Car Dealers Should Fear the Tesla Model

I’ve written at length about the American Automobile Dealers Association’s displeasure with Tesla’s business model of selling direct to consumers on a dedicated page on my blog. At this point the reasons for the fight are old news just like the dealer network and way of doing business is from a long-gone era. The dealers are tone deaf to the way consumers shop for and ultimately purchase products. The dealers have a number of stated reasons that Tesla should not be allowed to sell their cars. These are the ones most often stated.

Consumers Won’t get the Best Price

Tim Doran, president of the Ohio Automobile Dealers Association recently said, “If you have a manufacturer that is selling vehicles direct to the public and they are the only source for that particular vehicle, there is no competition for the price.”*

As a sound byte that seems logical. We know from experience that single providers veer away from consumer good and toward corporate profits. However, that happens even when there are multiple makers and suppliers of products and services. For years we only had one telephone company. If you wanted dial tone there was only one place to go, Ma Bell. The Bell System monopoly was broken up by federal mandate in 1982 as part of a consent decree. Certainly it opened up competition by MCI and Sprint for long distance service and eventually to the cellular phone network. It accomplished the goal of offering the consumer choice. Pricing is an altogether other thing. The plans that were made available were impossible for the average consumer to understand. Local rates, long distance rates and my favorite, local-long distance. Then there was the slamming. Calling a consumer and promising low cost phone service and then switching them whether they agreed or not. This strategy is a time-tested one. Offer non-customers a low rate for a fixed period of them them raise the price and they won’t even notice. Built-in price increases without having to publish the price.

Certainly there is an acquisition expense for the company that must be recovered as they calculate their lifetime customer value (LCV), but it lacks transparency and is full of unexpected surprises for the customer. A lower price up front always means it will be made up in some fashion over time. It requires consumers to put considerable effort in understanding the total cost of being a customer for that company and their product or service. Very few of us practice this economy.

Tesla is fully transparent. They don’t make or sell a car. I argue it’s not a car at all. It’s personal transportation. The likes of which has never been seen before. Tesla doesn’t tell consumers they are the lowest cost provider. All options and pricing are right up there on their web site for anyone to see. Configure your Model S and you know exactly how much it will cost when you pick it up. Here’s the real difference. The pricing on car manufacture’s sites have almost no connection with what you will pay when you finally cut your deal. Missing from the car builders’s sites are all the things that dealers will try to sell you and charge you for over time. And it’s estimated that dealers add up to $1,500 to the cost of a vehicle.

My suspicion is the real reason dealers don’t like Tesla is they make a transportation choice that they are unable to compete with. There is very little difference between most internal combustion engine (ICE) cars. Certainly they have varied feature options, designs, technology, etc., but the concept is the same. Thousands of moving parts, burn fossil fuel and carve out your time and money to keep it on the road each year. Dealers have to create promotions and gimmicks to get attention because shopping at Ford is no different than shopping at Chevrolet or Toyota or Honda. It comes down to which car fits your driving preferences and fits within your lifestyle. Not only is the shopping no different, the driving isn’t either.

Dealers are dealers and the experience is essentially the same. Saturn made a run at breaking that paradigm with their fixed price, no negotiation approach. It was groundbreaking and in some ways it worked.

The Model S is an entirely new approach to what goes into a car. That means first cycle technology which always costs a bit more at first but will get better and chapter over time. Trying to win on price is largely for commodity items, like milk and gas-powered cars.

Safety Will Be Compromised

Another item cited as a reason to continue the ban on direct sales of cars to consumers is safety. I’ve read numerous news reports and claims by car dealers that say they make cars safer for consumers. So let’s look at the stats. 22 million cars were recalled in 2013. GM alone has recalled 30 million in 2014. In General Motor’s case the recalls represent a shift toward a more accountable culture. Decades of covering up problems in the name of profit are perhaps seeing at least a peak of sunlight these days, but not without federal action.

My question to the dealers would be, what action did you take to demand safer cars? When Toyota had their unexpected acceleration issue, did you threaten to stop your orders until it was fixed? When customers flocked to your service bays did you band together with your fellow dealers and forcefully demand more facts and change? I’ve not read anything even close to that.

