Now that Tesla CEO Elon Musk and the company’s research and development team have revealed the existence of upcoming ‘Plaid Powertrain’ …
Now that Tesla CEO Elon Musk and the company’s research and development team have revealed the existence of upcoming ‘Plaid Powertrain’ variants, a few more questions about their recently-announced competition come to mind. Will the Porsche Taycan’s engineering achievements be overshadowed before they’ve even been enjoyed by future customers? Will Taycan reservation holders decide to wait for Tesla’s newest Model S to come out before making their Porsche purchase?
Musk’s latest play to stop the competition looks like it may just be as effective as he’s hoping it will be. Brian from the YouTube channel i1Tesla summed the move up nicely in a message to Porsche: “Your car’s not even out yet, and Tesla’s diminishing what you’re going to be doing…With powertrain technology and battery technology…Tesla is so superior.” Brian further opined that what the Taycan has ultimately achieved is along the lines of what Tesla did with the Model S in 2012, or perhaps a step above it. The Plaid system then becomes an achievement that renders the question of whether the Taycan is a ‘Tesla killer’ completely moot.
As its flagship electric car, Porsche considers the Taycan is one of its most important vehicles since the 911. It’s priced in the same bracket as the iconic sports car, around $150,000, and claims a battery range in the neighborhood of 240 miles per charge with a 100 kWh battery pack. A current Model S Performance, which now includes Ludicrous Mode and Autopilot as a standard offering, has about 100 additional miles of range than the Taycan’s ratings and has a price tag around $50,000 less. Perhaps there are significant differences in the driving experience of both cars and the customers they are designed to appeal to have differences as well, but on paper there’s definitely a nod to Tesla’s current Model S. Once the new Roadster is on the market, of course, an entirely different comparison will be on the table.
Although the upcoming “refreshed” Model S and X are arguably exciting enough to depress future Taycan sales, there’s the other question of whether or not the latest plaid-centered announcement will impact Tesla’s sales as well. Musk has said that the newer versions will be more expensive than current offerings, but it’s not clear that the additional cost would deter buyers from investing in the superior battery and powertrains that would come with them. New Model S and X sales could suffer as a result if customers take the ‘wait and see’ approach.
Musk cited this particular concern when it came to the Model Y. If customers stopped purchasing the Model 3 in favor of waiting for the Model Y, Tesla would majorly suffer as a result, especially considering the annual sales expectations for the all-electric crossover are estimated to be around 1 million units per year. This was probably why the Model Y unveiling event was notably subdued compared to other unveilings. However, it was likely important for Tesla’s long-term investment worth to show the progress being made towards a vehicle that is hoped to be a game changer in the electric vehicle market (and greater auto market overall) despite this risk.
Elon Musk held a call with Tesla employees this week in which he emphasized that Tesla needs to move cars out of the factory faster in order to fix the …
Elon Musk held a call with Tesla employees this week in which he emphasized that Tesla needs to move cars out of the factory faster in order to fix the automaker’s logistic problems.
He made several comparisons to Amazon.
Tesla is not like other automakers in many ways.
One of those ways is that Tesla owns and operates all its own stores, service centers, and delivery centers without doing business with third-party franchise dealerships, like most other automakers.
This business model results in several obvious differences, but one of the least appreciated ones is that Tesla owns and is responsible for all its vehicles all the way until the customer takes delivery.
It creates more complex logistics problems for Tesla than other automakers who simply sell to dealerships who keep a lot of inventory on their lots.
Currently, Tesla’s custom-ordered vehicles often don’t move from the factory until they schedule a delivery date with the customer, which is not always as easy as you would think.
According to people on the call, Musk told employees this week that starting next quarter, Tesla will put the vehicles in transit right away and deliver them to local delivery centers for the customers to pick them up at their convenience.
Tesla is spending a lot of manhours trying to coordinate customer deliveries and it is backing up inventory at the Fremont factory.
Musk wants a constant flow of vehicles going to the end destinations and compare the logistics to Amazon.
The CEO said:
“Amazon would go bankrupt if they would have to wait for customers to be ready to take delivery before shipping.”
