There Will Be Blood – Peter Mertens, Former Head of Audi R&D: “We All Did Sleep”

[wemay]

https://cleantechnica.com/2020/06/1...former-head-of-audi-rd-we-all-did-sleep/


Quote


TESLA changed the rules of the auto business, and, with it, everything...


To counter the challenger, the incumbent auto industry activated what it is best at, its supplier base. Automakers asked their thousands of suppliers if they could develop something similar, and the suppliers confirmed convincingly, "yes, we can," without knowing what they just committed to. 10 years later, the largest and best R&D department in the auto industry has revealed vehicles that are nowhere near the 2012 Tesla Model S.

Peter Mertens, formerly Audi's Head of R&D and a Board Member, just said in June 2020: "I say this with honesty — in my own responsibility, we all slept to a certain extent, and that's not only the auto industry, but in particular the suppliers." He added, "I have made wrong decisions. We have trusted too much that the suppliers will make it happen somehow."

For 10 years, the supplier base improved and combined their sub-systems in the existing IT and software infrastructure of the vehicles, claiming that if they just try hard enough they can build an integrated digitalized vehicle that can do what a Tesla has been able to do for a decade. The top managers of the German auto industry decided to use their strength from the ICE world to work with existing or new suppliers to try to achieve this.

Suppliers doctored on sub-elements of the vehicle instead of starting a completely new greenfield design with one integrated software architecture around custom-made chips and technology. Their reasoning for that decision was simple: revenue and profits. Congratulations, dear auto managers, you just asked a vampire to manage your blood bank.

At least at that point in time I would have expected that OEM managers in the auto industry would realize that they asked the wrong person for a solution of their problem, their supplier.

Today, all of those managers have left, but their successors still do not dare or do not know how to make a cut with the past and start a revolution. Instead, they've continued a slow evolutionary approach they do not have the time for. Time is the most precious and limited asset the auto industry has today. It is an asset you can't buy with all the money the auto industry has. You will not solve the software issue by simply throwing money and resources at it.

Herbert Diess, CEO Volkswagen Group, just in June 2020: "It will be years before we have reached the necessary level of expertise in software to be able to compete at the forefront."

"Even today, hardly a line of software code comes from us."

Without software, you lose the most precious asset you have as a consumer-oriented company: access to your customer.

Without software, you lose the gold of the digital age, customer data.

Without software, you are just what is left, a company assembling low-profit metal boxes assembling company — and low profit metal boxes are an exchangeable commodity.

Having worked 20 years of my life in the software industry, I can confirm that software is not magic, just a technology. To manage software, you need software engineers and a software organization. If you allow hardware managers in a hardware organization to manage your software, how could you possibly expect success?

10 years after the incumbent industry failed to develop working IT and software operating systems for their BEVs, they still repeat the same mistake — outsourcing the piece of technology that is critical for their success, their profits, and their future.

Automotive managers who know how to develop ICE vehicles and who succeeded in their hardware world have been and are still responsible for the software organizations of the e-tron, Taycan, EQC, ID.3, and all the announced BEV concept and models from those companies. The German auto industry gives their most critical new products, which will determine if they survive as companies in their existing structure, to the responsibility of managers who have the least experience and knowledge about their most critical part, the software.

The attempt of the Volkswagen Group to centralize 10,000 IT resources in a new organization to solve the software problems of the ID.3, which 100 — or maybe even 50 — good software engineers could solve, is a testimony to not understanding software.

Herbert Diess lost the important CEO position for the Volkswagen brand because of the software issues with the Golf 8 and ID.3. More managers will lose their responsibility because it's obvious that they do not know what they do and talk about.

Since their future depends on the software — be it in services, value, or profits — that software group needs to have one of the most powerful positions in the house. The software representative on the Volkswagen board had been promoted in 2019 and is in a weak position without the power and influence required. How can a company be successful if what they will make their main profits with does not have a real say in the decision-making board?

Managers who in their entire life have never written one single line of code nor understand it at all decide on vehicle software that determines the largest share of their profits. In the software industry, 80-90% margin is not unusual, while the auto industry is used to just a few percent. People who do not even know the basic current software languages nor what it means for success, or what good or bad code is, are deciding the big issues. They will not even understand the problem if a software engineer tries to explain it to them. They don't understand the challenge, and with that are far away from solving it.