Recall service is paid for by the manufacturer, which means dealers can make money on them. I’m not suggesting dealers want to see people hurt or killed, but for minor things that are not mission critical to safety, they probably don’t mind much. In fact they have changed the word recall to “product update.” When I bought an ICE car for my wife in January of this year, not a word was uttered about safety or taking me through the history of recalls and what was being done to ensure that was a thing of the past.

All Car Manufacturers will Start Selling Direct

Of all the reasons offered up, this one strikes me as the most lame. GM has so many self-made distractions these days, figuring out how to sell direct cannot possibly be high on their radar. First of all having a dealership is only mildly about selling cars, it’s really about selling service. It’s a system designed for customers to come back again and again to open their wallet to “maintain their vehicle in top working condition.” Why would Toyota or Honda or Ford even want to scale up for that? Perhaps I’m wrong and of course I don’t know the P&L implications, but this would likely require a huge investment.

Please remember ICE car makers build ICE cars. Tesla makes electric cars. They are on different planets. The Model S does not require anywhere near the service level that ICE cars require. Imaging having an ICE car and realizing that the only thing you had to remember to do was put gas in it and maybe replace the tires? No oil changes, tune-ups, timing belt replacements, transmission service, et… How many more new ICE cars would be purchased if that was true?

What you Don’t Have to Worry About with a Model S

Mr. Doran concedes that the Model S is “a pretty nice car,” but he says he wouldn’t buy one because there isn’t enough of an infrastructure for parts and service. So let’s make a list of some of the parts you find on an ICE car that you don’t have to worry about with a Model S because it doesn’t need them.*

Parts List

I can see how Mr. Doran is so concerned about needing easy and fast access to parts. With so many of them and that display of a lack of confidence in their reliability, he needs peace of mind. As far as “infrastructure” is concerned, the only one really needed is electricity which is already in ample supply across the country. Charging stations are numerous. ChargePoint, the service I use frequently has over 18,000 stations in the United States. As a quick comparison, there are 14,000 McDonald’s restaurants.

Let’s compare the power plants of an ICE car engine and a Tesla Model S motor.

Engine comparison

Tesla uses a brushless AC induction motor consisting of a rotor and a stator. The only points of contact in the motor are the bearings. It puts out 290 kilowatts and delivers 100% instant torque at any speed and does it using a single gear; drive.

Software as a Service

Tesla is a Silicon Valley company. True, there are issues with how these guys behave these days, but what you get is an entirely new experience and level of performance. When the first iPhone was released in 2007, it was either $499 or $599. Who would ever think that spending that much on a cell phone made any sense? After all, you got your new cell phone free from your provider (after signing a new subsidized 2 year contract of course). Apple sold 6.1 million of their first generation iphones in the first five quarters. It was groundbreaking.

Before I purchased my Model S I test drove a Mercedes Benz S Class. The salesman told me the navigation system was amazing and I could get map updates as well. I asked how that worked and he said I would schedule a service visit, bring in the car and they would update them for about $300. My Model S receives over the air updates and they push new versions of Google Maps to me free of charge. Another stark example why dealers don’t want Tesla’s model anywhere near them.

 

Ford was founded in 1903, General Motors in 1908, , Chrysler in 1925. Tesla was founded in 2003. They have taken the time to reimagine what transportation should be for consumers. Considered the environment while making them. Building in deep safety measures, and breaking the belief that along with car ownership comes the burden of parenting it with repeated maintenance and expense.

* Quote taken from The Columbus Post Dispatch, September 30, 2014

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Tesla Service Provides a Best in Class Experience

 

Tesla-Highland-Park-Service-Area

Having hit 6,000 miles on my Model S it was time for a tire rotation. I called the Highland Park service center. The person who answered the phone said they were very busy and could they get back to me later on. Not long thereafter I received an email that offered me several dates available for the service request. I countered with a different date. The reply came quickly and indicated that day would be fine. They would valet my car to the service center, perform the tire rotation and return it to me.