Interestingly, it’s also a financial problem since Tesla is investing all the money into building the vehicles and doesn’t get paid until the customer takes delivery.
Therefore, every day that the car is built and not in the hands of the customer, it’s a day that Tesla is several tens of thousands of dollars in the hole.
Musk has been emphasizing that delivering the vehicles faster to customers would greatly improve Tesla’s financials.
On a bigger scale, Tesla having production facilities closer to its customers basez would also have a big impact on reducing transit times.
According to people on the call, Elon was adamant about fixing Tesla’s logistics issues and he talked about Amazon as a good example of solid logistics.
It was a bold move for Tesla to build its sales, service, and distribution network around company-owned locations instead of franchise dealerships.
I think it paid off in many ways despite the fact that there are still some issues, including some sale bans in a few states, but I like that Tesla is still finding ways to optimize the business model like this and make selling electric vehicles a better and more profitable business in the long run.
Ultimately, it should be easier for customers who will have more availability to just go pick up their cars at Tesla delivery centers.
Amazon is an interesting comparison. It’s definitely an efficient company when it comes to logistics, but it is especially interesting with the context that Amazon has been itself looking into selling cars.
Hola! Today we did a very comprehensive analysis of Elon Musk’s Twitter activity. Let’s get started. First, the primary metrics: as of 2019-09-14, Elon …
Hola! Today we did a very comprehensive analysis of Elon Musk’s Twitter activity. Let’s get started. First, the primary metrics: as of 2019-09-14, Elon Musk (@elonmusk) has 28218544 Twitter followers, is following 83 people, has tweeted 8734 times, has liked 3811 tweets, has uploaded 520 photos and videos and has been on Twitter since June 2009.
Going from top to bottom, their latest tweet, at the time of writing, has 487 replies, 568 retweets and 6,263 likes, their second latest tweet has 1,452 replies, 1,524 reweets and 40,661 likes, their third latest tweet has 2,107 replies, 4,090 retweets and 61,464 likes, their fourth latest tweet has 237 replies, 3,061 retweets and 17,350 likes and their fifth latest tweet has 1,375 replies, 3,623 retweets and 65,541 likes. That gives you an idea of how much activity they usually get.
Going through Elon Musk’s last couple-dozen tweets (and retweets), the one we consider the most popular, having caused a very respectable 4872 direct replies at the time of writing, is this:
That happens to to have caused quite a bit of discussion, having also had 15588 retweets and 143823 likes.
What about Elon Musk’s least popular tweet as of late (again, including retweets)? We say it’s this one:
That only had 201 direct replies, 338 retweets and 8118 likes.
We did a huge amount of of research into Elon Musk’s Twitter activity, looking through what people were saying in response to them, their likes/retweet numbers compared to before, the amount of positive/negative responses and so on. We won’t bore you with the details, so our conclusion is this: we say the online sentiment for Elon Musk on Twitter right now is just fine.
That’s it for now. Thanks for coming, and write a comment if you disagree with me. Just don’t write anything too mean.
The two biggest names in the electric car realm are Tesla CEO Elon Musk (obviously) and a guy you probably haven’t heard of, RJ Scaringe, who …
Regular Business Insider readers know that every weekend, I write a take on something Tesla-related. This time around, I’m going to ask for patience as I preface the effort with a short auto-industry history lesson.
The development of the car business in the 20th century followed a predictable pattern: daring innovators gave way to savvy managers. The early days were the Wild West — or Wild Midwest, and the burgeoning industry was located mostly in the middle of the US, with Detroit as its capital — but after World War II and the emergence of a vast American consumer culture, automotive startups morphed into multinational corporations.
The two most important men in this story were Henry Ford, who needs no introduction, and Alfred Sloan, who does. It was Ford who laid the groundwork for the modern auto industry and pioneered both the effective moving assembly line and the idea of mass-market motorized transport with the Model T. The company that bears his name and that’s still run in part by his great-grandson, board chairman Bill Ford, remains the No. 2 US car company.
