Big Three Could Become Big Four as Tesla Motors Gains Recognition From General Motors

JAN 14 2014 BY ERIC LOVEDAY 29

Tesla Motors has accomplished the impossible: a startup automaker gaining recognition and admiration from one of the Big Three.

Tesla Model S In Detroit

Tesla Model S In Detroit

As the Detroit Free Press put it:

“The emergence of Tesla Motors as America’s fourth domestic automaker — a feat once viewed by the Detroit Three as practically implausible — poses a threat to the industry’s entrenched mind-set.”

With the addition of Tesla to the ranks of admired US automaker, we now have the Big Four.

The Detroit Free Press spoke with General Motors’ senior vice president of global product development, Mark Reuss, who remarked:

“I really, really believe that the world and the industry and America needs an Elon Musk.  I think it’s really, really healthy. I really admire the man for everything he’s accomplished with Tesla. He’s basically built a brand, which is very hard to do in a very mature industry. So that’s huge.”

It’s a changing of the tides.  GM now recognizes the achievements made by Elon Musk and Tesla Motors and commends the automaker for what it has done.

Elon Musk Celebrates

Elon Musk Celebrates

The Detroit Free Press remarked on the frenzy Tesla creates these days:

“With the Detroit auto show upon us, Tesla’s media conference today is no longer optional for auto journalists. It’s mandatory.  Musk himself is not expected to show up. But if he did, you’d see Cobo Center transform into the Detroit Zoo, with media members scrambling to track down the man…”

Tesla’s vice president of corporate and business development, Diarmuid O’Connell, is thrilled that Tesla is “gaining respect in the industry,” says the Detroit Free Press.

As O’Connell stated “our domestic counterparts who have been notably dismissive of our efforts from the very beginning” are now showing “some evidence” of change in how they view us.

Big Three to become Big Four with the established US automakers (GM, Ford and Chrysler) allowing Tesla to join the ranks?  It could happen, right?

Source: Detroit Free Press

Categories: Tesla

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29 Comments on "Big Three Could Become Big Four as Tesla Motors Gains Recognition From General Motors"

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I thought this was the interesting part of the article:
—-
“We don’t have a direct Tesla comparison vehicle,” Reuss said. “But I think there’s a lot of technology that frankly we’re all using it to some degree, in some way. We’ve had engineers that left General Motors to go to Tesla and we’ve had engineers that left to come back to General Motors. So we’ve got a pretty deep look into what they’re doing and how they’re doing it.”

There’s nothing unusual about that in the corporate world.

Frankly, Tesla doesn’t have any secret sauce that puts them above everyone else. Induction motors have been around for ages, their batteries are from a third party, and they’re using the same manufacturing robots and processes that everyone else has access do.

Tesla’s success is rooted in will, execution, and style. You can’t steal any of that. Any particular thing they wanted to know about Tesla’s tech could have come from a Model S teardown. The Model S incorporates every advantage an EV has over a traditional car – high power motor in a compact space, fixed transmission, no exhaust/driveshaft tunnel, flexible battery arrangement – into a very attractive fastback shape with 5 seats (or even 7, while ICE fastbacks all have 4) and gobs of cargo space.

Every competent engineer knows about all these strengths, but Tesla put it together with a vision that started at the top.

+100

It was interesting to me that someone would leave GM, go to Tesla, then return to GM. Would like to hear the story on that.

Industrial espionage? 😉

+1 Tesla’s non-tech secret sauce was also the giant bet that the traditional auto-business model would choose not to compete with them, that they could be going their own road for a very long time, and might have to build an infrastructure entirely on their own.

True, true, true.

There’s a parity relationship going on here, where Tesla sales reach a 1:1 point, characterized by the added profit of developing/selling similar cars versus the foregone profits from continuing to pursue exclusive ICE luxury. It’ll be a “Meredith Whitney” moment for some auto-analyst.

Try and ease off on the standard competition assumptions. TM’s raison-d’etre is to induce, inspire, or force the rest of the industry to go EV. It could fade away happily if GM and the boyz would make true affordable quality l.d. vehicles. They seem reluctant or unable, so TM will push the envelope as long as necessary.

Yes.

The secret sauce here is vision. Or perhaps just looking forward rather than backwards.

There is still the hard work of engineering a specific AC induction motor which means a complicated motor controller, the liquid thermal management system in the battery, the complicated charge controller in order to charge above 1C without damaging the batteries too much, and building and tuning a world class car that wins awards and top safety rankings. All from a Silicon Valley startup.

While no secret sauce at Tesla, it still takes someone with huge balls to make it happen. Always is interesting to hear people say, no secret sauce, once the company has had success.

Wow – k,
you’re right. It looks like a top GM executive flat-out admitting corporate
espionage.

And —- WHO CARES that folks are saying the “Big 3” might…just might,
allow Tesla into their fraternity….PSHHHH….

Chrysler isn’t part of any domestic automaker trio – they’re majority-owned
by Fiat. So – the “Big 2” mention Tesla….whoa boy! If
Tesla keeps up their innovative sales model, their no advertising except
if it’s social, media or free — If they just plain keep building cars that do
what the others’ cars cannot, whilst building out an entire free-to-customers
fueling infrastructure – I’d say they are just plain embarrassing the others
and it won’t be too long before Detroit is not playing the, “OK, we recognize they
exist” game, but simultaneously trying to destroy them, acquire them or
catch up to them.

LOL, you could also say Tesla is committing “corporate espionage” since they stole engineers from GM. Also this comment from Toyota about how the “learned” from them and vice versa:

“You can’t argue with the volume they are generating,” said Bob Carter, Toyota’s senior vice president of automotive operations, in an interview. “We’ve learned from them, they’ve learned from us — that continues.”

