One of our readers recently let me know that he had started a new site, Teslamondo. I absolutely love it. It packs Tesla news in short but useful and insightful posts that are framed with great humor and originality. Furthermore, the posts often integrate multiple stories, including stories from years back. Clearly, the author has been following Tesla for a long time.
I recommend that you just head on over there and subscribe to the site. However, as an appetizer, here are a few recent articles (links to the originals on the headings):
Assuming Tesla has invented a better mousetrap, we’ll soon see emulation, if not imitation. That means vehicles will have very few internal organs. That means very little need for maintenance. That means very few repair shops. You doubt Criswell? Consider this analogy: If you found a way to shed 80 percent of your internal organs with no downside but plenty of upside, how long would it take before others did the same? Imagine a race of humans with only a brain, stomach and skeleton. What would become of the health care industry? Criswell declares: We are all interested in the future, for that is where we are going to spend the rest of our lives …
There goes another rubber tree plant. Remember the unassailable car dealer lobby and its unassailable grip on public policy? Tesla is pushing it back, inch by inch. Not with outspending or outmaneuvering, but with a quiet tsunami of public support. The recent folly in New Jersey, in which US Pres. Chris Christie* attempted a sucker-punch but only punched himself in the gut, has made it amply clear that the public considers Tesla cool but car dealers — and any politician too cozy with them — uncool. So now we see a new attitude in Ohio, Texas, and New York. Rather than banning Tesla, lawmakers are showing dealers “the hand” and giving Tesla a voice. It looks like new reality in the US will be factory-direct sales for Tesla, middlemen for the rest of the auto kingdom. Unless, of course, other automakers decide that the dealer community is wrong about its indispensability and start to follow Tesla’s lead. So goes the snowball nightmare among car dealerships. My take? It won’t happen, simply because no automaker has the gonads to start a round of civil wars.
*Hopes to be, that is.
The NHTSA declared today that it found no defect in the Model S, after investigators spent the past few months staring at the undercarriage, confused. For investors, this no-defect announcement swats the mosquito that’s been buzzing around the room since last fall. An elemental design flaw would have sent Tesla back not just to the drawing board, but to Staples — to buy a whole new drawing board. Tesla says it’s now installing a new anti-scare apparatus on the Model S at the factory, and will offer retrofits on request. Like the original Tesla shield from the Cold War, this is all about phantom risk. Unfounded spooks tend to dog us in the United States, you might have noticed. Consider the recent Toyota acceleration farce, the Audi acceleration farce of the mid-80s and the Chevy Silverado gas tank farce of the early-90s. We’re not award-winning drivers, but we’re repeat gold medalists in the 500-meter worry and the 1000-meter sue.
Tesla now has over 12,000 orders, with deposits, for an abstraction called Model X. These aren’t $100 deposits. Many are $40,000. That’s a lot of interest, in more ways than one. Musk recently said he’s still tinkering with the design of the Model X. It’s a “damn hard” challenge, but apparently nobody doubts he’ll solve this Rubik’s Cube. My take: Styling may be less and less important as Tesla’s brand momentum straightens the curves and flattens the hills. Three burning questions remain:
- Roof rack?
- Side cameras instead of mirrors?
- When Musk et al said the falcon wing doors will make it to production, did they REALLY, REALLY, REALLY, REALLY mean it? If the curtain rises on a production Model X and those falcon wings open, it will nudge Tesla fans into the O-zone, as in Orgasm. Tesla will have drop-kicked yet another industry edict: ”Thou must issue ballsy concept cars to generate buzz, then castrate them on the way to production.”
When Toyota launched the Prius stateside in 2000, it had a negative profit margin, anonymous styling, zero winter traction thanks to primitive low-rolling-resistance tires. And most dauntingly, the Prius had big-name competition right out of the gate. Honda simultaneously opened its mighty Batcave and out came …. a tiny cockroach called the Insight. Well, even though the Insight proudly bore that trusted “H” on the front, it smacked of a rush job, a pre-term delivery that needed another few months in the Batcave, a science experiment that might have been spotted buzzing around Mass Ave. in Cambridge with a manic electronics professor behind the wheel. In short, it made the Prius look and feel like a Bentley by comparison. The Prius required far fewer compromises for similarly stellar fuel economy and green cred.
It’s now 2014. Toyota’s first-round advantage prevailed throughout this heavyweight match. Honda just announced it’s killing the Insight because the Prius has grown to a family of cars in three sizes and three excitement levels: low, lower and lowest.
