Tesla is in danger of losing all its first mover advantage because its CEO refuses to act like a grown up. By Paul Fisher.
While even now it is not definite that electric vehicles will entirely replace internal combustion engine (ICE) cars, it is beginning to look like it. Tesla has been part of this change, but not all of it.
Elon Musk is now synonymous with Tesla, but he wasn’t there at the beginning. The company was founded by Martin Eberhard and Marc Tarpenning in 2003. Musk came in as the largest investor in 2004, becoming Chairman.
Four years later, amid lawsuits and acrimony between them and Musk, they both left in 2008. A settlement allowed Musk to call himself a joint founder, and become CEO.
In that time Tesla produced its first car, a reworked Lotus Elise that proved the company could produce a viable electric vehicle, if not yet fully design and build from scratch.
Performance was impressive: 393 kilometres capacity (244 mi) on a single charge, 0 to 60 in 3.9 seconds and top out at 125 mph. At the time, the Tesla Roadster could claim to be the most advanced electric car in the world.
It got rave reviews from the media, for its insane acceleration and what felt like a new driving experience.
“With so much torque from literally no revs, the acceleration punch is wholly alien, ” said then editor of EVO Richard Meaden.
“Away from traffic lights you’d murder anything, because while they have to mess about balancing revs and clutch, or fiddle with launch controls, all you have to do is floor the throttle and wave goodbye”.
Many others expressed similar sentiments. Tesla fans often say that there is prejudice from petrol heads towards its cars, but this is not the case. Car people like good, interesting cars and the first Tesla was definitely one of those.
The car industry took little notice of what they saw as a niche vehicle that cost $112,000, however. A 911 cost less.
Many of Tesla’s biggest fans are those that really don’t like cars but do like having a car – especially for all those school runs, hiking trips and hops to the organic superstore. A Tesla frees of them the guilt of owning a “dirty car”, gliding silently above the fray.
But the car showed signs of things to come, and how Tesla would rethink how a car should be engineered, manufactured and sold. Most radical was Tesla’s ideas of what a car should look like inside.
And Elon Musk should be credited with much of this and his ambitious drive to produce cars that could compete with the incumbents. Indeed, change the game.
Musk is classic tech leader personality type. Like Steve Jobs, Jeff Bezos and Mark Zuckerberg, he is an industry outsider who becomes wholly associated with the company he leads, even fosters a cult among employees and customers.
Just like Apple, Tesla has an army of fanboys happy to do marketing for the company for free. A kind of holy war between Tesla and Big Auto has developed online, the plucky eco-angels versus the carbon burning, emission cheating devils. Many seriously believe that BMW, Daimler, Ford, GM et al will all die – stabbed in the heart by Tesla.
In reality, many of Tesla’s biggest fans are those that really don’t like cars but do like having a car – especially for all those school runs, hiking trips and hops to the organic superstore. A Tesla frees of them the guilt of owning a “dirty car”, gliding silently above the fray.
All of this would be fine if Elon Musk cared enough to make Tesla the force it once promised to be and is now in danger of losing.
Unlike Henry Ford or Enzo Ferrari say, Musk just can’t be satisfied with making the best cars he know how and, crucially, distributing and selling them. He gets distracted from that and despite his self-image he is not capable of hydra scale multi-tasking.
His side projects include digging tunnels, creating recreational flamethrowers, solar power, sending people to Mars, abusing people on Twitter, deliberately goading the SEC.
Solar power makes sense to Tesla. Everything else does not. It’s fair to say that Musk was interested in space before he got into cars. When his hustling to buy Russian rocket technology ended in failure, he decided to build his own. And he has done so. Does this help Tesla? No.
Musk has huge ambitions for his space programme – human colonies on Mars by 2040 no less, who will drive electric vehicles over Mars surface. Does this help Tesla? No.
That’s all the good stuff. The part of Musk that gets things done. Then there is the other side. The past three years have been critical for Tesla – it had readied its Model 3 – a serious attempt to produce a compact electric car at a realistic price – one that could tempt middle-income buyers out of their Fords, Chevrolets and Toyotas – if not their BMWs -yet. The Model 3 is a good car. I’d drive one.
But while it was delayed and delayed, Musk went on some kind of bender – determined it seems to destroy everything Tesla had achieved so far. And it could not come at a worse time.
Why did Musk decide to goad the SEC? Why did he piss off his investors? Why build a pointless tunnel in Los Angeles? Why did he needlessly get involved in the rescue of boys from a cave in Thailand – then double down on a juvenile and nasty Twitter spat derived from that? Why say Tesla will close its stores and then reverse the decision just days later? And flamethrowers???
Which brings us to where are are now. Eleven years after the Tesla Roadster, the car world has caught up. Or at least the hard-nosed people in Detroit, Munich, Stuttgart, Wolfsburg, Tokyo and ShangHai have caught up. The game has changed again – but in their favour.
The Model 3 is still hardly available but Tesla now must compete with an incumbent industry ready to bulldoze its way onto the EV market – one they wish to control. If they didn’t care 11 years ago, they bloody do now – even if it has taken EU and Chinese legislation to force them to switch to EVs.
At the same time, a raft of Chinese and US auto start-ups are learning from Tesla and putting their own ideas into production.
You can be sure that big auto and the new wave of EV start-ups will be looking at the situation Musk and Tesla now finds itself. They are licking their lips.
They know they don’t have to beat Tesla technologically, Tesla will remain the most advanced EVs in the world.
They won’t care – because they know it has a distracted CEO who can’t or won’t accept that being first and best doesn’t guarantee survival. Instead of killing it, Tesla could be killed.