In seriousness, this is all typical. Engineers swirl around all the time, and they can’t unlearn what they know. Patent law protects any infringements on designs.

Engineers can’t unlearn what they know, but they can’t reveal any “trade secrets” from a previous employer. A couple of years ago a two former GM engineers were convicted in federal court of stealing GM trade secrets. They stole these trade secrets in an attempt to sell them to Chery Automobile Company, a Chinese automotive manufacturer and GM competitor.

http://www.autonews.com/article/20130501/OEM06/130509970/u.s.-judge-sentences-couple-to-jail-for-stealing-gm-trade-secrets

That is completely different.

Hyperbole or Histrionics?

Market cap ranking:

1 Ford $60 billion
2 GM $55 billion
3 Tesla $17 billion
(Chrysler=Fiat owned)

So yes, financially part of the big three and considering its financial size clearly expected to be big in production volume too some day.

Clearly Tesla is closely monitored by the old guard but I’m not aware of any carmaker having concrete plans to do what Tesla is doing: long range BEVs supported by a fast charge infrastructure.

….What that tells me is that the old guard -despite Tesla’s spectacular market cap-is still betting that Tesla will remain marginal for some time or even fail, at least not become a serious threat to their business any time soon.

It has been observed or suggested that ICE-makers are in a trap. They can’t put the resources and effort necessary into making quality LD BEVs because it would urinate in their own soup.

the best

Interesting, but the premise is not exactly true. The big three haven’t excluded other car makers. The “triopoly” was born in the wake of WWII, and based on the fact that most of the world economy was on its knees, and US auto buyers would be forced to buy from them.

There have been many new auto makers who have come, and some gone, from the US market, in any definition you want. Including making cars here in the USA, full union shops and non-union shops (VW and Toyota).

If you are looking for the definition of how many car makers have STARTED on US soil, then yes, I would agree. The USA has been very good at stifling entrepreneurs in the car business locally.

Still seeing the majority of media snubbing Tesla even being present at the Detroit Auto Show. All the buzz I’ve seen was over rehashed ICE vehicles, like the new Corvette. 🙁

That is a bit vague the triopoly was born in the wake of WWII, how many years after WWII is that a period of years. Anyway I agree with sentiment, the big consolidation occurred in the 50’s. Here is a list of car makers. See if you can figure what happened to all of them. I could probably get around half of them.

Company Units Sold
Chevrolet 13,419,048
Ford 12,282,492
Plymouth 5,653,874
Buick 4,858,961
Oldsmobile 3,745,648
Pontiac 3,706,959
Mercury 2,588,472
Dodge 2,413,239
Studebaker 1,374,967
Packard (’50–’58) 1,300,835
Chrysler 1,244,843
Cadillac 1,217,032
Nash (’50–’57) 974,031
DeSoto 972,704
Rambler (’57–’59) 641,068
Hudson (’50–’57) 525,683
Lincoln 317,371
Kaiser (’50–’55) 224,293
Henry J (’51–’54) 130,322
Edsel (’58–’59) 108,001
Imperial (’55–’59) 93,111
Willys (’52–’55) 91,841
Continental (’56–’58) 15,550
Frazer (’50–’51) 13,914
Total (estimate) 57,914,259
Some numbers are based on some estimates.[14] Total does not count the figures from smaller independent automakers.

Without Tesla, the entire EV industry would still be an unhatched egg. GM’s Bob Lutz read the tea leaves of Tesla’s potential first – the audacity of the Tesla Roadster PO’ed him enough to push to develop the Chevy Volt, which in-turn got Nissan working on the Leaf, which in-turn inspired Ford, BMW, Fiat, Audi, VW, etc, etc, etc.

I’m glad GM was first to give Tesla a formal acknowledging “welcome to the club” comment.

I see Tesla as part of the big three…Ford, GM, Tesla.

Ever since the took over of Chrysler by Fiat, Big 3 is down to Big 2.

Now, with Tesla, we are back to “Big 3” again with Tesla being American.

GM and Chrysler are rehabbed zombies. I doubt if they can find enough brains to eat to survive TM’s challenge.

General Motors sales for 2013 was 2,786,078.
Ford Motor sales for 2013 was 2,493,918.
Chrysler Group sales for 2013 was 1,800,368.
Tesla sales for 2013 was 22,000.

I think Tesla has a way to go before it can be considered “Big”.

it makes me wonder what Elon has planned for the one millionth S delivery.

Will he personally fly out to wherever and after a blazing night on the town hand over the “keys”?

General Motors has a lot of “old school iron” obsolescence in its rank. I believe that the bankruptcy would change that, but it seems that it still wants to sell gasoline powered vehicles. The new GM president, being an EE, has a huge hurdle to overcome if GM has to electrify its entire production line in the future. The recent praise and awards for the 2014 Chevy Corvette Stingray is the greatest example, being a gas burning sportscar with new electronics and structure design but based on the old school legacy. GM, as the nation’s largest vehicle producer, must continue to develop and produce both the EREV and BEV design across all its vehicle lines, including their truck and luxury lines. The Cadillac ELR is the first example for the luxury line, but it must expand more and allow all their customers to sample the immediate benefits of electric transportation, then imply this expansion as the final goal of the company to eliminate all gas and Diesel fuel vehicles by 2050 (I will not see this date arrive). If there are still consumers who prefer burning fuel, they will have to keep older vehicles maintained, or buy a competitor’s product,… Read more »