German auto industry top managers always proudly stated that they have "gas in their blood" (e.g., Piech or Winterkorn in the past, and today all others). It's been seen as a statement of being qualified for that top management role. But since no gas is used in the electric world of BEVs anymore, and batteries and code are the critical qualification criteria, how fit are they really for the roles they own?

Do they have electricity and code in their blood? They don't, and therefore, they are not qualified, because they don't understand software and batteries or electric drivetrains. If they did, why do they deliver underwhelming BEVs?

If the justification for a top manager in the old ICE world is to have been a toolmaker or similar at the start of their career, today, using the same standards, a top manager now should have been a software coder at the start of his or her career. If you don't understand what your organization does, you are not only obsolete, but you are a risk for the future of the company.

After I wrote this article, Herbert Diess lost his Volkswagen CEO role because of the software disaster with the Golf 8 and the ID.,3 but what changes with the new CEO? Does Brandstätter know software? Did they make the decision for the new CEO dependent on software or battery expertise?

Run a job assessment with all top managers at VW, Audi, Porsche, BMW, and Daimler tomorrow and ask them to code a small game or a simple but working virus. If they are not able to do so, fire them immediately, because they are not fit for the job. How many will be left?

It may sound like a radical measure, but isn't it more radical to risk losing thousands of jobs instead because the top management is incompetent and unable to understand even the basics of what the value of the company is about?

Why shouldn't the CEOs of the German automakers be able to do what a 12-year old, now CEO of Tesla, did in 1984?! If you are a CEO of a German automotive company:

"Dear CEO, here is your challenger! Can you as a grown up do the same and prove you understand?"

https://blastar-1984.appspot.com

With 12 years of age in 1984, Elon Musk programmed BlaStar.

As a shareholder of one of the above companies, you want managers who understand their business. I believe that is a basic, justified, and elementary request. The shareholders have understood that and value Tesla already as the most valuable automaker in the world, higher than Volkswagen, BMW, and Daimler combined. One of the reasons for that is the software know-how that is reflected in the future profits, and profits are what a company's valuation is about.

The remaining options are simple, either you exchange the top managers with people who know their business or you risk losing it all.

Peter Mertens, former board member of Audi, Volkswagen, Volvo, Faurecia, and Jaguar Land Rover in June 2020:

"We slept (…) it will be bloody!"

 

[edwardh1]

Maybe I read it too fast. I found it wordy and long.

 

[wemay]

Yes, long but interesting imo.

 

[JHZR2]

Interesting read.

Shareholder valuations may not mean much here. When the economy really ranks, which companies have the diversity of products and industrial might to keep producing diverse products that people and businesses need?

My first thought reading that was, if I wanted to spend $75-95k+ for a car, I'd bite the bullet with a little more outlay, and but a $59k Porsche boxster and $40k Chrysler Pacifica PHEV, and have great performance, plug in and vastly superior fueled range, and more cargo and people capacity.

Sure the Tesla is "faster" 0-60 in a manner that's more or less impractical for normal use, and the range isn't bad... but their site says you can only add 131 miles in 15 minutes. No thanks for any real use. That's worse than I had thought.

Folks I know who have autonomy modes on their vehicles find it interesting but not trusted, and aren't keen on more autonomous capability. I don't know enough about it, but frankly, if I can't pull a laptop out and do work, I'm not sure I want it, especially not to PAY for it.

So I'd say that the organically-developed know how, managing the supplier base, etc. are all interesting attributes for the industry to learn from. I'm a bit surprised that these legacy car companies don't have more in terms of software capability, but maybe they're really talking about autonomy software and infotainment, not internal control?

 

[philipp10]

I think what the article is talking about software speaking, is where the auto industry is headed in the next 20 years. I see a future where 3 companies dominate and make all the profits. These 3 companies will not be traditional auto manufacturers, although with aquisitions, they could be. These companies will be code writers. They will produce self driving software and the optics to run self driving cars. They will probably not even manufature the hardware (cars) but source from the lowest bidder (this is up for debate).

