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A Practical Reason Why Nürburgring Records Matter To Tesla

Until a couple weeks ago, my knowledge of the famous Nürburgring race track in Germany was basically limited to the strange Ring Racer roller coaster that was built in 2009 to be the fastest in the world, but ended up only operating four days in 2013 after they blew more than 12.3 million euros making it.

Until a couple weeks ago, my knowledge of the famous Nürburgring race track in Germany was basically limited to the strange Ring Racer roller coaster that was built in 2009 to be the fastest in the world, but ended up only operating four days in 2013 after they blew more than 12.3 million euros making it.

But, as much as I might be fascinated by strange exploding roller coaster stories, the Nürburgring popped back up on my radar probably for the same reason as a lot of people here. Suddenly, it looked like Tesla wanted to challenge Porsche after the Taycan set a new production EV record on the track on August 26th.

Photo courtesy Tesla

Since that point, we’ve learned about the new Tesla Model S’s “Plaid” powertrain, which first broke the 4-door sedan lap record at Laguna Seca and has now posted an unofficial lap time at the Nürburgring approximately 20 seconds faster than the Taycan.

This has led to a lot of questions about why Tesla is unveiling the Plaid powertrain now, a year before it goes on sale, and why Tesla cares about this record at all.

The answer, in my opinion, is stock price.

There is this persistent belief among some people that Tesla products are more or less placeholders until legacy automakers decide to spool up production and enter the EV market in a meaningful way. This can be seen from our own articles calling out how often this happens (here’s a great look at the nonsense written… in June of 2017!), and how often that sort of coverage continues today.

Case in point: there was an analyst on August 21st who stated that they believed that sales of the Model S and X were off primarily due to competition from Audi and Jaguar’s new offerings. I’m not linking to the original article, because quite frankly I think that it was an extremely poor analysis and I don’t want to provide them any additional views for that reason, but I’ll instead link to this article from Teslarati that debunks this thesis by looking at the actual data.

The thing is, that poorly researched analysis created headlines about how new offerings were able to directly steal Tesla customers, and reinforced this belief that once legacy automakers start making EVs, Tesla is doomed. Tesla’s share price dropped nearly 2% that day.

This brings me back to the Nürburgring record. Porsche set a record and was using that record as part of its push to sell Taycans, specifically showing the things that it could do that it believed Tesla could not, like using its track ability and charging speeds as big selling points.

Unfortunately for Tesla, being second best in anything seems to result in a rush of analysts publishing articles about how this is the end for Tesla. Tesla has succeeded for as long as it has in large part because its products are the best in every category in which they compete. Whether it is performance, charging, range, efficiency, safety, charging network, or driver assist functionality, Tesla leads.

Porsche is the first company making an EV that has really tried to stake a claim to one of those categories in order to set the Taycan apart. Tesla feels the need to compete with Porsche on this record simply to keep misleading articles that claim the Taycan will destroy Tesla from cropping up.

This is important because articles about “Tesla Killers” directly affect Tesla’s share price, and while share price shouldn’t be the bellwether for the company, when it drops, we see huge increases in the number of FUD (fear, uncertainty, and doubt) articles published and rumors that Tesla is going to go bankrupt, articles that make potential buyers more leery about purchasing a vehicle from a manufacturer that supposedly knowledgeable analysts claim “won’t exist” in a year. In other words, hits on Tesla’s stock price also often impact sales, to some degree.

Because of this, my feeling is that Tesla is working to set the Nürburgring record simply to prove that its technology remains as far ahead as it was when Sandy Munro stated the Model 3 has “military-grade” electronics and had a 10-year lead over other US automakers earlier this year.

Photo courtesy Zach Shahan, for CleanTechnica

Elon Musk has not been shy about saying that maintaining Tesla’s lead in technology is the only way that they can survive as a company, and the fact that the Taycan is one of the first legitimate challengers to the Tesla Model S since it was unveiled in June of 2012 is proof that the company has indeed been years ahead. Maintaining that advantage is critical to the stock story, and why I expect this “fight” to continue.

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Written By

A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.


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