Electric Vehicles — Tesla against the rest
Caught by their desire to drive a sustainable car and reduce their carbon footprint significantly, 2 neighbors down the street bought a Tesla Model 3 a little over 2 years ago and roughly around the same time. The first neighbor was totally happy with his car and took the little flaws and rare issue with the same acceptance as Apple fans do when their devices just don’t have a feature all the others have.
The second neighbor appeared to have received what in the old days of manual assembly would have been called a Monday-car. All kinds of assembly issues were visible even without having to search for them. Wiring done so bad that it wasn’t covered by the badly aligned panels. Panel alignment nowhere to be found. Not on the inside and not on the outside. That misalignment was so bad that the car basically become a leaking bucket when driving in the rain.
And the assembly issues were just the beginning of 2 years filled with negative experiences. Sudden rebooting of the famous Tesla Panel while driving is very uncomfortable, especially when that occasionally happens twice during a 1-hour drive. The final drop for the neighbor came when an overnight OTA update basically bricked the car and the Tesla dealer needed 4 days to solve it.
The Tesla Model 3 was sold without remorse and replaced with a Volkswagen ID.4, a properly engineered and assembled car where the entire experience and expertise of Volkswagen in mass-producing high quality cars is visible in every detail. And the first neighbor who has been very happy with his Tesla Model 3 until recently is starting to experience reliability issues after 50,000km. Odd variations in available range and charging times which are “solved” by updating firmware. Lights that sometimes start to live a life of their own and can not be controlled from any control are also “solved” by updating firmware, until it happens again. The “flunk” that becomes difficult to close and open because the minor alignment issues turn out to be not so minor after all…
We can learn an important lesson from these real-life experiences with Tesla electric vehicles, which are definitely no isolated incidents, as research shows. Tesla is still trying to figure out how to mass-produce high-quality cars! And despite its enormous advantage over all the others in market share of electric vehicles, that is where Tesla is going to lose their dominance quickly once the experienced car manufacturers kick into full gear, which by the way already happened.
Volkswagen took their time and dropped the ID platform on the market once they were ready to do what they do best: quality in volume. And that is not just the brand Volkswagen, it is the entire Volkswagen Group which includes Audi, Skoda, and more!
BMW experimented several years with their i-platform and stepped up to the plate with what is know around the world as “The ultimate driving machine”. Volvo, yes, the brand known for quality and safety, has been in the hybrid market for more than a decade and announced to nobody’s surprise that they will convert their entire platform to EVs.
And then there are the Asian car manufacturers. China is already producing more EVs than ICE. Japanese manufacturers do what they have always done: design processes to rapidly launch platforms, and Toyota, Nissan, and others are making EVs available with all the variations we know from the Japanese brands.
What we currently experience is that the market gap of Tesla’s stock is seen as a performance indicator for the company itself, and from that perspective it is crystal clear that Tesla outperforms all the others significantly. But that market gap is driven by what analysts and investors see as opportunities and of course the celebrity factor of Elon Musk, and it doesn’t really reflect on the performance of the company itself.
What does matter for the performance of car manufacturers are essential elements like dealer and service networks, where Tesla is even trailing the smallest European brands. Experience in designing high volume processes with many product variations, where Tesla appears to be still struggling after a decade of attempting to do so. And even more important, experience in solving issues during manufacturing and assembly, reliable quality controls, and all the processes that make sure that for example Volkswagen doesn’t confront their customers with doors which are so badly aligned that the maximum speed during rain is less than 60 kmh.
Tesla will most likely continue to be a company with high stock ratings and a market gap that exceeds conventional evaluations. But unless Tesla miraculously gets it production, assembly, service, distribution, after market and engineering processes under control within the next 12 months, those who have these capacities in their DNA will start eating market share faster than the worst-case scenario Tesla’s C-Suite can currently come up with.