Back in April of last year, we had a post discussing how Tesla managed to set up its Fremont factory on the cheap. Now Wired has a video showing just what happens in the factory (Peek Inside Tesla’s Robotic Factory, Jul 16).
Automotive News recently had a report on driving a Tesla Model S electric car from Los Angeles to Las Vegas. You can find a video describing the drive here. What I found more interesting was the reporter’s description of stopping to charge up the car (A flaw in Tesla’s plan: It’s Chargie McVanish, Apr 8). In order to spur interest in its vehicles, Tesla is building out a network of solar-powered Supercharger charging stations. Their website says they currently have nine but plan to get to one hundred by 2015. One is in Barstow, perfectly positioned for a drive from LA to Vegas.
So what’s a reasonable wait to charge your Tesla? (more…)
Here’s an intriguing supply chain question: When should a firm sell directly to customers and when should it go through an independent retailer? Obviously, this isn’t a clean either/or question. Nike, for example, has its own stores as well as selling through a variety of different retailers. Of course, Nike stores are as much about marketing — showing all things that can be bought with a swoosh on it — as dramatically increasing the firm’s sales. Apple Stores, on the other hand, are very much above moving merchandise and, I suspect, have really punished many small dealers that have long specialized in Apple products. It is not fair to describe the Apple Store as being the only place to buy a Mac, but it is likely the first place that most people think of.
What go me thinking about this is a recent story about Tesla Motors, the Elon Musk’s electric car company (Car Dealers Sue Tesla, Citing State Franchise Laws, NPR, Nov 9). Tesla’s cars are unconventional and it turns out their distribution strategy is as well. As opposed to signing up franchisees across the nation to be dealers, Tesla has opted to open its own stores in malls. That is leading to complaints that they are violating state franchise laws.
Robert O’Koniewski, the executive vice president of the Massachusetts State Automobile Dealers Association, is suing Tesla for opening a store in a local mall.
In Massachusetts, franchise law 93B prohibits a manufacturer from owning a dealership, O’Koniewski says. An auto dealer association in New York is also suing Tesla.
Typically, car manufacturers build the cars, then ship them out to local car dealers, which have to meet the various manufacturers’ standards. …
Each brand represents another manufacturer that can require expensive equipment and training. Not having to meet those various needs, O’Koniewski says, gives Tesla an unfair advantage.
“Those dealers are investing millions of dollars in their franchises to make sure they comply with their franchise agreements with the manufacturers,” he says. “Tesla is choosing to ignore the law and then is choosing to play outside that system.”
Tesla insists it isn’t breaking the law, in Massachusetts, New York or anywhere else. But it is clearly trying to play outside the franchise system.
Jeremy Anwyl, vice chairman of Edmunds.com, thinks that’s the real issue.
“Let’s say consumers really liked buying from a factory store. That would put dealers in a tough spot because they’ve been saying for years that the franchise system is actually good for customers,” he says.
We’ve got two stories today that illustrate ways of taking cost out of building cars but they come from very different parts of the auto market. One is about making high-volume, low-cost cars at Renault. The other is about high-end, low-volume electric cars from Tesla.
The Renault story comes from the Wall Street Journal (Renault Takes Low-Cost Lead, Apr 16). Renault launched a low-cost model called the Logan in 2004 with the intention of selling it in developing markets but subsequently expanded its entry-level offerings (see the graphic) and started selling them in Western Europe. They now account for 30% of Renault’s sales and supposedly sport a profit margin more than double the margins on the rest of Renault’s line.
So how do they do it? (more…)