Five Reasons Mainstream Automakers Are Scared of Tesla

By · September 23, 2013

Historically, there has been little love lost between established automakers and Tesla Motors. When Tesla was a little-known startup company, the big-name brands, like General Motors and Nissan, saw Tesla as a curiosity—or a loud annoying pest.

Tesla Model S interior

Tesla is in the driver's seat for the entire electric car market.

Fast forward to today, and Tesla’s widely publicized successes have forced the same automakers to rethink their evaluation of the Californian company, which has set the benchmark for the industry, and established key targets for affordable, longer-range plug-in cars. Even GM, which currently produces the range-extended Chevrolet Volt and all-electric Chevrolet Spark, promised last week it would bring a 200-mile EV to market, specifically to compete against Tesla—a turnaround for CEO Dan Akerson, who was previously skeptical about pure EVs.

Tesla has become nearly synonymous with EV. The appeal of the Model S sedan make it a clear and present danger to established conventional automakers. But what else about Tesla scares the rest of the auto industry? Here are five things to consider.

1Performance

With more 420 horsepower measured at the wheels of its flagship Model S P85+, Tesla produces one of the most powerful luxury sedans on the market today. A recent group test by Autocar magazine in the UK pitted the Model S against a V-12 Aston Martin Rapide S and a V-6 Porsche Panamera Diesel. After triumphantly beating the competition, Autocar called the Model S “one of the most ground-breaking cars that we have driven this century.”

With ever-increasing emissions requirements making it tougher than ever before to build a high-performance gasoline car, automakers know that electric drivetrains are the future. Tesla has a big head-start.

2Range

While automakers like GM, Nissan, BMW and Ford are struggling to build cars capable of 100 miles of range per charge, a Tesla Model S fitted with an 85 kilowatt-hour battery pack can travel more than 250 miles per charge.

With Tesla’s unique battery architecture—that reduces cost by using mass-market commodity cells—rival companies will need to heavily invest in order to beat Tesla or even approach its range.

3Desirability

With an Apple-like fan base and thousands of satisfied Tesla owners, Tesla is one of the hottest automotive brands in the U.S. Helped by its unique sales and service strategies which include shopping-mall experience centers instead of out-of-town dealerships, even the process of buying a Tesla is more palatable than buying a car from an more established brand.

Add to the mix the tech-heavy content of Tesla’s cars, and customers feel that they are ordering a one-off, special car just for them—not buying a pre-specified car off the dealer lot.

4Flexibility

Thanks in part to its size and in part to the way it operates, Tesla remains more flexible compared to larger automakers. And because Tesla is currently only producing one car in one facility with many parts being made in-house rather than being shipped pre-assembled from elsewhere, it’s relatively easy for Tesla to react to customer demand, legislative change or changing tastes.

Similarly, thanks to remote firmware updates, and features which rely heavily on software rather than hardware, it’s easy for Tesla to provide feature enhancements to customer’s cars without costly service recalls.

5Charging Technology

Point blank: The Tesla Model S is the fastest charging electric car on the market today. While the rest of the industry is worrying about which connector to use, Tesla’s SuperCharger network is already providing hundreds of Tesla owners the chance to drive 500 miles or more in a single day without burning a drop of gasoline.

Even if rival companies can manage affordable 200-mile cars, unless they can replicate or better Tesla’s SuperCharger technology, Tesla will continue to have a firm advantage over the rest of the electric vehicle market.

As automakers face ever-tightening emissions and gas-mileage targets without any major breakthrough in any other low-emissions technology, electric cars remain a logical choice. But with Tesla already well ahead of the competition, it’s no wonder automakers now fear the company they ridiculed less than five years ago.

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