Why GM workers are studying Tesla(Read article summary)
As GM's CEO sees it, Elon Musk and Tesla have the potential to disrupt the automotive business model and change the face of the industry. So he's set up a team to study Tesla.
Fifteen years ago, the recording industry dismissed online music sales as a ridiculous fad. "Those MP3 files are huge -- two and three megabytes each! Who wants to wait around for those to download? Let's just copy-protect our CDs, and everything will be fine."
Around the same time, some bookstores pooh-poohed Amazon. "Who wants to buy novels online when you can just stop by your neighborhood bookshop and pick 'em up?"
More recently, Microsoft failed to see the promise of mobile computing. That didn't go so well, either.
Admittedly, the auto industry is a little different: its products are far bigger and more expensive than smartphones, e-books, and MP3s. But that doesn't mean that the auto industry can't change. In fact, it will change, and car companies that don't keep up will be hurled onto the funeral pyre of history, alongside folks who made teletype machines and the Betamax.
Which changes are coming? Who or what will be the big disruptor? We can't say for sure, but General Motors' CEO Dan Akerson has a hunch that it may have something to do with Tesla.
And that's why he's set up a team to study the start-up automaker.
Dozens of factors will shape the auto industry's future, but as we see it, two are especially important: outspoken innovators and game-changing technology.
On those counts, Tesla wins, hands-down.
First, Tesla's Elon Musk is a proven innovator, having also launched PayPal and SpaceX. What's more, Tesla is an American company, and though some will accuse us of bias, we firmly believe that Americans lead the pack in innovation. (That's one reason that scientists and researchers from other countries clamor to work here.)
Sure, China may have a bigger auto market, but it lacks a rich culture of experimentation, improvement, and thinking outside the box. In Europe, companies are hobbled by EU problems and the overweening albatross of Tradition. Some Japanese companies have been great innovators, but at the moment, they're sidetracked with financial and production issues. That gives the U.S. an advantage -- for now, anyway.
Second, Tesla is devoted exclusively to electric cars. Yes, EVs are still in their infancy, and no, they're not quite ready for mainstream drivers, but that day is coming soon. The era of cars that run on fossil fuels is coming to an end -- we don't know if the tipping point will come tomorrow or in 20 years, but most of us will live to see it, and no one is pushing us there faster than Tesla.
And so, according to GM's Steve Girsky, Akerson has created a team of workers to study Tesla and its founder, Elon Musk. Say what you will about Akerson, but he's smart enough to know a potential threat when he sees one.
That threat has never been more apparent. The Tesla Model S outsold the Chevrolet Volt in the first quarter of 2013, and the Nissan Leaf left the Volt in the dust last month.
What's more, Tesla uses a thoroughly disruptive sales model -- a controversial one, to be sure, but a nimble one that could upend the decades-old automaker-dealer paradigm. If it catches on, it would leave huge companies like GM scrambling to keep up.
To his credit, Akerson is working hard to ensure that GM remains competitive in the electric car market, with the next-gen extended-range Volt due to debut in 2015 or 2016. The company also has a top-secret, pure electric vehicle in the works. According to reports, that vehicle could arrive with a range of 200+ miles.
Can venerable old GM maintain its pace alongside whippersnapper Tesla? No one can say for sure, but it'll be fun to watch.
For another take on this very interesting development, check out our colleagues at Green Car Reports.