Has Tesla Received a Free Pass?
Five years ago, electric-powered vehicles began to make an appearance. Nissan and Tesla proceeded along two entirely different approaches to converting buyers from ICE vehicles to electric-powered vehicles. Nissan added the Leaf on top of its ICE vehicle lineup and Tesla was all in with its electric Model S. Other legacy manufacturers added small numbers of electric compliance cars to meet state requirements. Where is the free pass?
Here is where the narrative gets interesting. As these cars began to make appearances across the nation, the descriptions by critics always mentioned words like small, slow, short range, long charging times, range anxiety, cost, lack of a dealership support network, city car, good second car, no charging infrastructure, and battery life. But interestingly many articles in parenthesis used the words except Tesla.
2017, The Year Mattered
So what happened in 2017? What leads one to believe that Tesla has been given a free pass by legacy manufactures and their proxies, the dealerships? There are also several startups such as Fisker, Rivian, and others not quite to the playing field yet. Following Tesla’s business model, not GM’s, they will benefit from that pass as well.
Lawsuits by dealerships to prevent sales of Tesla vehicles at the state level are being resolved in Tesla’s favor. These will continue, but as Jim Ziegler, president of Ziegler Supersystems, said in an opinion piece in auto-industry trade journal Ward’s Auto:
We can keep Tesla busy defending what are basically nuisance suits. But it will prevail in all states one at a time. Or there will be some sort of sweeping federal action in its favor.
Charging infrastructure is a game changer and not one legacy manufacturer has stepped up to the plate. Tesla is energizing superchargers at a rate approaching 12 a day. The rest of the field is counting on public or private parties to install chargers for them. GM’s CEO, Mary Barra:
We are not actively working on providing infrastructure [for the Bolt EV].
Match or Beat these Points to Win
The list continues: Who builds not only the fastest electric cars but the fastest production cars on the planet? Tesla. Who is the only manufacturer to build full-size electric sedans? Tesla. Who has figured out how to end long charging times? Tesla. Who builds an electric car that can easily and conveniently travel coast to coast? Tesla. While this may be subjective, who builds sexy electric cars? Tesla. Who had a 39% sales increase in 2017? Tesla. Who has the free pass?
The Free Pass
Here is the final supporting points to the premise that Tesla has been given a free pass. Ford CEO Mark Fields:
We have driven the Model S, torn it down, put it back together, and driven it again. We’re very familiar with that product.
Mercedes, BMW, Audi, GM, Ford, and Volkswagen all have reverse engineered Tesla vehicles. The technology is known, the patents are open source, there is nothing about the cars that are magic or undecipherable. GM even took on the Model 3, beating it to market with the Bolt by an entire year. Or did they? Mary Barra CEO GM said:
We are not capital constrained in our EV or AV development.
General Motors, with unlimited funding, unlimited manufacturing capacity, unlimited talent, supplier network unrivaled, nationwide dealership network, and unlimited advertising budget, starts with a clean white sheet and delivers the Bolt. Every old canard about electric vehicles was designed into it except one, range. All of the other anti-EV talking points remained available for the media to jump on. Why? Was it to not upset Tesla? Give Tesla a free pass? Or was it to protect their ICE market by producing a car that would achieve the ZEV credits needed to continue selling SUVs and trucks? This from Elon Musk:
But the CARB credits are only effective at a production rate of about 20,000 to 30,000 vehicles a year. So that’s why you’ll see, mark my words, it’s not going to be any higher than that for the Chevy Bolt. That’s on order of 25,000 units a year…
Coincidence? Please say it isn’t so. Total Bolt sales for 2017 … 23,297.
In Truth is there no Beauty?
There may be no hope for the legacy vehicle manufacturers. Research firm KPMG released its annual automotive executive survey, and more than half (62%) of global auto executives say they believe these [electric] vehicles will fail commercially. Fiat Chrysler Automobiles NV CEO Sergio Marchionne said at the Detroit Auto Show the only reason Fiat Chrysler makes any electric vehicles are to comply with government regulations. Virtually all manufactures put out regular press releases about how much money they WILL spend on electrification. On the street, it seems like it’s nothing but vaporware.
You can Never go Home Again
Look at pictures of China, India, and Mexico City and there is no path that I can see that would convince them to reverse course and encourage fossil fuel vehicles. Hydrogen fuel cells work, but the infrastructure costs far more in money and energy than a fuel cell receives. California, another thorn in the legacy manufacturer’s side, would probably secede from the union before reversing course.
If I Only had a Crystal Ball
I’m not a stock aficionado and don’t pretend to be one. I’m one that buys high and sells low. I’ve never seen a company like Tesla that not only is the leader in their market, has amazing growth potential, and appears to have implicit permission from potential and powerful competitors to make, shape, and own the EV market. Literally, a free pass. Hmmm…