From that initial phone call they captured my cell phone number and matched it to my information on file. They knew my home address and had already lined up potential service bulletins that might apply to my specific car.

Exactly at 8:30 am last Saturday, as promised, my doorbell rang. My car was driven away and I went on with some gardening chores I was looking forward to doing. About three hours later my iphone rang. They were all done and leaving the service center.

In less than twenty minutes my Model S entered my driveway and was driven directly into my garage, exactly where I park it. The gentleman who drove it emerged from the car, plugged it in and handed me the key.

The tire rotation had been performed along with a couple other minor updates. My Model S had been vacuumed and hand washed, including tire shine. All of this at NO charge.

I’ve had dozens, perhaps a hundred or more service experiences with other car makers. None of them, absolutely not one compared to the experience Tesla provided.

Tesla continues to get things right. They’re not perfect, but in ten short years they have an amazing product and it seems they have the energy and determination to keep advancing.

Owning Model S – Book Review

UnknownThe Model S is in it’s infancy compared to global automotive standards. The Corvette is over 60 years old, this year the Mustang hits 50 and Rolls Royce was founded 110 years ago. In contrast, the Model S is less than two years old, so at that young age there’s not much history to report. We hear almost as much talk about Elon Musk, Tesla Motor’s CEO, and Tesla stock than the car; except that is, from the drivers.

Nick J. Howe is not really an unusual Model S driver, he has just taken it to an entirely new level. He’s been focused on Tesla and the concept of the Model S years before it hit the production line. He and I are in the same camp because we own and drive a Model S, but that’s where the similarity ends. Mr. Howe has been cataloging data, making observations and connecting with other Tesla enthusiasts on forums since the very early days. He has taken all that knowledge and insight and written it down in a book, Owning Model S: The Definitive Guide to Buying and Owning the Tesla Model S. That’s a mouthful. I prefer shorter titles.

The book is modest looking as trade paperbacks go. Glossy but sturdy paper stock covers the shiny pages on the interior. It has that self-published look and feel throughout. Not a bad thing, but I am looking forward to the day when someone will publish a rich, large volume dedicated to this innovation. I’m talking coffee table style. Hardcover, printed in Italy on acid free paper in 12 color. There’s a challenge.

We have all heard the idiom, “Never judge a book by it’s cover.” Here’s a prime example. This volume is jam-packed with details, tips, personal anecdotes and resources that validates the author’s claim as the “definitive guide.”

I was hard pressed to come up with many things not covered in some manner by Mr. Howe. He goes from the dawning of Tesla Motors, to his excitement of the experience of configuring and ordering the car to the excruciating wait (downplayed in the book) until delivery day. This is only the beginning. He goes on to cover every feature, detail and how it impacts everyday use. It’s actually more of a deconstruction of the entire concept than a guide to the car. He’s giddy  over the car’s obvious performance elements but doesn’t shy away from reporting the glitches uncovered early on as well as what he feels is missing inside the cabin. He wants interior brace handles, clothes hooks, cup holders, etc. Personally I love the minimalist expression of the car and am happy the creature comforts of the past were rejected by Tesla designers. The Model S looks like a sexy gas car at first glance, but when you look more closely you see something entirely different. The cool thing is no one really expects it to be an EV.

His writing approach strikes a smart balance between practical and scientific. I use scientific purposely. The technology age would not officially emerge for decades beyond Nikola Tesla and his magical experiments. Tesla was more of a sorcerer and was convinced he could bend the laws of nature to his liking. The Model S is a technology device embedded in a mode of personal transportation and to leave out discussion on these things would be a mistake. Howe breaks down the power train, regenerative braking and the battery into simple English so we can all understand and appreciate what went into designing the car and why it handles like no other.

I learned a lot of little things about the car that I’m now incorporating into my routine or cataloging away for a day when it will be very useful. The getting ready for delivery section might seem trivial, but this is not your normal car and you need to be ready or you will be somewhat frustrated. The writing style is short sentences. Lots of breaks, bullets, illustrations, diagrams and emphasis boxes. It’s feels like a PowerPoint presentation at times, but you can easily find what you’re looking for thanks to an exhaustive table of contents and a good index. I hate it when authors don’t include an index.