In 30-40 years, we old timers won't recoginize the industry as it will be downsized, consolidated into 3 main hardware manufacturers and 3 self driving platforms. Just an opinion of course. It is going to get bloody....as in many of our beloved auto names will cease to exist.

 

[svhanc]

Tesla is the internet around the time of the dotcom bubble...Not making money but everyone seeing the potential. If/When they have a safe, reliable car with decent range for $20k they will be a threat to the industry. Otherwise it is just one more player in the luxury auto market.
If traditional ICE carmakers can develop better integrated platforms as a result (whether ICE, hybrid, EV, etc.) then the industry will be better. If they throw all their resources into an all or nothing EV plan while neglecting their core competences, they will go bankrupt.
Not everyone can afford or wants a $75k+ car.

 

[UncleDave]

They are talking about a centralized SW architecture to run a whole car designed to be fast, easy to build, fix, update AND be profitable.

This is about way more than autopilot.

They slept and drank their own cool aid. The modern day equivalent of fiddling while Rome burns.

This is an acknowledgement of what guys like Sandy Munro have said all along that that existing automakers, and their mouthpieces like Bob Lutz have tried to brush off, deny, and pretend doesn't exist - the MASSIVE decade long head start Telsa has on them in the new BEV world.

Except last week (even only for a while) Tesla became the worlds most valuable car company surpassing even the mighty Toyota.

It's about building electric vehicles in a completely different way so that they at least have a chance to be profitable vs selling a profitable line of products that subsidizes an unprofitable (electric) line strategy that isn't going to work.

It's amusing and sad they way he throws the suppliers under the bus, as though they could have, or were somehow responsible for architecting a strategy for them.



UD

 

[jeepman3071]

Originally Posted by svhanc
Tesla is the internet around the time of the dotcom bubble...Not making money but everyone seeing the potential. If/When they have a safe, reliable car with decent range for $20k they will be a threat to the industry. Otherwise it is just one more player in the luxury auto market.
If traditional ICE carmakers can develop better integrated platforms as a result (whether ICE, hybrid, EV, etc.) then the industry will be better. If they throw all their resources into an all or nothing EV plan while neglecting their core competences, they will go bankrupt.
Not everyone can afford or wants a $75k+ car.


I think this is a big part of it. Especially with tech changing so quickly, cars have become very expensive smart phones, where the tech makes the car feel outdated pretty quickly. Combine that with cars in the rust belt lasting only a few years before they head to the scrap yard, repairs being expensive and complex, and buying a new vehicle sounds like a HUGE waste of money.

I work in technology, and love some of the tech in newer cars, but for the costs they demand it will be a long time before I feel it's worth shelling out that kind of money. Frankly, I don't see how people spend $80K+ on a non-commercially used pickup truck around here. By the time they just about finish paying it off, the thing will be rusted out and ready for the scrapyard.

 

[UncleDave]

It's amusing when people try to put them in a box " what they need to do" while ignoring, or simply not understanding whats already happened from a sales perspective.

Tesla already annihilated the mid sized luxury sedan segment with a 40- 50K offering. You can get into a 3 for 38K.
The model 3 outsells every BMW sedan in the US combined. Something that would "never happen"

Telsas SUV will do it again to that market.

Talking about 20K and 75K+ cars is complete swing and a miss on a Mguffin.


UD

 

[bbhero]

And given where our economy has been purposely tanked to.... It's even way, way, way harder on average everyday people to even think of buying a vehicle that even cost 30 thousand dollars... Much less a crud ton more...

And in my area where it's one of the wealthier places in Va... I don't hardly ever... Ever see a T vehicle... Ever.... And it sure ain't poor people living in my area... Far, far from it...

 

[JeffKeryk]

A key point in the article speaks to the importance, the value of software.
As a custom, large scale development programmer, I know this first hand. All too well.
Forget cars for a second...
Software is filthy expensive. And lousy because it does not do what you need it to do.
And takes years to change. Good money after bad.
If you do not understand what you are buying, you are in deep yogurt.

Tesla, as a company, is software driven, software first.
How many cars get new tech, new and important capabilities for free over a nighttime SW update?

Are Teslas expensive? Yes. For what you get, no. They are the future, here today.
No other company is even close.
It is not about 0 to 60 times, even as impressive as they are.
Yes, I could buy 3 Civics for what I paid for our Model 3.
That is not the point of this article.

