I was having a discussion with a friend of mine the other day. He s smart, educated and
successful. He follows energy quite a bit, happens to be an advocate of nuclear. And
we often talk about Tesla. In a recent conversation he kept talking about the competition. I am
going to actually quote what he was saying cars aren t exciting or new, there are mega
companies producing 10m cars a year each. All with loads of experience, and huge manufacturing
ability, all starting to produce either hybrid or EV s, and backed by massive existing cashflows,
with the ability to repurpose factories at a huge scale, and none of them are stupid
I explained all of why that is not an issue for Tesla, and had rebuttals to everything
else he threw at me. He even tried to tell me how small a share Tesla had in EVs, until
I had to explain to him the figures he was using also included Plug-in-hybrids, yea people
love semantics, technically they plugin and can be battery powered, but unless it's a
BEV (battery electric vehicle), then it should not be included with Tesla statistics. Eventually
all he had to say was Honestly the biggest issue i have with tesla
is their cars are generally a bit ugly to my tastes they look like 1990's japanese cars
.
Ok, first off, personally I actually like Tesla s designs. I think they look great.
The front of the model 3 and Y resembles closely to a McLaren F1. Not overly surprising there,
as that was pretty much Elon s first real car he ever bought for himself after he sold
Zip2. A McLaren F1. What was back then, the fastest car in the world.
Again this just goes to show Elon s love and passion for cars. His experience with cars
extends through to Tesla. How many other auto CEOs owned a McLaren F1 in their 20s?
And the rear of the model 3 has similar contours to the elegant Aston Martin, a car known for
its classic designs.
Therefore, as someone who does appreciate car design, I think Tesla have done an outstanding
job. And this was done with so many compromises that had to be made due to drag co-efficiency
and mass production on a scale we have may have never even seen before. On the other
hand, unlike almost every other car prior, there was no engine or driveshaft to have
to design around. It was almost a blank canvas.
But even despite the new Model S facelift, some people still say that Tesla s are starting
to look dated. Well the thing is, Tesla have made these cars
timeless. They are going to be the same shape for possibly decades to come. Similar to what
Henry Ford did with the Model T. However, Ford not updating the shape of his cars, was
actually their downfall, and what ended up costing them a large majority of their market
share, as the competition came in with nicer looking designs. Henry Ford was stubborn to
maintain the original Model T. He wanted to keep the price down through economies of scale.
But cars were already affordable by that stage, and people were willing to even spend a bit
more for something that looks more modern. But that was a long time ago, when we didn
t really have a basic concept of how a car should even look, compared to today. The actual
concept of the design hasn t changed much over the last couple of decades in reality.
The design changes are just whatever is in fashion more so. Along with nicer looking
paint jobs, and cooler looking lights. Now, as Tesla has adopted this timeless design,
then some people may think its boring, but it means it will likely be equally boring
in 10 years time. In other words, it still wont look that dated, it has a minimalist
look and feel in order to maintain the timeless appeal. With minimalism there is less that
can date in the first place. The same is true for the interior of a Tesla.
They have a minimalist look and feel inside. In fact its just a steering wheel and a computer.
We don t even have to see any ugly air vents. The less there is in the car, there less there
is to look dated.
I compare this to the fashion designer Coco Chanel, who designed clothes that never go
out of fashion. They are timeless designs. Even wearing a vintage collection is acceptable
in the world of fashion.
Now compare this to Toyota's new electric BZ4X. Can you imagine how dated that would
look in just 5 years time. And it's too late anyway, the market expects all these manufacturers
to change their shapes every so often. Sales start to dwindle after a few years a new model
is launched, as customers are happy to wait another year or so to get the anticipated
new shape. Therefore these auto manufacturers are stuck in this cycle of continually having
to make updates to their ICE vehicles. The result is a huge cost in updating lines, and
missing out on more economies of scale. I mean you would have thought it would be
hard enough for the legacy autos already. But no, just one more reason it is going to
be that much harder to ever catch up with Tesla. By the time a legacy manufacturer finally
manages to get a decent range in one of their EVs, then it's too late, the shape is too
old, and they need to re-build the production line.
So why have Tesla chosen this minimalist basic design?
It simply means Tesla do not need to update their production lines with new models every
5 to 10 years. Instead Tesla can continually refine the same production line. Invest in
more resources that will further improve the production speed and cost. Resources that
may not have been feasible for other OEMs, as they are not doing the units Tesla will
reach. Tesla has extreme economies of scale already. This just means they can keep adding
to their economies of scale for the same products, rather than having to start all over again.
Look how long the S and X lines have been down, for what appears to have been just a
facelift. Can you imagine how long the production lines would need to be down if they were updating
to a completely new design? There would be a lot of production down time, with resources
not being utilized. This would add significantly to opportunity costs, having robots and equipment
sitting there not being used for a year or so.
Tesla had to keep the shape fairly basic as to look like it wont date too badly. I mean
some people are saying the Model S does look a bit dated, but the majority seem to like
the Model S a lot more after its facelift. And demand for the car has gone through the
roof as a result. But the car is still the same shape. Which just goes to show how good
a job Tesla did with the Model S. The Model Y is probably the best looking of
them all, and will likely age the best.
An EV is an expensive item. Tesla have just done such a good job, they have managed to
make the cost of an expensive consumer item, affordable. It is through processes like maintaining
the same shape car to cut costs and take advantage of economies of scale, that can be attributed
to just how low Tesla are able to get the costs of their products.
Just think how efficient Tesla can keep improving these production lines of the same models
over so many years. It's highly likely the same shape Model S and X will still be around
in a further 10 years. Perhaps with an even more enhanced interior designed around FSD.
Tesla can therefore invest into massive economies of scale for any of their models, unfathomable
from any other car manufacturer, as they don't expect to get close to Tesla's sort of production
numbers.
Of course rather than just saving cost, it also increases manufacturing speed. If you
are continually enhancing the same production line. Along with the shape of
these cars too. This simplistic design has also been taken into consideration when it
comes to manufacturing complexity. The more simple designs means the cars can be manufactured
faster too. Tesla have a lot of cars to make, and they
don't have many factories to achieve it. Tesla will spend a lot of time, effort, resources
and expense on improving the speed of all these production lines.
If Tesla are able to increase their production speed by 20%, then that's the equivalent of
building a new Gigafactory.
Of course the production speed that is most important is the battery production. But actually
this might also mean that Tesla are all-in on the 4680 battery form too, and dont plan
on changing. Who knows, maybe they could eventually make batteries solid state, but still in the
same 4680 form factor. This would mean Tesla can continually keep
refining and improving the same battery line to further improve the battery density, price
and production speed.
Anyway, I thought I would just explain why Tesla doesn't follow fashion fads or trends
with their car styling, and stick to their own unique minimalist style, for aerodynamics
and cost. Which makes sense, as EVs are all about getting more range for the money.
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