My Car Quest

June 29, 2022

Detroit’s Only Course to Fight Tesla: The Chewing Off the Leg Gambit

by Wallace Wyss –

There is a dynamic duo of Tesla super fans that’s on YouTube with a show called Tesla Time News. They’ve posted hundreds of videos analyzing Tesla’s growth. I don’t know what stock price they got into Tesla with but suffice to say it’s enough to make them motivated to promote Tesla full time.

According to the San Jose Mercury News Zac and Jesse Cataldo, are a father and son who “feel like they contribute to what a communications department might do.”

Says the Mercury News:

“We almost feel like [Musk’s] translator sometimes,” said Zac Cataldo, who launched the channel in 2015 and saw it take off when they bought a Model X in 2016 and began posting road trip videos. They have a regular segment, “Elon’s tweets,” in which they try to put Musk’s comments in context and explain them. They say the YouTube channel has been successful enough to become a full-time job for both men. The Cataldos say they have been Tesla shareholders since 2013.”

I couldn’t find the net worth of both but Zac’s net worth is reported between $250,000 and $500,000. The fun thing to know would be what they bought TSLA (Tesla’s stock symbol name) at.

In a recent show they kept talking about the “legacy” automakers in Detroit and saying they are uselessly promoting ICE cars when they don’t realize they are caught in a trap–i.e. trying to catch up with Tesla. Detroit keeps saying “we will be competitive to Tesla in 2025” but by 2025 there will be four Tesla factories capable of pumping out 300,000 cars a year each.

GM at this writing is pumping out 0 electric cars. Oh the Hummer EV is coming but they have to fix the self immolating Bolts before they can make those again. Ford has the Mustang Mach E but I’m not sure if their EV Lightning trucks are being made yet. Not a good start in competing with the juggernaut named Tesla

Being from Detroit I try to look at both slides. I realize how Detroit’s dragged their feet on getting round to making pure electrics but it was because electrics were only 2% of the market. They weren’t making pure electrics their No. 1 goal.

Pickup trucks with giant ICE engines dominated the market. Why bother with puddle jumpers, right? Wrong. The big push for zero emissions has clouded the future for ICE cars. In some countries Tesla is already the leading seller, above Mercedes, above BMW, even though Tesla’s only got four models in production. No convertible. No pickups. No vans. No station wagon. No sports cars.

Going back to the chewing off of one’s leg, those new show hosts love to bring up, I can see what they mean. Take a fox, when caught in a bear trap, they might do just that. Detroit is so pressed for time to compete with Tesla and has its money tied up in conventional ICE cars they can’t seem to recognize that they are the fox. And that their leg is caught. They have to do something really drastic–like sell off land, sell off factories, borrow more money from the government, sacrifice something in order to have the billions it’s going to take to have new designs engineered, buy the casting and stamping machines to make them, develop batteries that can get the car 300-400 miles of range, and source electric motors that use batteries that don’t depend on some hard to source materials.

The same two critics point out how much Detroit automakers presently spend on advertising and public relations. While they claim Tesla spends nothing on advertising and PR (Not strictly true, because whoever plans the annual extravaganza known as Tesla’s Battery Day is doing PR even if they don’t call it that).

The only thing saving Detroit right now is that Tesla only has two factories going full tilt boogie at the moment–Fremont, CA and Shanghai China. But when the Austin TX and Berlin plants get green lighted for full production, they will double Tesla production capacity worldwide to well over a million cars a year. This will happen in months, and Detroit’s still talking 2025 before they can meet the threat. Where will Tesla be then? Maybe building two more plants (they have their eye on Canada and India at the moment…)

And so it is. The State of Play, as it were. Add to the menace of Tesla the fact that by that time Chinese automakers will have figured out how to sell $10,000 electric cars in the US. Good looking cars that will have a range of 300 miles and meet all applicable US laws. They will nip at Detroit’s entries at a price lower than Detroit can go, maybe $10,000 lower.

Now back to the leg scenario. I’ll admit, it’s not pretty but, hey, it’s gotta be done…

Let us know what you think in the Comments.

