NADA’s assignment: make Tesla want NADA

Gallup graphic TeslaMondoThe recent dustup in Iowa, with dealer groups blowing the whistle and forcing the shutdown of a Tesla test-drive event, begs a question: If Tesla is just a wildly-hyped niche player with no real mass-market potential, a mere chipmunk in the back yard of Big Auto, why are dealer groups frantically chasing Tesla around the yard with a baseball bat? Obviously Tesla is more than a chipmunk. It’s more akin to a fox, and in a couple more years, think coyote. Then wolf.

But dealer groups are taking the wrong tack. Using ordinances and statutes to whack a well-regarded competitor only draws attention to the competitor’s product, aligns you with politicians, and posits the competitor as underdog with you as bully. Even if you win in court, you’ll lose in the court of public opinion. And if you lose in both courts? Then you’re beyond lost. Banning the competition is like banning a song. History shows it doesn’t work. In fact, it guarantees a hit.

Tesla isn’t trying to destroy the franchise system. It just doesn’t want to participate. The nightmare scenario for dealers is that consumers and automakers will feel emboldened by this Tesla precedent, then get together and cut out the middleman. That wouldn’t be Tesla’s fault. It would be the fault of the franchised dealer system for failing to justify its existence to consumers and automakers.

So rather than throwing the book at Tesla, the dealer posse needs to step up its game and improve the customer experience. If everyone liked the automotive status quo — the way cars are distributed, sold and serviced — then Tesla’s factory-direct structure would pose no threat. It would constitute a mere curiosity, nothing more. Manufacturers would not be tempted to imitate it. Consumers wouldn’t be buzzingBanned in the USA Teslamondo about it. The middleman could get some sleep, knowing his role is secure. So, NADA, it’s time to kick customer service up a notch or two. But how? What would make your middleman role look less superfluous and more essential? In short, what would make Tesla want to use franchised dealers?

You’ve attempted to justify yourself to the consumer via this video.* But what about the other direction? Why do automakers need you? So far, they haven’t exactly come to your rescue. In fact, they’ve voiced displeasure with dealer protectionism. John O’Dell from Edmunds.com tried to go to bat for you, but whiffed because he forgot that Tesla has no inventory, sells a product that’s over the heads of many car salespeople, and needs none of the blood n’ guts servicing that makes dealers happy.

So your homework project is make yourself look vital to automakers, Tesla in particular. Ten-page minimum, single-spaced, and don’t even think about enlarging the font beyond 12-pt or fattening the margins beyond 1.25.” Due Oct. 10.

* The arguments presented in the video were dismantled by the Federal Trade Commission, and also by a crew of professors and economists. Seems dealers can’t find a friend anywhere — except in public office.

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Fire hysteria lawsuit fizzles out

Shareholder lawsuit TeslaMondoRemember the shareholder suit filed shortly after the fire hysteria in fall 2013? The one that claimed Tesla snookered shareholders by failing to disclose some fundamental design defect that leads to fires, and so the share price suffered and people lost money, blah blah blah? It’s going nowhere. US District Judge Charles Breyer says there’s zero basis for such a case. “I’m at a total—I mean total—loss understanding the basis for this lawsuit,” Breyer said. “Tesla said that this car was found to be one of the safest cars ever developed. That seems to be the case. There’s no evidence that that’s not true.” Remember, the day that suit was filed, TSLA was trading at only $137. Anyone who panic-sold last year deserves not just the judge’s rebuke, but also an hour of standing in the corner, wearing a dunce cap.

A similar suit was filed just a few months ago. It’s likely headed for the same (s)crap heap.

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Sound bite love: “Norway of Asia”

This Old House TeslaMondoTesla figures Hong Kong, with one of the world’s most prosperous economies, is super-fertile ground, and is hiring to that effect. Why the strong demand? The main downtown is only 10 miles wide, so residents won’t need to charge very often. That’s a good thing, because most live in high-rise buildings.* Surely Hong Kong will be the litmus test for Tesla’s ability to penetrate an extreme urban setting. If you can’t fit a proverbial toothpick, where will you fit a charging station? TeslaMondo predicts a novel charging method for this potential “Norway of Asia.” Norway, you may recall, is certifiably Tesla-koo-koo thanks in large part to aggressive government EV incentives and infrastructure spending. China may be catching up, however. It’s on an urgent mission to de-smoggify itself. Chinese demand for Telsa is robust, according to Goldman Sachs just yesterday. Technically, Hong Kong isn’t part of China, but technically, yes it is. Don’t bother clicking here unless you’re really bored. The Goldman Sachs comment ordinarily would boost TSLA shares dramatically, but since everyone is going through a TSR — a Tesla Sentiment Recession — the stock struggled to stay green yesterday.

* Here’s a beautiful photo essay of those buildings.

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On-the-fly improvements continue

Seems the Model S has quietly gained a couple of safety features:

1. “Speed assist,” which is capable of reading speed limit signs and GPS data to let you stick to the speed limit if you want.
2. A lane departure system that can read lane markings and buzz the steering wheel if you drift out of your lane.

Tesla’s hardcore forums indicate these upgrades were quietly introduced as standard equipment, to the chagrin of some who recently paid extra.

However, other car companies make similar improvements as model years change, or even mid-model-year sometimes. Toyota, for example, sandwiched a 2014.5 model year for Camrys. The new cars have a backup camera and better crash credentials in the IIHS small overlap test. Also, many automakers quietly raise prices in little increments during a single model year, with no equipment upgrades at all. The incremental price increases don’t make headlines, but they make a difference of several hundred dollars from the start of a model year to the end.

So continual improvements to the Model S shouldn’t irk anyone. The car is uniquely fluid and upgradable. Bring it on.

