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Icon image Tesla driver - Copyright VadimGuzhva @ stock.adobe.com

Tesla - The end of monopoly

Tesla Inc. is one of the few listed companies in which a major shareholder is both the head of the supervisory board and the defining figure of the company. Corporate communication is tailored to the speaker Elon Musk. For the outsider, it is impossible to really differentiate whether Musk only leads an international company according to his own taste. This leads to far-reaching irritations. So far, Musk's antics have had no far-reaching consequences - as a monopoly in the premium electromobility segment, there was no competition. The competitive situation will change suddenly this year.

Elon Musk likes to present himself in public as the master of ceremonies of the staging and speculations about new developments are abundantly fired via Twitter or Instagram. In the past decade, these instruments were enough to quickly define Tesla as a status symbol for electromobility. The rocket company SpaceX is now worth several billion US dollars and shot a Tesla Roadster into space on its first flight with media coverage.

Departure into electromobility


For almost a decade, Tesla dominated the premium segment of zero-emission cars with innovative all-electric cars. A great pioneering spirit and a radically new drive concept at the time were decisive for the success of the electric car manufacturer. The now legendary two-seater Tesla roadster heralded the era of electric cars with worldwide attention. In the early years it was still a very elitist car for the well-heeled clientele. But the past ten years have been a playground for Tesla with no real competition. In addition to the roadster, the main drivers were the Tesla Model S and Model X. The coming decade calls all global manufacturers onto the scene and ends Tesla's sole rule in the premium segment.

The pioneering work has paid off for Tesla. The construction of the production facilities, the network with superchargers and the now completed Gigafactory for the battery modules are bearing their first fruits. Last year, Tesla succeeded for the first time in becoming the best provider in the premium segment in the USA. In a message, the electric car maker from California was proud: "2018 was the first time in decades that an American car - the Model 3 - was the best-selling premium vehicle in the US," the website "electrek" quotes Tesla. However, the numbers also include sales to Canada. However, based on registration data, these only amount to around 5.000 units, so that around 140.000 vehicles of this model are still sold.

Up until now, it has been an elitist drive to drive a Tesla. The price structure, the unique selling propositions and the acceleration were outstanding and could no longer be topped. While the global manufacturers clung to internal combustion engines until last year, the whole front is now softening and the major counter-attack is planned for this year. Audi countered the Model X with the e-tron; Porsche wants to get back into the fast lane with the Taycan and Mercedes Benz is on the offensive with the fully electric EQC.

Successes and setbacks


The history of Tesla is paved with ups and downs. As with Apple, the successes were celebrated with opulent new announcements as part of their own show events. The promises made about the launch dates and production figures for the new models were often kept. More important, as it were, was securing the financing for the next development step, as one could only secure a purchase right for the future by pre-ordering. That then guaranteed a large part of the financing for Tesla for the coming months. With the number of pre-orders, it was possible to provide reliable information for the development of the company.

In the course of time, however, some serious errors had to be admitted. For a long time, free charging at the company's own supercharger stations was included when a new Model S was purchased. Tesla had probably trusted that the cars would mainly be fed from the in-house charging station and only be used to cover the routes during the holiday season. However, the assumption fell on their feet and the electricity costs on the superchargers ate up the contribution margins when selling new cars over the period of use. The flat rate for free charging is already history and now there is no longer even the free package of 400 free kilowatt hours per year for the Tesla Model S or Model X. As a Tesla driver, you could use it four to six times load. The increased number of units has made it unprofitable for Tesla to operate the Supercharger free of charge for end customers. Instead, a questionable price model is now taking effect in Germany: the minute billing of 34 cents per minute for over 60 kW charging power and 17 cents / minute for less than 60 kW, because the superchargers do not comply with German calibration law. The customer is dependent on this billing model on the real charging power at the charging station, for the operator, on the other hand, it is a lucrative opportunity to operate the supercharger economically.

A fatal accident of a Tesla driver in 2016, who obviously completely trusted the autopilot, also threw the driver, who had hitherto almost steadfastly trusted in autonomous driving off track. After that accident, Tesla Inc. repeatedly accused the dead driver of his misconduct in several press releases. There were then several overhauls with the National Transportation Safety Board (NTSB), which is responsible for traffic control and accident reports in the USA. Here, too, Tesla did not give a sovereign image in public.

Spare parts supply and manufacturing quality


While the sophisticated system for pre-ordering and securing sales works perfectly, German Tesla customers often have to wait a few weeks for simple spare parts such as fenders or bumpers, depending on availability. In a report from Manager-Magazin from March 2018, citing the owners and employees of eight certified Tesla workshops from all over Germany, the lack of supply was criticized.

The workshops obtain the parts from the European central warehouse in Tilburg, the Netherlands. Often parts had to be reordered from the USA due to the limited storage capacity.

In the Tesla forums, sharp tones appeared due to extreme waiting times and in some cases the poorer manufacturing quality compared to the German premium brands was pointed out. At BMW, Volkswagen or Mercedes, standardized spare parts are usually available the next or the next working day.
Tesla promises a remedy. A denser dealer network and the expansion of storage capacities should ensure this, according to Manager-Magazin.

Farewell to the monopoly


This year the competition in the premium segment of electromobility is already scratching its feet. Tesla's ivory tower is under massive attack. The premium brands Audi, BMW, Mercedes and Porsche will launch a massive assault on Tesla's line of succession in 2019. Audi is starting with a completely new e-tron series. In addition to the e-tron as an opponent to the X model, there is a direct attack on the S model with the GT version. The Mercedes EQC and the Porsche Taycan will also intervene in the event with a time delay.

A big advantage for the German manufacturers will be that the very important customization of the car in the premium segment is guaranteed by appropriate equipment variants and accessories. In addition to the high manufacturing quality, the equipment of the new cars is also scalable much more extensively. The intensified competitive situation gives the customer much more leeway. It will be interesting to see how the competition in this segment will develop in the coming years.

Significant price reductions for the Tesla Model S / X

The first sign of the emerging competition is the significant reduction in the price level for cars in the premium segment by up to 25%. The new pricing now looks like this:

Model S “standard range” (from 81.000 euros) / 520 km NEDC range / 225 km / h / top speed / 4,4 seconds 0-100 km / h

Model X “Maximum range” (from 90.400 euros) / 565 km NEDC range / 250 km / h top speed / 4,9 seconds 0-100 km / h

The price savings also annoyed many customers. “Finanzen.net” reports that in Taiwan, where prices are said to have almost halved by up to 50 percent, angry customers apparently blocked a charging station.

Addendum

Article from the green car magazine spring 2019.

Cover picture: Symbol picture Tesla driver - Copyright VadimGuzhva @ stock.adobe.com

Trends and information in the current issue of spring 2019. Subscription at

N. Hawthorn

One thought on “Tesla – The end of the monopoly”

  1. Here, too, one reads about e-tron, EQC and Taycan, which actually do not exist on the streets. Tesla still has no worries about the non-existent German competition.
    After all, even the English have a vehicle on the market and in the hands of customers with the Jaguar I-Pace.

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