In line with the recent comments of Porsche chairman, Uwe Hück, it is interesting to reflect on the statements he made. In his interview with Business Insider he abominates the Tesla business model and criticizes their way of working. According to him, Tesla’s approach is “immoral”, which is according to him why “they can never be an example to the automotive industry” (Verhelst, 2017). However, it does not mean that Porsche does not have any electrical aspirations. He strongly advocates for electrical driving, but hates the “real” agenda of Tesla’s business. Because it is not just selling cars that makes Tesla competitive, it is their ideology to change the way we drive our cars. (Troagott, 2017)
Back in the days, while everyone was arguing about electrical cars, nobody really made the first move to change. However, a few companies did invest in the design of an electrical car, of which Tesla was the first and most well-known brand that entered the market. This does indeed involve huge investments with external funding, which is why their business model is not as profitable yet. Nowadays, after Tesla’s proven success, conventional car manufacturers changed their strategies and are focusing on the development of fully electrical cars. However, Tesla is one step ahead which is why his statements do make sense. As mentioned, Tesla is not just a car manufacturer, but invests heavily in the development of self-driving cars and has major expertise in the field of software development. With all their cars driving around on the street for years, they are able to collect massive amounts of data which they can use to develop new technologies. Their cars are completely customized to function on their software and to collect relevant data. With this in mind, they actually behave more like a high-tech start-up (DeBord, 2016).
Reflecting on the plans of tech giants Apple and Google to realize autonomous driving, these companies are testing such technologies for years. With all their knowledge and software expertise, it would just be a matter of time before this becomes reality. But one essential part is forgotten: they are not car manufacturers. Making a short link (not only because Elon Musk and Larry Page are close friends) to the automotive industry, Tesla would be the most ideal company to cooperate with (Gibbs, 2015). However, probably not because Google wants to sell cars, they want to sell their technology. As Tesla CEO Elon Musk confirms: “Google has done a great job at showing the potential of autonomous transport, but they’re not a car company” (D’Onfro, 2016).
Going back to the statements of Uwe Hück, he may have a valid point stating that Elon Musk knows that Google or Apple will eventually buy Tesla. However, his comments may also imply that he does not want to see the reality in which we are living, which is where cars are not solely driving on petrol or even electricity anymore, but basically on data.
DeBord, M. (2016, 5, 16). This is why Tesla and Google are the future of cars — and Apple isn’t. Opgehaald van Business Insider: http://nordic.businessinsider.com/this-is-why-tesla-and-google-are-the-future-of-cars-and-apple-isnt-2016-5/
D’Onfro, J. (2016, 6, 2). Tesla CEO Elon Musk: Apple will be a direct competitor — even if it started its car project too late. Opgehaald van Business Insider: http://nordic.businessinsider.com/elon-musk-on-apple-car-2016-6/
Gibbs, S. (2015, 4, 21). Google almost bought Tesla when it had just two weeks of cash left. Opgehaald van The Guardian: https://www.theguardian.com/technology/2015/apr/21/google-almost-bought-tesla-elon-musk-larry-page
Troagott, J. (2017, 9, 25). The Tesla Model What? Porsche CEO Doesn’t See Tesla As A Rival. Opgehaald van Carbuzz: http://www.carbuzz.com/news/2017/9/25/The-Tesla-Model-What-Porsche-CEO-Doesn-t-See-Tesla-As-A-Rival-7741228/
Verhelst, K. (2017, 9, 22). De herrieschopper van Porsche noemt het verdienmodel van Tesla onhoudbaar en ‘immoreel’. Opgehaald van Business Insider: https://www.businessinsider.nl/de-herrieschopper-van-porsche-noemt-het-verdienmodel-van-tesla-onhoudbaar-en-immoreel/
Hi Maxim,
Interesting discussion topic. On one hand I agree with you, Google and Apple are certainly not car manufactures. They could certainly benefit from buying a car manufacturer. While on the other hand both companies don’t really manufacture their hardware themselves. They make use of large manufactures like FoxConn. I think they could apply the same principle in the future with cars. Google for example could turn their driving software into a platform like they did with Android. This would give them certain advantages over car producers who develop the software on their own and have to produce cars.
What do you think about driving software being offered in a platform environment?
Hi Maxim,
Thanks for sharing this interesting opinion. I think that it won’t take long to see private self-driving cars on the road. Nowadays, there are a lot of public transportation models with self-driving cars. Though, I doubt whether Google and Apple buying Tesla will be the right strategy. Since Tesla is in their growing phase, the number of Tesla cars on the road is minor. Besides that, not only Tesla is capable of creating a smart vehicle that can scan the traffic and so drive autonomous. A lot of car manufacturers are currently doing heavy research in the development of self-driving cars. Therefore, I think that Google has to develop their own software which can be installed in cars. All Google users and cars using Google software can be aggregated into smart traffic. With this, car manufacturers keep continu doing what they always did and Google extends their services with their contribution in self-driving cars.