Published on December 2nd, 2018 |
by Zachary Shahan
December 2nd, 2018 by Zachary Shahan
There’s a lot of excitement in the electric vehicle world these days. Tesla has come along and shown that you can produce a mass-market electric car that ranks #1 in its class (by far) and even ranks in the top 5 of all car models. This has created excitement about new frontiers — electric crossovers, electric pickup trucks, electric semi trucks, etc.
There are a handful of electric startups that we’re cautiously excited about — or at least interested in — and we’re eager to hear more details about electric models some large automakers have hinted at or even shown and revealed names for.
But let’s be honest: there’s one automaker that offers the most promise when it comes to electric pickups, electric crossovers, and electric semi trucks.
Yes, we’ll have models in each class from a variety of automakers, and the industry needs variety. Yes, differing features, pricing, and styling are still important in all of these classes. But the Tesla Model 3 is clearly electric car champion even though tens of thousands of consumers find it more sensible to buy a Nissan LEAF, Chevy Bolt, BMW i3, Fiat 500e, Toyota Prius Prime, Kia Soul EV, Hyundai Ioniq EV, Volkswagen e-Golf, etc.
Yes, trucks are not cars, crossovers are not cars, and semi trucks are not cars. That said, it’s the underlying battery leadership, electric powertrain leadership, software leadership, superb styling, and overall company reputation that made the Model 3 into the tremendous success story it has become. All of those strengths can be carried over into the other classes. Unfortunately, what’s important is that I don’t see any other company that competes with Tesla on any of these matters, let alone all of them.
Batteries: Who can compete with Tesla + Panasonic on batteries? Seriously. I go around the world giving presentations on electric vehicles, interviewing experts who know much more than me about them, and moderating panel discussions with industry leaders, and I’m yet to find someone who even tries to convince me that some other company is leading on batteries. LG Chem, CATL, Samsung SDI, SK Innovation, and others are making progress. They are following strong industry trends regarding cost, chemistry, performance, and production capacity, but they’re all a slide below Tesla + Panasonic from what I can tell.
Powertrain: It’s not just the batteries. Tesla has innovated when it comes to motors, fuses, inverters, etc. Something often mentioned in passing but not given much thought or discussion is how relevant Tesla’s extensive vertical integration is to its success. The company designs the components of its electric beasts to fit together smoothly, elegantly, and powerfully. Where possible, Tesla buys cheap off-the-shelf products, but where needed in order to meet certain product objectives in the still nascent EV industry, Tesla in-houses the work and develops something worlds better than what can be found on the market. The whole package is what matters, and it seems that Tesla puts it together better than anyone else — by a lap or two. Granted, this seems to be an area where the likes of Volkswagen, Hyundai, Kia, Nissan, and others might be gaining ground, but I’m yet to see any evidence of someone doing it better than Tesla.
We’ll see what the likes of Rivian, Lucid Motors, NIO, and other newbies can do. They have great people on their executive teams, have years of combined experience, and appear to be making good progress. But getting off the ground is no easy task — ask Elon — and the market is much more competitive than it was 10 years ago. Getting production to 100,000 vehicles per year would be a solid marker for any of them that I think would make their goals more warranted in the discussion, but all of them are a ways off from such a milestone.
(Side note: A UBS analysis of Tesla Model 3 costs appeared to be woefully off the mark in large part because the analysts assumed market prices for rare or unique products Tesla produced in-house. In other words, it’s Tesla’s design and manufacturing talent that led to the Model 3 being such a competitive vehicle.)
Software: Yet again, this is something that I think typically gets mentioned briefly and in passing with regards to Tesla but deserves a hefty weighting. Tesla has software expertise on hand that can rival almost any other leading software company. The company is constantly working in hyperdrive mode to improve software, make it more efficient, make it more user friendly, persuade it to do more for customers, and have it handle more of the work that a paid human would normally have to do. Tesla’s software isn’t perfect! But it seems to come from an entirely different galaxy than the software in other cars. I just can’t imagine any large automaker catching up in the next handful of years, and I think startups are at a bigger disadvantage — they don’t have as much money to pour into the department in order to try to get to Tesla levels.
Being the only fully loaded automaker based in Silicon Valley must help. It may seem inconsequential in an era of airplanes and the internet, but the socio-corporate connections centered around place are still highly relevant in various industries, and certainly EV production.
Naturally, software developed at Tesla can be used by the Model 3, Model Y, forthcoming pickup truck, Semi, Model S, and Model X. The more vehicles Tesla brings to its vehicle fleet, the more revenue it makes, and the more it can pump into software development and refinement. The core architecture for Tesla’s software business is already strong. Now it’s a matter of letting the construction workers and operational managers do their jobs.
Styling: It’s easy to congratulate Elon Musk and Franz von Holzhausen for their design sense and the elegant, minimalist, lasting beauty of Tesla vehicles. It’s rare that you hear someone say a Tesla is ugly, but if you do, it’s hard to not wonder if the person is crazy, a paid troll, or a BMW/Volkswagen/GM/Ford employee.
What is perhaps more surprising, however, is how hard it apparently is for other auto companies to design equally compelling EV designs. I’d give Byton and Lucid Motors some props for pretty, modern yet not too modern, across-cultures designs, but I have not been thrilled by the aesthetics of concept vehicles from other EV startups. When it comes to large automakers, they sometimes roll out wild and fugly designs like the iNext and Concept-i; and they sometimes roll out interesting, eye-catching, yet normal enough designs like the Crozz, Buzz, ID, new LEAF, and EQC; but they seem to come up short when it comes to out-competing Tesla’s sense for timeless designs. (Or maybe I’m just biased.)
The Full Monty: Put it all together and you have a powerful Tesla upper hand on four key components of any successful electric vehicle. Just as Tesla led in the electric car space and is now zipping light years ahead of other automakers’ electric models, I have to presume at this point that we will see the same kind of initial result in the crossover (Model Y), pickup truck, and semi truck markets. Oh yeah, and Tesla can throw on some solar panels or tiles as well. Who’s going to offer the full package so seamlessly and competitively in the coming decade? I’d love to believe Tesla will have some serious competition, but I’d be lying to myself (and you) if I came to the conclusion that any other automaker presents a threat to Tesla’s leadership.
The good news is simply that others are now trying to catch up.
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