Before we begin, a quick story.
No one seemed precisely sure when Tesla CEO Elon Musk first claimed he would build a car that jumped from 0-60 mph in under 2 seconds. But he said it several times, about more than one car.
Some have since been canceled or remain officially in development years after Tesla
promised. But one — the Model S Plaid – is the current flagship of the Tesla line. Musk pledged on several occasions that it would beat the 2-second mark.
To be clear, a 2-second 0-60 is absurdly fast. Tiny Formula One race cars have broken the 2-second line. But no production car had come close. Never mind one that could comfortably seat four adults.
But Musk promised it, so the automotive press set out to test the claim. MotorTrend got the first crack. You can read the whole saga on its website, and you should. But we’ll give a short version here.
MotorTrend journalists scheduled a chance to test the Model S Plaid’s 0-60 time. Then the caveats started.
The magazine couldn’t use its test track. They had to conduct tests at a Tesla facility.
When the journalists said no, Tesla offered to allow the test at a MotorTrend facility, but only if MT agreed to its track surface prepped with a particular sticky substance, TrackBite, sometimes used at drag strips.
It’s grippier than asphalt, so MT objected — the test results wouldn’t compare fairly to those of other cars. Eventually, the magazine relented and agreed to do the test under Tesla’s conditions and publish the results with an asterisk.
MT reports Tesla engineers left the stuff “caked on so thick it nearly pulled our shoes off.”
Tesla personnel took an extra 15 minutes to set up the car properly before allowing the run. And then a magazine test driver stepped in and, sure enough, ripped from a standstill to highway speed in a shocking 1.98 seconds.
The next day, away from the watchful eyes of Tesla’s technicians, MT did the same run on a normal asphalt surface. The result? A jaw-dropping, Ferrari-beating, blink-and-you-miss-it 2.07 seconds. The fastest car they’d ever tested.
Think about those two scores for a moment.
Tesla built a car capable of the fastest 0-60 in automotive history. It’s not an exotic car you have to baby and save for track day. It’s a sedan. You can take the kids on vacation in it. It’s a nearly 5,000-pound car, almost as quick as a race car weighing less than a third of its bulk.
But Tesla couldn’t let the number be published because it had promised something more.
It had to cheat to get the figure to what the marketing material said. Tesla delivered something astonishing but didn’t live up to the boss’s promise.
That’s the Tesla story in a nutshell.
Tesla makes some of the world’s most impressive cars
Let’s get this out of the way immediately – Tesla makes some astounding cars.
That Model S Plaid posts quarter-mile times quicker than 2-seat hypercars from Ferrari
and Lamborghini and does it with sumptuous seating for four.
The Model Y and Model 3 have been so good that in late 2021, they made Tesla America’s bestselling luxury automaker.
Read that sentence again. It doesn’t say that Tesla sold more electric cars than anyone else. It says that Tesla sold more luxury cars than anyone else. The company now outsells BMW
Lexus, and Mercedes in the United States.
But Tesla makes promises it can’t keep
But the 2-second* claim is part of a long pattern with Tesla.
When Tesla retired its first product – the little 2-seat Roadster – Musk promised a successor by 2014. Six years later, the car is still not here. Some buyers put down $50,000 reservations six years ago and haven’t received so much as a date the car will enter production.
Musk has promised his future-funky Cybertruck would reach buyers in 2021. And 2022. And 2023. He also promised its windows were unbreakable — moments before presenters broke them.
Everyone is catching up
Tesla was the first company to announce plans to build an electric pickup. In a best-case scenario, it will now be the fourth to bring one to market.
R1T is already in customer driveways. Ford
has delivered thousands of F-150 Lightning trucks. General Motors’
GMC Hummer is already on sales lots, and its Chevy Silverado EV is on pace to appear in showrooms before the Cybertruck gets here.
Tesla has documented quality problems
Tesla vehicles are wildly popular and have a massive army of fans. But they have lower build quality than the average car. That sounds like a wild opinion, but it’s a documented phenomenon.
When Tesla has a choice, it doesn’t participate in comparative quality studies. When it has no choice, it doesn’t do well.
Three comparative quality studies stand out above others in the automotive industry. Tesla can prevent two of them from studying its cars, but not the third.
The first is J.D. Power’s Initial Quality Study. It looks at drivers’ problems in the first 90 days of owning their new car. Several states require automakers to consent before J.D. Power can use their data. Tesla always chooses not to participate.
J.D. Power, however, publishes incomplete data drawn from the states that don’t require automaker consent. The result? In the most recent study, Tesla would have finished tied for 28th out of 33.
J.D. Power also publishes a Vehicle Dependability Study that examines problems reported by people who have owned their cars for three years. Once again, Tesla declined to be ranked. If it did, J.D. Power says, it would have finished 30th of 33.
Consumer Reports uses a different system. Because it polls only its members about their cars, it doesn’t need to get automaker consent. In CR’s most recent reliability ratings, Tesla finished 27th of 28 brands.
