How Honda’s U.S. Success Makes Tesla’s Outlook Seem Bright

FEB 11 2018 BY EVANNEX 16

Elon Musk

Elon Musk Roadster 2.0 reveal

WHAT HONDA’S SUCCESS CAN TEACH US ABOUT TESLA

“To the more established brands, it is a young upstart company with performance claims that seem unreasonably optimistic. Instead of being rooted in reality, its new sporty two-door appears to be little more than the expressed will of a mercurial leader. There are already rumors of potential bankruptcy. Surely, this is hubris run amok.”

The automaker in question? Honda in the late 1960s. Fifty years later, Tesla and Elon Musk are the objects of great admiration, but also constant targets of criticism. In a recent article in The Globe and Mail, Brendan McAleer tells a fascinating story of a young company with a charismatic leader, which finally found great success by tempering its expansive dreams with a dose of reality.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

In the sixties, Honda and its founder, Soichiro Honda, faced attacks very similar to those being launched at Tesla today. Mr. Honda’s pride and joy was the Honda 1300, aka the Coupe 9. It was an innovative, forward-looking little car, with an air-cooled four-cylinder engine, independent suspension and excellent fuel efficiency.

The iconic Soichiro Honda celebrates the first H1300 car off the production line (Image: Honda)

The problem was Soichiro Honda himself, who apparently couldn’t resist the urge to keep improving his design. At one point, he ordered the assembly line to stop so that new features could be added. “Eventually, his engineers set up a desk in the factory to deal with his constant interfering,” McAleer writes (sound familiar?). “Honda was forced to step back and his engineers worked to combine his passionate ideas with the practical needs of modern mass manufacturing. The next car they produced was the Honda Civic. You could say it did pretty well.”

Like Mr. Honda, Elon Musk is famous for his interest in every detail of his company’s vehicles. However, it’s safe to say that the extremes of emotion Elon inspires go far beyond anything ever aimed at Mr. Honda, at least in the Western press. Is Musk “a messianic figure or the fraudulent leader of a cultish mob?” McAleer asks.

honda tesla

Honda’s 1300 nearly drove the employees of the young Honda Motor Company mad (Source: Petrolicious)

Noting that the truth surely lies somewhere in the middle, McAleer lists some of Tesla’s strengths and weaknesses. The latter include a consistent failure to deliver product on time, quality-control issues and “an apparent inability to turn a profit” (which it might be more accurate to call a lack of interest in turning a profit).

McAleer goes on to say that Tesla’s corporate culture appears to discourage internal criticism, and cites Model X’s Falcon Wing doors, which even some at Tesla have characterized as a mistake, as a symptom of a top-down culture. He doesn’t seem to be enamored of some of Model 3’s innovations: “Clean-slate thinking is one thing, but ignoring the lessons learned by others is a mistake.”

honda tesla

Elon Musk’s complex Model X falcon wing doors caused the CEO to sleep on Tesla’s factory floor in order to speed up and fine-tune production (Image: Beyond)

Tesla’s greatest strength is the fanatical devotion of its customers, and in today’s brand-centric business world, that may be an insurmountable advantage. As a brand, Tesla is one of the greatest in history, right up there with Harley-Davidson and the Grateful Dead. Legacy automakers are gearing up to offer vehicles to compete with Tesla (as they reportedly have been for several years now), but it’s difficult to imagine any of them ever rivaling Tesla’s brand loyalty.

Elon Musk has set out to electrify the world’s transportation system – a far loftier goal than anything Soichiro Honda thought about doing. But as Honda’s story illustrates, those who would change the world need to ground their dreams in reality. Hopefully the continuing rollout of Model 3 will demonstrate that innovative ideas combined with a healthy respect for the practical aspects of manufacturing and consumer behavior add up to a winning formula.

===

Written by: Charles Morris

Source: The Globe and Mail

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

Categories: Honda, Tesla

Tags:

Leave a Reply

16 Comments on "How Honda’s U.S. Success Makes Tesla’s Outlook Seem Bright"

newest oldest most voted
William

Never underestimate Honda, they have “ground their dreams in reality”.

Come on Elon, keep “Grinding” away in production he??!

The Helpful Honda Folks are daring you to succeed in your EV revolution.

mx

Hmmm. Does Honda still put independent suspension in every car? When the leader goes so goes the leadership.

Will the new Honda Insight be just a hybrid, or will it have a plug?

Is that a ‘Plug’ as in Superbowl Commercial? Or as in ‘Look what we made!’
?

theflew

EVANNEX has been working overtime on soft pro Tesla stories. Tesla could solve many problems by keeping Musk’s mouth shut in public and Twitter and get Model 3’s out the door. Everything else will take care of itself.

The story should be why did Tesla only deliver ~1500 Model 3’s when ~800 were in transit at the end of December. So only an additional 700 where built and delivered in 4 weeks? One would think with 500k preorders Tesla could just deliver cars in CA to cut delivery times.

Something just isn’t adding up with Model 3 deliveries.

Winston

It is your math that doesn’t add up.

You can’t take the number of cars that were delivered and subtract from that cars that were built but not delivered and come up with “additional cars that were built and delivered”

If they delivered 1500 and another 700 were built but not delivered you ADD the numbers and come up with production of 2200.

While they could just deliver cars in California, Tesla knows that getting the cars out across the US is important to both get the cars in front of the public outside CA but also keep their customers outside CA happy as well.

Where you will see Tesla gaming the deliveries is at the end of Q2 when they will be shipping cars to Canada in Q2 and stuffing the channel with cars for delivery in the US in Q3.

