GM and Ford take cues from Tesla’s success, but try to avoid Musk’s mistakes

People go to Ford’s all-electric SUV Mustang Mach-E on the 2019 Los Angeles Auto Show in Los Angeles, the United States, Nov. 22, 2019.

Xinhua through Getty Images

DETROIT – “Respect….” It was a easy assertion by Ford Motor CEO Jim Farley acknowledging Tesla CEO Elon Musk’s tweet saying the 2 firms had been “the only American carmakers not to have gone bankrupt out of 1000’s of car startups.”

Farley’s retweet of Musk earlier this month was a jab at his Detroit rivals, whereas additionally recognizing what Tesla has been ready to accomplish. Ford has typically touted its survival of the Great Recession, after crosstown rivals General Motors and then-Chrysler, now part of Stellantis, went bankrupt in 2009.

It was additionally one of many newest examples of executives at legacy automakers displaying Musk some appreciation. They’ve additionally adopted a minimum of a few of his firm’s methods to catch up to Tesla’s electrical automobile gross sales the world over.

“What I take away from Tesla’s success is that there’s a huge market for EVs and they validated that,” GM CEO Mary Barra stated throughout an on-line dialogue Thursday for The Economic Club of New York’s Women in Business occasion.

Tesla is credited with pressuring legacy automakers to speed up plans for all-electric automobiles, but Musk and his firm even have been forward of the curve on different applied sciences, corresponding to over-the-air software program updates and localized manufacturing of battery cells.

Here’s what they’re taking from Tesla’s success — and what they’re avoiding.

Battery cell manufacturing

Tesla has been producing battery cells domestically by means of a partnership with Panasonic since 2017. It’s one thing GM solely lately introduced intentions to do, whereas Ford likes the thought but hasn’t introduced any precise plans.

“We need to bring battery production to the U.S.,” Farley stated final month throughout a Wolfe Research convention. He stated it is an “important” challenge to help in logistics and avoid provide chain issues.

Tesla makes the battery packs for its automobiles on one aspect of its Gigafactory in Nevada, whereas Panasonic produces cells for them on the opposite aspect. However, Tesla informed traders in September that it began producing its personal cells at a pilot plant in Fremont, California, as properly.

Industry insiders, alarmed by the affect of a semiconductor scarcity for automakers this previous yr, have warned a battery cell provide scarcity may hit U.S. automakers subsequent, citing the quantity of latest electrical automobiles coming to market. Making cells in-house, or partnering on manufacturing like Tesla does is anticipated to assist automakers lock in earnings and grasp manufacturing.

“We want to be in control of our own destiny, not only from making sure we have the ability to have the cells that we need but also to work on cost improvements and technology improvements,” Barra stated throughout the firm’s most up-to-date earnings name.

GM is anticipated to quickly turn out to be a serious participant in battery cell manufacturing by means of a three way partnership with LG Chem. Through their Ultium Cells three way partnership, GM and LG are at the moment spending $2.Three billion for a brand new battery cell plant in Ohio. The facility is anticipated to be accomplished in 2022.

GM earlier this month additionally confirmed it’s already evaluating places for a second plant, highlighting the significance GM is placing on ramping-up manufacturing of battery cells within the U.S. It additionally disclosed a deal final week with a Massachusetts Institute of Technology spinout for joint improvement of next-generation electrical automobile batteries which might be anticipated to reduce the price of the know-how by 60%.

German automaker Volkswagen on Monday stated it plans to construct six battery cell manufacturing vegetation in Europe by 2030. It additionally referred to as the vegetation “gigafactories,” taking a web page straight out of Tesla’s playbook, as a part of a “Power Day” highlighting the corporate’s push into EVs. The occasion was in contrast by some to Tesla’s “Battery Day.”


If imitation is the best type of flattery, Musk should have been blushing when Ford debuted the all-electric Mustang Mach-E crossover. The automobile was immediately in contrast to the Tesla Model Y, particularly for its efficiency and trendy and minimalistic, large-screened inside.

The new Tesla Model Y is launched. Tesla has expanded its mannequin vary to embrace an SUV based mostly on the present Model 3.

Hannes Breustedt | image alliance | Getty Images

The main distinction within the inside of the Mach-E in contrast to the Model Y is the addition of a driver-mounted display for info. Tesla’s Model Y solely has one center-mounted display.

