Tesla Changes Gears

If you’re in the market for a Tesla, there’s some things you’ll want to know.

Yesterday, Tesla announced a new version of the Model 3 for a mere $35,000 (tongue in cheek). The new model is estimated to have 220 miles of range and will be able to reach a top speed of 130 miles per hour. 

It’s also offering a Model 3 Standard Range Plus version, offering 240 miles of range, and a top speed of 140 miles per hour. That model is $37,000.

That may still seem expensive, but the average new car cost in the U.S. now comes in at $37,000.  So, consider your new discounted Tesla 3 a bargain at the cost!

But the more notable news, I thought, coming from the company was that it announced it was moving all of its sales online.

Existing stores will turn into information centers and showrooms, according a report from TechCrunch and citing Tesla CEO Elon Musk, which means retail employees will likely be let go but there will be more technicians and mechanics.

The Wall Street Journal explained the moves this way:

Lowering the price to $35,000—a key part of the Silicon Valley company’s effort to become a mainstream auto maker—is a goal Tesla has discussed for years and repeatedly delayed, but the shift in its sales strategy was a surprise.

The move to online-only sales is likely to further rile U.S. car dealers that have spent about a decade fighting Tesla’s effort to sell directly to customers through company-owned stores. For more than 100 years, auto makers have relied on a network of third-party franchised dealers to sell their vehicles across the U.S.

My first question is, what will this mean for marketing?

Tesla has been notorious for not having a paid advertising budget, instead depending on word-of-mouth referrals and publicity stunts like sending a Tesla into space atop a SpaceX rocket.

Will the company move some of its savings on retail into traditional advertising to try and broaden the market? If it doesn’t, I could see ripples shimmering into Detroit and Madison Avenue — Tesla may not be just disrupting the traditional automobile industry sales model, but its marketing and advertising model as well.

As for Tesla’s competition and state regulatory bodies, something tells me that political fight is far from over. Those dealers will fight to the last hill against this direct model, although I can only presume we’ll all be buying our cars, and so much else, from AI-driven robots soon.

And where traditional (or used) car dealers are concerned, I’ll take C3PO every day of the week.

What does all this mean for consumers?

Instead of taking test drives, Tesla will extend its return policies, allowing new customers to own the car for a week and drive up to 1,000 miles and still return it for a full refund if they don’t like the electric glide. And the Journal cites Mr. Musk as claiming that shifting sales online could cut costs 5% to 6%.

Consumers used to balk at purchasing clothes sight unseen over the Internet, so could this dramatically change the way high cost, high consideration products like a Tesla Model 3 are sold?  Maybe Tesla will offset the lack of a retail car experience with a virtual reality one instead? 

“Sir, it’s very possible this asteroid is not stable” C3P0 said in the Star Wars epic, “The Empire Strikes Back.” 

Not stable, indeed.

Then again, Elon Musk may be taking the car industry to a whole other planet whether it likes it or not.

Human Crash Test Dummies?

Put on the brakes!

The NTSB has dispatched investigators to examine another fatal crash of a Tesla electric vehicle, this one last week in California. 

One of the goals of their investigation will be to determine whether its semi-automated driving system was engaged, according to a report from The Wall Street Journal.

“Unclear if automated control system was active at time of crash,” the NTSB said in a social-media posting, in a reference to Tesla’s Autopilot feature. “Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene.”

According to the story, a man died in the accident after his Tesla Model X sport-utility vehicle traveling south on Highway 101 struck a barrier and was struck by two other vehicles.

“This investigation is not focused on the automation, rather, it is focused on understanding the post-crash fire and the steps taken to make the vehicle safe for removal/transport from the scene,” an NTSB spokesman said in an email message. “We are working with Tesla to determine if automation was in use at the time of the accident, but the focus of this field investigation is on the other two points.”

Still, the NTSB has found itself increasingly scrutinizing emerging automated- driving technologies, adding to typical investigations the agency conducts of crashes involving aircraft, trains and buses, and other incidents.

