How Tesla is turning the car industry upside down

Much of what came out of Tesla Motors [NASDAQ: TSLA] Master Plan, Part Deux was a vision from Elon Musk that has been (mostly) telegraphed in prior comments from the CEO. Sure, there were surprises like plans for a Tesla Semi, but, the big surprise came in the form of an in-house strategy for car sharing. That said, when you step back a bit, and process all of the details of Musk's Master Plan sequel into one cohesive whole, it's clear he's looking to go even bigger... he's planning to turn the car industry upside down.

We've reviewed some comments from a handful of media outlets, but, no one has really captured the full potential of what Musk is forecasting. However, a fascinating post from the Elephant in the Web*, presents a deeper dive into Musk's transformative vision. Julien Stieg writes, "Tesla in fact is not anymore just a car manufacturer, but it is about to become a mobility service provider – pursuing a development looking to transform the whole automobile industry... the aim is nothing less than to arrive at a sustainable long-term solution for human mobility."

How does this differ from other auto companies? "Toyota has just recently announced a strategic partnership with Uber. Volkswagen has invested 300 Million Dollars into Uber competitor Gett. General Motors has invested 500 Million Dollars into Uber competitor Lyft. Last year, BMW, Daimler and Audi together bought Google Maps competitor HERE for over 3 Billion Dollars to be prepared for 'future mobility'... [but] when we now look at the industry’s big picture, it becomes clear that the role of traditional automakers is challenged." Indeed. Tesla is, instead, choosing not to rely on another company for car sharing. Musk will create a fully integrated car sharing strategy all on its own: "Tesla is about to become a sort of infrastructure for mobility."

Above: What's already considered the coolest car in the Uber fleet? A Tesla of course (Source: Uber Sweden

In fact, Elon Musk's plans are actually far bigger: "Tesla is saying farewell to the time of being just an automaker. Instead, the company is aiming to become an integrated mobility service provider, spanning the full circle from energy generation (solar power on home roofs, SolarCity), energy conservation (batteries at home and in cars, produced together with Panasonic), energy consummation (electric-powered cars) to mobility distribution (new autonomous car sharing platform) and even recycling (recycled car batteries become home batteries for storing solar energy, Tesla Energy). The goal is clearly an 'everything out of one hand' strategy. Building the actual car is only one part out of it. This is a revolution in an industry that has been focused on selling the best car product again and again for 130 years."

How will the car industry react to this paradigm shift? "These disruptions are tough calls for an industry petted in success for decades. It will be interesting to observe, to what extent well established automakers will be able to adapt to the challenges and how new players such as Alphabet’s Google, Apple or Faraday Future will perform. But then again: Change in the mobility industry is more than welcome. We need to realize, that the current solution for mobility with all its downsides and inefficiencies can only be a temporary one. Even if we just want to maintain the quality of life we currently have, we need to find a durable, a sustainable solution. And by being sustainable, we can actually grow as a society."


*Source: Elephant in the Web