ICE Manufacturers Need To “Adopt The Tesla Principle” To Stay Relevant

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Originally published on EV Obsession.

The noted director of automotive research at the University of Duisburg-Essen Ferdinand Dudenhöffer recently published an article in a Swiss paper that argued that the major ICE (internal combustion engine) vehicle manufacturers will have to “adopt the Tesla Principle” in order to stay relevant.

The forum member “LST” on the Tesla Motors Club forum (who first posted a link to the article in question) noted in the recent discussion that this is the first time that Dudenhöffer has acknowledged Tesla as being a serious competitor. I suppose that it’s getting a bit hard at this point to deny it.

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Here are some excerpts from the article in question run through an online translation program (thanks to “sandpiper” for this):

Switzerland is certainly not the most important car country in the world. But at the Switzerland trends can be identified. The Swiss do not have private carmaker and are therefore “neutral”, in terms of technologies. The neutrality of Switzerland makes the country interesting to observe trends unadulterated. This is shown at 4 different forms. First, there are no favors for diesel fuel, such as in Germany and many other European countries, but the fuel tax per liter for gasoline and diesel fuels in Switzerland (are) equal. Therefore, Switzerland has not the extreme diesel boom as in other European countries observed. Second, there are no subsidies for electric cars. This must be the vehicles in the “hard” competitive with conventional drives prevail. A Norway- or Holland effect, in both countries are electric cars subsidized by the state, so do not exist. Thirdly, Switzerland is a market for high-quality vehicles. For high-value vehicles, new technologies are usually used first. The Switzerland is thus also a kind of test market for the marketability of future technologies. Whether Rolls-Royce, Ferrari, Porsche and Audi, Mercedes, and BMW – have the Swiss by their high national product per head significantly higher levels of premium as and luxury vehicles of rest Europe. Fourthly, Switzerland does not have a car maker. In countries such as Germany, the propensity for new technologies is “overestimated partly”. The domestic carmakers – such as the VW brand – bring up to 30% of new cars as own admission in the market. So certain are vehicles artificially “pushed”. This distortion there is in Switzerland not.

…In 2015, the model Tesla S has with 1556 new registrations, the Swiss dominated full-size cars. From Model S in more sold than on Range Rover (1065), 911 (1027), Porsche Cayenne (894), Mercedes S-Class (776), Audi Q7 (759), BMW X6 (668), Mercedes CLS (500), Mercedes ML and GLE (489), the BMW 7 Series (192), Porsche Panamera (168), the Audi A8 (100) etc. Record for Tesla is impressive and for the upper-class manufacturer rather “sobering”. The entire Mercedes S-class – including its plug-in hybrids – sold worse than the one Tesla model. Even the classic Porsche 911 with its many body styles can not get Tesla.

The market share of Tesla’s Switzerland to 0.7% in January 2016 and increased. That sounds like a little, but is relativized when the market shares of other car brands to look. As for the classification: In Germany in 2015 have the brands Honda (0.66%), Land Rover (0.57%), Jeep (0.46%), Subaru (0.2%), Jaguar (0.16 %), Alfa Romeo (0.1%) all less market shares achieved as Tesla with a single model in January 2016 and in Switzerland. Here, the Model X has not yet been delivered in Switzerland. What incidentally applies to Switzerland, may also transfer similar to the United States. 22,635 Model S cars Tesla has sold in 2015 in USA. The Mercedes S-class was only sold 21,934 times, the Audi Q7 only 18,995 times and Porsche Cayenne (16,474) and 911 (9898) as well as BMW 7 Series clearly under Tesla. However, there are in the US government support for the purchase of electric cars. Therefore, the image is “distorted”.

…But the customer demand in the neutral test market Switzerland is impressive… The newcomer Tesla is the only one who so far the right jump has made ​​in the electromobility. The strategy of traditional carmaker – to bet on all horses, ie diesel, hybrid, plug-in, fuel cell and a few high-reach poor electric cars seems to have failed.

Interesting points. Similar to ones that we’ve made a number of times here at EVObsession, but of course hearing such comments coming from someone like Dudenhöffer has its own implications. I wonder what the CEOs at some of the aforementioned companies thought when hearing about this?

Those that speak the language, or are curious to see the original regardless, can find it through the TMC link at the top of this article.

Reprinted with permission.

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

James Ayre has 4830 posts and counting. See all posts by James Ayre

34 thoughts on “ICE Manufacturers Need To “Adopt The Tesla Principle” To Stay Relevant

  • Switzerland’s opinion is 100% garbage. Your opinion doesn’t count when your country’s core wealth is predicated on hiding other rich people’s money.

    Do something useful for the global economy and then you get an opinion.

    • Question:

      Is not “hiding other rich people’s money” “something useful for the global economy”?.

