The Tesla Model S and Model X
Germany’s top automakers have been plagued by an unprecedented crisis related to cartels and collusion surrounding their beloved diesel engine technology. Now, having turned their backs on electric vehicles for years, they’re facing another existential challenge. Der Spiegel* reports, “The biggest cause for concern in the German auto industry is an American rival, Tesla. Founded in 2003, it has achieved what the German manufacturers failed to do for years: build an electric car that many customers want.”
Tesla’s Model S outsells Mercedes S-Class, Porsche Panamera, and BMW 6/7 Series combined in the US. And even on their home turf, the German auto giants are facing increased pressure from this Silicon Valley rival.
It’s reported that Tesla: “has more than doubled its German sales in the first half of 2017, for a total of 2,000 vehicles. This is an impressive number for Germany, which lags behind other developed nations when it comes to electric cars.”
However, there’s an inherent problem when trying to fight Tesla, “unlike the German automakers, Tesla does not have to worry about a massive existing [internal combustion engine] car business. This helps explain Tesla’s aggressive approach to marketing, which makes it seem like the company is less interested in selling cars than in changing the way the world uses energy…. [Tesla’s] message sounds more convincing than that of the German auto industry, which constantly fluctuates between commitments to electromobility and statements of loyalty to the internal combustion engine.”
Klaus Fröhlich, BMW‘s head of development describes Germany as a country “where they like to talk about e-mobility” but where “relatively little is being done.” He blames policymakers, pointing out that Munich, for example, currently has only 50 charging stations. Der Spiegel adds that “some of the [German auto] companies’ efforts to prepare for the future seem half-hearted. In late 2016, Daimler, Ford, BMW, and VW announced a joint initiative for rapid-charging stations. The project was scheduled to begin in 2017, with about 400 locations across Europe planned in the first phase.”
So what’s happened beyond the much-hyped press release?
“Nine months have passed since the announcement and the current number of charging stations is still zero. The first charging station is expected to open this year, allegedly with charging technology superior to Tesla’s. By comparison, Tesla has already installed more than 6,300 of its so-called Superchargers worldwide. It aims [to] increase that number to 10,000 by the end of the year.”
Regardless, in an exclusive interview with Der Spiegel, BMW’s Fröhlich claims he “actually wants to talk about BMW and his planned electric strategy, not about the competition. But he keeps coming back to the company’s California rival. The BMW executive mentions the word ‘Tesla’ 16 times within 60 minutes. He sees BMW as being ‘neck and neck’ with Tesla, but plans to have trumped his US rival in no more than three years.” He joins an ever-growing chorus of industry executives who’ve downplayed any threat from Tesla.
Not all industry execs have taken this posture. Karl-Thomas Neumann, head of German carmaker Opel before it was sold to GM’s French rival PSA, has a somewhat different point of view. While German automakers drag their feet on vehicle electrification efforts, Neumann believes, “Tesla now has a cult status that other brands can only dream of.”
With international rivals like BYD and Tesla, Neumann feels that the German auto industry, “runs the risk of being outpaced by new competitors from China and the United States.” He believes the Germans need to “accept that diesel is gradually going extinct.” In turn, he recommends Germany’s car companies use the money they save to invest heavily in electromobility.
But change is difficult. Germany’s top automakers have moved slowly to match the furious pace of progress Tesla has achieved (and plans for) in areas like electric vehicle battery development and its forthcoming Tesla Network ride-sharing platform.
Meanwhile, Der Spiegel reminds us, “The [German auto] industry spent decades resisting overly substantial changes. Anyone who talked about electromobility or car sharing in the 1990s was immediately mocked.”
That legacy of resisting the future just might leave Germany’s automakers in the past.