One of my favorite items in the book is Decoding Your VIN. It’s the geek in me.

VIN Decoded

One Thing Bothers Me

I do have to say that I would like people to stop referring to supercharging as “free for life.” If you have an 85Kw battery then your Model S is activated for supercharging at the factory. The $10,000 premium paid for the additional electricity storage likely has a predicted supercharger usage factored in. Today’s price to activate supercharging on a 60Kw battery is $2,500. True enough there is no additional cost for plugging-in once you make that one time payment, but if we use Mr. Howe’s formula of 8,000 miles driven equals $300 in electricity cost, then a 60Kw driver would need to plug exclusively into a supercharger over the course of driving 66,000 miles to break even. Unlikely, if not impossible.

I found myself referring back to this book several times to remind me of something or add clarity to what I thought I already knew. Thank you Mr. Howe for doing all the hard work. If you own are will be soon owning a Model S, this book is worth the investment. For me it goes right into the glove box of my Model S. Or should we really call it the J1772 adaptor box?

Roger Pressman, founder of teslaaccessories.com and very early Model S adaptor is to be thanked for recognizing the value in this material and working to get it published.

Get your copy of Owning Model S here.

Read a prior post on another book about the Model S. Tesla Model S: Best Car Ever

My calculations on the Total cost of ownership of a Model S

A Scientific Lifestyle

It’s not unusual for people who have a strong attachment to something to form clubs in hopes of meeting like-minded people. It’s been happening for centuries. Tesla is no different. There are a lot of communities, forums and information sites out there that are Tesla related. A couple of months ago I came across a very interesting one, Teslarati.

Teslarati Logo

Teslarati’s goal is to be the number 1 source for Tesla lifestyle news, product reviews, aftermarket upgrades, and accessories for the Tesla Model S, Model X and Roadster.

The site is very modern and keeps with the current design trend by making things easy to find. Content at a glance. It takes on a diverse collection of topics and does it with a mix of auto industry pros and journalists. They have global connections and a significant amount of their readership comes from outside the United States.

Recently they reached out to me after reading my blog and asked if I’d be interested in contributing. Needless to say I was honored and after a phone conversation with Gene, the founder, it was clear to me that these guys were the real deal. Gene had never met a Tesla owner outside California before talking to me. The site was started as an experiment to try to capture and communicate the Tesla lifestyle. They are growing fast.

I’m happy to report my first post for Teslarati was published yesterday. I conducted an interview with Gino Bernardi who is the only licensed livery driver in Chicago that drives a Model S on the job. You can check him out, and order a ride from his web site Watts on Wheels. Below is Gino’s Tesla on the tarmac of an executive airport waiting to pick-up a client.

 

Model S on Tarmac

 

Although the Model S is now registered in all 50 states, the greatest concentration is of course in the Golden State. But Chicago has a strong Tesla following as well as car ownership. I will be reviewing aftermarket products on Teslarati as well as providing my personal perspective on what it’s like to drive the car in the Chicagoland area. I believe in time that the EV can seamlessly integrate into most people’s driving lifestyle. As the technology gets cheaper and more advanced, millions will be able to afford one in a few short years. Change is always hard and slow. One of my goals is to help people learn, get comfortable with and clearly see the benefits of driving electric.

Tesla Tax Time

It is a widely held belief that there are only two sure things in life, “Death and taxes.” This post is about the latter. Like everyone on the planet, I am not a fan of taxes, but Tesla has given me a present this April 15th. A refund!

Let’s step back a bit. Business incentive rules passed after the 9/11 attacks allowed a $38,000 Federal tax deduction to be taken if you bought a Hummer H2 and used it for business purposes. This was a very difficult time for the nation and especially car companies. On a very personal note, I lost a friend on American Airlines Flight 11, the first plane to strike the World Trade Center. For weeks I was in a fog. Consumer confidence eroded after 9/11, and car sales were especially hit hard. This program was put in place to stimulate the economy.

