Richard Thalheimer, founder and former CEO of The Sharper Image, and founder of RichardSolo.com, knows a few things about consumer trends and hot products. He conceived and built The Sharper Image into an international brand with a mail-order catalog, 200 retail stores, and a strong online presence.
Now having personally owned four Tesla electric cars, he’s uniquely qualified to speak about the future of the industry’s transition to autonomous driving, and electric vehicles.
“When you think about it, computer-driven cars have the potential to be much safer. Imagine going down a freeway at high speed, separated by precise computer control. No wild swerving, no dangerous lane changes, no tailgating, no impaired driving. Just fast, safe, controlled movement.”
“Not only is it much safer, but it also reduces traffic jams on the highway, while you relax and enjoy reading or texting.”
“Electric cars, with their instant torque and silent motors, are especially suited for this environment. Their lack of tailpipe emissions is a huge plus as we combat global warming.”
While autonomous driving for everyone is a number of years away, the technology is rapidly arriving. Tesla is arguably the best example of what a future car will be.
Combining multiple vehicle cameras, a large touchscreen display, powerful electric drive motors, over-the-air updates to its operating system, and a huge Supercharger network to enable convenient long-distance driving, Tesla has a formidable competitive advantage.
So why do experts like Bob Lutz, former head of Ford and Chrysler, and Vice-Chairman of GM, predict Tesla is an “automobile company that is headed for the graveyard,” source
Thalheimer thinks he’s missed the point, and that what Elon Musk and Tesla are doing is extraordinary. “Perhaps at this point in his career, Bob Lutz wants to create headlines and see his name in the spotlight, regardless of the accuracy of his statements.”
Bob Lutz is also highly critical of Musk personally, saying “he (Elon Musk) is a nice guy who doesn’t know how to run a car company,” source
Really? Thalheimer points out, “Musk started from scratch, and 14 years later his cars are outselling BMW, Mercedes, Audi and Jaguar in their respective niches. Tesla cars are consistently the highest rated for safety and customer loyalty.”
And in their most recent quarter, Tesla reported a substantial profit and dramatically increased revenue, surprising analysts and critics.
What’s more, the new affordable Tesla Model 3 sedan is a huge market success, and comes at a time when Ford has announced it is discontinuing all sedan production except the Mustang sports car and a compact Focus crossover, as consumer tastes shift to SUVs and trucks, and away from sedans. “That makes the Model 3 sedan success all the more remarkable.”
Thalheimer goes so far as to predict manufacturers like Ford is in danger of losing their following, as they are not competitive in the new electric and high technology vehicle marketplace. Ford’s stock price reflects this, hitting an eight-year low recently.
“Will Ford even be a viable car manufacturer in five years? Only their truck business might keep them going.”
GM has admitted as much, announcing it is closing 5 US car factories, as it transitions to electric cars:
“General Motors’ restructuring has sent shock waves throughout the auto industry, the political world and, most of all, in the communities of the five plants the company will shut down. Some observers see the move as driven by technology that’s forcing old-school automakers to become more like what Tesla has been doing all along.” source
Another pointed article criticizes traditional car makers in a MarketWatch Opinion piece Nov 27:
“The problem for traditional automakers is that they are too deeply wedded to an old technology headed for obsolescence — along with the way they’ve been doing business for decades.
Those who still believe in traditional automakers point their manufacturing expertise and well-established supply chains, sales and marketing partnerships, and distribution networks as a structural advantage. BMW, for instance, has 30 manufacturing sites for internal combustion engine-based vehicles in 14 countries. They are good at making cars.
But an electric vehicle is a different proposition, with a different manufacturing process, different parts, a different sales and education approach and different supporting infrastructure. The problem for the likes of GM and BMW is that the kind of quick transition that’s required for survival in an electric world would lay large parts of their existing businesses to waste.” Marketwatch
Tesla meanwhile, continues on a roll. Coming up next for Tesla is their new affordable Model Y small SUV, and also a Semi Truck big hauler. Their production problems appear to be behind them, and cash flow has turned positive.
It’s an exciting time for Tesla as it travels fast, and silently, on autopilot down the curvy highway, gaining more ground on some of the worlds best car manufacturers. And, it’s looking like Bob Lutz missed the turn.
