July 29th, 2020 by Steve Hanley
Tesla has been pleading with established automakers for years to please, please, please make competitive electric cars. Some are trying. Hyundai and KIA have some very attractive electric vehicles on offer. Additionally, they are about to introduce their first cars built on a dedicated electric car chassis. Yet, they are targeting tens of thousands of sales whereas Tesla is focused on building a million or more cars each year.
Volkswagen is walking the walk but admits to being years behind Tesla in many areas. Last January, CEO Herbert Diess said, “I think it’s great to have good competition. We think that Tesla plays a very important role in the transition because they are paving the way. They showed that electric cars are working, that a fully electric car is the right solution. So, we appreciate that.”
Recently, he praised Tesla once again for its ability to power through the disruptions caused by the coronavirus and still make a profit. “Elon Musk delivers results that many have deemed impossible,” Diess said in a post on LinkedIn, according to Automotive News. He added that Tesla’s results support his view that “in five to ten years the world’s most valuable company will be a mobility company — that can be called Tesla, Apple, or Volkswagen.”
Tesla has several advantages over any other car company in the world. Its autonomous driving system is superior to anything else out there (although, it still has some shortcomings) and its powertrains are simply more efficient. For instance, the Model Y has more than 300 miles of range while the Audi e-tron and Jaguar I-PACE struggle to go much more than about 230 miles before needing to be recharged.
For all those companies struggling to catch up, Elon Musk has a simple solution. Buy what you need from us. Asked whether that included Autopilot, Musk said it did.
Tesla is open to licensing software and supplying powertrains & batteries. We’re just trying to accelerate sustainable energy, not crush competitors!
— Elon Musk (@elonmusk) July 29, 2020
— Elon Musk (@elonmusk) July 29, 2020
The devil is in the details, of course. What would be the cost of using bits and pieces from Tesla as opposed to developing the software and hardware in house? And the licensing details could be complex. For instance, would Tesla still have access to data from its Autopilot system to improve the product if it is embedded in someone else’s automobiles?
Ford has agreed to use the Volkswagen MEB platform for a future electric car and the two companies are cooperating on other projects. Are we seeing the beginnings of trend where more traditional companies begin to consolidate, leaving just a handful of major manufacturers in the world?
One side note in all of this is the amount of money Tesla has taken in from other manufacturers who have purchased zero emissions credits from it. In a sense, they have paid for Tesla’s success and now will pay again to buy components they need from Tesla. Wouldn’t it have been smarter to just invest the money in building competitive products of their own instead of forking over hundreds of millions of dollars (or more) to Tesla?
Some criticize Tesla for the amount of money it makes selling ZEV credits, but it didn’t create those emissions schemes, it merely took advantage of them. Those other companies could have done the same thing themselves but chose not to. They were too busy focusing on selling traditional vehicles with their climate killing emissions. Shame on them.
When it comes to selling batteries, why wouldn’t other companies simply contract directly with battery manufacturers themselves? The answer could be revealed during Battery Day, currently scheduled for September 15. That promises to be a most interesting day.
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