800x100 static WP 3
WP_Term Object
(
    [term_id] => 95
    [name] => Automotive
    [slug] => automotive
    [term_group] => 0
    [term_taxonomy_id] => 95
    [taxonomy] => category
    [description] => 
    [parent] => 0
    [count] => 720
    [filter] => raw
    [cat_ID] => 95
    [category_count] => 720
    [category_description] => 
    [cat_name] => Automotive
    [category_nicename] => automotive
    [category_parent] => 0
)

Tesla’s (and Uber’s) Teflon to be Tested in 2017

Tesla’s (and Uber’s) Teflon to be Tested in 2017
by Roger C. Lanctot on 01-06-2017 at 7:00 am

 For the past two years the impression has been spreading that Tesla Motors can do no wrong. (I can’t really say the same for Uber after the recent San Francisco licensing debacle.) There is no question that Tesla’s legal department is growing by the month as fights persist over opening stores and forestalling liability judgments, but, so far, even fatal crashes of Tesla vehicles have failed to tarnish the Tesla brand.

This will change in 2017. Tesla is quietly and not so quietly shifting its strategy from bobbing and weaving and legal actions in order to open stores – toward strong-arm, Trump-like muscle flexing.

Sources in the industry indicate that Tesla has begun threatening to make sourcing decisions based on the level of local support for its marketing and sales activities. This kind of influence peddling is not new and is reflected in states modifying their autonomous vehicle laws to attract the likes of Google and Uber and their development dollars and investments. It is also reflected in Nevada’s scoring of two electric vehicle plants in 2016.

Competing car companies can only look on in awe, envy, disgust and anger at the result and the complete lack of a consumer backlash. Were a driver to be killed in a Toyota or a General Motors or an Audi with an autopilot-like system congressional hearings would be called, executives would be humiliated on C-SPAN and fines would be levied.

Tesla has the non-stick Teflon coating of the Silicon Valley startup widely regarded by consumers and legislators alike as the source of national pride and economic growth. Existing car companies are seen as passe impediments to progress, locked in the past and dragging their heels on safety advances – only contributing to the rising toll of highway fatalities.

Tesla has the halo of the innovator, not unlike Silicon Valley neighbors Apple and Google/Alphabet and Uber. We tend to treat these companies with kid gloves because we fear our economic future hinges on their success even if we find ourselves surrendering our privacy and … freedom?

European regulators are far more concerned with privacy and harbor no illusions about halos or innovation. This is why the rough treatment that Apple and Google have received from Brussels seems so odd from a distance. It’s worth noting that concerns for privacy have led to the barring of dashcams in Germany and Austria. The obsession with privacy does have its limits.

In the U.S. the steepest resistance to Tesla has come from state regulators standing in the path of Tesla opening retail stores. State legislators and regulators are vulnerable to the immense lobbying influence of automobile dealers who are tightly woven into their local communities and drive a substantial amount of economic activity including both tax revenues and employment – to say nothing of charitable and political donations.

But taking the economic argument to the next level to leverage production decisions to the advantage of product development has so-far eluded incumbent car makers. Incumbent car makers aren’t leveraging their sourcing decisions for economic advantage. Rather they are scurrying from the glare of the incoming Trump administration which is casting threats far and wide against car makers seeking to build plants in Mexico. The resulting negative impact on Ford, GM and Toyota stocks is manifest.

Perhaps in recognition of the might of the dealer lobby, Tesla has taken the gloves off. Work with us, say CEO Elon Musk’s minions, or we will take our business, our tax dollars, our employment contribution elsewhere. Uber, too, has taken this approach with mixed results. Austin, Tex., said: “No.” to Uber’s preference to not fingerprint its drivers. The state of Maryland said: “Okay.” to Uber’s demand.

Nowhere is Tesla’s threat more potent than Michigan, where Tesla is likely to achieve victory in its drive to open stores in the state in 2017. But the overt Tesla (and Uber) threats being made behind closed doors and, increasingly paralleling Trump’s more public Twitter-based efforts, will test the public’s patience.

Both Tesla and Uber are placing multi-billion dollar bets on transformative transportation technology and business models. In the process jobs are both being created and destroyed. Tesla’s rise puts the entire internal combustion dealer network under threat. Uber is putting the jobs of millions of professional drivers of cars and trucks at risk.

Consumers have so far remained on the sidelines in the struggle – happy to benefit from subsidized cab rides (Uber) and subsidized EVs (Tesla). But these subsidized experiences have a cost (Uber – mistreated passengers, Tesla – fatal crashes) capable of bringing a reckoning in 2017.

Uber and Tesla appeal to our emotions and our pocketbooks. Let’s hope that in the end it isn’t all just a shakedown where we are surrendering both our freedom and our privacy – which represent core consumer value propositions that are carefully curated by the incumbent car makers. Both Tesla and Uber are out to narrow rather than expand our transportation choices. This is a battle where things will get very sticky indeed.

Share this post via:

Comments

There are no comments yet.

You must register or log in to view/post comments.