    • What you are criticising, without any merit at all I might add, is not a Swiss opinion. It’s the analysis of a well respected German automotive industry researcher looking at the Swiss market and drawing some conclusions from it. Your ad hominem attack on the Swiss as a whole, for something that is hardly even done any more since the Swiss banking secrecy was more or less abolished, and completely unfounded dismissal of ‘an opinion’ which isn’t theirs, comes across as uniformed, xenophobic, opinionated and generally stupid.

      I suggest you try again. Maybe address the actual content of the analysis instead of just dismissing it because of your opinion about a country and/or its people?

      BTW: I’m not Swiss.

      • I think he was baiting you. Where they get their money is irrelevant, as it would be here if such a study were done. In California, corrupt local politicians might drive a Tesla if someone else pays for it…
        The essence of the story is that Tesla produces one good car, whereas the others produce a bag of mixed products, some of which appear to compete for now.
        My Spark EV is the best car I’ve ever owned, in terms of fun, reliability, practicality, cost, and just the good feeling of how sensible it is. Within days of having it I knew that converted, steel bodied econoboxes wouldn’t do it for successive generations and there should be a motor on each wheel.
        And anyone other than GM should be selling it. Arranging a lease through the Chevy dealer ended up at the BBB, mostly because they had no interest in electric cars, and knew nothing about them, misinforming me multiple times through both ignorance and deceit.

    • C’mon, they make good knives and chocolate! Plus, somebody’s got to put all them holes in their cheese.

      • They do have a reputation for staying out of the messy stuff. They tell me it’s because they’re surrounded by mountains, a natural defence which prevented them from being invaded for centuries.
        Things turned out differently in other mountainous areas around the world however, so that doesn’t hold water…
        The concept that expensive cars are made much better doesn’t hold water either……GM and the others have always sold the same car with different finishes for a variety of prices, the maintenance of same netting them more $$$. Pontiac brake pads vs Cadillac brake pads.
        I like the new ‘leather-like’ materials. The few I’ve seen are nicer, more durable, better looking, easier to clean and maintain, animal friendly, supposedly environmentally acceptable, all the good stuff.
        As for “distracted” driving which means anything other than concentrating on traffic around you, I’m abhorred at the current situation. Very bad and getting worse quickly with all the gadgets, most of which are used to digitize involuntary, neural hiccups of gas. Until you own a self driving car, do yourself and everyone else a favor and just drive. The timing for us couldn’t be better. I’ve witnessed what happens when old people drive until literally, they can’t anymore. That last run is always memorable.
        I’m going to have a solar charged, Tesla X or similar that pollutes nothing, costs nothing for fuel (after equipment costs which are going into the house anyway) and takes me where I want to go when I’m 70. Literally. So who else is making a car like that?

    • Switzerland’s financial services represents 11.6% of GDP. In the UK it is about 10% and the US the figure is around 7.2%. If Switzerland’s opinion is exactly 100% garbage, neither more nor less, then we can calculate that the UK’s opinion is 86.2% garbage and the United States opinion is 62% garbage. With financial services at 16.6% of GDP, Hong Kong’s opinion is 143% garbage.

      • And Luxembourg, which basically consists of a bank and a false teeth factory, has an opinion that is 310% garbage.

        • And I know what you are thinking, but the Luxembourg false teeth factory was not made so their bankers could lie between them.

          • We’re at the point where having a lot of money means you are likely suffering from overwhelming guilt feelings. Ha, ha.
            Money does strange things to people. It makes them feel superior, which is often the case if it comes down to contests of some sort, but too often ‘superior’ extrapolates to ‘privileged’ and the trouble begins.
            It really shows the world ‘who you are’. Money gives you opportunities to express yourself in increasingly loud ways, although some like the Swiss, do so very subtly. If there is a hidden bully in you, inheriting a million dollars will probably result in some poor S.O.B. somewhere, receiving a portion of your wrath. Money likes to throw it’s weight around, so everyone knows who the boss is.
            A general like Tsun Tsun can pick these fools apart, but he’s been doing it a long time and really knows the spy game. We need a Tsun Tsun to follow Obama right now. We’re about to enter another fight armed with only our brains. God save us.

        • I’m impressed by your sound logic and math.

    • It’s not “Switzerland’s opinion.” Its a professor of automotive technology at University of Duisberg Essen; a public university in Germany. Develop some critical reading skills before enlightening us with your insightful commentary next time.

      • Oh, somebody beat me to the verbal thrashing. Oh well, eat some more crow Shig Knight.

    • Actually, that’s untrue.

      Switzerland is still relatively highly industrialized and has a trade surplus even though it has absolutely no resources and even has to import 40% of all food.
      Switzerland actually exports 2.5 times as much to the US as it imports from the US. Mind you, this despite the fact that the US is rolling in resources and has lower labor costs:

      Switzerland was the wealthiest country in Europe long before the big banks started their fraudulent schemes:

      It’s true that neoliberal policies are continuously pushed by the financial sector, even they just had to be saved by the tax-payer. But this is unfortunately the case almost anywhere in the world.