A book, from a hardware standpoint, has pages, bindings, ink, etc. Basically firewood...
What is of value is the knowledge in that book; the software.

"Whether you want to uncover the secrets of the universe, or you just want to pursue a career in the 21st century, basic computer programming is an essential skill to learn."
- Stephen Hawking

"Everybody should learn to program a computer, because it teaches you how to think."
- Steve Jobs

"All of my friends who have younger siblings who are going to college or high school - my number one piece of advice is: You should learn how to program."
- Mark Zuckerberg

"Coding is the language of the future, and every girl should learn it. As I've learned from watching girls grow and learn in our classrooms, coding is fun, collaborative and creative."
- Reshma Saujani

"I think it's fair to say that personal computers have become the most empowering tool we've ever created. They're tools of communication, they're tools of creativity, and they can be shaped by their user."
- Bill Gates

"I taught myself how to program computers when I was a kid, bought my first computer when I was 10, and sold my first commercial program when I was 12."
- Elon Musk

 

[JeffKeryk]

Originally Posted by bbhero

And in my area where it's one of the wealthier places in Va... I don't hardly ever... Ever see a T vehicle... Ever.... And it sure ain't poor people living in my area... Far, far from it...

You will.

 

[UncleDave]

Originally Posted by JeffKeryk
Originally Posted by bbhero

And in my area where it's one of the wealthier places in Va... I don't hardly ever... Ever see a T vehicle... Ever.... And it sure ain't poor people living in my area... Far, far from it...

You will.


Even if he doesn't, "statistics" like that are simply aren't meaningful.


UD

 

[PimTac]

My understanding is that car ownership will become less as people use subscription services to get rides to wherever they want to go.

Another issue I see is the transition from humans driving to autonomous driving. There will be a period of time when both share the road. Insurance companies must be already planning on how to deal with that.

 

[JHZR2]

Originally Posted by svhanc
Tesla is the internet around the time of the dotcom bubble...Not making money but everyone seeing the potential. If/When they have a safe, reliable car with decent range for $20k they will be a threat to the industry. Otherwise it is just one more player in the luxury auto market.
If traditional ICE carmakers can develop better integrated platforms as a result (whether ICE, hybrid, EV, etc.) then the industry will be better. If they throw all their resources into an all or nothing EV plan while neglecting their core competences, they will go bankrupt.
Not everyone can afford or wants a $75k+ car.


Agree. Its a luxury product, and given that we were at the peak of the economy and due for a correction regardless of diseases or other social situations, the reality is that it is highly likely that the showoffs with big hat, no cattle, were starting to slow down, while the folks who could truly afford high end still remained. The Tesla, especially the Model S is in reality, still a toy for well-heeled individuals. Lots of folks are buying a model 3, but come on, its in no way an MB E, BMW 5, Lexus GS, or similar vehicle.

Originally Posted by UncleDave

They are talking about a centralized SW architecture to run a whole car designed to be fast, easy to build, fix, update AND be profitable.

This is about way more than autopilot.

They slept and drank their own cool aid. The modern day equivalent of fiddling while Rome burns.

This is an acknowledgement of what guys like Sandy Munro have said all along that that existing automakers, and their mouthpieces like Bob Lutz have tried to brush off, deny, and pretend doesn't exist - the MASSIVE decade long head start Telsa has on them in the new BEV world.

Except last week (even only for a while) Tesla became the worlds most valuable car company surpassing even the mighty Toyota.

It's about building electric vehicles in a completely different way so that they at least have a chance to be profitable vs selling a profitable line of products that subsidizes an unprofitable (electric) line strategy that isn't going to work.

It's amusing and sad they way he throws the suppliers under the bus, as though they could have, or were somehow responsible for architecting a strategy for them.

UD


Sorry, but Autopilot IS where the safety-critical and challenging SW resides. Not downplaying the complexity of other SW development, but its just not the same - the power electronics, motors and related elements are more of a cost, thermal, degradation, and monitoring challenge, but that has been in widespread development in other industries, and frankly, I dont see that Tesla has done anything THAT special there.

