German Brands Are Finally Taking Tesla Seriously, but Could It Be Too Late?

There's no doubt that Tesla is nothing else but a party crusher as far as German car manufacturers are concerned. There they were, ruling the automotive industry with their technical prowess and impeccable engineering, when a small company from California decided to revolutionize the automobile and give it a fresh start.
German EVs 1 photo
Photo: Collage from official press images
That's not exactly what the Germans wanted after over a hundred years of progress in a certain direction. Sure, the new car proposed by Tesla still has four wheels, a chassis, a suspension system, and all the other major components that have been refined over the course of time. The Germans still arguably know best how to do all that, but it's the core of the vehicle that's changing. The thing that makes it go forward, go fast and go long isn't what Hans and Schultz have learned to build and tweak to perfection until now.

The fact that one of them decided to fool the world about the performances of its engines by installing a defeat device didn't help Germany's car industry case, nor that of the internal combustion engine, and the Dieselgate scandal couldn't have dropped any better for Tesla. In this context, Edzard Reuter's - a former Daimler CEO - statement from November can only be described as a clear case of denial and/or infatuation: "[Tesla is] a joke that can't be taken seriously compared to the great car companies of Germany."

The truth is the only reason German companies didn't think electric cars would catch on was because they couldn't build a decent one. And, of course, if they couldn't, nobody else could. With their ranges of no more than 100 miles (160 km), cars such as the BMW i3, the Mercedes-Benz B-Class or the Volkswagen e-Golf have now become the joke compared to the 250 miles offered by the Tesla Model S.

And it's not just about the car. Tesla had a holistic approach and focused on building an infrastructure as well as the vehicles themselves. That's how it managed to beat the Germans on their own soil by selling more EVs than any other local brand: 1,582 Model S units in 2015 compared to 1,051 BMW i3s, 1,161 electric Mercedes-Benzes, 676 units of smart fortwo electric drive, and 796 Volkswagen e-Golfs.

It's true that Tesla still has a long way to go until it can even come close to the global volumes these companies push. Even if we take the 400,000+ Model 3 reservations made so far (which won't be met over the course of just one year anyway) into consideration, Tesla would still only hold a marginal part of the global sales pie. And the German brands are starting to take the EV business a lot more seriously.

The only difference is that instead of going shoulder-to-shoulder, they now have to play catch-up due to their negligence and arrogance. They're also losing men, people who would rather work for a visionary company that allows them to make better use of their knowledge and imagination, so they're starting to lose that aura of "the best place to work in" as well.

However, there's no reason the Germans carmakers couldn't become competitive in this market in a few years' time. Eric Heymann, a car sector analyst for Deutsche Bank Research believes that's exactly what will happen: "I don't think the first one into this market will necessarily dominate it," he said, quoted by the Los Angeles Times. "German carmakers weren't always the fastest with new technologies but often ended up doing it better."

Whatever the outcome, it's clear they've made it harder on themselves and are now in a race against time to remain relevant ten years from now as well. It's clear that, even in the most optimistic scenario for Tesla, the Californian company can't handle the car demand of the whole world by itself, so the rest of the manufacturers - be they German, American, Japanese, Korean, or from any other country - will have to chip in. But one thing is certain now: if the car industry does turn electric over the next five to ten years, it was all mostly because of Tesla.
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About the author: Vlad Mitrache
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"Boy meets car, boy loves car, boy gets journalism degree and starts job writing and editing at a car magazine" - 5/5. (Vlad Mitrache if he was a movie)
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