#electric cars

David Undercoffler on Tesla’s plans to debut a cheaper model in early 2015:

The newest model debuting in 2015 will be the third step, as its platform will differ significantly from anything else Tesla has built so far.

The plan for a mainstream model follows a strategy that Tesla Chief Executive Elon Musk laid out in a 2006 blog post.

“The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium,” Musk wrote in a post titled “The Secret Tesla Motors Master Plan (just between you and me).” “Then drive down market as fast as possible to higher unit volume and lower prices with each successive model.”

That post, written nearly eight years ago, laid out exactly what Tesla aimed to do.

In the world of startups, eight years seems like an eternity. It’s hard enough to think one year out, let alone a decade. Yet in the automotive industry, eight years seems like nothing. Very little used to change in that span. 

It’s amazing not only how far Tesla has come in the past eight years, but just how well they’ve been able to execute on that original plan. 

Elon Musk on the ruling that you cannot buy a car directly from a manufacturer in the state of New Jersey:

It is worth examining the history of these laws to understand why they exist, as the auto dealer franchise laws were originally put in place for a just cause and are now being twisted to an unjust purpose. Many decades ago, the incumbent auto manufacturers sold franchises to generate capital and gain a salesforce. The franchisees then further invested a lot of their money and time in building up the dealerships. That’s a fair deal and it should not be broken. However, some of the big auto companies later engaged in pressure tactics to get the franchisees to sell their dealerships back at a low price. The franchisees rightly sought protection from their state legislatures, which resulted in the laws on the books today throughout the United States (these laws are not present anywhere else in the world).

The intent was simply to prevent a fair and longstanding deal between an existing auto company and its dealers from being broken, not to prevent a new company that has no franchisees from selling directly to consumers. In most states, the laws are reasonable and clear. In a handful of states, the laws were written in an overzealous or ambiguous manner. When all auto companies sold through franchises, this didn’t really matter. However, when Tesla came along as a new company with no existing franchisees, the auto dealers, who possess vastly more resources and influence than Tesla, nonetheless sought to force us to sell through them.

The reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none. Moreover, it is much harder to sell a new technology car from a new company when people are so used to the old. Inevitably, they revert to selling what’s easy and it is game over for the new company.

Stop me if you’ve heard this one before: an outdated law being twisted to impede progress and maintain the status quo. Even better:

An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car. Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no visit to the service center is required for that either.

This is so clearly the future of the automotive industry, so this is ultimately just delaying the inevitable. But consumers have every right to be outraged and New Jersey should be ashamed of itself.

Farhad Manjoo:

None of this means that Tesla should abandon its goal of building the world’s best electric cars. By competing on service, style, and the dependability of its vehicles, it can sell a lot of cars while also letting rivals use its core technology. But to be a great tech company, it’s no longer enough to just make great products. You’ve also got to let others build stuff on top of your technology—you’ve got to build a platform. Elon Musk gets this, and that’s why his company isn’t emulating just one tech behemoth. Tesla is Apple on the outside, but it’s Google at its core.

I love the concept of using your would-be rivals to build infrastructure for you.