Wallace Wyss

THE AUTHOR: Wallace Wyss has worked on automotive marketing for Chevrolet, Oldsmobile, Mazda, Toyota and Ford.

 
 
 

Tesla Factory in Fremont, CA

Tesla Factory in Fremont, CA

Summary
Detroit's Only Course to Fight Tesla: The Chewing Off the Leg Gambit
Article Name
Detroit's Only Course to Fight Tesla: The Chewing Off the Leg Gambit
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The only thing saving Detroit right now is that Tesla only has two factories going full tilt boogie at the moment--Fremont, CA and Shanghai China.
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Comments

  1. Glenn Krasner says

    Wallace,
    My feeling that once Tesla hits its manufacturing goals, Elon will cash out by selling the firm to one of the Big Three or a European auto manufacturer. I also feel that once he hits his goals for Space X, he will also cash out by selling out to Boeing, Grumman Northrup, or Lockheed Martin. This is what he did with PayPal, and unless he keeps both companies to satisfy his tremendous ego. As it stands, I believe he will take the cash and move on to something new. Glenn in Brooklyn, NY.

    • Glenn,

      Tesla has a market value higher than the combined market value of GM, Ford, Toyota and VW with a few hundred billion dollars left over. None of those companies can afford to buy Tesla and Tesla does not need them because Tesla is the EV market leader. Most of Musk’s net worth is in Tesla stock and he is not going anywhere.

      BTW he sold several billion dollars of Tesla stock this year and he claims he is paying more than $11B in US income taxes this year. Imagine his income if he is paying $11B in taxes.

      • Glenn Krasner says

        Mike,

        For a company with such few actual physical assets, I feel that the company is WAY OVERVALUED, and, eventually a market correction will occur. When that happens, I think Elon will cash out. It continually boggles my mind that Tesla has such a high market value as you stated, as it has only four actual brick & mortar car plants and one battery plant. It just reinforces my belief that Silicon Valley/Wall Street works on innuendo, hearsay, and inside knowledge, and that the adage “fake it until you make it” is still thriving. Glenn in Brooklyn, NY.

  2. The New GM is just like the GM of the 60/70/80/90’s , reactionary ! Big contrast from the company that at one time was the “ Symbol of Excellence “. Elon is just the latest after Honda, Datsun, Toyota/ Lexus to exploit GM’s antiquated management system.

  3. wallace wyss says

    i think saying he has “only four brick and mortar plants is not accurate when you consider een not counting Fremont which was refurbished from a legacy automaker the other three plants are state of the rat, heavily robotized, able to produce cars far faster than competitors, such as Tesla making a car in 10 hours compared to VW’s I.D. 4 at 20 or more. Both the Texas and Berlin Tesla plants will crank out 300,000 cars a year. Tesla’s Berlin plant will be making more cars in a year than BMW does in 14 plants in a year. So implying Tesla is too small because of only four plants is a misnomer. They went from nowhere in ten years to become the world’s leading electric car maker. (Biden thinks GM is,so don’t tell him the only ones they actually sold were ll recalled)

    • Wally, you blow around like a dry leaf. Now you are a Tesla fan and all you do is bash America auto makers. Lots of people that you used to report on are doing the proverbial spinning in their graves.

  4. stephen turkfeld says

    it seems that every month china is coming out with new and improved electric vehicles. if we think japan ruined the american car industry we aint seen nothing yet. china will be putting american car companies out of business. please wake up detroit before it’s to late. thanks for the shot across the bough wallace.

  5. wallace wyss says

    Stephen is right. I was in Calif. in 1965 in Los Angeles. A few feet from my office 17 Japanese men were there to sell a vehicle called the Land Cruiser. That was the opening shot from Toyota.Now there is an office for BYD (Build Your Dreams) in Los Angeles. Commercial vehicles. Nothing to worry about, right?

    • Glenn Krasner says

      The Buick Endeavor SUV is already made by GM in its China plant, and then brought here to be sold. Glenn in Brooklyn, NY.

    • Mike Clarke says

      In 1972Hamilton and Electro/Data introduced the first digital watch. they would own the market ! and in a few years all the standard watch manufacturers would overtake them with the help of Texas Inst, Seiko and Casio.

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