In the understatement of the century, I'll say that Elon Musk is far from your ordinary businessman. The billionaire CEO keeps a sleeping bag in his office so he can stay overnight at the Model X production line. He canceled a customer's order earlier this year because they dared complain about the quality of the Model 3's launch presentation. Most remarkably, he has the general public talking about electric cars with legitimate enthusiasm -- something no other Tesla competitor, from the Nissan LEAF to the BMW i3 to the Chevy Bolt, has even come close to accomplishing.
And yet, even with this seismic shift in the electric-car conversation, even with a half-million pre-orders out for the Model 3, I'm not convinced of Tesla's long-term viability as a carmaker. Hey, maybe I'll be wrong and eat my words five years from now. But as I'm writing this, I'm literally watching the stock prices drop in the aftermath of a corporate earnings call. There are several giant red flags waving in front of Tesla, none of which are easy fixes.
Tesla sells you an illusion first, and (hopefully) a car later
Much like a radical politician aiming to change Washington, Tesla has brilliantly positioned itself as an industry outsider. Ask the average person to describe Tesla and you'll most likely get a lot of big buzzwords: it's the "anti-establishment underdog" that creates "disruption through innovation." In and of itself, that's not an issue. The issue arises when people buy (quite literally) into the promise of innovation, rather than any solid, proven technology. Which is exactly what's happening with the Model 3.
More than any other vehicle, Teslas are marketed on the premise of what they're going to be, not what they are now. People don't seem to grasp that the Model 3 is still in its nascent stages, with much development left to complete. Beyond misleading statements on efficiency (more on that in a second), it's quotes like these that raise a proverbial eyebrow: "The Model 3 is going to be an incredibly safe car... The Model 3 will not just be five-star [crash safety rating] on average, it will be five-star in every category."
Seriously? I'd rather have an automobile company state literally anything other than its target for top-flight safety.
The result? Dangerous misconceptions about the car's capabilities.
Let's use autopilot as an example here. Tesla gets a lot of credit for its autopilot which is, admittedly, a cool party trick. But that's all it is. In the grand scheme of autonomous cars, it's a Level 2 -- meaning, it's semi-autonomous. You absolutely can't lean back and have sex while it drives for you. Still, you've seen plenty of people on YouTube driving around in their Teslas, hands-free -- a clear indication of a general assumption that the car can drive itself.
One of Volvo's top crash-avoidance engineers said it brilliantly in an interview with The Verge: "It gives you the impression that it's doing more than it is. It's more of an unsupervised wannabe." It's all fine and good that the system works reasonably well, but when drivers don't understand the basic concept -- it's an assistant, not a substitute driver -- people are eventually going to get hurt, and they'll think it's Tesla's fault instead of their own. That represents a misplacement not just of trust, but of responsibility.
Not to mention misinformation about Tesla's "green" factor
Electric cars are an environmentally efficient means of transportation -- if the electricity powering them is from renewable sources. Just one problem: only 13% of American electricity comes from wind, solar, or hydro-electric production.
Many of Musk's claims about Tesla's environmental friendliness aren't based on hard numbers, but on projected numbers as the United States gradually shifts toward a renewable-dominant electric grid. The result is more than a little misleading, since the completion of such a shift is unequivocally not going to happen during the average lifespan of any car produced today.
When it comes to eco-friendly cars, as with anything else, having the right tool for the job is paramount; for many parts of the country, the right tool simply isn't electric -- yet. In the future? Sure, when the grid catches up. For now? If you live somewhere that uses coal for electric production -- and fully one-third of the nation's electricity is coal-based -- you're better off driving an efficient hybrid.
It'll make "half a million new cars by 2018"? Really?
2018 is shaping up to be a big year for Musk, whose other company SpaceX just announced it'll be sending spacecraft to Mars by then. Meanwhile, Musk's recent brash claims that Tesla will produce half a million cars by 2018 isn't admirable for its blind ambition; it's alarming for its ignorance. Tesla has a well-established pattern of declaring a huge undertaking with unbridled ambition and confidence, and then encountering chronic production problems -- whether it's the Model S, one of its updates, or the Model X, which famously encountered wave after wave of delays. Finally, once production came to pass, recalls began almost immediately.
A company, whose track record suggests tardiness is the norm, intends to finish the highly ambitious gigafactory on time, while developing a car for production on a much larger scale than ever before, on a time frame even the most loyal Teslaphiles must admit is unrealistic, and despite having a mere fraction of the resources that more established manufacturers have. Alrighty then.
Speaking of resources, Tesla's research and development capacity is nowhere near the industry titans
I'm going to preface this point by saying that I don't have in-depth knowledge of Tesla's research and development programs. I do, however, have a pretty good idea of the research and development programs at the Fords and GMs of the world. They're the Goliaths of the industry, and for very good reason.
It might sound counter-intuitive to say that making a car that's truly different is a lot easier than making a car that's well established, but consider the following. Large carmakers have virtual-reality chambers that are the real-world embodiment of a Star Trek holodeck: they allow engineers, designers, even psychologists to examine a vehicle's design and reform it in real time, from various locations across the globe.
Yes, I said "psychologists." Everything from how long an alert is displayed on your instrument cluster to how many times your turn signals blink is determined by professionals who study your human peculiarities for a living. Ford just released a slew of market research that delves into the style of beverages people drink. Why? Because it impacts the design of cup holders. Ford even developed a robot named Ruth whose sole purpose is testing cup holders ad nauseum.
The point is, Tesla is the David fighting Goliath, a very small company in the grand scheme of things. Admittedly, that anti-establishment business model has some legitimately innovative practices that could have a lasting impact on the automotive industry long after Tesla is gone. Those ideas, however, won't help Tesla overcome the inevitable pitfalls that come with transitioning into a small-to-midsized manufacturer. It just doesn't have the kind of resources, human capital, and physical infrastructure needed to achieve its ambitious goals -- specifically, maintaining build quality while cutting costs and increasing production tenfold.
Sorry, Tesla, but the mass market is a vastly different place
So far, Tesla has played largely within the friendly confines of a tightly defined niche. The affluent early adopters of the Model S are one thing, but Tesla has half-a-million people lined up to buy a car they haven't even tried yet. Opening the owner pool to hundreds of thousands of people, while simultaneously moving downmarket, means every aspect of the car will be picked over by owners with far less-rosy glasses.
And that's where production delays become all but inevitable. Research and development aside, reducing noise, vibration, and harshness (things like wind noise and that thud when you hit a pothole) is one of the most costly and involved areas of the engineering process... but an absolutely essential one if Tesla expects to satisfy owners with a refined vehicle. The early indications of the Model 3 are that it's still lacking in that respect. It's damned difficult to cut costs without cutting quality, and the slightest rattle in the interior could rattle the entire company.
Time will tell; in the interim, if you've got a bachelor's in mechanical engineering and hate squeaks and rattles, Tesla wants to hear from you.
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