I’ve had this article in mind for many months, eventually set the draft up on March 17, and put it on my schedule last week to finally write it on Saturday. Then, on Friday evening, Elon Musk basically made my point in a couple of tweets and “stole my thunder.” Alas, it’s actually his thunder anyway, and my words are just echoes, but still … not cool, dude.
The good news is there’s far more to say than can be said in a couple of tweets.
To kick things off properly, though, let’s get to the core point so that you know what the heck I’m writing about: Tesla’s mission — believe it or not — wasn’t to rule the world. It wasn’t even to rule Mars. Elon Musk presumed that there was a 90% chance Tesla would not survive past a baby stage. Actually, it did almost die … a few times. The company nearly went bankrupt back in 2008, for example, and was dramatically saved by a “pour all my money into it” approach from Elon, which also boosted the faith of other key investors in the company’s vision and potential. Now, any sane person new to this story might be wondering, “Why start a company if you think it’s going to fail?” Elon has presented two key reasons several times: 1) to stimulate quicker and more compelling electric vehicle progress among major automakers, and 2) because the purpose was so important that it was worth trying even if the chance of success was slim.
Without a doubt, Tesla has dramatically increased EV progress from large automakers and directly stimulated the development of some of the top electric cars on the market. Bob Lutz long ago explained how the Tesla Roadster led to the Chevy Volt, as one early and well known example, but the wild success of the Tesla Model S, Tesla Model X, and Tesla Model 3 (even before its release) have stimulated more serious and quicker EV development plans from probably every major automaker.
The full threat of the Model 3 is without a doubt a big part of that. Several of these companies could lose a boatload of market share and even go bankrupt if they don’t catch up to the coolest kid on the block. (We’re looking at you, Audi, BMW, Mercedes, Lexus, and Acura.)
Survey results from our new EV report. Responses came from over 2,000 EV drivers across 26 European countries, 49 of 50 US states, and 9 Canadian provinces. Responses were segmented according to region — North America vs Europe — and type of electric car — plug-in hybrid vs Tesla vs non-Tesla fully electric car.
But some automaker execs woke up before the Model 3’s threat really hit. Some of them must have been stimulated to move when they discovered how much a compelling, exciting,
insanely ludicrously quick electric landboat could thrill humans around the world, and even steal the “Large Luxury Car” gold medal from Mercedes. These automakers/execs may not have a great deal to show for it yet, but their behind-the-scenes planning has certainly shifted to electric drivetrain R&D.
I was in a meeting recently where I met an executive from a drivetrain designer who works with several major automakers. After talking for a while, he revealed that there has been a notable shift in the industry at this stage of vehicle development. His company has been putting more and more time and attention into drivetrains that include a plug since this has become the main drivetrain of interest for major automakers — as in, it’s now more than half of their requested work. He made it clear that the shift to a world full of plug-in cars is underway. And note that he and his company don’t come from an EV background — they’ve been developing systems for internal combustion engines for years.
Beyond vehicle design and production, automakers seem to have woken up to the charging network element (after a long delay/denial period). The Tesla Supercharger network has shown that you need a holistic ecosystem approach to the electric transport transition if you are really going to succeed. After delaying, delaying, and delaying, big automakers have finally come to accept this and are moving forward with their own potential solutions. (However, it seems they still aren’t doing so nearly as fast as Tesla.) I doubt Daimler, Ford, BMW, and Volkswagen would have announced a move toward a superfast-charging network by now if Tesla hadn’t all but forced them to do so in order to be able to sell electric cars in decent volumes. Again, that’s one more medal around Tesla’s neck for inspiring a quicker move to sustainable, electric transport — Tesla’s chief aim and reason for being.
Tesla has shown that being an integrated EV producer that is heavily involved in the production and supply chain of EV batteries is important as well. Batteries are the hearts of electric supercars, and just as top automakers of the 20th century had to develop solid expertise in complicated engines, Tesla seems to be making the case that top automakers of the 21st century need to develop expertise in batteries — and, at this stage, help to scale up the production and underlying supply chain. There may be debate in many board rooms at this point how much automakers need to be involved in the battery production business, but trying to tease out the best path forward is certainly a hot item — stimulated first and foremost by Tesla & Panasonic’s first Gigafactory and Tesla’s tremendous Gigafactory rollout plans. We’ve heard murmurs of a potential $11 billion Volkswagen battery factory (speaking to a Volkswagen Group insider in recent months about Volkswagen Group’s EV transformation, my impression is that decision is still very much up in the air), billions of dollars of EV battery investment from Ford, and a newfound battery production focus from Daimler, but it still seems to be a case of Tesla leading by a mile and pulling everyone along faster than they want to drive.
But that’s basically the thing — accelerating the revolution is not exactly what the top executives and many shareholders of Big Auto want. Revolution is not kind to reigning kings and queens. Revolution is disruptive. And, in this case, revolution will mean a dramatic hit to the ROI of certain Big Auto investments (think: engine factories, engine patents, careers focused on mastering a non-electric drivetrain, a vast service network focused on servicing gasoline and diesel cars, etc.).
Unfortunately, that continued reticence and foot-dragging from Big Auto is why “Sort Of” is in the title of this article. Tesla has certainly sped up the transition to electric transport, but Elon Musk and crew didn’t want to speed it up just for shits & giggles. The point is that we need to shift to clean energy and electric transport quickly enough to not fry our planet. We’re not exactly on track to succeed.
Thankfully, Tesla’s still in business and has hit the ludicrous mode button for both electric transport and solar energy. But we still need the alarm clock to go off in Big Auto’s house, and we need consumers to help the revolution along by buying clean electric cars and spreading awareness about the many benefits of electric cars.
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