This is an excellent question and a interesting one. It also deals with why we’re not going to see the mythical Tesla Killer anytime soon. So let’s dive deep!
It’s important to understand that the very structure of Tesla Inc. gives it an edge even before we get to the specifics of technology. Tesla makes battery electric vehicles, and this is the only type of vehicle they make.
Every auto manufacturing part of Tesla Inc. is designed and operated with this in mind. Because of this there is no internal conflict about what Tesla’s core business is and there is no competition from other divisions.
Everything about the cars, from the chassis on up, has been designed exclusively for a battery electric car. Indeed, the entire automotive side of Tesla is solely dedicated to the success of battery electric vehicles. Their whole approach is different from other car makers and nowhere does this show up more clearly than their most important technology, the ability to supercharge and the accompanying supercharger network. So what’s supercharger and super charging? Lets find it now
Coming to powering up the car, the supercharging. So what’s supercharging?. Supercharging is a kind of fuel station for tesla cars. The goal of the Supercharger network is to enable freedom of travel for Tesla owners at a fraction of the cost of gasoline. Tesla periodically updates prices to account for changing electricity, construction, and maintenance costs to support the rapidly growing network.
Because of this you won’t normally find them where they are convenient for everyday use. They are in places where they are convenient for long distance travel. It is in Tesla’s best interests that they have enough chargers so that people aren’t waiting much to use them or are otherwise inconvenienced much.
Other automakers have gone to third parties to solve the range problem and this has consequences. These third parties have to make a profit, so their priorities are much different from Tesla.
While it makes perfect sense for Tesla to spread their chargers out to various interstate (in the U.S.) or international (in the E.U.) routes to ensure continuous charging availability along the way, a profit driven service will be looking to maximize use of its chargers so that it makes as much money as possible per unit. And that’s another reason why Tesla stands away from the crowd.
Another area of Tesla supremacy is batteries. Tesla/Panasonic batteries cost less and do more than their competitors. Tesla Has 20% Battery Cost Advantage On Competition, Says UBS Analyst You can see where this really stands out in kw vs. range:
- Ford Focus electric: 33.5kwh for 185 km
- Volkswagen egolf: 35.8kwh for 201 km
- Nissan Leaf: 40kwh for 243 km
- Chevy bolt 60kwh for 383 km
- Model 3 long Range 75kwh for 500 km
- Jaguar I Pace 90kwh for 376 km
- Porsche Taycan (not for sale until Mar 2021) 90kwh for 500 km
- Model S: (Many battery sizes available) 90kwh for 473 km
See any Tesla killers here? Most of these electric cars get their decent range from being small and light and while the Porsche claims to have good electric mileage, this may change when there is an actual production car to test. You can see the vast difference between the Model S and the Jaguar, which are in the same weight and luxury class.
The Teslas can carry more weight and use less power for less battery cost than any competitor. That is a significant advantage.
Some quick points why Tesla is better
- Branding– Tesla projects a lifestyle/ aspirational brand that resonates well across a wide cross-section.
- Manufacturing – Simplified, optimized, automated.
- Lack of legacy costs– dealerships, unions, advertising. In addition, their manufacturing is not hamstrung by capital/equipment acquired to build cars from 50 years ago. Their management structure does not come the having to manufacture in the last millennium.
- Battery / Motor Tech. Probably best in class for commercialized product. Also, development of batteries supports other businesses like the stationary power business which supports the PV business. One strategic option is a pivot away from cars to batteries, supporting a variety of applications ( cars, backup power, etc).
- Software – Driver assist is constantly learning with industry leading number of miles with real drivers/ real conditions. This feeds the neural network optimization of the self driving software. Engineers are also constantly developing better ways to extract more range/ power from the same hardware. If Tesla can win the race to level 5 autonomous, it is possible to license.
- Over the Air (OTA) updates- my car gets more capable over time with version updates similar to a smartphone.
- Supercharger network. Range anxiety is real. Having a proprietary network offers strategic options- build a walled garden ( today) or create new business/ income by selling the service to non-Tesla (future)?
- Internet sales– Yes u can buy a Tesla from online. Unlike other brands tesla has a online sales where you cancel out dealers and eventually cut down some price.
- Speed. Clear vision and pursuit of the “move fast and break things” aspiration allows them to innovate, adapt and outgrow the competition. If you had a 100 Billion dollars, would you invest on Tesla or would you invest on every other automaker? Tesla is in my opinion, the fittest, fastest competitor in the space they compete in.
- Rabid fan base. The free publicity translates into interest and incredible valuations. This gives Tesla incredible capacity to raise capital to pursue their aspirations.
So why tesla?
When Tesla Killers are discussed. They talk about one of these aspects. In truth, each point warrants its own dissertation. Having to tackle all these advantages is why all legacy brands are struggling and will continue to struggle. Tesla runs a different race, largely independent of the competition, which means they don’t waste energy thinking about what everyone else is doing. Rather, they can focus on running to their strengths, and building the best product. They develop and commercialize technology faster than their peers, are more organizationally nimble and have more strategic options available to them – support the electrification trend by focusing on supplying class leasing battery technology or support the autonomous mobility trend by supplying class leading self driving technology. This is the hallmark of good strategy- strong pillars that are individually difficult to copy, but form a synergistic package that is compelling and unique.
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