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Scouting for new European plant?

Tesla Tilburg plant TeslaMondo

Tesla’s Tilburg assembly plant

Tesla already assembles its European cars in Tilburg, Netherlands. But according to a Slovak website, the company is shopping locations for another European plant, and Slovakia is a candidate. Would this replace Tilburg? Add to Tilburg? Or is this a non-story entirely? Google Translate is junk, y’all.

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Bright Tesla bulbs besides Elon

Tesla sells cars on a fixed pricing menu. No “deals” to be found. Jewelers do just the opposite. They wheel and deal. But both Tesla reps and jewelry salespeople perform the same function. They BUILD VALUE in the product, so that you, the customer, can justify the purchase to yourself. And how does this jeweler at the Clay Pot in Brooklyn build value in her high-end pieces? Skip to 2:40 and you’ll hear her compare one to a (pick one):

1. AMC Hornet
2. Saab Sonett
3. Tesla

That’s a bright idea. Former Tesla engineer Neil Joseph had a bright idea too, and so he teamed up with a former NASA engineer to work on that bright idea. Now they’re in the light bulb business. But this isn’t an ordinary bulb. The Alba bulb adapts to ambient light to avoid wasting energy, and even adapts to your household routine. Cost: $150 for two. But that’s a pittance considering we’re talking about the Tesla of light bulbs.

The Tesla of vice presidents, Diarmuid O’Connell, spoke a few days ago at the 7th annual Renewable Energy Finance Forum in California. He advises thinking of the Gigafactory as a vast machine. “It will In essence be a machine itself — that’s how we’re thinking of this. A machine that takes raw materials in one side and produces batteries.” How vast? “You have to go up to the site to really appreciate how big a building this will be. It’s a mile long and 70 feet high.” Now, before you go booking a Gigafactory tour through some shady third-party operator, and letting a rattly ol’ bus drop you off in the desert, just remember the factory isn’t quite complete yet. Perhaps you could push for a discounted rate.

Incidentally, here are the world’s biggest buildings by footprint, according to Wikipedia:

largest buildings TeslaMondo

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A word from Neuman Securities

Cup and underwire patternAlfred E. Neuman TeslaMondoTesla’s chart will probably grow a third breast, continuing the cup with underwire pattern evident in the two-year chart. The rest of 2014 will likely form the sag, with analyst gravity pulling against precious little product news and nothing super-clickable happening in Nevada or China. Meanwhile, Q3 and Q4 results could cause barbs along the way, for better or worse, but nothing to alter the cup formation.

Come mid-January, at the Detroit Auto Show, when the restyled Model X is released from its cage, and photo-ops start happening at the Tahoe-Reno Industrial Center, TSLA sentiment will abruptly end its hibernation, ultimately completing the right wall of the cup and easily breaching the $300 mark by spring. Tesla fever in full effect, coming early 2015. Until then, better order a custom brasierre. Men included.

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Non-trivial Tesla trivia

1. Tesla inspired GM to produce the Volt.

2. Daimler saved Tesla from oblivion with an 11th-hour battery contract for the electric Smart and a purchase of company shares.

3. Tesla was so close to death that The Truth About Cars started a “Tesla Death Watch” series, and the Huffington Post actually wrote a postmortem about Tesla, written in the past tense even.

4. When Tesla needed a designer for its Model S, codenamed WhiteStar at the time, it tapped former BMW designer Henrik Fisker. Tesla later sued Fisker, accusing him of stealing Tesla’s ideas to start his own company, the ill-fated Fisker Automotive.

5. The Model S ultimately was designed by Franz Von Holzhausen, who also designed the Saturn Sky/Pontiac Solstice cousins while at GM, and had a hand in the New Beetle while at VW.

6. Three media outlets have admitted bungling Tesla reports. 60 Minutes admitted it screwed up by adding engine noises to a Tesla segment. The New York Times admitted it botched a story about an alleged Model S mishap. And the BBC admitted it botched a segment about an alleged Tesla Roadster mishap.

 

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Wishing our brains got OTA upgrades

Model S software update TeslaMondoMany of us are middle-aged. This means we could be considered ripe for a mid-cycle refresh. Given a choice between these modifications, which would you choose?

1. Physical modification (slightly modified nose, different hairdo, different eye color)
2. Mental modification (ability to see through walls, memorize more information, speak in a foreign language)

Most of us would choose the mental upgrade and stay with the same old body — true? And so goes the Model S with a new array of abilities sent over the air to owners a couple days ago. Version 6.0 adds new lobes to the Model S brain, making the car startable via iPhone, more streetwise to traffic, more savvy to energy-saving strategy, more conversant with your smartphone and aware of where it’s supposed to raise itself higher from the pavement, based on your previous inputs. This mid-cycle refresh leaves the body alone but boosts the mind. And the mind is a terrible thing to waste. Other automakers will attest.

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Dealer chum concedes eventual defeat

Jim Ziegler TeslaMondoLongtime auto dealer consultant and speaker Jim Ziegler says Tesla will eventually sell legally in all 50 US states. But beyond that, Ziegler predicts other automakers will follow Tesla’s lead — just as dealers fear. Remember, Tesla never intended to dismantle the century-old franchise business model. It simply didn’t want to participate in it. So the Tesla battle is all about a precedent and nothing more. The nightmare scenario for dealers is that Tesla is cracking a dam and will soon allow a flood of similar factory-direct efforts. TeslaMondo readers already know the recent history on the subject and remember that Ford and GM made overtures in 1999 but had to retreat in defeat.

TeslaMondo has long predicted:

1. Another retail invasion by big OEMs.
2. Better profit margins as a result.
3. No improvement in typically lousy customer experience. A cattle house is a cattle house regardless of who pays the workers.

 

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