How can the establishment scupper Tesla?
What unites the pandemic responses from the German industry’s chiefs? Panic. At BMW, Oliver Zipse is keen to re-focus on hardware and forget grand talk about being a service provider. At Audi, Markus Duesmann is considering saving the doomed TT and R8; they may be niche products, but at least they’re distinctive and admired. Merc’s Ola Källenius is having serious doubts about car sharing and hydrogen fuel cells for passenger cars. VW’s Herbert Diess, meanwhile, is lobbying for a softening or delaying of the inevitable huge penalties for not meeting CO2 targets.
Even consumers who expect to hold on to their jobs are in no mood to spend on new cars. Many are now much more likely to hang on to what they’ve got, in some cases extending their lease with smaller monthly payments. Most manufacturers are facing far fewer orders, leading to job losses and eating into cash reserves. The assumption is that the post-pandemic car world will restructure itself to be less reliant on global supply chains, and will employ notably fewer people.
Tesla is bucking every trend. It’s growing in appeal, pressing ahead with building a factory in Germany, and able to magic up waiting lists for even the most divisive of products, such as the Cybertruck. We expect it to come up with a compact city car soon. Gloomy old-world manufacturers are figuring out how to learn from Tesla, and how to beat it at its own game. Some options? Go head to head, o ering potential Tesla buyers a direct alternative. Or o er cars in the market segments Tesla has so far skipped, such as sub-compacts. Or exploit Tesla’s weaknesses: patchy build quality, dull design and a lack of solid-state battery leadership. And finally, push digital, making cars better at being mobile o ces and aids to e-commerce.
It’s all a very long way from the traditional car industry way of doing things…