When Elon Musk unleashed his “Master Plan, Part Deux” for Tesla a few weeks ago, we learned that the automaker intends to go well beyond building cars and crossover SUVs, the heart of its current lineup.
In the future, Tesla will construct a pickup truck, a bus, and most provocatively, a semi-truck. All this new “product,” as it’s called in the industry, set off a flurry of enthusiastic speculation.
In theory, it all makes sense: Musk has a grand vision of liberating humanity from its dependence on fossil fuels. Attacking the problems of oil-powered mass transit, freight, and as a plus bringing an electric pickup to the people is consistent with his ideas.
But there’s a problem. It’s unclear whether anyone wants an all-electric bus, semi, or pickup. At least at the moment and for the foreseeable future.
The big “Why?”
There’s no question that Tesla has demand. But I’m starting to wonder if that’s demand for specific vehicles. Increasingly, I think a lot of people want to be part of the Tesla experience, to join the brand. This is why buyers who might otherwise be shopping for Porsches and Ferraris go Tesla.
For the car maker’s decade-long history, joining the club has meant coming up with upwards of $100,000 to buy a Roadster sports car, a Model S sedan, and more recently a Model X SUV. Tesla also offers leases, but they aren’t cheap, either.
Even the $35,000 mass-market Model 3, slated to arrive in late 2017, isn’t inexpensive. The 375,000 advance deposits of $1,000 apiece that Tesla has taken signal a vast desire to buy into the Tesla brand, given that no one has yet seen or driven the actual production car.
The company has now made the seemingly logical decision to expand the segments and sectors that it serves. But it’s hard to tell if anyone really wants these vehicles, or whether Musk just thinks they should be on offer. After all, we should note that although Tesla could sell 80,000 vehicles in 2016, the market for electric cars hasn’t developed as robustly as anyone thought it would five years ago.
Let’s start with the pickup. Just because you can build a pickup, that doesn’t mean you should. The vast majority of pickup-truck buyers are located in the US, and they buy full-size trucks from Ford, GM, and Fiat Chrysler Automobiles. They are insanely loyal and, frankly, aren’t thinking about why they need an electric version of a vehicle that in gas- or diesel-powered form is already completely satisfying.
The smaller pickup market has been revived in the past few years, but it’s still tiny and the intersections with pickup owners, but existing and potential, are minimal. Maybe Tesla wants to create a “Teslamino,” an electric version of the famous El Camino car-truck hybrid? The market for that is surely huge.
A bus? A Semi?
Yikes. Now on to the bus. There aren’t many electric buses in cities, presumably the target market, and even if Tesla built one and dominated that market, it would take decades for the current fleets to be replaced.
Since the Master Plan, Part Deux publication, I haven’t heard of any municipalities knocking down Tesla’s doors to get their orders in. My colleagues and I have discussed a smaller bus, sort of like what you ride to and from rental car lots at the airport, but that market seems well-served at the moment. This one strikes me as a tough nut to crack.
How about the semi? A startup called Nikola (Get it?) claims to have raked in thousands of pre-orders for a hybrid natural-gas-electric semi, but otherwise, the semi fleet in the US is now served quite well by all the large and experienced manufacturers of big trucks. Electric and hybrid-electric drivetrains are hardly a new technology, so it’s safe to assume that if they saw their diesel-powered business vanishing, they could make the switch pretty quickly.
The stuff that Tesla does well — producing a fast, sexy, exciting luxury electric car and selling it for a lot of money — isn’t what big truck makers do. Semis are cool. But their primary function is to haul huge loads. Some cabs are outfitted to be very comfortable rolling hotel rooms. But it isn’t a core concern.
Plus, it can already take an hour to fully recharge a Tesla Model S battery, to get about 250 miles of range. Some significant advancements in charging a large-battery technology are going to be required for Tesla to develop a viable long-haul semi.
Never say never?
I’ve learned from experience to never, ever write off Tesla’s ambitions or Musk’s ability to turn his ideas into reality.
But Tesla has also benefited from a public that wants to connect with the company’s story, and that’s willing to pay handsomely for the opportunity. Those people wanted to be part of a cool brand that was doing cool things.
But now Tesla is entering a period where it must flirt with the uncool to grow — and fulfil Musk’s vision. And it will have to move into markets where, frankly, customers are uninterested in what Tesla has to offer.
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