BEV still has massive challenges lingering, related to the sourcing of materials, energy, dealing with these batteries and the materials as they degrade, charging a widespread fleet, etc., etc. Coulombic efficiency drops rapidly at high rates, which is why when folks poke holes at their truck, it is warranted. Could kind of be a good idea until the range and other aspects come into play, under load, for long durations.

The supplier angle is very interesting, because it sheds insight into the lack of organic knowledge and technology. As seen in so many places, the outsourcing and offshoring of knowledge and products may possibly create efficiencies, but it also creates liabilities and risk of other kinds related to development cycles. Look at Apple's aim to go to ARM processors due to developmental cycles and delays from intel. Now look at the battery, power electronics, high bandgap materials, motor and control worlds - rapidly changind in industrial, academic, and in the auto industry.

Fiddling while Rome burns is an interesting analogy, because IMO you could look at it the other way - Tesla is not hedging bets, and is extracting money while the green and Government subsidized push for these vehicles is still being made. Forget the true social costs. Forget the reality when the Government starts taxing these vehicles properly for the road use. Forget when the other subsidies go away. Heck, look at the misleading way that Tesla prices their cars on their website - showing a price that "assumes" government tax subsidies and reduced fuel use.

When society needs to realize the actual costs for more solar, nuke, power distribution, etc. to power these vehicles, and what theyll have to pay to allow celebrities to enjoy their nose-up behavior with $75k toys, the winds may shift somewhat. And again, I see some niches, and are very much behind HEV and PHEV vehicles in practical form factors and costs.

The fact that Tesla is valued higher than Toyota on notional sales of a few niche products in a market high doesnt tell us much of anything. At best, it tells us that the market is due for a correction, especially since Toyota has far more best in class or near best in class products across a more diverse range, than Tesla.


Originally Posted by UncleDave
It's amusing when people try to put them in a box " what they need to do" while ignoring, or simply not understanding whats already happened from a sales perspective.

Tesla already annihilated the mid sized luxury sedan segment with a 40- 50K offering. You can get into a 3 for 38K.
The model 3 outsells every BMW sedan in the US combined. Something that would "never happen"

Telsas SUV will do it again to that market.

Talking about 20K and 75K+ cars is complete swing and a miss on a Mguffin.

UD



And again, something that is funny to me. NOBODY that I know who owns a model 3 compares it to a 5 series or E class. They compare it to a 3 series or C class. And $38k for a model 3 then starts to potentially make sense if you can live with the short range and slow charging (cited before, Tesla tells us the S can do 131 miles in 15 minutes of charge). Especially when typical buyers are wooed by things like 0-60 which the tesla will win on, and it also appeals to the uninformed person's greener side.

How much of a backlog still exists from folks that Tesla took $100 deposits from a few years back? That was a pretty interesting gimmick, I remember that deposit being used as bragging rights on the Facebook. Get people to play social media mental games and try to keep up with the Joneses and you can keep sales going for a while, especially if appealing to other real or perceived attributes.

Originally Posted by JeffKeryk
A key point in the article speaks to the importance, the value of software.
As a custom, large scale development programmer, I know this first hand. All too well.
Forget cars for a second...
Software is filthy expensive. And lousy because it does not do what you need it to do.
And takes years to change. Good money after bad.
If you do not understand what you are buying, you are in deep yogurt.

Tesla, as a company, is software driven, software first.
How many cars get new tech, new and important capabilities for free over a nighttime SW update?

Are Teslas expensive? Yes. For what you get, no. They are the future, here today.
No other company is even close.
It is not about 0 to 60 times, even as impressive as they are.
Yes, I could buy 3 Civics for what I paid for our Model 3.
That is not the point of this article.

A book, from a hardware standpoint, has pages, bindings, ink, etc. Basically firewood...
What is of value is the knowledge in that book; the software.



Yes, again, safety critical software for functions like autopilot can be severely expensive. Because the liability is severely expensive. But a car isnt just code. Trying to compare an overnight SW flash to an item with mechanical, electrical and electrochemical phenomena governing its performance is folly. The BEV design isnt hard to understand - design with massive amounts of margin in the battery design (which is part of the reason why any and all are obscenely expensive for what they are), and then as you build more data around the understanding of degradation and safety, something admittedly that Tesla is good at by letting all owners be beta testers, then eat into the margin that you designed in and the owners paid for but couldnt access. That's the reality of it, not the "apps" on a touchscreen. Its a status symbol on many levels. Remember the celebrities sticking their noses in the air driving prius because it was so eco-friendly? Enter Tesla. To the uninformed, its more eco-friendly (plenty of discussions on the matters of battery safety, materials sourcing and recycling, lifetime, challenges of end to end conversion efficiency, power generation, distribution, etc). But it does bring flashy tech, a look that appeals to some, and some performance numbers, range aside, that are very impressive.

