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Tesla Envy Grips Germany's Giants
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Time: 2016-09-05 09:37:29 UTC
Original URL: http://www.autonews.com/article/20160905/OEM05/309059949/tesla-envy-grips-germanys-giants [autonews.com] using iso-8859-1 encoding.
Title: Tesla Envy Grips Germany'S Giants
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Tesla Envy Grips Germany'S Giants
Arthur T Knackerbracket has found the following story [autonews.com]:
FRANKFURT -- The gleaming white Porsche with menacing black trim took less than 8 minutes to complete the Nurburgring's demanding Nordschleife circuit. The result was respectable but not spectacular for a 600-hp beast that sprints from 0 to 62 mph in a little more than 3 seconds.
Unlike the Panamera production car, which can easily beat its lap time, the Mission E concept doesn't have camshafts, pistons or valves to mix air and fuel in a combustion chamber or a spark plug to ignite it. It runs on a current of pure electrons supplied by a lithium ion battery, and it can almost fully recharge itself within 15 minutes.
The Tesla Model S doesn't come anywhere close to those specs -- which is the point.
Porsche's 1 billion euro ($1.12 billion) gamble to lure Tesla owners from their beloved electric car is just one example of how much premium European automakers are investing to try and match their Silicon Valley-based rival.
Tesla's zero-emissions sports sedan has made Europe's finest automakers look woefully behind the times in an area they typically dominate: technology. The question is whether established brands can win back the hearts and minds of car buyers seeking the next big thing.
Germany's best known sports car maker promises its Mission E, which was teased at last year's Frankfurt auto show, will be "an electric Porsche that deserves the name." That means it will be consistently fast over an extended period with no loss of performance despite repeated accelerating and braking. It is supposed to be the first zero-emissions car worthy of being taken to the racetrack.
Porsche, however, will need years before it can mass produce and sell its electric sports car at a decent profit. Meanwhile, Tesla will continue to deliver tens of thousands of its vaunted sedans and SUVs every year to wealthy progressives around the world, most likely at a loss.
"I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche, not a brand typically prone to technological envy. "We have to earn money at the end of the day though."
Speak to other developers in Germany and the same healthy respect mixed with a dose of jealousy can be heard. Whether it is the Wall Street-funded business model, outlandish marketing claims or its brash determination to ignore conventions such as independent retailers, Tesla refuses to play by the same rules as everyone else. And, so far, the company gets away with it.
How do Europe's premium carmakers, and particularly the German luxury brands, compete against a rival like that? The truth is they can't -- at least not as long as Tesla remains a money-losing boutique manufacturer of luxury sports cars propped up by investors.
"Part of it is a cultural issue," said a Mercedes-Benz official who asked to remain anonymous. "You can't compare a 130-year-old company shaped by German engineering ingenuity with a startup from Silicon Valley. It's a different approach."
Despite those differences Audi, BMW and Mercedes are joining Porsche in the race to provide a response to Tesla's success. Audi plans to launch a dedicated electric model in 2018. Mercedes will showcase its Tesla fighter with a concept car this month at the Paris auto show. Mercedes also plans to create a subbrand for electric cars that will offer two electric SUVs and two battery-powered sedans, people familiar with the plan told Bloomberg last month.
BMW hopes its fully autonomous iNext, due in 2021, will revolutionize the industry but in the meantime it will continue to promote its poorly performing i3 as the best option for those looking for a premium zero-emissions car. Volvo plans a Model S rival, which will arrive in 2019 and share its underpinnings with the S90, V90 and XC90. Jaguar Land Rover is expected to debut a battery-powered concept in November at the Los Angeles Auto Show.
More electric vehicles will undoubtedly follow as European Union regulators crack down on road transport emissions, announcing early next year stringent new carbon dioxide targets for the period after 2021. Carmakers have no choice but to electrify their powertrains.
Porsche faces big technical and safety challenges to bring the Mission E to fruition and, on top of that, it is unclear whether the brand's loyal buyers will follow it to this new frontier.
"We believe Porsche can bring to life in an electric car those kinds of values core to our brand, such as performance, sportiness and exclusivity. Whether the customers will be the same or not, we will see," development chief Michael Steiner told Automotive News Europe.
It is too early to say whether Porsche's customers will trade the guttural roar of their engines for a silent electric drive. It's just as unclear whether BMW, Audi and Mercedes can win back customers lost to Tesla. German car executives claim that Musk's customers are far more willing to accept flaws and shortcomings they wouldn't overlook at other brands.
As a startup, the company can get away with things that make some engineers at established carmakers envious but make their legal teams sick to their stomachs. Tesla's Autopilot function is a prime example. While the car can accelerate, brake and steer itself, it is still just a glorified form of assisted driving. Occupants have to constantly watch the controls in case the car suddenly swerves off course for no reason. German engineers bristle when asked about Autopilot.
"We made the very conscious decision to be conservative in our marketing since it's not in our interest for the assistant systems to be used in circumstances they should not," said the Mercedes official. "Once every 7.5 million kilometers (4.7 million miles) driven there is a serious accident in Germany. Our assistant systems are supposed to minimize that, not add to it by creating new accidents."
So while many might be thrilled at the novelty of watching a steering wheel rotate left and right by itself, Germans just shake their heads in disbelief.
"Where's the added value for the customer?" asks Klaus Verweyen, Audi's project chief for fully piloted driving, which will debut in a limited form next year in the revamped A8. Nevertheless, the glory associated with cars that can drive themselves has gone to Tesla. The MIT Technology Review named Tesla's "software update that suddenly made autonomous driving a reality" one of the top 10 breakthrough technologies for 2016. While it admitted the system used a "legal gray area," Autopilot was "a grand gesture toward an ever-nearing future," according to the magazine.
One of the mistakes many German car executives have made in recent years is believing that Tesla is an electric car brand. If that were the case they would have a strong chance to conquest sales back from Musk once they brought their own versions to market.
Yet Tesla is far more than that. It builds battery packs, installs charging infrastructure and most recently plans to integrate energy generation and storage via an acquisition of Musk's photovoltaic company SolarCity. In the future it plans to expand into electric pickup trucks and even tractor-trailers.
Musk has built something of a theology around Tesla with himself as a high priest and sustainable mobility as his nirvana. Rivals may roll out their own Tesla fighters, but you cannot fight it because it's a way of life, not a product.
In other words, Tesla will stand or fall regardless of what the German luxury brands attempt. Several executives admit their best chance to gain back lost sales is if the young company mismanages its transformation from serving a base of die-hard fans to becoming a profitable full-scale producer of zero-emissions vehicles. Many startups fail to surmount this hurdle. Electric car charging station provider Better Place also began life as an investor's darling because of its charismatic young founder, Shai Agassi. Instead his company collapsed three years ago.
Tesla's biggest strength is also its greatest weakness. Musk is the company's most eloquent advocate and he is already the third most influential CEO on Twitter, according to research by French business school INSEAD. Musk is Tesla as much as Steve Jobs was Apple.
Moreover, reputational problems may catch up to it. Allegations have been leveled that Tesla tried to hide suspension flaws in the Model S from the public by forcing customers to sign nondisclosure agreements. More recently, a fatal accident has put its Autopilot in a negative spotlight. Also, when the Model 3 eventually debuts, Tesla will target more demanding consumers, who are not likely to be as forgiving when it comes to the inherent trade-offs of an electric car.
A senior automotive executive at Bosch is convinced that sooner or later Musk will not be able to maintain this startup style showmanship over substance: "At some point as they grow customers won't accept this and Tesla will have to adopt a zero-tolerance approach."
