The Tesla Difference
Tesla developed their own centralized Electronic Control Unit (ECU) system early on that manages all the functions and features in their cars, while all the other automakers have hundreds of decentralized ECUs that are not coordinated, connected, or able to be updated, and all those ECUs are managed by outsourced suppliers and not the auto-maker, and that's one of the biggest problems auto-makers have... but not Tesla.
What do the ECUs control? Basically, anything electrical, and in an EV, everything is electric...
The
4 window motors
Door locks
Trunk lid / hatchback release
Trunk lid / hatchback motors
Front trunk hood release
Climate controls for heating and cooling
Seat position motors
Side view mirror motors
Windshield wipers
Windshield washer motor
Headlight controls
Parking lights
Interior lighting
Acceleration controls
Brake controls
Steering controls
Stereo system controls
Ride height controls
Security system
Airbags
An Important Word About Updatability
These
days, a car is a computer on wheels. So you've got your laptop, your
phone, and now your car, and all are computers. If you couldn't update
your phone or laptop's software, that would be pretty bad; they couldn't
be kept current with the latest features and enhancements, and software
bugs couldn't be fixed. Same for your car. But to be able to do this,
car-makers must include hardware that allows for connectivity, and that
reduces their profits, so many don't. If that car needs a software update
to fix a bug, you've got to bring it in to a dealer. And if we're talking
hundreds of thousands of cars, sometimes the manufacturer won't mention
that there's a bug that needs fixing, so it won't get fixed unless there's
a recall forced by the car regulatory agency, NHTSA. (So I wouldn't
buy an EV from this kind of car-maker.)
But Tesla is both a software and hardware company, so they know the
value of being able to do software updates. This is why all Teslas can
do this. Additionally, to be able to get real-time traffic info, and
real-time info about charging stations, an EV must have 4G lte connectivity.
And some don't. Tesla's do, which is why a Tesla vehicle can communicate
to "Tesla Central" when it senses a problem so that a Tesla
support person can call you to alert you to the problem and schedule
a service call (which may simply consist of a Tesla tech coming to the
car in a Tesla Mobile Service van; yep, only Tesla does this).
And when Tesla designed their first EV, they knew that one day they'd
have a phone app for the car, so this meant that to be able to control
certain features of the car with a phone, the car had to have, not only
connectivity so the phone and car could "talk" to each other,
but all of the car's devices had to be controllable by the car's computer.
Take for example the windows: Normally they are controlled by a button
on the door. The button has direct control over the window motor. But
for a phone to be able to control the windows, the window motors must
instead be controlled by the car's computer (and the switch on the door
tells the computer that you want to lower the window). So that's what
Tesla did, way ahead of needing to. Do other EV makers do this? Many
don't. So they can't have a phone app. So if you own their car, and
it's 95 degrees out, and you've been in the mall for an hour and are
now going to go to the parking lot and get into a very
hot car, you can't turn on the AC when you're ready to leave the mall
so that your car won't be a sweat box when you get into it. And you
can't have your phone tell you when your EV is done charging when it's
at a public charger and you're in a nearby store. And you can't use
your phone to view the car's cameras. You get the idea. Get an EV from
a manufacture that's both a hardware and software company, and one that's
very "vertically integrated" (makes all the car's parts in-house).
And that's Tesla, and currently only Tesla.
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What the legacy automakers weren't counting on 1. Tesla making it as a company. Many automakers firmly believed that Tesla would fail, so there was no need to come up with competing products (because EVs would make them less money in the short term). And some just kept their fingers crossed that Tesla would fail. But Tesla succeeded and thrived. (Uh oh!) 2. People like Sandy Munro of Munro & Associates buying their new EVs and tearing them down and reporting on what they found. When it became evident that Tesla was here to stay, the OEMs had to rush to not lose marketshare to Tesla. And rush they did. They rushed out EVs like the Ford Mustang Mach-e and the Ford F-150 EV pickup truck. And Sandy Munro immediately bought them and tore them apart (that's what his company does). Being an automotive engineer who worked at Ford for a long time, Sandy is eminently qualified to opine on what he found. The "engine bay" of the Mach-e was "a mess". The rushed design resulted in too many parts being used (coolant hoses and individual modules), and it resulted in a lower level of serviceability. And the large amount of parts caused the vehicle to weigh more than it could have, which results in lower efficiency and a lower MPGe. Same for the F-150 Lightning. And because Sandy's videos go viral, Ford had to publicly admit that their "Gen 1" vehicles were going to be improved in their "Gen 2" models... and sales of their Gen 1 vehicles took a dive. 3. How difficult it was to start from a clean sheet of paper when designing a new type of car. Initially, Ford and GM announced they would have dozens of different EV models by the end of 2023. When it became obvious that they would not be able to pull this off, they had to backpedal on their pronouncements. And this was not a good look for them. One issue was that EVs have more software than gasoline engine cars, and the legacy automakers had always farmed out their minimal software requirements. This became a problem for them. But Tesla is both a software and a hardware company, and very vertically integrated (making their parts in-house instead of outsourcing them). And with Tesla's giant head start, the legacy automakers are now beginning to realize just how far behind they are, and how difficult it is to switch to a completely different kind of car. The two types of cars may look similar on the outside, but "under the hood" they are very different. Right now, both Ford and GM are losing money on every EV they sell (because of small quantities). They are able to deal with this loss because they do make money on every gasoline car they sell. The problem is, they are selling less gasoline cars, due in large part to Tesla. So their finances are suffering. Industry experts believe that failing legacy automakers will be bought-out by other ones (hopefully). Who will thrive? EV startups like Tesla, Rivian, and some Chinese EV makers (like the Japanese automakers did in the mid 70s when they invaded America). |
Return on Assets
refers to a financial ratio that indicates
how profitable a company is in relation to its total assets.
FYI: Ferrari sales to date: 220,000 Tesla sales to date
4 million
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Another Tesla Difference Cathie Woods (of ARK Invest): "The transition away from gas-powered cars to EVs has been accelerating, and will increase even faster because electric vehicle prices are going to follow their costs down in a way that gas-powered cars cannot. And of all the EV makers, because of their engineering talents and innovations, Tesla is best poised to bring their COGS down [Cost of Goods Sold]. Tesla's TAM [Total Addressable Market] will increase exponentially when they bring their compact car to market next year [which means increased sales because more people can afford their cars]." Like I've said, the lower cost to manufacture $25,000 Tesla EV, less the $7,500 federal EV rebate, equals $17,500 for one of the safest and best cars in the world that comes with the best highway self-driving software, and comes with their own public charging network. No legacy automaker will be able to compete with this scenario. |
And Another Tesla Difference
