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Tesla sales foil predictions of German automotive critics

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On: Tue, May 10, 2016 at 1:57PM | By: Bill Wilson


Tesla sales foil predictions of German automotive critics

There is a strange, persistent irony that flows throughout history. A small group of visionaries comes up with an idea that challenges conventional wisdom. The concept is so radical that those in power either ignore the newcomers or revile them. Over time, however, the outsiders begin to transform the world.

In desperation, the old guard tries to suppress the newcomers. Failing to do so, it then seeks to imitate them, only to find itself badly outclassed. In the end, those who were once dismissed as kooks seize the reins of power. Their ideas, which were at first considered impractical and absurd, become the new conventional wisdom. The process then starts all over again. For proof of this dynamic, simply consider Thomas Edison. Or Henry Ford. Or Steve Jobs.

This same “newcomer outfoxes old rivals” process has happened in the automotive world since the founding of Tesla in 2003. European automakers enjoyed poking fun at the new company. Former Daimler chairman Edzard Reuter went so far as to call the pesky California startup “a joke that can’t be taken seriously compared to the great car companies of Germany.” No doubt Reuter inspired a hearty round of laughter among his fellow auto executives with that crack.

That was then, this is now. These days neither Reuter nor anyone else is laughing at Tesla founder Elon Musk. The wake-up call for legacy automakers came in April of this year, when Tesla announced that almost 400,000 buyers across the globe had put down $1000 apiece to be among the first owners of the Tesla Model Three.

This is unmistakable evidence that many of the world’s smartest and wealthiest people think that high-performance electric-powered cars are far from a joke. It’s also proof that, once again, a small group of visionaries has managed to outfox its dinosaur-like competitors. The fact that many of Tesla’s most ardent fans live in Germany makes the pill an especially bitter one for the people at BMW, Daimler, and Mercedes to swallow.

“Germans have an enormous amount of pride in their engineering skills. They believe they know everything about cars,” said Ferdinand Dudenhoeffer, a car industry analyst at the University of Duisburg-Essen. “And then along comes this young punk in California… now they’re seeing that he’s leading the revolution.”

While BMW and other German automakers have been developing their own electric vehicles, their offerings fall far behind Tesla models in terms of range and performance. For example, the VW Golf has a maximum range of 83 miles, while the tiny Smart EV runs dry at just under the 70 mile mark. On the other hand, Tesla’s Model S can go 250 miles between charges and look sexy as hell while doing it. Perhaps that’s why 1,582 Germans laid down their hard-earned euros to purchase a California-made Tesla Model S in 2015 alone.

For their part, European automakers point out that Tesla still has a long way to go. Despite the American company’s enormous popularity and record-breaking sales, it has yet to earn a profit. Tesla officials say this will change during 2016, forecasting a healthy return on investment by the end of the fourth quarter. Whether this prediction comes true or not remains to be seen. However, by successfully challenging the automotive world’s old guard, the company has proven that history, for good or ill, never fails to repeat itself.




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