    • Ah, might tone down your rhetoric a bit and check your facts bud. Switzerland’s largest industry is manufacturing – specifically specialist chemicals, health and pharmaceutical goods, scientific and precision measuring instruments and musical instruments.

      Banking may be what they’re best known for, but it only makes us a small portion of their actual economy.

  • Great article and useful information. Now if only China would play fairly so Tesla could grow like it has in Switzerland.

  • Interesting points about Tesla’s strong sales vs competitors in a neutral/objective market, but it seems that he paints that picture of Tesla success in order to then make a point about what Tesla is doing right that other companies should emulate. And the article mentions “adopting the Tesla principle to stay relevant. So what is the “Tesla principle” and what is he recommending?

    • It might be, for high end manufactures, to just Build Electric, with charging infrastructure.

      • And no dealerships, too.

        • As far as I am aware, dealership associations have no relevance in Europe. You can buy directly or from a dealership. The dealerships haven’t bullied manufacturers into not selling direct.

          • Socialism is like that, they abhor monopolies, they have revolutions about them.

        • Lennon; “and no religion, too”.

      • Almost; Zero emission vehicles will be key to saving the atmosphere from further degradation. There are higher priorities, but we have to stop burning hydro carbons.
        Therefore we need economical electric cars that will replace the ICE cars everyone drives, as part of our strategy to save the planet.

    • Afaiu by reading the original article, tesla principle is:
      -build pure ev with huge range (don’t bet on all the horses)
      -don’t wait for government to install charging infrastructure, but make it on your own

      I wonder why he didn’t mention the free updates of firmware.

      • Musk is a software writer first. Watch Tesla develop an electric car software platform like Microsoft did for PCs.

      • The article you linked is about BMW being fined CHF156 million for a contractual clause preventing a Swiss customer from buying a new car from an authorized BMW and MINI dealer outside Switzerland. Is this the result of lobbying buy Swiss dealerships, though?

    • I understood the ‘Tesla’ principal to be this; Build one (or two?) models well, rather than present a variety of models generated from both cheap and expensive, old and new, technologies.

  • In just a few short years Tesla has destroyed the high end luxury car market. If they have 1/2 the success they did there in the lower end luxury market with the Model 3. The US will be talking about the big 4 auto makers.

    • Tesla just need to dot their i’s and cross their t’s. Get it done, and make sure you don’t ship problems. I think they are being careful with the X, and they have made really good progress with their quality.

      • Talk about shipping problems, as soon as I watched the fellow operate the six(?), seven(?) doors using only the remote I thought wow, who’s going to keep all that in adjustment? We have a 14 year old Mercedes SLK (beautiful car) that becomes a convertible when the roof slides into the trunk. But not when it’s more than 100 degrees in the shade, it gets stuck when the framework expands in the heat. I build kitchens sometimes. The doors that open when you ‘touch’ them. Stay away.
        At first, I thought the drivers’ door that opens and closes by itself was another problem but it’s probably the one that will need the least attention, because my wife won’t ‘body slam’ the thing.

    • That’s how I see it, but I live in California, and have been driving electric for over two years. We’re nearing the end of a 3 year lease on a Chevy Spark EV. Is it time to buy not lease? My niece lives and works in Toronto, where she has a ‘bus’ pass for the TTA that costs the same as the cost to drive the Spark EV, mostly because we don’t pay for gas, the cash from the state and the maintenance has been two tires and a couple of wiper blades. Lease was $0 down and $220/month/3yr. Plus they paid the first month lease payment, and threw in a Bosch Level II charger. Plus California sent me a check for $2500.00. (The federal tax credit of $7500 was already calculated into the lease rate) Total cost to operate including insurance is $0.26/mile (estimate). 28,000 miles/$7500 (total lease payments less $2500 from state)
      I just read about someone in Denver who bought a 2015 Leaf for $8500 after hockey sticking through the incentive maze.
      Other than deals manifested by the explosive development, the first one with an affordable EV will be the Apple of this emerging industry. From what I’ve seen of the Model X there is a problem; The car is too good for the price already, it exhibits driving and safety features that can’t be found anywhere at any price. And they have to sell it for 20% less without depleting it, or someone else does. It’s still too expensive.

  • Tesla’s success in an unsubsidised market is an interesting datum that disproves allegations of a subsidy bubble. The Swiss are rich, fiscally conservative, technically demanding, and environmentally conscious – closer perhaps to Californians than to Nordic social democrats.

    Google Translate is pretty grisly on German. It can’t even deal with negatives at the end of sentences.

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