Former General Motors CEO Speaks Out In Support Of Tesla Motors


Former GM CEO Dan Akerson in Front of Chevy Volt

Former GM CEO Dan Akerson in Front of Chevy Volt

Former GM CEO Now A Tesla Fan

Former GM CEO Now A Tesla Fan

Tesla Motors CEO Elon Musk is a visionary.  Even former General Motors CEO Dan Akerson realizes that the achievements made by Musk and Tesla Motors are remarkable.

Forbes states:

“Even facing incredible odds, Musk has made breath-taking strides to bring renewable energy to consumers. Surprisingly, his competitors are his most enthusiastic fans.”

One of those “most enthusiastic fans” is none other than former GM CEO Dan Akerson, who says this of Elon Musk and Tesla Motors:

“No other car manufacturer has achieved a global brand so quickly, it’s a huge accomplishment for this hard-charging executive.  Teslas are beautifully designed with great pick up and first class engineering.”

That’s quite the compliment from the man who headed the U.S. largest automaker.

Akerson adds:

“Musk has challenged the industry and it has to respond. He’s running between the legs of elephants and has a temporal advantage. Competitors are behind technologically, but have advantages in scale and scope. By 2018, you’ll see game-changing competitive responses globally. The auto industry is notoriously Darwinian and may consolidate into a few worldwide giants from a hundred small car makers.”

So, Tesla has until 2018 to get its cards all lined up, meaning Model S, Model X and Model 3 must all be pumping out at max production in order to outpace the competition.  Tesla likely also has to find a way to better delivery, display, service and inventory cars to truly compete against traditional auto; in other words optimize and expand their boutique/dealer store system.

If Tesla can’t get the Model 3 to market by 2018 at the promised price of 50% of the Model S, then those automakers with “advantages in scale and scope” could very well surpass Tesla with one knockout product of their own.

It’s a race for Tesla and Elon Musk is fully aware of this.  If Model 3 slips, Tesla’s lead will vanish.  Why else do you think Musk pushed so hard to get the gigafactory deal signed ASAP?

Source: Forbes

Categories: Tesla

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25 Comments on "Former General Motors CEO Speaks Out In Support Of Tesla Motors"

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Well I don’t think Tesla is at a scale disadvantage with the Giga factory. It makes the GM/LG/Nissan production facilities look small. Whether Tesla can smoothly scale their opporation by a factor of 10 will be interesting. Just getting 40,000 cars a month to customers isn’t going to work with the current model and lower margins of the Model 3.

Relative to spending $1k+/unit on advertising and $1.5K+/unit on distribution, Tesla sales model will work and then some.

Maybe competitors can design and produce a competitive product versus the Model 3. Can they produce that vehicle in significant volume given global battery capacity?

Will they have strategically located fast charging networks that don’t charge customers a per use fee that allow intracity travel across North America,Europe,China,Japan and Australia by 2018?

“Will they have strategically located fast charging networks that don’t charge customers a per use fee that allow intracity travel across North America,Europe,China,Japan and Australia by 2018?”

If they did, it would still be far behind what Tesla already has unless they were building it out at breakneck speed and sinking gargantuan amounts of money into the venture. While that might be theoretically possible, I have yet to see any automaker even vaguely interested in doing so to the extent that Tesla already has. Nissan comes in at a lagging second in that regard by installing DCQCs at dealerships, which aren’t exactly the best locations for long distance travel.

The battery and even the powertrain is not where Tesla’s disadvantage is. It’s everything else.

Other companies share parts across multiple high-volume product lines, can better negotiate with suppliers, and have decades of experience in cost cutting. They put together whole cars and sell them for $15k.

We have yet to see if Tesla can match the big boys in that aspect.

The problem other manufacturers encounter is cell cost. If Ford, GM, Toyota, etc. are paying $300/kWh for a finished battery pack and Tesla is paying $175/kWh, that’s a difference of $6,250 on a 50kWh battery for a 200 mile range mid-sized Sedan. So where else can the big auto manufacturers make up that $6,250?

This is EXACTLY why I’ve been saying for some time that Musk is brilliant. He knows that if he can become the low-cost producer of car-scale battery packs not only will Tesla havbe a huge competitive advantage but the production volume from the gigafactory will let him sell packs to renewable energy companies that want to turn intermittent power into dispatchable electricity. I’m convinced that by 2020 we’ll be talking about how the original gigafactory is far too small to meet current demand and speculating about when gigafactory 2 (or 3) will be built.

GM, Ford, Honda, Toyota, et al. are worried about selling cars over the next few quarters. Musk is focused on much bigger and much longer term goals.

Can someone see what the demand be like if Tesla makes 500,000 cars a year? I suspect that by then demand will be a lot more that what they are producing. It could be a fold of 10; simply put every one in the world will want a $35k EV that will travel at LEAST 200 miles.

The auto industry is notoriously Darwinian and may consolidate into a few worldwide giants from a hundred small car makers.”
D’oh! Didn’t this already happen? Well at least it has in the U.S. where 90% of all vehicles were produced in 1930 by dozens of manufacturers now mostly gone. Also, Define few. Is that two, five, ten?
Certainly except for exceptional cases like Tesla who have a special niche, all but the top twenty produce less than a million cars a year, so I think we could pretty much discount those makers.

