Almost 17 years ago, a small company appeared in California, the founders of which sought to fulfill their dreams and create a car that would be powered by electricity, rather than fossil fuels. That is why other car companies that have been on the market for decades have been dismissive of Tesla.
What a nonsense... Creating cars on electricity seemed stupid and unjustified. Legacy automakers ridiculed Tesla when it was struggling with production problems, with a particular emphasis on the fact that the company wasted money. Many hedge funds have bet that the automaker, led by eccentric genius Elon Musk, will fail.
But after only a few years, the legacy automakers no longer laugh, now in a panic they are trying to catch up with Tesla, who has done the incredible, it revolutionized the world’s automotive market.
A recent article in the New York Times explains how European carmakers failed to take the threat from the upstart Californians seriously, and why it may now be too late for them to catch up. Just a few months after the start of production, the Tesla Model 3 became so successful that it shocked industry leaders. While Volkswagen, BMW and Mercedes-Benz laughed at Tesla, they missed a startling shift in automotive technology. And despite many warnings, they are just starting to implement competing electric cars.
In 2019 Tesla sold less than 100,000 cars in Europe. The company has a limited selection of models, but within one month, it was able to sell 24,000 cars, which is a third more than BMW or Mercedes, although they offer dozens of models!
German carmakers unwilling to compete with their own most profitable products have been waiting too long to offer a battery-powered car comparable to Model 3.
Many of the electric cars offered by well-known companies are mainly modifications of conventional cars, such as the Audi e-tron or Mercedes EQC. They do not take full advantage of the opportunity that electrification offers to rethink automotive design.
“They are not really game changers,” Felipe Munoz, an analyst at JATO Dynamics, said of the electric cars offered by traditional carmakers. They “lost some time and that’s why Tesla is doing so well.”
The Porsche Taycan was designed from the ground up as an electric car, but its high price and limited capabilities will certainly not make it a car for the mass market.
BMW began producing battery-powered i3 in 2013. But, it's a small car, with an initial price in Germany of €39,000, including taxes. The i3 costs almost as much as the spacious Model 3, which starts at €45,000. Also, the i3 software is very simple and it cannot be compared at all with Tesla software, with its autopilot.
The battery-powered ID.3, which should cost around $30,000, was supposed to be a competitor for Tesla. But Volkswagen still cannot make high-quality software that will work in their cars according to their plan. This, in turn, delays the production and delivery of cars to customers.
For European automakers, the situation has become even more complicated, since in November Tesla’s CEO Elon Musk announced plans to build a factory in the heart of the European automobile industry in Berlin, Germany. It is at this factory that the company will produce Model 3 and Model Y, which are aimed at the mass market. Now Tesla will have access to German engineers and manufacturing experts. For European automakers, it's time to act quickly and efficiently, otherwise they will disappear in a cloud of dust, trying to catch up with Tesla.
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