In as late as 2010, Japan labeled the Hummer H3 as “fuel efficient” and offered a 250,000 yen ($2,779) subsidy as part of their imported car rules. They buckled under pressure from General Motors who complained they were not being treated fairly as an importer to Japan.

The manner in which the Hummer vehicle was classified did not require GM to display MPG ratings on the sticker. Guess what Hummer owner’s number one complaint was after their purchase. It was that the vehicle really uses a lot of gas. Insert your own reaction here.

Back to the present day. My tax preparer shot me an email today and let me know that because of the $7,500 Alternative Motor Vehicle Credit established by the Internal Revenue Service (Form 8910) I will receive a refund for 2013. Couple that with the $4,000 check the State of Illinois sent me last week and I am happy to report that the $11,750 subsidy is real.

Rebate Check

The Hummer story aside, I’m thankful we have not had to live through another horrible 9/11 since then and our government is supporting the future of electric vehicle innovation. This subsidy is only available until Tesla sells 200,000 electric vehicles.

After many years in a row of having to write a check to the U.S. Treasury, I am getting a refund. It’s small, but every dollar counts.

 

American Automakers: A Cautionary Tale

The American Automobile

America has done so many things well for dozens of decades. Farming, industrial, health, manufacturing and technology are but a few of the practices that have flourished in our fledgling democracy. You name it we have been leaders. It has been said, “They make airplanes in Everett (Boeing’s primary assembly point), every one else is still working on it.” But as is always case, people, cultures and politics eventually catch up, and indeed in many cases we have been surpassed. The idea of the horseless carriage was truly a global desire. Countries across the world came up with early designs and prototypes, trying to solve the same problem of getting someplace faster and easier.

Henry Ford founded his company in 1903 and once he invented the assembly line, the automotive industry was born. After an amazing head start, American car manufacturers lost their way in the late 1990’s into the 21st century, and are just now clawing back the public trust and loyalty.

Growing up I had two uncles who were mechanics plus one who drove race cars on the midwest super modified circuit. I watched these open-wheeled cars dash around a high-banked, dirt quarter mile oval track every Sunday night. When a back injury forced my race driving uncle to retire, guess what he did. He sold cars. First Chevrolet where he would say that Ford meant “found on road dead.” Then he got a better offer from the Ford dealership and suddenly it stood for “first on race day.” Cars are most definitely part of my heritage. As soon as the new car models were in the showroom, my dad would drive me from dealership to dealership looking under the hood, in the trunk, inspecting the interiors. It was sacred annual pilgrimage.

GM Then and Now

General Motors headquarters buildings, then and now

GM was the only way to go in our family. Once my dad bought an MG Roadster for fun and it literally fell apart before our eyes. Needless to say I was influenced by him and was a charter member of the GM fan club when it came time for me to choose a car. He did all the maintenance himself. Oil changes, brakes, timing, tune-ups, mufflers. Whatever it needed he did and I was right there learning from him.

I gravitated to Chevrolet. My first car was a 1969 Nova that I drove to high school before I was properly licensed. Times were different then. This was followed by two Monte Carlos, then a Buick. Ownership of these cars was annoying. Each car had its own peculiar issue. Some place along the way GM changed the trunk mechanism from a simple mechanical hinge to hydraulic mechanism which was bound to fail. Why make that change? The old design worked fine and never needed attention no matter how long you kept the car. I was young and didn’t have the money to repair all these things, so I just bumped my head every time I put something in the trunk. There were many other problems with seals, transmissions, air conditioning, starting in cold or wet weather, flooding, starters and overheating. It was a part time job to keep these contraptions working.

Losing their Way

In the early 1990’s I was on a business trip to Philadelphia and rented a Pontiac. I don’t recall which model. As I approached the car I couldn’t believe what I saw. Where had the styling gone? No stance, no statement at all. It got worse once I sat down behind the wheel. This was the same brand that gave us the GTO? Everything reeked of cheap, cutting corners, absolute bare minimum. Driving it was the absolute worst. Shaky, no power. It did not feel safe.