Compared with the Prius at the turn of the century, the Tesla Model S in 2014 has similarly wayward competition — this time from BMW and GM, and is similarly pregnant with a family of sorts. Take those two ingredients and then add a heaping tablespoon of muscle-car EXCITEMENT to the green-car formula for the first time in automotive history, excepting the niche-bound Tesla Roadster, and you get an expensive indulgence without guilt.
But, say worriers, Tesla is no Toyota. It’s a mouse in a herd of mastodons. It can’t lean on more profitable models while the market digests the Model S. Tesla doesn’t even have household name status yet. Ask the man on the street if he’s ever heard of Elon Musk, and here’s what you’ll get.
* If the man is over 45 years old: “No.”
* If the man is under 45 years old: “No.”
* If the man is under 18 years old. “What grade is he in?”
But Tesla arguably has some advantages over Toyota circa 2000. First, it sells aspirational products that appeal to more of the brain than the prefrontal area of the frontal lobe. Second, it has much more government help, from the seminal loan to the ongoing tax credits to the Tesla ban in some states. Yes, bans help. Telling consumers they can’t have a product is the best possible endorsement and free publicity to boot, especially when a tag team of untrusted car dealers and politicians concocted the ban. And third, Tesla’s relatively small size could quickly go from disadvantage to advantage. Tesla is hyper-reactive. We’ve seen the company change its policies when “others were right and we were wrong.” And we’ve seen it issue over-the-air updates to instantly tweak its cars. Returning to my mouse/mastodon analogy, it’s not hard to imagine such a nimble mouse causing much consternation and even some mastodon injuries while it darts around their feet in the Model S, a.k.a. the new Prius, a fully-assed product among half-assed competition.
Now, regarding those upcoming Toyota and Honda fuel-cell cars …
Good car salespeople resist the temptation to disparage the competition. It accomplishes two things, both bad: It makes you look like a lowbrow rookie, and makes the customer MORE interested in the fruit you’re forbidding. So on a larger scale, it’s a bad idea for an automaker to diss another. Yet that’s exactly what the CEO of Chinese automaker BYD did with Tesla. By calling the Model S a “rich man’s toy,” BYD’s chief Wang Chuanfu set the tone for BYD’s salespeople. Surely they’ll repeat the CEO’s mantra in showrooms. This is good news for Tesla, which has priced the Model S in China identically to the US model excepting tariffs etc. That’s unheard-of. Usually automakers boost Chinese pricing simply because they can. So when you couple Tesla’s lowball pricing with lowbrow competition, what do you get? A chance to buy a rich man’s toy on the cheap. This helps the Tesla scale in China:
- It’s made in America. Even China doesn’t like “Made in China.”
- It’s high-end. China likes frontin’, as evidenced by its infamous luxury-car knockoffs.
- The same attributes helping it in the US (crashworthiness, performance, tech showcase).
- Tax credits for buyers.
- Anyone can buy a BYD, while Tesla is lumped with gas cars in Beijing’s car-rationing lottery intended to ease pollution.
- Lower price.
- Backed by Warren Buffett, the rich guy whose name nobody can spell correctly.
Tesla’s foes in the US are going a step beyond dissing. They’re banning! That’s even better. Banning a product is the ultimate endorsement and instantly provides rocket fuel to its allure. Think of some outlawed movies, videos, music, advertisements etc. over the years. If you weren’t interested before the ban, you were interested afterward and surely found a way around the ban. Tesla’s Q2 report will show the fruits of these high-profile battles as fence-sitters vote with their wallets.
Edmunds.com refers online car shoppers to dealerships and gets paid for it. Nothing wrong with that. But it means Edmunds is a macro car dealer. Which means Edmunds is yet another business potentially disrupted by Tesla. If factory-direct selling becomes de rigeur, what would that mean for Edmunds? Maybe manufacturer-run stores would employ Edmunds the same way. But maybe not. And no business likes “maybe” anything. So it’s no surprise that John O’Dell, green car editor for Edmunds, would hope Tesla adapts instead of disrupts. What’s surprising is that CNN would give O’Dell an open microphone for an opinion piece called “Why Tesla should stop fighting auto dealers.” When I used the comments section to point out the paid relationship between Edmunds and auto dealers, I generated about 500 votes-up in one hour. Then CNN deleted the comment. I re-posted. CNN deleted again and so on:
Needless to say, you need to follow Teslamondo.
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