As they said, they built most of the 2400+ in the last 3 weeks or so of December: From the 9th of December to month end, and even then, they were getting more built each day than the previous day, generally speaking! Thats why Elon stated they made 793 in the last 7 working days if December, but in the last few days of the Month, the number they built, could be extrapolated to equal 1,000 per week! (Is that 2, or is it 3, or was it 4 days? We don’t have better details!) So 860 in transit = about 8-9 days work at that time, and at the end of December, in case you forgot, people have busy end of year work commitments, Holiday commitments, and shopping for Christmas still happening! Quite likely those 860 were for people who were very busy, cars awaiting an Auto transport (Nit all Truckers ignore their Family on Christmas!), getting the road dust washed off, and the usual ‘PDI’, but were not delivered to customers before pumkin hour! (12 Midnight, December 31st! Or, more likely, 4 or 5 PM on New Years Eve!) Regardless, it was what it was, but I have… Read more »
Gasbag

The actual delivery numbers per IEV are 1,060 for Dec 2017 and 1,875 for Jan 2018. Reputedly about 800 additional M3s were produced in Dec but were in “the pipeline” meaning in transit or destined as inventory.

793 in 7 working days implies production in excess of 110 per day. With With 22 working days in Jan that same rate extrapolates to just under 2500 for January and that is assuming 0 ramp up for Jan. So did the production rate decline or did the pipeline suck up an additional 600+ vehicles in Jan?

Pushmi-Pullyu
“So did the production rate decline or did the pipeline suck up an additional 600+ vehicles in Jan?” Almost certainly some of both, but probably the former more than the latter. Tesla has a bad habit of pulling out all the stops to maximize sales at the end of the year, and that includes cranking up production to an unsustainable level. They apparently do that every year, which IMHO is stupid, but that seems to be the reality in Tesla-land. Anyone who has been watching Tesla closely knew that the production rate would fall back substantially in January, as compared to what Tesla claimed for its maximum run rate at the end of December. That said, it was still a surprise that the run rate apparently fell back as far as it did. It looks like Elon’s claim that they had solve the bottleneck at Gigafactory One, about midway through Q4 2017, was pretty far from the truth. As I understand it, Elon admitted in this conference call that much of the battery pack assembly is being done on semi-automated lines (with significant human labor involved) rather than fully automated ones. Anyway, it’s now more apparent why Tesla scaled back… Read more »
Steve

About time you were honest about what’s been going on.

As far as transparency goes, I think you are mistaken. That was excuse making and trying to fluff over the fact that he lied last quarter. He’s lost all credibility when it comes to reporting the truth with production.

wavelet

Honda isn’t quite a great analogy:

— Soichiro Honda was a mechanic & racer for many years before he founded Honda, as well as selling engine parts; he was in no way an outsider like Musk.

— By the time Honda sold their first car (a pickup, BTW), they were already the world’s largest motorcycle manufacturer — only 15 years after selling their first, very impressive… But they didn’t get there by disrupting motorcycle technology in any way: They built conservative, reliable, cost-effective motorbikes.
Their first feature-leading bike they made was probably the CB750 FOUR of 1969 — and then the innovation was more in managing to make a high-spec, high-power bike very reliable and inexpensive, not the tech itself which had been used on many race bikes.

Excellent perspective. Honda (1974 Civic, my first new car) was an evolution in design and engineering. Tesla is revolutionary in every aspect.But, given the prices of their products, not of the proletariat kind. More of the “revolution of the affluent and the elite” comes to mind. I hope they succeed, but even if they don’t, having pushed the mainstream manufacturers towards EVs assures Elon & Tesla a place in history.

This was in reply to wavelet

Pushmi-Pullyu
My first car was a 1975 Honda Civic CVCC. Back then, the Civic was a very small subcompact coupe, roughly the size of a VW Beetle; not much bigger than a microcar. To call it “sporty” is laughable. The CVCC engine was innovative for its high fuel efficiency, as compared to other cars of the era, but the 0-60 time was (according to Motor Trend) 15.6 seconds! About as far away from “sporty” as you can get. (To be fair, the non-CVCC Civic had more power and a better 0-60 time.) The 1977 Civic’s electrical system sucked, too. According to my car repair guy, the model had a reputation for that. No doubt the newest Civics are much, much better. Certainly they are bigger! Anyway, if they’re comparing the 2008 Tesla Roadster to the Honda Civic… then that’s a laughably absurd comparison. Honda and other Japanese auto makers got a solid toe into the American market because they were selling cheap cars — note the sharp contrast with Tesla’s first car — and because American cars at that time were at the low point on build quality, with American auto makers stupidly using a business model based on “planned obsolescence”… Read more »
arne-nl

In relative terms, the best car I’ve ever had was a Honda Jazz (called the ‘Fit’ in the USA).

Amazing packaging: small from the outside, roomy on the inside. Felt like the TARDIS.

High quality fit and finish, every detail right.

Loboc

I have never owned a Honda except a lawnmower. The lawnmower was excellent, expensive and stolen. Replaced it with an EGO battery mower.

Some in my family have owned new and used Hondas. Seem to be very reliable cars. Some friends have Honda Gold-wing motorcycles. Very nice cruisers.

I have read some articles lately saying that Honda is no longer chasing Toyota’s volume play. They are going back to their engineering roots. This is a good thing.

Tim Kulogo

EGO makes some good stuff. I’m still waiting for a tiller and a 2 stage snow blower though.