Sloan, a more obscure personality, created the modern corporation in General Motors. At its peak in the 1950s, GM controlled half the US car market; it still controls about 20%. (The Germans and Japanese weren’t really selling vehicles in the US during the Eisenhower administration.)
The Utopian Ford vs. the pragmatic Sloan
The key distinction between Henry Ford and Alfred Sloan was that Ford was something of a utopian (and, more troublingly, given to anti-Semitic propaganda) who harbored visionary, paternalistic attitudes toward his workforce and his customers. He believed that his workers should be paid enough to buy the cars they produced, and thereby created a virtuous circle, but he disliked credit and figured that there was no reason to sell Model T’s that weren’t black.
Sloan, by contrast, thought that the buyer was always right — or at least that the consumer should enjoy abundant choice, and that GM as a corporation should provide it. Some of this was expeditious: GM was created by combining brands — Chevrolet, Buick, Cadillac — so Sloan was simply managing reality as GM’s president. But GM has always concentrated on the pull of consumers, rather than Ford’s push to deliver singularly great products.
The symbols of the two American giants capture this distinction. Henry Ford’s great achievement was the mighty River Rouge factory, where train cars loaded with iron ore pulled up to one end of the plant and finished cars rolled out the other. Sloan’s work of genius was GM’s organizational chart, the blueprint for American managerial capitalism.
OK, history lesson over. Now let’s see how history repeats itself
The two biggest names in the electric car realm are Tesla CEO Elon Musk (obviously) and a guy you probably haven’t heard of, RJ Scaringe, who leads Rivian, a startup electric SUV and pickup-truck maker. In my cycles-of-history framework, Musk is Ford and Scaringe is Sloan. (There’s some irony here, by the way, as Ford has invested $500 million in Rivian, while Tesla hasn’t seen a major automaker take a stake since Daimler and Toyota bought equity prior to Tesla’s 2010 IPO.)
The big difference between Musk and Scaringe is that Musk, the visionary, wants nothing to do with the legacy auto industry anymore, while Scaringe is running Rivian sort of like a junior OEM. When I saw the photo below, of Scaringe and Bill Ford after the Ford investment was announced, I speculated that I was looking at Ford’s next CEO.
Like Henry Ford, Musk is preoccupied with the manufacturing process — Tesla’s Gigafactories, in Musk’s view, are more important than Tesla’s cars. They’re the “machine that builds the machine,” and Musk would like them to become radically automated.
Why Rivian is more like a traditional automaker than Tesla
Scaringe — like Sloan, an MIT engineering grad — is creating an electric automaker that’s designed to reach the consumer; he’s not trying to reinvent manufacturing. To achieve that, he wants everything to do with the legacy auto industry. Where Sloan had his org chart, Scaringe has partnerships and deals, all intended to make Rivian vehicles easier to manufacture, sell, and service. His most recent investment, of $350 million from Cox Automotive, is representative. (Ford and Amazon have also kicked in, giving Rivian a $2 billion total.)
Cox owns Kelley Blue Book and Autotrader, among other properties. These entities are designed to facilitate the car buying and leasing process and are heavily organized around the consumer. By investing in Rivian, they’re getting a piece of the future, the chance to integrate sales not just of EVs, but of SUVs and pickups, the most popular vehicles in the lucrative US market. Rivian is getting a huge pipeline to buyers from the deal.
In the history of the car business, Ford is seen as stubborn and idealistic while Sloan is considered adaptable and pragmatic. Of course, both Ford and GM are still around, so it’s not clear that Ford’s vision lost out to Sloan’s technocracy. Musk likes to note that Ford and Tesla are the only two American car makers that haven’t gone bankrupt.
But Ford did have to recruit a cadre of number-crunching efficiency experts after World War II — the so-called “Whiz Kids” who had brought statistical analysis to the war effort — to modernize its business. Nonetheless, Ford has often been home to outside-the-box thinkers, from the brash Lee Iacocca to the former Boeing exec Alan Mulally, who rescued Ford from insolvency before the financial crisis. GM continues to embrace the skilled manager, although in current CEO Mary Barra the company has been making tough call after tough call on issues that the pre-bankruptcy GM had endlessly postponed, such as selling the perennially money-losing European division, Opel.
