-friendly markets like China, Norway, etc.
They're between a rock and a hard place, especially if enough consumers adopt and a tipping threshold becomes obviously inevitable.

 

[tropical1]

This is a great article and needs to be posted mainstream! It gets really old hearing about how X company is going to have a car in 2020 that will beat Tesla. What a joke, what do you think the Model S or Model 3 will be capable of in 2020. Tesla is not sitting still they innovate faster than any other car company. It is crazy, but Tesla still really has no credible competition in EVs and EVs are definitely the future.

 

[ABCTG]

Since most residential neighborhoods that currently (pun intended) have Teslas, use 40 amp circuits (a few with dual chargers have 80 amp), the same thing will happen when they all turn on their electric dryers or ranges at the same time. Nothing. Electricity providers (mine included) are already planning upgrades adding additional transmission capacity, in addition to adding 'smart' capabilities with energy storage facilities.

My impression after reading your comment? You don't like Tesla? OK. Don't buy one.

I feel there's more than enough negativity in America today.

Your impression is wrong.

I have a deposit for my Tesla since 2016

Since when was asking a question being negative?

By the way, you did answer the question, so how hard was that?

It's great that the power company is being proactive.

My impression after reading your comments. You don't like being realistic. okay. don't read my comments.

 

[ABCTG]

Don't wait on autopilot getting remarkably better, as Tesla doesn't make it. That software is made by an Israeli company that sells it to any company that wants to buy it

Tesla and Mobileye parted ways due to not seeing "eye to eye."

Tesla Breakup With Mobileye Turns Ugly

 

[Jim R]

Given that most charging should be done at non-peak times, when power now moving through the neighbourhood transformers is lowest, means there is a lot of underutilization of the grid at those times. After all, the grid handles peak power consumption very well now.
And I am sure Tesla easily could monitor when the car is plugged in and drawing power, and the geographic location of the car. It would be a short jump to the ability to smooth out charging of all the Teslas in a neighbourhood to prevent jumps in charging by all the cars at once, yet still allow fully charged cars for everyone by 6 a.m. Extrapolate that ability being a requirement for all ev’s by 2025 and a tie in to the grid, and it could be done. Within the last few years, I have been offered a new programmable thermostat that would allow the utility to adjust the temperature setting of our central air conditioning by a few degrees at the few times of the year that the grid is stressed during a heat wave. Not too far fetched to see a similar thing being done for ev’s.

That "NEW programmable thermostat technology was in a house I bought in 2008 in Ottawa Ontario Canada. So not so new, but still a good thing I suppose.

 

[timreeser]

Thats not what I have heard Tesla saying. At 2500/week Model 3 makes money, and at 5000/week Tesla as a whole will be showing profit. (non-GAAP). Maybe also GAAP profit sometime during the year.

That was Q3 2017. Read their year-end report and 10k. They have updated those statements to correspond with the much slower ramp, and more realistic battery costs in lower volumes.