Sunday, 16 July 2017

Will established auto manufacturers' complacency deliver a monopoly to Tesla?

Tesla's first Model 3 rolled off the production line just days ago.
Credit: Tesla/Warranty Direct/Twitter

“Yes,” says Alexander Haissl of Germany's Berenberg Bank.

My take: established manufacturers will be happy to continue to make a minimal effort while Tesla works out how to make it happen. E.g. General Motors developed a T-shaped battery for the EV1 & Volt. Tesla showed them that flat, under the floor was the way to go, & they adopted that for the Bolt (along with other manufacturers).

On the other hand, many manufacturers don't appear to have noticed that most of the advantages of front wheel drive don't apply once a relatively tall, heavy internal combustion engine isn’t part of the design equation.

When all of the problems are solved & what the market wants becomes clearer, established manufactures expect to be able to scale development &/or token production to take back the market. Nissan is an exception.1

Strength of this strategy is largely obvious – leverage Tesla's huge R&D effort & the fact that Elon Musk is smarter than any of the competition’s engineers or management. (“He is by far the single smartest person that I have ever worked with … period.”)2

Perhaps their best hope is that Tesla will continue to share its technology.3,4

1 Nissan has been an exception – CEO Ghosn has been committed to EVs & developing them in-house since at least 2008:

GM-Volt (2008): ‘Nissan CEO Ghosn: “I Don’t Want a Range Extender”’,

2 HitchHiker’s Guide 2 Tech: “How Elon Musk taught himself rocket science”,

3 HitchHiker’s Guide 2 Tech: “Why Tesla gave up on patents”,

4 HitchHiker’s Guide 2 Tech: “Will Tesla share its technology with other automakers?”,

/ Tesla win big race to sell electric cars to the world German analyst competition from traditional manufacturers complacent Elon Musk California upstart near monopoly of the market Tesla out investing the competition hampers itself save money building on legacy engineering developing new focused technology report analyst Alexander Haissl Hamburg Germany-based Berenberg Bank readiness Tesla’s competition Daimler’s Mercedes best prepared Volkswagen BMW dithering GM General Motors Chevrolet Bolt Ford FCA strong ratings manufacturer complacency electric vehicle EV electric car technology developing EVs mass-market adoption lack of real action strategic commitments underlying convictionno clear pathway to high-volume EV production Haissl Tesla near-monopolistic opportunity gain market share outcompete incumbent automotive industry /