A few weeks later I was traveling westward, but this time the rental choice was a Toyota Camry. My reaction was just the opposite. Substantial car. Nice interior, lots of features, clean design. Oh yeah, it was a pleasure to drive. That rental (call it a test drive) didn’t necessarily convert me to buy a Japanese car as much as it made it clear I did not want a Pontiac. Within weeks I was driving a brand new 1993 Toyota Camry.

It’s my belief that you can boil down American’s car problems in the early 2000’s to the following:

  • Arrogance
  • Inertia
  • Lack of consumer understanding
  • Ivory tower syndrome

Arrogance is the easiest to understand, ”We make the best cars in the world.” Like the Boeing quote. End of conversation. One of the worst things that can happen to corporate America is success. It fuels a conservative perspective and stifles real innovation. When I say innovation I don’t mean trying nylon seats on a low end model.

Inertia is more subtle. The assembly line to showroom chain was a finely honed process for American car makers. One of my uncles lived in Lansing, Michigan where there was an Oldsmobile plant. As a child he took me on a plant tour and I marveled at how all the parts came together like a well choreographed production number. They got them off the line and onto the dealer lots efficiently. In 2008 GM alone produced 8.35 million cars with 5.37 million of them sold outside the United States. Worldwide today over 165,000 cars are produced everyday. A well oiled machine to say the least.

Even though cars were a significant expense for the average family, they were still relatively affordable for many years. My father didn’t make a lot of money as an electrical engineer, but he paid cash for every car he ever bought, trading up to a new GM model every couple of years. He was a Pontiac man and loved the sedans. Here’s the bill of sale from his purchase of a 1961 Pontiac Tempest Safari station wagon (the first SUV). Total price $3,249.35.

Scan

The boomers were coming of driving age in the late 1970’s and the Eisenhower Interstate Highway system was in place connecting the vast country. The family car was how you saw America, it was the “vacation transportation.” Women began to enter the workforce and so a second family car was needed. The price of gas was under .50 per gallon. American car barons were riding a very tall wave. All these factors that led to meteoric growth also conspired against them as they pushed the supply chain thinking to the max. This has made it very difficult to rethink or re-imagine a complicated business.

America definitely made cars safer and more comfortable, but it’s hard to see how they thought beyond the next model. It’s as if some guy said, “Let’s try this.” And everyone did it at the same time. There was a brief attempt by Preston Tucker of Ypsilanti, Michigan in the late 1940′s to create “The Car of Tomorrow.” It was successfully stopped on trumped up Securities and Exchange Commission charges.

The Japanese were successful in creating electronics. Sony with the walkman and perched to take over the premium television market from Philco and Zenith. The next frontier would be automobiles.

That brings us to lack of consumer understanding. Remember my trunk story? When Japanese automakers found a part or design that worked well, they kept it. As a result the quality of their products improved over the years. They mastered manufacturing excellence and incorporated cumulative learning into the process. This allowed them to focus more on the consumer driving their cars. Honda and Toyota pulled off an amazing marketing feat. They used their management and production methods to raise quality, and their vision and research to gain an amazingly strong foothold in the U.S. They gave boomers the Honda Civic and Toyota Corolla as they entered their 20′s. Reliable, efficient, affordable, low maintenance and long lasting cars. Once the boomers became established in careers and began to accumulate disposable income, they gave us Lexus, Acura and Infiniti, just as we were looking for more luxury and prestige. Brilliant.

Meanwhile American car companies knew they were in trouble and trying to manage brand strategy and find the quality recipe. The boomer’s parents (at least the dads) pretty much stuck to a few brands, but everyone of them ended up in the repair shop with all those annoying problems. Oh by the way, they cost more and didn’t last as long. American car companies were on an internal corporate hamster wheel and it was out of synch with consumer need states. When you give consumers similar choice they will freeze because they can’t see differentiation between them. Offer them distinct choices and you will reshape how they think and widen their consideration set. It didn’t hurt a bit to see all those Japanese cars on the road. It took a while for Toyota, Honda and Nissan to be taken seriously, but once U.S. consumers saw that this different was better, it was all over.

The “Buy American” anthem was hatched to try and hold off the outsiders. How dare you buy a car made outside the good ole U S of A? So the Japanese opened state of the art factories in the states. Buying American is great and people would love to, but it would have been much better if it was “Buy American because it’s better,” and actually true.