Would I like a Tesla 3 or S as a toy? Sure. But even for my typical 150-ish mile trips for work and other matters, it becomes impractical for day trips without eating into time severely, or having no margin on returning home. So it would be a fun around town vehicle, but Im still much more practical... Until I find $75k in a bag on the sidewalk someday... And even then, I can think of a few other ways Id spend the money.

 

[wemay]

Originally Posted by UncleDave

They are talking about a centralized SW architecture to run a whole car designed to be fast, easy to build, fix, update AND be profitable.

This is about way more than autopilot.

They slept and drank their own cool aid. The modern day equivalent of fiddling while Rome burns.

This is an acknowledgement of what guys like Sandy Munro have said all along that that existing automakers, and their mouthpieces like Bob Lutz have tried to brush off, deny, and pretend doesn't exist - the MASSIVE decade long head start Telsa has on them in the new BEV world.

Except last week (even only for a while) Tesla became the worlds most valuable car company surpassing even the mighty Toyota.

It's about building electric vehicles in a completely different way so that they at least have a chance to be profitable vs selling a profitable line of products that subsidizes an unprofitable (electric) line strategy that isn't going to work.

It's amusing and sad they way he throws the suppliers under the bus, as though they could have, or were somehow responsible for architecting a strategy for them.



UD


You said it better than I was framing to. I couldn't agree more.

 

[UncleDave]

Mola...how you or I, or the viewing audience here segment models isn't really relevant.
The industry puts these cars in the same segment they measure themselves by.
The list of autos I posted was not compiled manually, but is a "segment" defined by the industry.


Sorry indeed - The germans are having incredibly basic problems with throttle brakes and unified control over the car (ID4) they dont even have a grip on unified control but come from a subsystem based supplier model.

Until you can master basic control over the car from user input perspective, you cant hope to to control the car from an automation perspective.

They are so far away from where Tesla is today they are just now realizing - hence the " we have been sleeping" reality that is now hitting them front and center.

UD

 

[JeffKeryk]

Sorry, but Autopilot IS where the safety-critical and challenging SW resides. Not downplaying the complexity of other SW development, but its just not the same - the power electronics, motors and related elements are more of a cost, thermal, degradation, and monitoring challenge, but that has been in widespread development in other industries, and frankly, I dont see that Tesla has done anything THAT special there.

BEV still has massive challenges lingering, related to the sourcing of materials, energy, dealing with these batteries and the materials as they degrade, charging a widespread fleet, etc., etc. Coulombic efficiency drops rapidly at high rates, which is why when folks poke holes at their truck, it is warranted. Could kind of be a good idea until the range and other aspects come into play, under load, for long durations.

The supplier angle is very interesting, because it sheds insight into the lack of organic knowledge and technology. As seen in so many places, the outsourcing and offshoring of knowledge and products may possibly create efficiencies, but it also creates liabilities and risk of other kinds related to development cycles. Look at Apple's aim to go to ARM processors due to developmental cycles and delays from intel. Now look at the battery, power electronics, high bandgap materials, motor and control worlds - rapidly changind in industrial, academic, and in the auto industry.

Fiddling while Rome burns is an interesting analogy, because IMO you could look at it the other way - Tesla is not hedging bets, and is extracting money while the green and Government subsidized push for these vehicles is still being made. Forget the true social costs. Forget the reality when the Government starts taxing these vehicles properly for the road use. Forget when the other subsidies go away. Heck, look at the misleading way that Tesla prices their cars on their website - showing a price that "assumes" government tax subsidies and reduced fuel use.

When society needs to realize the actual costs for more solar, nuke, power distribution, etc. to power these vehicles, and what theyll have to pay to allow celebrities to enjoy their nose-up behavior with $75k toys, the winds may shift somewhat. And again, I see some niches, and are very much behind HEV and PHEV vehicles in practical form factors and costs.

