Are the German automakers concerned about Tesla Motors?

Posted on April 20, 2016 by Matt Pressman

There are signs that Tesla Motors [NASDAQ: TSLA] is beginning to make the German automakers nervous. According to the LA Times*, "The proud makers of the world's top-selling luxury brands such as Mercedes, BMWAudi and Porsche could not fathom how a small-time, loss-making upstart from California could ever compete with the giants of the industry that had a century and a half of experience and expertise... [but] some in Germany are now, rather belatedly, seeing Tesla as a long-term threat." 

Instagram: jarrodbarnesphotography

What are some of the experts in Germany saying? "The German carmakers are taking Tesla more seriously every day now," said Ferdinand Dudenhoeffer, a German car industry analyst at the Center for Automotive Research at the University of Duisburg-Essen. "They used to think there was no way that anyone could possibly build cars as well as they do. And then along comes this young punk in California. They thought he [Elon Musk] didn't have a clue about cars and treated him like a joke. And now they're seeing that he's leading the revolution."

Source: Car Magazine UK

"German carmakers have been in denial that electric vehicles can create an emotional appeal to customers," said Arndt Ellinghorst, head of global automotive research at Evercore ISI. "Many still believe that Tesla is a sideshow catering to a niche product to some tree-hugging Californians and eccentric U.S. hedge fund managers. I'm sure German boardrooms are having some interesting discussions now." And, Claudia Kemfert at the German Institute for Economic Research explains, "The German car industry is in the process of squandering the chances for the future... Tesla is at the same time both a danger for German manufacturers, but it's also a wake-up call."

Instagram: smaom

And executives at the German automakers are beginning to publicly admit competition from Tesla. Dieter Zetsche, the chairman of Daimler AG, conceded this month that: "Tesla has promised a lot but has also delivered most of it" and said there was now a lot of excitement in the industry about the "overall appearance and approach Tesla is taking." Of note, the article also cites that: "Tesla has become the bestselling luxury car in Western Europe, according to a report by Automotive Industry Data. It said that its data showed Tesla's Model S sales in Western European countries in 2015 hit 15,787 and for the first time surpassed Mercedes' S-Class, which sold 14,990 cars."

Above: Tesla Model S takes the crown in Western Europe for best selling luxury car in 2015 (Source: Automotive Industry Data)

Furthermore, the Financial Times reports, "Shareholders at Daimler on Wednesday [April 6th] expressed concern at the threat posed by Silicon Valley companies including Tesla." Case in point: a recent survey by Germany's Autobild shows 66% of all Germans polled said they would consider purchasing a Tesla Model 3 [see below].

Above: German Tesla Model 3 poll (Source: Autobild)

And, it's not just Daimler -- Stefan Niemand who oversees Audi’s electromobility strategy conceded he's impressed by Tesla Motors. “I hate to admit it, but Tesla did everything right,” he said. And, don't forget that last year Porsche chief Matthias Mueller said, “Tesla has built an exceptional car. They have a very pragmatic approach and set the standard, where we have to follow up now.” Interestingly, after the diesel-gate scandal, Mueller was promoted to CEO of all of Volkswagen Group and proclaimed that, "The automotive future should not be left to Silicon Valley.”

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*Source: LA Times

Posted in Audi, BMW, Elon Musk, Mercedes S Class, Porsche, Tesla, Tesla Model 3, tesla model s, TSLA


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