Elon Musk's Real Endgame
From the July 2016 issue
The new, somewhat-affordable Tesla Model 3—here in just two years’ time! Put down your deposit now!—should open up a new triumphalist chapter in the company’s hagiography. It ought to bring Tesla’s disruptive EV and automated-driving technology to a broader swath of the driving public. Maybe. By then, Tesla’s cars could very well be done. Exanimate. Kaput. And other terms for dead.
Until now, Tesla has been the only carmaker to understand that most drivers care more about style and performance than about what’s under the hood. Elon Musk has given the world sporting machines that are stylish, fast, nimble, and quiet as tombs, with an added sprinkling of holier-than-thou. But if recent reveals are anything to go by, Porsche and GM, among others, have started to figure out that EVs can be more than just $40,000 CARB-compliant cars with less than 100 miles of range. And when these giants bring their everyday-practical EVs to market, they will relegate Musk’s cars to curiosities for future generations to study and admire.
2018 Tesla Model 3
Why? Because who would opt for a Tesla when you can get an equivalent Porsche, one that can be bought and serviced in any state? What is Musk’s advantage in the face of established brands? The early adopters have already early adopted. The EV mainstream will require mainstream retailing, service, and credibility.
Musk knows this. Which may be why he has lately eased off in his fight with the dealer lobby. What Musk really wants you to buy aren’t his cars but his concept of the EV. Commercialization of the technology, not the vehicles themselves, has always been his long game. He wants people hooked on EVs—any EV—as long as his Gigafactory is making the batteries and his pipeline is supplying the electrons. Musk’s cars should be seen as marketing for Musk’s utilities. The cars he can let go. And let go he will, by which time Tesla will be competing not with GM or Porsche but with ExxonMobil and BP. Even harder than creating a successful car company is creating a new utility. But he’s going to do both.
