REUTERS / Mike Blake
Tesla manufactures large cars, but has always had problems manufacturing them according to the best accepted practices of the global automotive industry.
I call this the "Tesla Paradox".
However, if Tesla makes a massive turnaround to robotaxis, the Tesla Paradox could disappear.
There is no guarantee that this will happen, but CEO Elon Musk is clearly pushing the automaker in that direction.
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I like to consider it as the Tesla Paradox: the first American automotive company to succeed in decades, selling about 250,000 vehicles last year, is not really that good at making cars.
The contrast between Tesla's brand image and his production competence is dramatic and inexcusable; While making cars is not easy, all the major automotive companies that are screwing them up these days have reached an absolutely boring level of efficiency.
Rarely do you hear about production problems in large car manufacturers, and even if problems are solved, they usually resolve fairly quickly. Meanwhile, Tesla generates almost weekly headlines about how their production processes work and how they do not work. (To be fair to Tesla, once his vehicles leave the factory, they tend to impress, and if they have problems, Tesla has always been committed to solving them.)
Read more: It does not matter if Tesla delivered 90,000 cars or 900,000 in the second quarter, which is more important if Tesla goes to the mass market or stays luxurious.
Tesla's Paradox is reduced to happily satisfied customers who have a loving and almost evangelical relationship with the CEO company Elon Musk and his vision faces a widespread understanding in the automotive industry that Tesla does not seem to find a manufacturing system that is more or less perfected 20 years ago.
Interestingly, Tesla's Paradox could be about to disappear.
Musk thought process
Joe Skipper / Reuters
Some important things have happened. Apparently, Musk has discovered that the global wave of electric vehicles that he hoped to encourage with Tesla will be small and move more slowly than expected in 2010. Electric vehicles could be superior to cars that burn gas from a technical point of view, but they still have body panels, windows and doors that must be screwed, and in that sense, Tesla is no different from Toyota.
In addition, the market has been receptive to Teslas, the first wealthy adopters that customers have helped, but they are also generally skeptical about electric vehicles.
Tesla has also proven not to be immune to the financial realities of automobile manufacturing: the automotive industry is capital intensive, and while car companies can generate a large amount of revenue, they struggle to manage the juicy profit margins.
Beyond all that, the action in Silicon Valley has gone from the EV to the AV; Self-driven cars are the new hot thing. Tesla has struggled to catch up with this score, but companies like Waymo and Cruise, owned by GM, appear to have a substantial advantage.
Read more: This is what makes the development of the Ford-VW alliance unique: & # 39; coopetition & # 39;
That's not going to stop Musk, who recently stated that Tesla plans to get a million robo-taxis on the road.
Robo-taxis could be what kills the Tesla Paradox. Taxi-theft vehicles must be fairly basic, cookie-cutter type cars, without having to worry about the traditional benefits of consumers, such as luxurious materials or complex seating. Nobody should care much if they are not beautifully done, as long as they are presented when they are acclaimed and do not break on the way to their destinations.
Musk is a fan of beauty; It does not cost me anything else to do something beautiful, he explained to me once, so it would be a great step to give him the aesthetic advantage of Tesla. But relieving Tesla of the responsibility of doing beautiful taxi-theft would consign what remains of the Tesla Paradox to low-volume, high-margin vehicles that Tesla could continue to see for personal property. In which case, the paradox could disappear on its own, as Tesla switches to custom manufacturing for such cars.
Musk is also a fan of money. He believes that Tesla should be profitable self-sustaining. But a decade of running an automotive company has shown him that from scratch, even the fact that Tesla reaches its current sales level does not guarantee that the company can operate consistently on black.
He also realized that if he wants to sell cheaper vehicles, he will need to make them by the millions to get the returns that investors want. That means that it is unlikely that Tesla's cash incineration story will be reversed.
Robotaxis, on the other hand, could publish much better margins and scale more easily in markets outside the US. UU The entire automotive industry has reached this conclusion, and companies like Uber and Lyft, with their high handling costs, are betting the future. For Tesla, the eventual podmobiles that most expect to use the taxi-robber fleets could be much easier to manufacture using the automated factories that Musk has foreseen for a long time.
Read more: It is said that one of the largest motorcycle companies that is taking over cities around the world lost $ 100 million in three months and wants to raise even more money.
Is Tesla coming out of the car business?
Benjamin Zhang / Business Insider
The result here is that, to be honest, it seems that Tesla no longer wants to be an automotive company, at least not in the traditional sense. He wants to move to the taxi business.
That's depressing, but it makes financial sense. And really, anyone in the automotive industry could evaluate Tesla's growth prospects as a car manufacturer and see that they were out of control with what the company is capable of doing. But Tesla as a provider of mobility on demand! Now that it matches the projections of Tesla's most enthusiastic drivers, now that they have finally learned from experience how the automotive business actually works.
Then what could go wrong? A lot, since the automatic driving technology of the Tesla autopilot could be overtaken by the more expensive laser radar systems that competitors have adopted. Tesla may also find that being a robber-taxi provider and a robber-taxi manufacturer are two tastes that do not go very well together. (Personally, I think it could be a great advantage, but it could also mark the return of the Paradox version of Tesla, Lite).
But the writing seems to be on the wall, and Musk has read it. Tesla, the automaker, could have been simply a phase, one that is now ending.
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