Published on September 25th, 2020 |
by Alex Voigt
September 25th, 2020 by Alex Voigt
To hold an event with a large number of people in the time of the most severe pandemic the world has seen may not sound like a good idea, and some have been asking why do it at all. But it was a great idea.
Information you share as a company to a broad group of investors, customers, influencers, and the media is not just the naked plain information alone, but also how the message is conveyed and to whom. How it is received and discussed depends on many usually unknown subconscious influences. How you provide the information is of importance, but with whom you share real content is also important, because the process of how we humans build an opinion is determined by many factors, and most of them we are not even aware of.
Aside from what we hear and read, there is body language and the interaction of people behind the scene, to name just two important matters, but who surrounds us or not is also critical to connect the dots, comprehend the complexity, and make conclusion. If you sit alone in front of a screen, you will not receive the same message as if you are with many people together in a group listening, absorbing, and interpreting their reactions. A message is not a piece of naked information, but a result and output out of a complex process whose mechanics we are not very much aware of if we know them at all.
Having been in person at the highly anticipated and often delayed Battery Day from Tesla in Fremont on September 22, this became dramatically transparent and apparent to me. Comparing the message received from people who listened onsite with the message received from people who listened offsite is like talking about two different events.
As a side note: the safety procedures I experienced walking along a street into the Kato production facility parking lot were the best I have ever seen, with every single person guided and sitting alone, separated in his or her car after temperature measurements were taken and other critical questions were answered. One of the safest places in the world if you drive in traffic is in a Tesla, and one of the safest places if you are in a pandemic was at this Tesla event. It was a well thought through safety exercise that once again showed the creativity of a company doing many things differently, and usually making things better.
As a leader, innovator, and disrupter of new technology, Tesla doesn’t have a competitor that reveals its shortcomings and mistakes in core area. Therefore, it needs to identify those itself, which is harder than it may sound. This critical approach indicates that the space of improvement is always orders of magnitude larger than what we believe or imagine, and that pool of potential improvements is an always-available resource. If you accept that as a net positive and fact of life, you are able to achieve the impossible with continuous improvements.
When we look at the impressive plan from Tesla to produce batteries with lower costs, better efficiency, and faster and cheaper manufacturing, we are looking at the holy grail of engineering productivity gains that will result in widely unexpected lower-cost BEVs, with a future $25,000 compact car that will open completely new and customers and customer demand levers. What is completely overlooked is that Tesla’s pace of innovation is accelerating. With vertical integration into the mining business, it will be even easier in the future to open new levers of improvements other automakers can’t even dream about.
All of these improvements will be included in Tesla vehicles gradually as available, making them available for the consumers faster than anticipated. Each new Tesla gigafactory — be it the one in Berlin, the one in Austin, or the next one (which Tesla may be searching for a location for right now) — will integrate new innovations immediately, offering better products as soon as they start producing vehicles.
The gigantic scale of future battery production volume is a game changer, because not only will it produce the most batteries globally, but they will also have the best performance specifications and lowest costs. Unit costs are extremely critical, not because Tesla wants to make huge profits, but to continue funding an accelerated transition to sustainable transportation.
While many who watched the presentation are confused about this, Tesla intentionally educated its competition this week because that is important to being successful. A blueprint was shown that enables companies like Volkswagen, which has invested more than €30 billion into the transition to fully electric vehicles (BEVs), to avoid mistakes of the past. Tesla needs partners in this global transition, because climate change is accelerating too, and it’s impossible for one company to do it all. Volkswagen and others should realize that you can miss the ship once, but if you want to survive, you better should not do it twice.
The car I was asked to sit in at Battery Day, a beautiful Model Y, is already a game-changer in markets where it’s being delivered. It will be a game-changer in my home country as well, because it has what most are looking for: great range, very good efficiency, and a form factor people love. To believe BEVs like the Volkswagen ID.4 can compete is a denial of science.
“My Model Y” was, funnily enough, not only located in the 3rd row of what were approximately 280 vehicles standing side by side like in a drive-in movie theatre, but was also surrounded by almost all of the members of the 3rd Row Podcast team. To my left, Kristen (K10) was waving to me, and in the car behind was Omar, with Gali to his left and Sofiaan nearby too. Rob Maurer of the Tesla Daily YouTube channel and podcast was in a vehicle behind Omar recording his first video takes, and Ryan McCarthy from the podcast Ride the Lightning to my left ahead.
Eli Burton, also called Starman, brain, and owner of the famous and incredibly well done The Adventure of Starman comic series, was in a row in front, and I drove his Tesla Model S P100D the next day realizing that ludicrous mode is not far away from flying and Autopilot works in the USA much better and more smoothly than in Europe, where regulators for unclear reasons restrict abilities that can save lives and undeniably reduce accidents.
The “who’s who” of social media influencers were present, nearby. That group of young, enthusiastic influencers knows a lot about Tesla, putting publicly available information into a new context. Even more incredible is all that happened to me before and after the Tesla Shareholder and Battery Day presentation. While some say that Silicon Valley is the place to be if you want to make a difference, I can now say that Silicon Valley is indeed a very special place and the supporters of Tesla aiming to make the world a better place are special too. All of a sudden, I found myself, the next day, in an unplanned business meeting in downtown San Francisco that was Tesla related.
The institutional investor group was, of course, present at Tesla Battery Day too. Although, most of them, like in the previous Tesla Autonomy Day event, did not seem to comprehend the content of the presentation, and since no financials were released, they seemed somehow misplaced.
At the entrance, I passed Ross Gerber from Gerber Kawasaki Investment, one of the very few finally understanding the opportunity of Tesla as an investment, following the lead of Ark Invest, which early on understood the incredible financial opportunity of Tesla as a technology company. He almost yelled into his smartphone he was holding in front of his face for a live interview with Fox News that was broadcasting his face and the Tesla factory behind him while the Tesla service team stood around watched the entertaining scene with obvious amusement.
When Elon Musk walked on stage and the presentation began, it was not only broadcasted on the large displays to the right and left of the stage, but also to each vehicle display. While the incredible plan for the future of battery technology was unveiled, I had to realize that although the interior dimensions of the beautiful and well built Model Y I was sitting in were large, they were not large enough for the emotions that my body urgently wanted to express.
As Tesla started to present technology improvements, anyone watching who was expecting an easy-to-digest, polished marketing and PR show (as they knew it from other automakers) must have been disappointed. The content shown could only be understood well if the person that listened to it was educated enough about specifics in that technology field and prepared to learn more. For Tesla, it did not matter if these expectations were met or not, because this was not a marketing event or intended to influence the share price, but rather an event to share technology improvements and give competing companies a hand to follow. So far, they have not really followed Tesla’s lead and tried to vertically integrate or increase their pace of innovation enough to join the party. But Tesla is still pushing for it.
My disappointment with Battery Day is seeing the automotive industry in my home country falling further behind instead of investing in better technology. Instead of that, they try to shape customer expectations downward to be able to sell inferior products. To try to explain go a potential customer that the product is superior when it isn’t is an insult to his or her intelligence.
Not long ago, I described Germany as a bunch of crazy engineers, as a country with the DNA needed to innovate incredible products the world has not seen before. But now I need to give that title and crown to the only company that deserves it, and that is Tesla.
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