Tesla finishes consistently near the bottom of automotive reliability studies and tries its best to avoid measurement.
‘Full Self-Driving’ is a lie and a hot mess
“I really would consider autonomous driving to be basically a solved problem,” Musk said in 2016. “I think we’re basically less than two years away from complete autonomy.” The company took its first payments for its suite of automation called “Autopilot” that same year.
Six years later, Tesla sells three separate driver assistance systems: Autopilot, Enhanced Autopilot, and Full Self-Driving. None do what Musk promised, and all are misleading enough that government regulators are beginning to step in.
Buyers have been paying for Full Self-Driving since 2016, but the system remains officially in “beta testing.” Beta testing allows Tesla owners to use the system on public roads where the rest of us are driving, as long as they sign a series of waivers promising not to sue the company.
The National Highway Traffic Safety Administration (NHTSA) is investigating the system’s safety. The New York Times reports, “NHTSA has said it is aware of 35 crashes that occurred while Autopilot was activated, including nine that resulted in the deaths of 14 people.”
The California Department of Motor Vehicles has accused Tesla of false advertising for the names “Autopilot” and “Full Self-Driving,” and for advertising claims about the system. The DMV has asked a court to set a formal hearing date at which its right to sell cars in America’s largest market could be revoked.
Tesla has responded by raising the price – Full Self-Driving now costs $15,000 — $5,000 more than just nine months ago.
Tesla’s cutting-edge technology is drifting out of date
Tesla got there first, with mainstream luxury electric cars and many entertainment technologies. That goes a long way. It helped create an aura of cutting-edge technology around the brand.
But now that Tesla has proven the market for electric cars, some of the world’s largest and most experienced companies are devoting their energy to catching up and passing the company.
When Tesla’s 400-volt EV architecture debuted, it was astonishing. Today, the Audi E-Tron GT, Hyundai Ioniq 5, Kia EV6, and Porsche Taycan all charge faster thanks to their 800-volt systems. Musk says Tesla has no plans to match them.
Its minimalist, screen-focused cabins were like nothing else on the road when they launched. Today, they’re a common element of car design.
People who love Teslas and people who love cars can’t talk to each other
If you’re surprised that Tesla owners report more quality issues than owners of almost any other car brand, it’s probably because Tesla fans dominate internet discussions of Tesla. The company has a unique set of superfans and investors who vocally lobby for the cars and dispute criticism.
They’re unlike fans of any other car brand.
Tesla has inspired an entirely new set of car enthusiasts. There’s undoubtedly some overlap between the audience of traditional gear heads and Tesla lovers. But, for the most part, the two are different groups of people.
If you doubt it, take to Twitter
In recent weeks, Tesla Twitter has hosted two very telling arguments. In one, Tesla fans began referring to their Model 3 sedans with the acronym “M3.”
That’s useful to save space when you’re keeping to Twitter’s word count. But since 1986, it’s also been the name of a car dear to the hearts of many gear heads – the BMW M3. The two sides argued over who got custody of the name.
The same happened when Tesla fans began using “MY” as shorthand for the Model Y, usurping the traditional car world abbreviation for “model year.”
The point here isn’t that either side is right or wrong. It’s that the two sides are talking past each other because they’re not the same set of people, and they’re not interested in the same things.
That might be the key to understanding the entire Tesla controversy.
There’s one study where Tesla does well
J.D. Power does a third study worth mentioning here. But it’s not one where Tesla does poorly. It’s one where Tesla is miles ahead of the industry.
It’s the U.S. Tech User Experience Study. This one tracks new car buyers’ complaints about the technology in their cars within the first 90 days of ownership.
As usual, Tesla declines to participate. And, as usual, J.D. Power provides a partial score based on the limited data researchers can access about Tesla cars. In the most recent study, that data showed that Tesla would have easily taken first place.
Tesla owners rarely complain about the technology in their new cars. That technology is why they buy Tesla vehicles.
Two cultures in conflict
Gear heads complain about wide gaps between panels, poor interior material quality, and other build quality issues that would be shocking in a Toyota
or a BMW product. That causes them to see Tesla models as poorly made cars.
Tesla lovers love how their car feels like it’s on the bleeding edge of technology and puts them into a social movement. They aren’t always bothered if the price of that feeling is a panel gap. Particularly if they’ve joined online communities of owners or placed their financial hopes in Tesla stock rising, they may even feel threatened by people who point out the problems.
“The “move fast and break things” tech company ethos hits differently when it comes to products that actually move fast. And potentially break people.”
Silicon Valley clashes with a century-old industry
Much of the disconnect between Tesla fans and car enthusiasts comes down to the idea that Tesla acts like a tech company but builds cars.
“Beta testing,” of course, is a concept from the software industry. Not the auto industry.
The “move fast and break things” tech company ethos hits differently when it comes to products that actually move fast. And potentially break people.
But Tesla is a tech company through and through. That leads to a culture clash with the legacy auto industry.
