Tesla Has Old Lessons to Learn
The auto industry has developed certain unwritten rules over the last hundred years or so. Got new technologies or features? Save them for the new model year. Have a new product announcement? Make it at a car show. Want a new product? That will be several years of development.
Tesla Chief Executive Officer Elon Musk treats most of these traditions as if they don't exist, and for his trouble, he is rewarded with the kind of public adulation that no other auto executive could even hope for. The problem Musk faces is that not all of these "traditional" ways of doing things are ripe for disruption. Beaming new features to an already-sold Model S? Cool. Tweeting announcements and wasting as little energy as possible on the well-worn car show/comparison test/auto media circuit? Sure. Create a new car out of thin air? Um, no.
This is why Musk's "D" announcement last night was basically pre-ordained for disappointment: As an automaker, Tesla is far more constrained in what it can do than many seem to believe. Rumors of a self-driving system, whipped into hysteria by Musk's awed references to progress in artificial intelligence, materialized as a suite of safety systems that seem to barely differ from those already offered by several automakers.
With deliveries of Tesla's Model X SUV delayed until 2015, Musk really only had one new product move to make: Put a variation of the Model X's all-wheel drive in the Model S. And because Tesla's brand is built on Silicon Valley cachet, making this new car as fast as the McLaren F1 Musk once wrecked (while uninsured. On Sand Hill Road. With Peter Thiel in the passenger seat. Silicon Valley cachet doesn't get much better than that) and charging lots of money for it were no-brainer decisions as well.
The problem is that this is all just good, smart product work from a tiny luxury automaker, not the kind of change-the-world visionary stuff people expect from Musk. The Hyperloop was a bad joke, but at least it added to Musk's futurist ethos. This just makes Tesla look like just another automaker squeezing some cash out of an aging model with a performance-tuned variation, holding splashy big media events and ruthlessly enforcing news embargoes. Any other automaker would have thought to name the thing something better than "Model S P85D."
No doubt, Musk's Tesla is a breath of fresh air in a business that relies too heavily on convention. But like any other company that talks (or thinks) about "disrupting the auto industry," Tesla has a lot of unglamorous but important lessons to learn -- things such as "Model S P85D is a terrible name for a halo model," "maybe try keeping a head of public relations on staff for a while" and "anything called 'falcon doors' will delay your SUV program." Forget Musk's goal of becoming a market leader in an all-electric-vehicle world; Tesla will have to learn these lessons fast just to survive as an independent luxury player.
This is the contradiction at the heart of Tesla's appeal: People love Musk's bold futurism, but the car business relies on consistent, pragmatic, long-term leadership. As Tesla scales toward a sustainable level, there will be even fewer opportunities for Musk's personal touch, in terms of both his product-development perfectionism and his seat-of-the-pants PR. As Tesla's stock tumbles today, perhaps Musk is realizing that the almost-terrifying power of his Twitter account can't change some of the fundamentals of the car business. Finding a way to maintain his halo for the brand while professionalizing tasks that require a less mercurial approach remains Musk's great challenge as he guides Tesla from vanity project to established automaker.
Tesla does have a limited presence at some auto shows, but it does not make major product announcements at them.
In the words of former Hyundai Motor America CEO John Krafcik, the new technologies represent Tesla "catching up with the industry on self-driving features."
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