By James Kelly
When Tesla broke into the automotive industry with the Roadster, it got enthusiasts pondering what the next generation of sports cars would look and sound like. The company ushered in a new product and a new perspective, paving the way for modern electric vehicles by creating a car that looked like it was stolen from 10 years in the future. Turns out that’s the trick to car design. 2009 was a good year for automotive design, as the Model S prototype was in good company when it hit the scene. (For reference, see the Ferrari 458 Italia, Aston Martin One-77, and Alfa Romeo 8C Spider.)
The product battleplan from Tesla in the early days was actually a very calculated one, if you can believe that. It went like this: Shock the industry with a Lotus Elise-based electric sports car, move past a questionable incident with Top Gear, and announce plans to manufacture a sedan just a few years later. They delivered on their promise of the Model S in 2012 and with a base MSRP of $57,400, they had lobbed it right into the mid-size luxury market. No one had done that before.
Right around this time, Fisker had the Karma, and Nissan had the Leaf. The Karma wasn’t a true EV per say due to its gasoline range extender, and the Leaf was a compact hatchback with an EPA estimated 71 miles of range. These two cars bookended the EV market at that time with prices around $102,000 for the Karma and $35,200 for the Leaf. Tesla had brought the fight to where the money was, and it worked. Plans for an SUV were announced after the first Model S’s were being delivered, which kept the industry on its toes. This bombshell meant everyone else was going to be further behind than they thought.
I would be doing a disservice to my business professors if I didn’t break this down a little more so bear with me while I make an attempt. They started by making a low-volume sports car that gets the attention of enthusiasts by licensing the technology of an already fantastic car, the Lotus Elise, leaving 80-90% of the costs going towards developing the powertrain. Pricing the car at a premium means profitability is attainable at a lower point when there’s a lack of economies of scale. However, that’s where they were headed. They had made an exciting vehicle with a cult following and plans to enter a more lucrative market with a sedan. All they needed was the capital, and they got it.
After Elon Musk joined Tesla, and just before the Roadster went into production, he invested $70 million into the company. Then, in 2009, the U.S. Department of Energy gave the company a $465 million loan and in 2010, a year after the Model S prototype was revealed, Tesla launched their IPO which earned them $226 million. This went towards funding the Model S and eventually the Model X.
The only logical next move for Tesla was to make an SUV to gain even more traction in the industry. They did. They gave it gull-wing doors, too. The skateboard platform that most EVs have are adjustable to accommodate whatever body is placed on them, so all Tesla had to do was develop an SUV body to put on their current platform, leaving more room in the budget for some fun. Making a bigger vehicle also means getting to charge more money for it. The cash from both the S and the X would then go into the fund for the Model 3, their cheapest vehicle on sale to date.
The model Y entered the compact SUV swinging and became the best selling model the company has ever produced. Every move that Tesla has made to pin them as the best-selling manufacturer of EVs has been calculated and with purpose. They came out of the gates ready to dominate and pinched every penny to stay on top of new development.
Tesla has always had little gimmicks here and there that added to the charm of owning an electric vehicle. They counted on owners having FOMO when hearing a V-8 roar by on a backroad, because why else would they program a Trans-Siberian Orchestra Christmas light show into their car? Sure, an E63 Mercedes AMG could sing like an angel as it eats up miles on the German autobahn… but can it make fart noises? These little party tricks started out as something fun, but now things might be going over the edge.
The Cybertruck debut in late 2019 left Teslaphiles throwing their wallets at Elon, hoping to grab a slot for a preorder. Was this a publicity stunt? No. A pep rally for fanboys? Maybe. Personally, I think Elon got bored with Tesla. The next car in the works was the new Roadster, which Tesla says won’t be delivered until 2025. It was revealed to the public in 2017 at the Semi launch, with availability slated to start in 2020. The Cybertruck, on the other hand, the biggest joke in the industry, struck like lightning.
It touched down without any warning, and it’s already out to owners. The Cybertruck was announced after the reveal of the Roadster, and was delivered to owners before the Roadster. How volatile does executive boredom need to be in order for it to result in producing a street-legal lunar rover? Forget for a moment that Cybertruck buyers are realizing what a mistake it was to buy in the first place– the truck is a danger to pedestrians, vehicles around it, and to owners who worship Elon like he’s going to take them to his Martian promise land. What car company would do this sort of thing?
A car company… That doesn’t want to be a car company.
Apparently, we’ve been looking at Tesla wrong for the last several years. In January, Elon Musk made a post on X, formerly known as Twitter, calling Tesla an “AI/robotics company that appears to many to be a car company.” Confused yet? Tesla, which started out as “Tesla Motors, Incorporated,” was renamed in 2017 to just “Tesla, Incorporated,” to encompass the new business developments being pursued. Some of their efforts have expanded beyond the scope of car manufacturing… so they shaved 50% of their name off in order to keep from looking crazy for straying away from cars. Yeah, that’ll show’em, Elon.
Car companies that are not car companies do not exist. Well, there’s one company that comes to mind. Porsche. The official name of Porsche is “Dr. Ing. h. c. F. Porsche GmbH, Konstruktion und Beratung für Motoren- und Fahrzeugbau,” which essentially means they are an engineering and consulting company by name, that happens to build their own cars.
Tesla is currently in talks with another “major automotive company” that is looking to license its Autopilot and Full Self Driving (FSD) technology, so the Porsche comparison isn’t too far off. In a letter from 2014, Musk expressed Tesla’s concern for the climate crisis and the role the company needs to play in combating it. He mentions that Tesla “will not initiate patent lawsuits against anyone who, in good faith, wants to use [their] technology.” Not quite an engineering consulting company, however if you copy their homework they promise not to tattle. But what if they did follow the Porsche mentality? Today, the only piece of Tesla technology that most other manufacturers are starting to integrate into its cars is supercharging compatibility.
Why not go further? They should have worked with other companies to advance their electric vehicle initiatives that encompass more than just a communal charging network.
In that same letter, Elon stated that their competition wasn’t other electric cars, but gas-powered cars. If Tesla really sees gasoline cars as their biggest threat, then why not offer their help to Detroit? Think of a story similar to the Audi RS2 Avant and Mercedes 500E, a pair of revered performance cars from Germany. Porsche helped in the development and manufacturing of both of those cars, and wouldn’t exist without their help. What if Tesla had a story like this? They could offer powertrain designs to companies that looked to create enticing electric cars, and still hold true to all their beliefs about climate change and open source technology. Not a bad idea, right?
I think this could’ve worked sometime between 2014-2017, just after the popularity of the Model S, and right around the time the Model X was being delivered to customers. (This was also before Elon got especially nutty.) This was prior to other companies debuting comparable EVs, and building full force Tesla-beating war rooms, which may have triggered the end of the company’s automotive division. The only hint of Tesla doing something like this was when they sent a letter to major automotive manufacturers detailing how to implement a 48-volt system architecture in their cars.
All I’m suggesting is, if Tesla wanted to go down the Porsche route and help other manufacturers build viable, modern electric vehicles and build their own cars, they could have kicked-ass. They would be less of a joke like they are today, because the Cybertruck is a sad example of what happens when you know you’re about to get beat at the game you started. Who knows, maybe the next time Tesla changes their branding it will be to “what part of ‘not a car company’ didn’t you understand,” and we’ll be the ones who don’t get it.