Tesla followed a traditional Silicon Valley approach to capital as it grew. The company was founded in 2003 and had its first profitable quarter selling cars in 2021. Before that, it made most of its money selling regulatory credits to other automakers and lost money selling cars.
But it poured the revenue it raised into growth, building factories on three continents. When it did start to turn a profit, it grew explosively. Its first-quarter net earnings this year were 658% of those from just one year before.
Other companies have succeeded with a strategy of losing money to grow until they were too big to fail. Famously, it’s how Amazon
became the world’s largest retailer.
It’s not how automakers traditionally work. But it has been wildly successful, reshaping the auto industry.
They’re now too big to fail
That growth strategy worked. Tesla now sells more luxury cars in America than any other company.
It’s the world’s most valuable automaker by market capitalization, but that’s an unreliable measurement of size. Inflated stock prices can make a company seem more valuable than its market position and products justify.
More to the point, the company employs more than 110,000 people on four continents.
Automakers can survive many lackluster years. Should Tesla’s fortunes change, the company will still likely be with us decades from now.
Tesla has changed car buying forever, and everyone benefits
The foundation of the auto industry is a set of business ideas nearly a century old.
Dealerships, for instance, came about primarily as a way to spread the risk of an unsuccessful car design in an era when feedback loops were slow.
Once, a company like Ford could invest much of its nest egg in a product like the Edsel and nearly fail when buyers didn’t want the car. One way the industry protected itself was by partnering with local businesses who knew their communities well and could absorb some of the loss of a bad product in exchange for some of the profit of a great one. That’s why the automakers built vast networks of third-party dealers.
They helped get that system enshrined into law.
When Tesla launched, it wanted to sell cars directly to customers. Most states banned automakers from selling their products without the help of dealers as middlemen.
Tesla lobbied to change those laws. In more than half of the states, it worked. The company now successfully sells its cars without a dealership network.
Tesla sets its prices. There’s no negotiation, no dealer markup, and no business partner splitting the profits.
That model has worked so well that it tempted even the oldest automakers. Ford CEO Jim Farley has openly discussed turning his company’s dealerships into delivery-and-service centers for cars that aren’t even built until a customer orders one.
That model might ultimately work better for buyers. It means predictable prices, ending much of the stress of car buying. We have Tesla to thank for the possibility.
We should also thank Tesla for proving the viability of electric cars. The U.S. Department of Energy says that transportation contributes to America’s greenhouse gas emissions problem more than any other sector. If we make a dent in climate change, we will do it by reducing our dependence on gasoline.
Tesla proved that it’s possible to succeed in the marketplace by selling zero-emissions cars. For that alone, every Tesla skeptic owes the company a debt.
What the future holds
In the fourth quarter of 2021, 72% of all electric vehicles sold in the U.S. were Tesla products. Twenty-five EV models had at least one sale. Tesla built four of them.
By the second quarter of 2022, Tesla EVs made up 66% of EV sales. Overall, EV sales grew by 66%. But Tesla lost ground. Why? Because 33 different EV models had at least one sale. Four were from Tesla.
Competition is heating up as traditional automakers enter the EV market. The Alliance for Automotive Innovation, an industry trade group, estimates that there will be 72 models of EVs on sale by the end of 2022. Thanks to constant delays for the Cybertruck and Roadster, we’ll almost certainly be able to say that just four are Tesla vehicles.
Tesla achieved something significant by being the first automaker to make electric cars practical. It remade how Americans buy cars, making direct-to-consumer sales legal in many states. The company reinvented car interiors, pioneering the minimalist, screen-centered aesthetic that dominates car design today. It grew too big to fail. It built a rabid fan base that loves the innovation in their cars and defends them vociferously.
But it remains an automaker with a small lineup of cars, documented quality problems that put it near the bottom of the industry for reliability, and more competition by the day. Its 400-volt architecture is aging, and its constant product delays mean much of the industry is destined to catch and lap the company soon.
Losing market share is a problem for any company. But for one that has built its identity around exaggerations, there’s a real risk that the public opinion bubble will pop.
For instance, let’s go back to that 2-second 0-60 run. Last year, a California startup called Lucid Motors
began selling a luxury electric sedan, the Air. The EPA has certified the Lucid Air as the longest-range electric car on the market.
But that’s not Lucid’s goal. Instead, it announced a high-performance version called the “Air Sapphire.” In announcing the vehicle, it promised — you guessed it — a 0-60 time under 2 seconds. But this time, Lucid announced, it will involve “with no extra-cost equipment upgrades or protracted preconditioning routines.” Like, say, sticky stuff on a track.
Will Lucid pull it off? We’ll find out early in 2023. But the threat is clear – if Tesla is built on exaggerations and other companies can cash the checks it writes, that slipping market share begins to look like a free fall.
Tesla isn’t going anywhere. But its days as the dominant name in EVs are numbered.
This story originally ran on Autotrader.com.