Aside from its inside design, the Mustang Mach-E additionally options over-the-air, or distant, updates – an rising development within the automotive trade pioneered by Tesla.

While GM had over-the-air, or OTA, connectivity in its automobiles for many years by means of its OnStar division, Tesla has been making important adjustments remotely to its automobiles since 2012, together with automobile traits. That’s one thing most automakers have solely lately expressed an curiosity in doing.

On EV charging, Tesla has its personal “Supercharger” community. Automakers corresponding to GM and Ford have proven no real interest in proudly owning their very own public charging networks. Instead, they’ve introduced partnerships with firms specializing in EV infrastructure corresponding to ChargePoint, Volta Charging or Volkswagen subsidiary Electrify America.


A know-how the Mach-E did not try to match on the Model Y was its autopilot driver-assist system. It as a substitute took a web page from GM’s playbook.

GM’s Super Cruise driver-assist system makes use of facial recognition to decide whether or not drivers are or aren’t paying consideration. The monitoring additionally makes it so drivers do not have to “check-in” by touching the steering wheel like in Tesla automobiles.

Ford says its Active Drive Assist system will enable for hands-free driving on greater than 100,000 miles of divided highways within the U.S. and Canada.


The monitoring system lowers the danger of the function being abused. Some Tesla drivers have discovered workarounds to “check-in,” permitting them to be much less attentive and even depart the motive force seat and transfer into different areas of their automobile.

Ford’s Mach-E and different automobiles are anticipated to function an identical facial recognition system to GM’s beginning later this yr. Both Ford and GM methods can solely be used on pre-mapped freeway roadways.

Tesla’s system can be utilized on highways and metropolis streets. It additionally doesn’t make the most of pre-mapped roadways, as a substitute counting on a redundant system of onboard cameras, radars and different sensors to drive the automobile when engaged.

The National Transportation Safety Board on Friday referred to as for stronger federal necessities for the design and use of automated driving methods on public roads within the U.S., and it is citing Tesla’s practices and system design for instance of why that is wanted.


A view of the dashboard in a brand new Tesla Model S automobile at a Tesla showroom on November 5, 2013 in Palo Alto, California.

Justin Sullivan | Getty Images

The root of Tesla’s drawback with the screens is a number of the elements weren’t what the trade calls “automotive grade.” While there is not any set definition, they’re sometimes elements that undergo rigorous testing and are meant to final a minimum of 10 years or 150,000 miles, if not the lifetime of the automobile.

Tesla, in a letter to federal regulators in January, stated the malfunctioning half within the display had been solely anticipated to final 5 to six years. That means they weren’t automotive grade, a cornerstone of manufacturing for many automakers.

“This was a bad decision on Tesla’s part. They never should have used this component in this way,” stated Sam Abuelsamid, an engineer and principal analysis analyst at Guidehouse Insights. “Electronics are intended to last the life of the vehicle. They are not intended to be ever be replaced through the lifecycle of that vehicle.”

Social media

While Ford’s Farley and GM’s Barra have more and more used social media to share information and have interaction with followers – which Musk does continually – they’re much more conservative in contrast with the Tesla and SpaceX CEO. They’ve additionally averted drawing the ire of the Security and Exchange Commission.

In September 2018, Musk was sued by the Securities and Exchange Commission for allegedly making “false and misleading” statements and failing to correctly notify regulators of fabric firm occasions. It was in response to Musk’s now-infamous tweet he had secured funding to probably take the corporate personal at $420 a share.

Days after the SEC submitting, the two sides introduced a settlement that included $40 million in fines and Musk relinquishing his function as chairman for a minimum of three years. The fines had been cut up evenly between Musk and Tesla.

Farley, who joined Twitter in March 2019, has elevated his presence on the platform since changing into CEO in October. He additionally used the platform throughout the early days of the coronavirus pandemic to unfold some laughter utilizing memes of his late cousin, Chris Farley, a comic who rose to stardom by means of NBC’s “Saturday Night Live” and a collection of flicks within the 1990s.

Farley has greater than 31,000 followers, whereas Barra has 55,500. That compares to Musk, who joined in June 2009 and has 49 million followers.

– CNBC’s Lora Kolodny contributed to this report.

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