Why Tesla will beat traditional car companies

In recent months many German automakers have announced their plans for electric vehicle programs. This caused many journalists to predict the end of Tesla and title electric vehicle concept cars from German automakers “Tesla Fighters”.

In my opinion this is simply not true, because Tesla has a number of advantages over traditional carmakers. I’d like to explain this and dig into the details in the following lines.

The one common mistake people make is to compare Tesla to traditional car companies. They think that Tesla’s advantage is simply range. They think that the Chevrolet Bolt qualifies as a “Tesla Fighter” because it’s said to feature a range of 200 miles. Similarly the concept car Mission E by Porsche which should arrive by 2020 and the Audi e-tron Quattro SUV.

This is total nonsense. Tesla has started a revolution that no one can stop.

1)Superchargers

Tesla has built a world wide charging network that enables Tesla drivers to recharge their car in about 30 minutes at no cost at all. There are currently about 600 Superchargers with an average of 6 stalls per station around the world. Tesla says it adds about one station per day.

2) Software updates

Tesla cars are able to receive software updates over their built in wireless 4G connection. This means that Tesla can add features to the car and that it gets better over time. In October 2015 Tesla added Autopilot features to all cars that had the necessary hardware via software update.

3) Tesla Stores

Tesla doesn’t sell its cars through traditional dealerships. Instead the company runs its own stores which are located in shopping malls or pedestrians zones. The idea is to educate the customer about the car, unlike in a traditional dealership where you have to deal with some douchebag sales guy whose only interest is to sell as many cars as possible.

5) Tesla Gigafactory

Tesla is currently building a giant battery factory in Nevada with the goal of reducing battery cost by at least 30%. The factory will start production at the end of 2016 and when reaching full capacity in 2020 it will double the lithium ion battery production of 2013. The Gigafactory will help Tesla maintain its leading position.

6) Tesla Energy

In May 2015 Elon Musk unveiled Tesla Energy, the company’s battery division. Tesla Energy currently sells two products, a smaller batter pack for homeowners which can use the battery to store energy from their solar roof panels and a large scale battery for utilities, which allows them to also store energy from renewable energy farms. Tesla Energy will further diversify Tesla’s product lineup and help Tesla if it gets too much competition in the car business which I highly doubt.

7) Startup organization

Another major advantage Tesla has is its startup organization and management structure. Decisions at Tesla are made quickly and efficiently. A lot of decision are made by Elon directly, either to the car, their sales strategy or other areas. If Tesla made a wrong business decision, its management structure allows Tesla to quickly correct this error. In traditional car companies, hundreds of mid level managers as well as the board an many other people debate over months whether to build a car or not or which marketing campaign is the right one. Traditional car companies are to big and heavy to follow Teslas path. They can’t move quickly enough to keep up with the innovation that Tesla brings to the industry.