FREMONT — Standing in front of one of electric car manufacturer Tesla's buildings, a customer says he has just been reassured, by company founder Elon Musk himself, that the car's new battery is going to change the world. "Let's be honest," he adds. "Driving a Tesla, you can get any woman!"
Tesla drivers tend to think highly of themselves, and they believe they are healing this planet of ours, even just a little bit, by buying electric cars.
The company's investors are participating in the green revolution, yes, but they also have a superiority complex. To put things in perspective, Tesla has built 52,000 cars this year, 0.059% of all the cars built worldwide. It's a very small slice of the pie. The company's goal is to build 500,000 cars a year in five years' time, which would still represent a small portion of the pie. So far this fiscal year, Tesla's losses are valued at $488.8 million.
What's so fascinating about a company that is currently estimated to be worth $30 billion and, according to Musk, could be worth $700 billion in a decade? Why has Forbes magazine just named it the most innovative company of the year?
Tesla CEO Elon Musk on Sept. 30 in Fremont, California — Photo: Liu Yilin/Xinhua/ZUMA
Technological analysis company Gartner developed the so-called "hype cycle," which divides emerging technologies into five phases: technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment and plateau of productivity. Traditional car manufacturers are currently finding themselves in the trough of disillusionment when it comes to environmentally friendly developments, and this isn't just because of the recent Volkswagen emissions scandal. Tesla, on the other hand, can be found near the peak of inflated expectations, although some predict that the necessary crash is just ahead, whereas others insist that the rise will continue for some time to come. Whatever the case, people are fascinated.
To understand it, a trip to the Silicon Valley city of Fremont, California, is in order. That's where Tesla manufactures its cars: the Model S sedan; the SUV Model X with gull-wing doors, which has been in production for only a few short weeks; and last but not least, medium-sized Model 3, which could begin production before the new year. This last model has been the catalyst of the Tesla revolution as a so-called "high-end disruptor." That phrase is used to describe a company that initially shakes up the market with high-end products and then conquers it by introducing affordable versions of the initial products.
Apple did it with the iPod, and Starbucks did it with coffee and comfortable cafés. Model 3 isn't meant to lure women, to serve as a status symbol or to comfort your bad conscience. At $35,000, it's supposed to be affordable for the masses.
Saving the world?
There are, of course, the typical Silicon Valley follies. Especially eye-catching are the more than 500 red robots that are reminescent of J.A.R.V.I.S., Iron Man's intelligent, literal right hand. It looks pretty futuristic when eight of them are assembling a Model S while practically waving at you simultaneously. There are, of course, plenty of robots in any given car plant around the world, but Tesla is proud that its robots are capable of welding, bending, riveting, holding and moving something. There are 10 giant robots that carry the superhero such as Wolverine, Thunderbird or Colossus.
Multi-tasking robots with superhero names are cool. But critics see them as inefficient and the causes of production delays and income losses. And now they are tasked with learning how to construct a new model.
"Model X is probably the most difficult car to build," Musk says. But this, he continues, isn't a problem, given that he's not out to produce the most profitable car in the world. Only the best.
Musk loves to embody the role of the visionary, the do-gooder, the superhero. He is sometimes compared to Iron Man, whose alter ego Tony Stark is a swaggering show-off but also a genius. Of course, swaggering show-offs are among the most fascinating men — as long as they are geniuses.
Inside the Tesla factory in Fremont, California — Photo: Jim Gensheimer/San Jose Mercury News/TNS/ZUMA
Musk likes to descibe himself as driven, and he expects nothing less of his employees. Those who want to change the world will have to make sacrifices. This mantra is basically handed out with the staff badges.
Diarmuid O'Connell has been working for Tesla for nearly 10 years now and before that was chief of staff at the U.S. Department for Political and Military Affairs. O'Connell's role is to broker deals such as state subsidies for the company. Musk talks to politicians, but O'Connell is the one who gets them to support Tesla in name and deed. O'Connell is a man of few words. If 10 words are enough to convey the facts, then he will utter exactly 10 words.
He gets up to draw a circle on a blackboard, and in it he marks Tesla's tiny share of the market. "We do not want to dominate that one percentile in the market, but want to become one of the biggest players in the field," he says. "The company's goal in the end is to revolutionize the down market towards sustainable transport. Everyone who is aiming to drive the revolution forward is welcome to join. We invite everyone to compete with us."
When Elon Musk speaks of improving the world, he is not, like many other Silicon Valley bosses, talking about his company's position within the market. He actually means that he wants to improve the world. And others are more than welcome to share by building cars and batteries based on the freely available Tesla patents.
Tesla is simply a fascinating company. The bigger the hype around it, the bigger the hype around sustainable cars. Of course, it's possible that Tesla will fail, as the trough of disillusionment follows the peak of inflated expectations in the "hype cycle." It is also possible that a competing company will produce better cars, sidelining Tesla within the market. But should every car be powered like a Tesla, then the company will profit from the battery production and might actually make the world a better place.
That's what Tesla and its employees believe in. If Musk were really honest about sustainable transport, then he wouldn't care whether Tesla is financially successful, as long as the revolution lives and is driven forward quickly.
Upon leaving the plant in Fremont, it's not immediately apparent that the company could one day be worth $700 billion or that a man driving a Tesla could snag any woman he wants. But what is clear is that Musk and his employees are crazy enough to want to try to improve the world. Also, the Wolverine robot really was waving.