Tesla has had the superior product for a long time and is now heralding a new design era with the Cybertruck. It ‘s able to produce better products cheaper and faster than the rest of the car industry. Like a jigsaw puzzle, the individual pieces gradually fit together to form a coherent picture. The motif shows Elon Musk, grinning broadly and smoking a joint in a space suit.
A few weeks ago, the former Audi head of development publicly and more vehemently than ever before criticized the terrible situation of German premium manufacturers when it comes to understanding the new value chains. The quintessence of his rant: the development of the over important central vehicle software was outsourced to suppliers. Yet these suppliers are not interested in new products, control systems or synergy effects that would cannibalize their margins. And so they’ missing the mark. Meanwhile, at company headquarters, no one from the board of directors possesses the necessary vertical software understanding. According to Mertens, the result is an octopus with eight arms and no brain. We don’t want to recount the problem at this point, we want to make it worse (and hopefully more urgent).
Designing the modern combustion engine has indeed been a complicated task. So complicated that, next to comfort and safety aspects, drive technology became the moat of the German automotive industry — and thus created a great deal of prosperity. Then came the Internet, closely followed by electric drive technology (only 250 components), and the new complicated problem to be solved was no longer the drive but the software — to control the car and act as an interface to the driver and the environment. 10 years of this “problem shift” later and there is only one brand that has solved the new, difficult problem. That’s Tesla and they have a good laugh! All the other manufacturers have developed great apps for opening doors, for automatic parking, or they put the money right away into bombastic retail stores where you can buy a car via app. They may have won app awards, but they may also have gambled away the future product-market fit.
The biggest mistake of the local (and rich!) car industry was to put too much energy and momentum into sales, communication and retail innovations, because this theatre has been a great distraction. Why would I want three Audi subscriptions a year if the car isn’t cool anymore? What’s the point of a gnarly shop if it doesn’t carry a gnarly product? Admittedly, it’s easy to ask these questions in hindsight. None of these innovations were wrong, but they didn’t change anything in terms of value creation and didn’t contribute anything to solving the new big problem. In an article entitled “Nothing to laugh about electric cars”, we described a possible “mental model” in the form of the Stan Shih Smile Curve, which shows what the new added value and thus also the competitive reality of the automobile looks like. An excerpt:
In the theory of the “IT-relevant manufacturing industry”, the Smile Curve describes the change in value creation in the various phases of a product’s market launch. The model was developed by the founder of Acer, Stan Shih. According to his observation, the two ends of the value chain — conception/R&D and marketing — in the computer industry have a higher value added to the product than the middle part of the value chain — manufacturing itself. If this phenomenon is represented in a graph with a Y-axis for the “value added” and an X-axis for the production stage (time axis), the resulting curve looks like a smile. A smile where a company prefers to be located in the corners of the mouth.
VW, BMW & Co are no longer high in the corners of the mouth since the problem shift. But Tesla is clearly right there: smiling broadly. If you’re looking for proof, check their latest product: the Cybertruck. At first glance, it follows Tesla’s PR narrative, because the Cybertruck looks like a driving meme. What else should a CEO’s vision look like who’s building rockets on the side? The Tesla Cybertruck is a meme, a bold corporate vision and possibly even the beginning of a new era in design. It’s not just about aesthetics, but about manufacturing logic as a whole.
The Cybertruck is just as rough and remixed as content on TikTok. Not only do both want to impress the same target audience, but Tesla and TikTok share a similar engineering approach. TikTok is described as “the first social network where AI is the product”, as its algorithm is by far superior at arranging content. Tesla builds a similar engine with its factories for models like the Cybertruck. A video by car guru Sandy Munro shows the production perspective behind the design, especially the cost side:
The Cybertruck is built with materials and manufacturing technologies that Tesla adopted from Space X. That alone is still marketing, but Space X poses completely different questions about materials and costs of production, which Tesla is now also asking itself (and Audi hasn’t even heard of). The result is a car that is much easier to produce and that has its own aesthetics. Sandy Munro does the cost calculation of this new aesthetic in the video excerpt:
A production line that can produce 50,000 Ford F150 pick-up trucks per year costs 210 million US dollars to build. The production line of a Cybertruck with the same output costs 30 million US dollars (that’s one seventh of the cost!). The cost difference for 600,000 units per year is even more spectacular: $615 million for the F150 and $125 million for the Cybertruck. And this is solely due to the design, in particular the easier sheet metal processing because there are hardly any curves and the lack of paint work.
A Tesla updates automatically overnight — you’ll enter a new car the next morning. A Tesla surprises with entertaining mods like the Ludacris mode, drives autonomously and has more power than a Porsche Taycan. And now you might find a new aesthetic that reduces costs, massively speeds up production and enables completely new model ranges.
This all happens while the former Audi boss is sitting in prison like a James Bond Villain. Not for ‘moving fast’ and ‘breaking things’, but for the accusation of exhaust manipulation. Wake Up, Germany!
The Cybertruck may just be Cyberpunk, a marketing stunt. But: who cares what will be en-vogue next? Tesla will be the first and maybe only brand to profit from it. The bitter realization: in this innovator’s dilemma, only one person will be able to laugh at the end. And that is Elon Musk.
child is a strategy consultancy based in Frankfurt, Germany that solves big problems through radical simplification.