The BIG question surrounding the fledgling electric car business is whether its big enough to support all the people who want to get into it. For those wondering about the answer, it’s “NO”, just as it was with the internal combustion car business. The only remaining intrigue is about who’ll have a chair when the music stops.
For the biggest of the pure EV start-ups it was a case of one step forward and two steps back.
The one step forward was the announcement of a ‘leasing’ plan that would allow more people access to Tesla vehicles without having to stump up their huge prices up-front. That’s good news. Offering what regular car companies can offer is essential if Tesla are going to become a regular car company.
The two steps back?
The first step back is best characterised by Tesla calling their lease plan ‘revolutionary’ and Wired.com calling it ‘bizarre’. Car & Driver went so far as to call the promotion of it Misleading. That’s the chasm between perception and reality at Tesla HQ right now.
Why the contention?
In selling their leasing plan, Tesla put together a calculator intended to show the ‘true cost’ of owning a Tesla under this plan. The problem being that the calculator was loaded with assumptions about how much people’s time is worth, how much time they’ll spend driving long distances and re-charging, and other stuff.
Calculators like these can be a good idea, but the blowback from this one wasn’t great for Tesla. Elon Musk announced the lease plan saying it was possible for the ‘true cost’ of owning a Tesla to be as low as $500 per month (the actual cash cost is at least $1,199 per month). Out of all the people in the motoring press who tried it out that I was able to read, the best of them got their ‘true cost’ down to around $650 per month.
My favourite mocking quote was a tweet from an Automotive News journalist:
“According to Tesla website, if you live in Calif. and make $2 million/year, driving a Model S has an effective monthly cost of minus-$2,000.”
Indeed. The lease/finance plan IS a great idea but Musk has got to learn that doing his own publicity is very much a double-edged sword. He gets it right a lot of the time, but he’s becoming the face of Tesla more than the Model S is, and when you get it wrong, that’s a really dangerous thing.
The second step back for Tesla wasn’t as widely reported, but it was covered here in Australia by one news source, at least. Tesla’s initial quarterly profit has been called into question after Bloomberg News talked with an owner and discovered that Tesla had asked customers to pay for orders up front in order to include them in their profit figure.
According to the email, Tesla was “right on the cusp of profitability this quarter for the first time in 10 years since the company started”.
It then encouraged customers to stump up their payment for the car “in order for Tesla to be able to count your Model S for the quarter”.
Essentially they robbed Q2 to pay Q1, which was a monumentally stupid idea as the market’s only three months away from finding out the real implications of this. Tesla’s share price has been up recently, too, quite possibly on the back of the profit announcement. I’m sure the regulators will be watching market transactions with interest.
I don’t think Elon Musk is long any sleep over the stuff mentioned above, but imagine the headache Henrik Fisker must have today. Actually, cancel that. Henrik Fisker left the company that bares his name last month due to disagreements with the board.
So imagine the headache someone must have today after Fisker announced – on a Friday, of course – that it was sacking 75% of its workforce, effective immediately.
Have a nice weekend, folks.
I got an email from John Flores at New Motor Mag. He had just got off the phone after doing an interview with Mikael Ostlund from NEVS about the situation at Saab. You can read/hear the interview here.
Disclaimer: I haven’t listened to the 30-minute conversation yet.
But assuming they’ve done their job and included the salient points in the summary, then it’s a saddening event.
I conducted an interview with Mikael Ostlund a full five months ago and it seems that absolutely nothing has changed in terms of NEVS’s PR story for Saab. There’s either nothing going on (unlikely) or NEVS has had no change of heart about the way they communicate with potential customers.
It’s a very arrogant approach IMHO and it’s slowly but surely eroding any goodwill that people might have had toward the new Saab.