The contrast between tesla and the rest of the auto industry is terrifying jrpi gas station


Meanwhile, there’s a traditional auto industry that after being pummeled by the financial crisis has come roaring back since 2010. The four old-school companies that I follow closely — General Motors, Ford, Fiat Chrysler Automobiles, and Ferrari — are awash in cash and profits and have been raking it in for literally years.

The stock of GM and Ford has performed poorly relative to the overall markets, and since 2010, Tesla has massively rewarded risk-taking investors. Since its own IPO in 2014, FCA shares has rallied strongly, up almost 275%, while following Ferrari’s spinoff from FCA and its 2015 IPO, stock in the Italian supercar brand is up 140%.

That’s fine for a jazzy storyline, but Tesla’s struggle isn’t related to its narrative — it’s falling short on fundamentals, such as being able to effectively build a mid-size sedan in the Model 3. Any other established carmaker could crank out hundreds of thousands in short order, but Tesla spent a closely watched year trying to manufacture a few thousand per week.

The first is leadership. GM CEO Mary Barra is the best in the business. Her laser focus on maximizing the carmaker’s return on invested capital has yielded quarter after quarter of profits. She’s now arguably the best CEO GM has ever had, surpassing even mid-20th-century management genius Alfred Sloan.

The second is scale. To sell 10 million vehicles worldwide in a year, you have to be good at building them. What Tesla considers to be an ambitious production target at its single factory (ironically, once jointly operated by GM and Toyota, another global juggernaut) in California — 5,000 Model 3’s per week — is a rounding error to GM. GM could have achieved and surpassed Tesla oh-so-obsessively monitored objectives in a few months at most.

The third is speed. Everybody thinks Tesla is a fast-company Silicon Valley operation, but the carmaker is, in fact, agonizingly slow. It’s been years between reveals of new vehicles and their actual appearance in the market. The Model 3 is no exception. A launch in mid-2017 led to just a few thousand cars delivered by the end of the year.

GM, on the other hand, revealed and launched its Chevy Bolt long-range EV in about a year, start to finish. It’s been on sale in the US since fall of 2016. And nobody obsessively followed its rollout. It … just … happened. Right on schedule.

Ferrari, like Tesla, is a brand built on a story, and for Ferrari, that story is racing. Yes, Ferrari has sold plenty of road cars since the middle of the 20th century, and it has sold them for a lot of money. But at its core, Ferrari is about winning Formula One races.

Tesla, on the other hand, has a Ferrari-like portfolio of vehicles, in terms of size (just three cars currently coming out of the Tesla factory, versus five for Ferrari). There’s also a vision, although unlike Ferrari it isn’t predicated on winning races. Rather, it’s Musk’s desire to hasten humanity’s exit from the fossil-fuel era and to mitigate global warming.

Tesla, unfortunately, isn’t modeling itself on Ferrari, which would actually be logical. Instead, it’s aiming to become GM or Toyota, producing cars at a gigantic scale. Tesla’s core business — luxury vehicles — shares Ferrari’s sexiness and preoccupation with performance.

Musk would obviously like to be half Ferrari-half GM, but this is an impossible circle to square. The tragedy is that as Ferrari talks about going electric, Tesla is already there. The problem is that the CEO simply can’t accept that destiny.

From Middle English rest, reste, from Old English rest, rst (rest, quiet, freedom from toil, repose, sleep, resting-place, a bed, couch, grave), from Proto-Germanic *rast, *rastij (rest), from Proto-Indo-European *ros-, *res-, *erH- (rest). Cognate with West Frisian rst (rest), Dutch rust (rest), German Rast (rest), Swedish rast (rest), Norwegian rest (rest), Icelandic rst (rest), Old Irish rus (dwelling), German Ruhe (calm), Albanian resht (to stop, pause), Welsh araf (quiet, calm, gentle), Lithuanian rov (calm), Ancient Greek (er, rest, respite), Avestan (airime, calm, peaceful), Sanskrit (rmate, he stays still, calms down), Gothic (rimis, tranquility). Related to roo.

From Middle English resten, from Old English restan (to rest, cease from toil, be at rest, sleep, rest in death, lie dead, lie in the grave, remain unmoved or undisturbed, be still, rest from, remain, lie), from Proto-Germanic *rastijan (to rest), from Proto-Indo-European *ros-, *res-, *erH- (rest). Cognate with Dutch rusten (to rest), Middle Low German resten (to rest), German rasten (to rest), Danish raste (to rest), Swedish rasta (to rest).

From Middle English reste, from Old French reste, from Old French rester (to remain), from Latin rest (to stay back, stay behind), from re- + st (to stand). Replaced native Middle English lave (rest, remainder) (from Old English lf (remnant, remainder)).