It’s funny but this reminds me of a famous quote: “First they ignore you, then they laugh at you, then they fight you, then you win” Mahatma Gandhi.

p.s., GM, Tesla Motors is NOT a carmaker. I wrote about this a year ago on Teslarati. It’s a giant squid with tentacles and you are only seeing one tentacle. 🙂

Blah, Blah! Whatever you hallucinate, Dude!

Typical responses from Tesla fans: can’t take a compliment, always must respond disparagingly.

Musk must avoid ego-driven paths that waste time and money over things that are inconsequential in the big picture (e.g. falcon doors), otherwise Tesla is going to flame out and get steamrolled.

Heh. Those doors may well become a signature feature for every Tesla vehicle designed after Model X. 😉

As much as I would like to have a Model X, what good is a SUV if you can’t put a roof rack on it?

I think Musk would be perfectly fine with other automakers making EV cars comparable to the Model S, X, and 3.

One of his stated goals was to bring EV’s to the mass market. He never said Tesla was going to solo this endeavour. By making the Model S, he proved that people will buy EV’s so long as they have good range, performance, and looks sexy. This forces other automakers to take EV’s more seriously, as they probably figured no one would want an EV any time soon. Until Tesla started to eat into their luxury car sales.

In the end, this is a win for consumers, as it allows us to choose from a selection of EV’s that are competitively priced, and with a decent amount of range, performance, and looks. This will also help us to get off our oil and gas addiction in our vehicles as well.

Ford etc will “probably” make a 200 mile EV, but it will be just like their current cars.
You will still have to pay for Navigation updates, your head unit will never get updates. OTA updates? Forget it.
New features and improvements will still be based on model years.
Their dealers will still be treating the Service Dept as a cost center and making more from “service” than new car sales.
Of course Ford et al will still not be bothering to look at the charging infrastructure needed to let people travel outside of their home range.
They still think its about the car – and by the time they make one that’s worth buying it may will be.

When former GM CEO Dan Akerson, states “a huge accomplishment for this ‘hard-charging’ executive”, I was left wondering if his reference was to Tesla Motors vehicles, or to Elon Musk’s vision for the Supercharging and support networks? ie: Does Akerson really understand the magnitude of Tesla’s accomplishments? Akerson’s comments specifically focused on automotive “Brand Building”, while Tesla Motors has gone beyond brand building to building infrastructure to ensure a quality experience with a supporting network. Details like automated software updates, network of Superchargers providing full mobility, and a supporting community of fans are points missed in the Forbes article. eg: “Tesla likely also has to find a way to better (1) delivery, (2) display, (3) service and (4) inventory cars to truly compete against traditional auto; in other words optimize and expand their boutique/dealer store system.” Tesla has taken a non-traditional approach to: 1. delivery: pickup at customer service center, or delivery direct to customer (independent from sales) 2. display: show rooms in malls, popup displays, educational website & forums (minimal, flexible customer interaction) 3. service: a growing network service centers (automated software updates, advanced sensor monitoring and logging) 4. inventory: zero inventory (just product in the delivery pipeline and… Read more »

Those work fine for a niche $100K car, when half of the cost is paid for by governments.
But they fail miserably for a mass market, high volume car. The company will go bankrupt in a matter of months if it had to provide just ranger service for the cheap EV cars.

“e) Will Tesla be able to deliver same type of experience as it scales volume?”

NOPE. It is already in deep s*** delivering cars on time and communicating with its customers.

Electric Car Guest Drive

As usual, right on point Brian. 1++

Dan Akerson is acknowledging the other advantages of scale, that manufacturers have. Will Telsa be on cue with a new body style, an interior restyle, or the other non-EV components that the majors have an easier time re-arranging/updating/integrating? Will they have facility in a 30-40k price bracket?

If Musk would put away his MC Hammer pants and get to delivering the Model E, he’d see how a battery advantage might be overcome by the major’s ability to put value into cheap cars. That’s what has become so competitive, since the sector’s 2009 crash. My two cents.

Tesla replacement parts cost 3 times more , so the repair costs are huge. If you get in an accident, that’s it. Other car makers have scale to lower these costs.

A lot of Teslarians claim that only supercharger scale is important. Guess what? This is something than is very general, and can be easily outsourced and shared. That’s what other car makers are doing. But parts for Tesla cars are not generic, and their high costs are killing its customers.

Electric Car Guest Drive

I think you miss Tesla’s market advantage entirely. Maybe reading more of Brian Henderson’s posts will help.

The other automakers apparently don’t even understand what is important. Ford still sells EVs without Quick Charge. Chevy sells cars with 3kW chargers.

Toyota, Honda and Hyundai apparently don’t think people will get annoyed that they’re not building viable mass market zero emission cars.

It’s not just Tesla they have to worry about.

You’re very much out of place here, See Through. Most people’s comments display intelligence, vision, an enthusiasm for working towards something worthwhile.

Yours, in stark contrast, mark you as a slow-witted, dull person, incapable of of grasping new concepts. Has it never occurred to you that car dealers treat you like a sucker? Do you REALLY want things to stay the same? If so, you are truly a fool.

The attention he gets (a form of social petting), overrides the shame such a being should normally feel, for the consistently poor quality of their personal contributions here.

But a paranoid conservative troll is always the last to grasp when they should go…