When Tesla ideas go mainstream... again

Discussion in 'In the News' started by Electric Jen, Mar 21, 2017.

  1. Electric Jen

    Electric Jen Member

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    There are times in life where you have a lightbulb moment, so to speak, where suddenly a new way of doing things seems obvious. A month doesn’t seem to go by where Tesla isn’t doing some form of that to the auto industry.

    First, it was electric cars. Against all odds, Tesla has proven that electric cars can be beautiful, compelling, practical and fast, all at once.

    Next, it was over the air updates. A car that gets better over time? Unfathomable. Same goes for their off-cycle upgrades. A car company that doesn’t work in model years? Absurd!

    Then, in what’s probably the least likely of Tesla’s practices to be copied, it was not making parts and service a profit center. While traditional dealers make a majority of their profits from these areas, Tesla chooses not to. Insanity!

    Tesla also built out their own refueling infrastructure. Making it free or low cost is just not something anyone ever pictured with regards to the auto industry. Outside of gimmicky “free gas for a year” promotions, it’s just unheard of.

    There are many more: the effective use of social media, the refusal to pay for traditional advertising, not paying sales folks on commission, online ordering, built-to-order cars, up front pricing, and many more. All of these items on their own amount to mosquito bites on the bare skin of other automakers. This small, once thought insignificant start up from California had no chance in their deeply entrenched good ole’ boys club. Except, that’s just not true anymore. 250,000 reservation deposits in two days for a new car proves it. Tesla is here to stay and has changed the course of how other companies in the auto industry will have to operate to stay alive.

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    In fact, I got a surprising email from a major auto insurance company recently. The subject was “About those driver’s-assist features you love.” The content provided some great and practical advice to using them, reminding drivers to provide the brains and not to fall into the trap of say, failing to check your blind spot just because your car has blind spot detection. That advice however, wasn’t what I noticed first. “Tesla did this,” I thought to myself, before I even read the content of the email. Tesla has brought attention to the lightening-fast march of car technology so much so that a major insurer felt compelled to talk to customers about it.

    Speaking of insurers, Tesla wants to go there too. Place another checkmark in the column of industries Tesla is stepping on the toes of. They can get in line behind ride-sharing giants, since Tesla has also mentioned ride sharing in their Master Plan Part 2. Which reminds me that the airline industry may also take a hit.

    My personal favorite change, however, is the car dealership experience. The current model is obsolete. No matter how well prepared I was, how keen to their tricks, how adamantly against being sold an extended warranty, it still took me three whole hours to help a neighbor buy a car recently. It took at least that long to buy our last Jeep and longer than that to buy my first new car, a Scion. I just want to do some research, narrow down choices, go for a test drive, then buy a darn car. I don’t care if it takes weeks to get, as long as those weeks are spent at home doing my own thing and not sitting in an uncomfortable dealership filled with stale pretzels and fluorescent lighting. I don’t want to haggle. I especially don’t want my intelligence insulted by being shown monthly payment terms that hide the fact that your first offer was actually $9,000 over MSRP. (I’m talking to you, Jeep.) I have a calculator. Actually, I have a printed out spreadsheet that shows my monthly payments for 10 different price points and 3 different interest rates since I know you insist on negotiating in monthly payment terms rather than total purchase price. I’m a dealership’s worst nightmare. But it doesn’t need to be that way. Tesla proves it. Scion claimed they did - pure pricing they called it. I knew wherever I shopped, my 2008 tC was going to cost me exactly $18,400. It still took me all day to buy that car. Buying my Model S was a joy.

    And now, a couple hundred thousand of my closest friends are about to experience that same joy. Actually, they may experience something better. Tesla appears to be trying to best themselves by providing a 5-minute delivery model. After all, Tesla doesn’t discriminate when it comes to who they show up when they decide they’ve found a better way, they just do it.

    Article: When Tesla ideas go mainstream... again
     
  2. Taylor S Marks

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    For the most part, Tesla was just doing with cars what Apple did with computers and phones.

    1 - Make the product sexy and appealing in addition to useful? Check.
    2 - Over the air updates? Check.
    3 - Manage repairs themselves, and don't profit from them? Check.
    4 - Build infrastructure themselves? Nope. Prior to the iPhone launch, Apple investigated the possibility of building their own cellphone network. They used the fact they could do that as leverage to get AT&T to give them exactly what they wanted (unlimited data.) But yeah, never actually happened. Tesla definitely wasn't in any position to force anyone else into making the infrastructure for them in 2012.
    5 - Minimal traditional advertising? Check.
    6 - Sell products themselves? Check.
    7 - No Sales commission? Check.
    8 - Insurance? Check.

    Another major thing they do that you didn't mention is that they build things from the ground up, with their own components. Just like Apple designs their own CPUs and then has another company actually build them (Samsung or someone else), Tesla designed their own motors and battery cells but then has Panasonic build them. The only difference is Apple has them built overseas in factories owned by the other company, while Tesla is building the Gigafactory and owns it themselves in the US.
     
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  3. Tesla Bargain

    Tesla Bargain New Member

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    And all this is just the beginning, I am sure there are many more great things to come from Tesla. A company worth supporting, not anything like Apple, which enforces proprietary and ruthlessly making money first.
     
  4. electric joe

    electric joe New Member

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    I'm not sure it's fair to say Tesla is "not anything like Apple". Taylor just spelled out the many ways the two are similar. I'd go further and add that both companies put focus on limiting their environmental impact. That point is obvious in Tesla's case, and in Apple's case I can point to their zero carbon footprint data centers, advanced product recycling programs and gradual, constant reduction of dangerous materials in their products year after year. That said, Apple's fixation with producing anorexic products means more glue and fewer screws, and that means repairability ratings are poor or very poor for most of their recent products.

    As for making huge gobs of money, I can't fault Apple for that. I love to think that Apple is a more valuable company than Exxon for several reasons. And I look forward to the day that I can say the same about Tesla!
     
  5. Electric Jen

    Electric Jen Member

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    @Taylor -
    Excellent point!
     
  6. DSnow

    DSnow New Member

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    I agree wholeheartedly with your assessment of the purchasing/delivery experience. I recently bought a Model S. I decided on the model and options I wanted online. I ordered the car and put down a deposit online. I did almost all of the paperwork including loan application online prior to delivery. I made an appointment to take delivery of the vehicle. After 5 minutes of signing forms that were already prepared, I got a thourough and enjoyable introduction to my new car, including customizing the settings for me and syncing my phone. I drove out in less than an hour, and most of that was the fun stuff of learning about my car's features.
     

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