I’ll ask the question: Is this going to increasingly put the NTSB in a difficult position, being asked to investigate accidents by semi- or fully-autonomous vehicles after the crash has occurred, instead of having the U.S. Congress or other authority put some laws into effect that are proactive and prescriptive?

The SELF-DRIVE Act, which was passed by the U.S. House of Representatives late last year, aimed to allow automakers and tech giants to eventually test as many as 100,000 experimental autonomous vehicles annually. 

But as reported by Recode, under the proposal those companies could obtain exemptions for the federal safety standards that govern all motor vehicles, and they would not have to seek review of their technology before it hits the market.

The measure got hung up in the U.S. Senate, and perhaps for good reason (although the hitch was concerns about cybersecurity intrusions, and not the autonomous technology itself).

When I went through driving school, they always told me to keep two hands on the wheel and my eyes on the road.  I always thought it was a pretty good prescription for safer driving.

And though I fully expect in the long term autonomous vehicles will be a boon for highway safety, in the short term, we humans seem to be sitting in the crash test dummy driver(less) seat.

The Electric Filling Station

Click to enlarge. With IBM’s Intelligent Electric Vehicle Enablement Platform, drivers across Ireland will be able to use their mobile devices to locate their nearest electric “filling station” and even make a reservation to stop and charge their car.

Happy Monday.

A friend of mine from overseas sent me an article over the weekend featuring traffic horror stories around the globe.

Most of the stories were about emerging third world cities grappling with rapid growth, but one of them included a story about right here in Austin, Texas.  The gist of the story about Austin was this: The individual in Austin traffic noted they were sitting in a car by themselves in a long line of traffic, watching as empty buses and trams whistled by.

I won’t get started on trying to change the longstanding behaviors of Texas commuters, but I WILL highlight a new project IBM is providing some assistance for in Europe that has huge potential for, if not streamlining traffic, then at least helping bridge the gap to a more electric-oriented energy and transportation future.

The Public Charge

IBM today announced that it has teamed with ESB ecars to implement a fully integrated smarter charging IT system that will help manage electric vehicle public charge points, which are being rolled out across Ireland by ESB ecars.

With approximately 1,000 public charging-points currently available, ESB Networks is on track to deliver one of the largest integrated and operational electric vehicle infrastructures in Europe.

ESB Networks will use IBM’s Intelligent Electric Vehicle Enablement Platform to provide the services needed to operate and manage the charge-points installed throughout Ireland.

Together the companies will add a layer of intelligence and convenience to the charging process, allowing EV drivers to access, charge and pay, using an identification card.

Additionally, this project will provide utilities with access to energy usage data that can help improve smart grid operations, reduce power strain during peak charging times, and ensure reliable energy distribution to customers.

This project is bolstered by Ireland’s energy policy to increase sustainable energy use in the transportation sector by 2020. Today, the goal is to produce 40 percent of the country’s current electricity consumption from renewable energy and have electric vehicles represent every tenth car on Irish roads.

Charging Cars, Reducing Greenhouse Gases

Already on the renewable fast track, this integrated EV charging network will allow Ireland to also contribute to the European Union legislation to reduce greenhouse gas pollution levels by approximately nine million tones before 2020.

The new system accommodates the needs of all EV owners. The IBM EV platform will enable EV drivers to select convenient payment options and access all charge-points using one ID card — a process that will aggregate usage costs and simplify billing.

This smart charging capability allows consumers to charge anywhere at anytime, regardless of their electricity provider and without the need to carry multiple access cards. Additionally, drivers will also have the option to use a mobile device or browser to locate the nearest charge post, check its availability, and make a reservation if the post is available.

This initiative along with the recently announced Smarter Charging demonstration with American Honda Motor Co,. Inc. and Pacific Gas and Electric Company (PG&E), as well as the EKZ Smartphone Application pilot, demonstrates IBM’s ongoing focus to improve driver services, increase renewable generation, and intelligently manage electric vehicles.

IBM is involved in more than 150 smart grid engagements around the world, in both mature and emerging markets. You can learn more about IBM’s vision to bring a new level of intelligence to how the world works—how every person, business, organization, government, natural system, and man-made system interacts, here, and you can learn more about electronic vehicle infrastructures here.