Interestingly, with Musk and Scaringe we also have a contest of engineers. Or more accurately, technologists, as Musk’s background is in physics while Scaringe has a PhD in mechanical engineering. Don’t interpret that as meaning Scaringe is a superior engineer; Musk likely knows more about electric-vehicle design than most people in the business. But while the auto industry is full of engineers in leadership roles, Musk likes to express engineering in a way that’s wonky and unique (as well as sort of irritatingly didactic at times). Scaringe is more low-key. But in Scaringe, Musk has a potential rival who can actually out-engineer him, something he hasn’t really had to deal with up to this point.
What we don’t have with Musk and Scaringe is a contest of celebrities. Musk is world-famous, the basis for the “Iron Man” Tony Stark character — a real-life billionaire and occasional playboy (Musk gets around, but he also has five kids). Scaringe is unknown outside the car business, and not even that well-known in it. I’ve been covering cars for over a decade and I’d never heard of him prior to about a year ago.
But obviously, even if you know nothing about cars, you’re probably familiar with Henry Ford, while Alfred Sloan might ring a bell only if you live in the New York area and are aware of the Sloan Kettering medical centers or the Sloan Foundation’s philanthropy.
The historical comparisons aren’t perfect. Musk is a creature of Silicon Valley and its embrace of risk-taking, rapid-iteration, launch-now-and-debug-later ethos. He’s been compared with Steve Jobs. The business dynamics of the tech industry in the early 21st century are not the same as the car business in the early 20th. Scaringe, meanwhile, has just begun to hit his stride, after almost a decade of developing and pivoting Rivian. He seems fresher because Rivian missed out on the EV-startup surge of the 2010s — a fortunate thing, as most of those startups, save for Tesla, have vanished. Scaringe is a creature of the next wave, which entails a lot more cooperation with Detroit and recognizes that building vehicles at scale is extremely difficult.
Prior to Scaringe, Musk’s main rival was often seen as Henrik Fisker, a car designer who founded Fisker Automotive, which went out of business in 2013 (Fisker himself had resigned by then, and the automaker’s decline was due to bottlenecks with its battery supplier and the unfortunate destruction of a load of cars in Hurricane Sandy). If anything, Fisker was a more flamboyant and compelling personality that Musk; I’ve talked to him on several occassions, and his talents as a raconteur are formidable. He’s currently engaged in a wide range of projects, from building a supercar to resuscitating electric mobility with a new company, Fisker, Inc.
To borrow a famous analysis from the philosopher Isaiah Berlin, Fisker is a fox to Scaringe’s hedgehog (according to Berlin, referencing from an early distinction in ancient Greek literature, the fox knows many things, while the hedgehog concentrates on one). Musk, too, is a fox, engaged with space exploration, tunneling, and artificial intelligence.
At first glance, Henry Ford might seem hedgehog-like, but in my view, he was probably a fox, or perhaps a fox-hedgehog hybrid (as was the novelist Leo Tolstoy, by Berlin’s reading). Foxes function well as entrepreneurs, even though they might be single-mindedly devoted to their companies and their missions; Ford started two failed enterprises before the Ford Motor Company — and maybe even three, depending on how you assess his fortunes.
Sloan, meanwhile, found his glory in melding GM with the American consumer, and in a larger sense, postwar life. The definite GM quote didn’t come from Sloan, but he enabled the automaker’s World War II-era president, Charles Erwin Wilson, to tell Congress during his confirmation hearings to become Eisenhower’s Secretary of Defense, that he could make a decision that would place GM and the US in conflict because “I thought what was good for our country was good for General Motors, and vice versa.”
We’re now watching this business narrative of the 20th century repeated in the 21st. Ultimately, this is important because the gestational electric-vehicle industry needs big personalities to sustain and grow it. The first decade has been a mixed bag, with Tesla stumbling through a decade of infrequent profits and serial controversies while the major automakers approach a market that’s still quite weak, with halting steps.
Ford and GM are both producing electric cars, but we really need the new Ford and new GM. In Tesla and Rivian we could have not just that, but the leaders who can do for EVs what Henry Ford and Alfred Sloan did for internal combustion.