The fact that Tesla is valued higher than Toyota on notional sales of a few niche products in a market high doesnt tell us much of anything. At best, it tells us that the market is due for a correction, especially since Toyota has far more best in class or near best in class products across a more diverse range, than Tesla.

And again, something that is funny to me. NOBODY that I know who owns a model 3 compares it to a 5 series or E class. They compare it to a 3 series or C class. And $38k for a model 3 then starts to potentially make sense if you can live with the short range and slow charging (cited before, Tesla tells us the S can do 131 miles in 15 minutes of charge). Especially when typical buyers are wooed by things like 0-60 which the tesla will win on, and it also appeals to the uninformed person's greener side.

How much of a backlog still exists from folks that Tesla took $100 deposits from a few years back? That was a pretty interesting gimmick, I remember that deposit being used as bragging rights on the Facebook. Get people to play social media mental games and try to keep up with the Joneses and you can keep sales going for a while, especially if appealing to other real or perceived attributes.

Yes, again, safety critical software for functions like autopilot can be severely expensive. Because the liability is severely expensive. But a car isnt just code. Trying to compare an overnight SW flash to an item with mechanical, electrical and electrochemical phenomena governing its performance is folly. The BEV design isnt hard to understand - design with massive amounts of margin in the battery design (which is part of the reason why any and all are obscenely expensive for what they are), and then as you build more data around the understanding of degradation and safety, something admittedly that Tesla is good at by letting all owners be beta testers, then eat into the margin that you designed in and the owners paid for but couldnt access. That's the reality of it, not the "apps" on a touchscreen. Its a status symbol on many levels. Remember the celebrities sticking their noses in the air driving prius because it was so eco-friendly? Enter Tesla. To the uninformed, its more eco-friendly (plenty of discussions on the matters of battery safety, materials sourcing and recycling, lifetime, challenges of end to end conversion efficiency, power generation, distribution, etc). But it does bring flashy tech, a look that appeals to some, and some performance numbers, range aside, that are very impressive.

Would I like a Tesla 3 or S as a toy? Sure. But even for my typical 150-ish mile trips for work and other matters, it becomes impractical for day trips without eating into time severely, or having no margin on returning home. So it would be a fun around town vehicle, but Im still much more practical... Until I find $75k in a bag on the sidewalk someday... And even then, I can think of a few other ways Id spend the money.
[/quote]

Many of your points do not reflect the reality of owning a Tesla or Tesla's winning strategies.
Yes, a Tesla is a luxury, expensive car. Name a luxury car that is not expensive or is not a toy. The S and X are not big sellers; the 3 and new Y are and will be.
This was Musk's strategy from the beginning.
Even during the pandemic, Tesla is making money and selling more cars than many. Not on the $75K and up cars...
You talk about charging times. The vast majority of owners charge at home; you spend much more time overall at a gas station.
In Silicon Valley, many people commute 75 to 150 miles daily. They love the Tesla because they charge at work (free or subsidized), get the computer lane, etc.
Of course, long trips are not any ECs strong point. Personally, I would rather fly and have other vehicles.
There are all kinds of updates; some are gimmicky others are important. Safety and ease of use features are examples. The Model 3 is one of the safest cars on the road.
Calling SW update folly is incorrect; it is the future. And it is Tesla strong point.
Tesla's real world data capture is a huge asset.
You compare the Model 3 to other lux cars. After driving the Model 3 and getting into the beautiful GS, I find the GS interior cluttered and confusing.
You mention Apple switching to ARM RISC architecture. Intel is behind on their chip software vs RISC. Same as every other carmaker vs Tesla. Except more so.
Tesla's market cap reflects investor's confidence in them as a company. I would not say that tells us nothing.

2 points:
The Model 3 is #1 in owner satisfaction; only mighty Porsche is even close.
Every major car company is building EVs. Why? Tesla has set the mark pretty darn high. Heck, the incredible Model S is 10 years old.

 

[Blueskies123]

It is funny how so many people cannot see the future. All those people that owned horses in the early part of the century just could not get their head around horseless carriages.

 

[CT8]

Corporate group think?