Now the oldie, but goodie, the ivory tower syndrome. American car execs drove their own car brands and models to work each day and never had any problems with them. “What are all these people complaining about? These cars are fantastic.” Well first of all they always drive new cars. American cars will get you down the road pretty pain free for the first year (12 month or 12,000 mile are the mystical numbers). Second, when they parked in the headquarters garage a team of mechanics would swarm their vehicles and make sure all was in perfect working order. Hmmm, maybe that had something to do with why the cars were in tip top shape. The execs should have given themselves 3-5 year old models to drive and forced to maintain them the way everyone else had to, by making an appointment with a dealer and finding an alternate means of getting to work.

Consumer Reports Auto RankingsDespite the positive changes by American carmakers over the last several years, a 2013 Consumer Reports survey shows that there is a ways to go. Ford in particular has struggled to satisfy their customers and the culprit seems to be the “synch” technology which has been a cornerstone of recent advertising. Microsoft was hired to do the programming and the interface has baffled a lot of consumers. Ford is searching for a new software platform. GM, Chrysler, Chevrolet, Cadillac and Dodge all faired poorly in the recent rankings. Lexus, Acura and Audi held the top spots among the established manufacturers. The recent troubles with GM’s ignition problems in the Colbalt and other air bag issues will be a challenge for their new CEO Mary T. Barra. Personally I was thrilled that Ms. Barra is the first woman to be elevated to CEO status of a major car maker. Perhaps the most storied one at that. I wish her nothing but good fortune.

I don’t believe that any carmaker is purposefully putting safety aside. The larger problems my lie in the communication and culture of GM to quickly identify and begin to correct problems, even if they seem inconclusive or could pose a risk to profit. For the record, Tesla scored a 99 on this Consumer Reports ranking.

Making a Change

I had my 1993 Toyota Camry for seven years, drove it 118,000 miles and never once opened the hood myself to check the oil or troubleshoot a problem. It never saw the inside of the shop for anything except normal maintenance. It never, ever failed to start, even in the harsh Chicago winters. This experience showed me that car ownership can be better.

The 1970’s oil embargo and eventual energy crisis forced firms to downsize cars and improve mileage. But America quickly forgot about that; longing for bigger and faster. So on came the SUV, the rebirth of the V8 engine and the era of monster cars and trucks. Remember the Hummer? When looking at profit margins on those vehicles vs. other models, it made great business sense to U.S. carmakers to continue to build and promote them. Wall Street liked it too. The quality and styling of American made cars has come up nicely as of late. The dealer experience has also improved as a formal customer satisfaction scorecard has come into play.

I traded my Camry for a new 2003 Acura TL. I would have been happy to trade for another Toyota, but their designs at that time were so boring and not at all fun to drive. The experience I had with my Acura was similar to the Camry. Reliable at a relatively high level. I did have to replace the transmission, but Acura subsidized that repair at an acceptable level. Bottom line, it never failed me.

The success of outsider car manufacturers sharpened the short sightedness of U.S. carmakers. I still think they were in denial and felt no real harm could come to them. The price of oil continued to rise which began to spur more conversation about alternative fuel cars. American car companies have tinkered with alternative fuel cars. The Chevy Volt became the first serious contender to the Toyota Prius. Sill these are hybrid cars that have gasoline engines and need to be maintained with oil changes, tune-ups and other items. the full gain of electric power is not realized.

The Electric Vehicle

Gm-impact

General Motors EV1

From 1996 to 1999 General Motors built 1,117 of an all electric car called the EV1. You couldn’t buy one, you had to lease it. For the 800 or so who did they became instant lovers of the car. Alas, that love did not last as GM put an end to production and repossessed them, eventually crushing them for recycle scrap. Many felt it was borderline conspiracy to keep oil and the current system in place. GM always said it was an experiment. The EV1 was a concept car and no promise was ever made to mass produce it. They built it because of toughening emission laws, especially in California.

