Over the past few months, there’s been a lot of chatter about Tesla facing competition from a cluster of new electric car companies — including some very serious potential contenders, such as Apple and Google.
The Apple Car, which doesn’t exist yet, and the Google Car, which can drive itself but otherwise isn’t much of a car, aren’t dominating the latest round of speculation, however.
Now we’re hearing about Faraday Future and NextEV. With Chinese money behind them and employees hired away from Tesla, these carmaker must be ready to take on Tesla, right?
Of course not. They’re nowhere near ready to take on Tesla. And although Tesla would be delighted if a few more startup electric vehicle makers broke into the business, relieving CEO Elon Musk & Co. of the responsibility of being the only true 100% all-electric carmaker around, the Faradays and NextEVs of the world have miles to go before they’re going to be even so much as competing with Tesla, much less challenging Tesla.
For starters, neither has a car yet. Tesla has two — the Model S sedan and the Model X SUV — and a forthcoming mass-market vehicle, the Model 3, expected in 2017 (if you consider the original Tesla, the Roadster, then the company has three cars.) Tesla is also able to build about 50,000 cars per year, with an expectation that it will built ten times that by 2020.
Faraday Future is reportedly going to show the world a prototype of its vehicle at the Consumer Electronics Show in Las Vegas early next year.
NextEV recently announced that it had hired a former Cisco executive, Padmasree Warrior, to be its CEO. But NextEVs website looks more like a recruiting effort now than a mobility showcase. NextEV is practicing the vague art of surfing various futuristic transportation trends, mainly car sharing and “de-ownership” of a personal vehicle, rather than showcasing anything so mundane as a metal rectangle with four wheels and seats.
We’ve seen this all before. When Tesla burst onto the scene about a decade ago, a passel of other electric-car startups were poised to push EVs to the next level. The financial crisis drove them all into bankruptcy or outright failure: CODA, Aptera, Better Place, Fisker. Only Tesla hung in there, along with the major automakers, which can run modest EV programs with one hand tied behind their backs.
Tesla and the remaining efforts by the big car makers have validated a small market for electric cars, and there’s a good reason for Ford and GM and others to keep EVs going: increasingly stringent government fuel-economy regulations. Electric cars help big automakers meet their future obligations by raising average MPGs for their fleets.
There isn’t much to be gained by debuting a new EV platform — even if Tesla gets to 500,000 in yearly production, that’s a fraction of an 18-million annual new car market in the US alone.
But another Silicon Valley startup, Uber, has intensified a buzzy new trend: transportation as a technologically enabled service. This is why Faraday and NextEV are stressing connectivity and ride-sharing over actually buying a car. If you want to buy a car, you already have abundant options.
But if you want to be join a mobility service, you’re somewhat more limited.
NextEV isn’t completely without car making experience: it actually has a racing arm, partnered with Team China Racing, that turned in a successful first season in Formula E, the all-electric version of Formula One. And according to various reports, the company’s game plan seem to be: Bring that racing tech to the streets, by 2016, in the form of a flashy, high-performance supercar.
That sounds more like a page from the Tesla playbook, and may help NextEV to distinguish itself from Faraday Future.
But neither company is currently building a production car. And until they do, the challenge to Tesla doesn’t exist.