Hardly a month goes by without some new development in this space, whether it’s Rocket Lab reaching a new milestone in small rockets launched, or one of Sir Richard Branson’s “Virgin” companies announcing some new twist to the rockets story. Last month, though, it was SpaceX — better known for launching large rockets than small — that made waves in the new space industry when it announced an upcoming series of “regularly scheduled, dedicated Falcon 9 rideshare missions” that would carry exclusively satellites massing up to 150 kilograms and put them in orbit for “as low as $2.25 million per mission.”
At the time, I suggested SpaceX was attempting to disrupt the market for small rockets before it reaches critical mass, pre-empting a move to smaller rockets by offering similar services for cheaper prices. But there was still just one problem with SpaceX’s plan:
Even scheduling regular trips to orbit, SpaceX was only planning to launch dedicated rideshare missions once per year. For any small satellite operator needing to travel to space sooner, that wait might prove too long, opening up a niche for small rocket makers: rocket launches on demand.
Now SpaceX is moving to close that gap in service and eliminate that niche.
SpaceX is making its mark, and claiming all of space launch as its own. Image source: SpaceX.
Monthly rocket rides to space
In a quick tweak to its Smallsat Rideshare Program announced last month, SpaceX has confirmed that in addition to its annual mass satellite bus-rides to orbit, it will now also be offering “monthly missions.” It will do this by allowing small satellite operators to hop aboard the monthly launches SpaceX itself will be running as it puts its own Starlink satellites in orbit.
Now, we’ve already run down the details of SpaceX’s original flight plan: Beginning sometime between late 2020 and late 2021, the company will offer customers the chance to book a slot on one of its “Dedicated ESPA Class” Falcon 9 launches to sun-synchronous orbit. Subsequent missions will launch roughly once per year, in the first quarter of every year, and will fly regardless of whether the rocket has booked enough reservations to max out its capacity — meaning there are guaranteed launch dates.
The big change is that in addition to these guaranteed, annual departures, SpaceX will now be offering monthly launch opportunities. Because SpaceX is planning to rapidly accelerate the launch tempo of its Starlink missions so as to get its satellite broadband constellation in operation sooner, it’s now able to use these additional monthly launches to also carry third parties’ satellites. In so doing, SpaceX can offer customers the best of both worlds — guaranteed launch dates once per year for folks who can wait that long, and more flexible, once-per-month launch slots available to those who simply cannot wait.
Adding to the attractiveness of the program, SpaceX has simplified (and lowered) the rideshare program’s pricing, while raising its capacity. Previously, the plan was to charge customers $2.25 million to launch a payload massing up to 150 kilograms. But that price may have been just a bit too close to what competitors such as New Zealand’s Rocket Lab were offering.
To make the difference much more stark, SpaceX will now advertise launch prices “as low as $1 million.” And it will carry payloads up to 200 kilograms in mass for that price, with an excess baggage fee of $5,000 for every 1 kg a customer goes over the weight limit. Basically, what that works out to is a launch cost of $5000 per kilo no matter how big a customer’s satellite is, with a $1 million minimum ticket price.
What it means for the competition
So what’s the upshot of all this?
At last report, Rocket Lab — the only small rocket maker that wants to compete in the market for launching small satellites and has proven its ability to launch its rockets successfully — was charging about $1 million to put a 12U “cube” satellite (which would mass about 16 kilograms) into orbit. For an equivalent price, SpaceX is now offering to orbit a satellite 12.5 times as large — or perhaps to orbit 12.5 satellites for that same low price.
Got a bigger satellite you want to launch? An entire Electron rocket mission, carrying a maximum payload of perhaps 225 kilograms, would cost about $6.5 million at Rocket Lab, whereas SpaceX will launch a similar-size satellite for just $1 million and change. And SpaceX is offering to launch these satellites about as often as Rocket Lab is already doing so today — once per month.
I don’t know about you, but it sure looks to me like SpaceX is trying to smother the small rocket market in its cradle. At prices like these, it just might succeed.