The Toyota Prius, a hybrid, has sold over 3 million units and the Nissan Leaf is the bestselling highway capable vehicle of all electric cars to date with over 100,000 of them on the road as of January 2014. There are no less than 18 EV models available globally with more on the drawing board.

The Invention of Tesla Motors

IMG_1589

The Model S

Along came Tesla Motors in the early 2000’s with a mission to advance the adoption of all electric vehicles. It was named for Nikola Tesla, a mad professor of electricity who was Thomas Edison’s contemporary and very much underrated. They built the Roadster, an expensive two seat sports car as their first production model. They needed to start somewhere and so this was their choice. I personally know three people who own them, one for over eight years, and they absolutely love it. But this was not the car for me. I love sports cars, but I wanted something more in the luxury family, larger, but just as fast.

The Model S was announced and I was all over it. After watching the company and car development closely I was beginning to feel this might be the one for me. I drove my neighbor’s last spring and that was it. I configured it online and 32 days later I was driving one home from the Chicago service center. A grey 60kw Model S with tech package and panoramic roof. I have been all smiles ever since.

Imagine a car where you have no engine, no oil, no radiator or starter. No fan blade or belt. No tailpipe, catalytic converter, muffler and therefore no exhaust. No gas tank or fuel line. No drive train, transmission, spark plugs or any scheduled maintenance. All those burdens that come with gas car ownership are absent from the Model S. All that space and expense can be given back to the engineers to start from the ground up. It’s a marvel. The Model S is German elegant, Japanese sleek and American powerful.

The car was designed and is manufactured in Fremont, California. All American. It is clearly the dawning of a new era of car making in the U.S. There was no way GM or Ford or Chrysler could have made this car. That’s like saying Sears could have been Amazon. Not possible to disrupt that much from inside a long standing company with so much owed to the past.

It is an expensive car and not in most people’s price range, but sticker price is no longer how we should measure the cost of a car. When assessing the price of a car it’s important to remember all those things you have to do along the way. Take at look at my post on the total cost of ownership between an Acura TL and a Model S. You will be surprised.

Personal Transportation is the Future

In many ways early adopters of EV’s are funding the research and development needed to take the required steps to cracking the code on new car technology. As I look back on my father’s car ownership record, he owned 41 cars. I prefer to support further EV development. If it comes from GM or Ford or Chrysler then great. But Tesla is pioneering the new way forward. It’s no longer an automobile. It’s now Personal Transportation. Brilliant software integrated into superior hardware, both working together to make the experience the highest level it can be.

It’s the best car I’ve ever driven.

The Tucker 48 and the Model S

The-TuckerI dipped into my film archives a few days ago and watched Francis Ford Coppola’s film Tucker, Tucker: The Man and his Dream. Preston Tucker was an aspiring designer, engineer, manufacturer and car enthusiast. He built the Tucker 48, a forward thinking car with safety and practicality as its hallmarks.

There are a number of things one can connect between the Tucker Corporation and Tesla Motors. For example, both the Tucker 48 and Model S have a front trunk (Frunk). Tucker got a break obtaining a factory from the government, The Dodge Chicago Aircraft Engine Plant. Tesla got the New United Motor Manufacturing, Inc. (NUMMI) after GM and Toyota couldn’t make it work. Each company challenged the status quo of car making as it existed and said there is a better way.

Mr. Coppola, a Tucker owner himself, made a highly stylized film that focused on two things; Tucker the man and the Tucker sedan. We get a strong sense of the time, post WWII. America at the top of her game. Corporations and manufacturing booming. A bright, new age of culture and business.

The Tucker 48 was a marvel for its time, but was squashed by more powerful, shadow powers of a system that dominated the era.

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The film gives a nod to Nikola Tesla through a poster of him in the lobby of the courthouse where Tucker was on trial for alleged Security and Exchange violations. Mr. Tucker was acquitted on all counts. Jeff Bridges who plays Tucker, paces before the Tesla during the trial deliberations.

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Tucker, Studebaker and DeLorean all wanted to build a different car. Some were better than others. None of them succeeded.

Photo Credits: Tucker 48 from Wikipedia, Film still from Paramount Pictures