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Tesla Have Just Disrupted The Automotive Industry Again

The announcement of the Semi and Roadster will change the market

20Nov

Elon Musk spent the week ahead of the reveal of the Tesla Semi waxing lyrical about how great it was going to be. In one tweet he exclaimed 'This will blow your mind clear out of your skull and into an alternate dimension. Just need to find my portal gun ...' and 121,000 people liked it. It isn't controversial to say that there has never in the history of the world been as there been as much excitement about the launch of a new semi-truck.

This is something that Musk has been an expert in for the past 5 years. He seems to have an uncanny ability to work people up into a frenzy over his car company and gain a huge following in the process. Ford is the car company most synonymous with US auto manufacturing. They invented the modern car and sold 17.6 million cars in 2016. They have 1.2 million Facebook followers. Tesla, on the other hand, is less than a decade old and sold only 84,000 vehicles in 2016. They have over 2.3 million Facebook followers. This is precisely because of the kind of excitement that means that hundreds of thousands of people can get excited about the launch of a truck.

At the actual launch itself Musk managed to get as much excitement around the surprise relaunch of a new Roadster model, the first car that Tesla first produced in 2008. It was an evening of oohs and aahs as Tesla showed off their new technology, but the reality of what was unveiled has far more impact across the entire car industry. What Tesla unveiled was not simply a case of them flexing their muscles, the innovation that they unveiled should strike fear into the heart of both ends of the automobile spectrum.

The first innovation was clearly the truck, which, according to Musk, is more aerodynamic than a sports car. This is one of the reasons it can drive 500 miles on a single charge, meaning that while it makes roughly double the number of stops a traditional truck does, the driver can go for the entire day without needing to worry about finding a charging point. All in, Musk predicts that this will save 20% per mile over traditional trucks which, for an industry with such tight margins, is a huge amount especially in the face of increasing fuel prices. This will make this truck incredibly attractive to every haulage company and represents a major threat to any traditional truck maker.

However, Tesla didn't only throw down the gauntlet to the long distance haulage industry, it also went completely the other way and threatened sports cars, with Elon Musk claiming 'It’s the fastest production car ever made, period.' It also has incredibly impressive performance numbers, hitting 0-60 in 1.9 seconds, 0-100 in 4.2 seconds, the quarter-mile in 8.9 seconds, a top speed of 250 mph, a 620 miles range and its 2+2 seating arrangement means it’ll even hold four people. However, the coup d'état is that it costs $200,000 despite being faster accelerating and more fuel efficient than a $2.7 million Bugatti Chiron.

Both the Semi and the Roadster in isolation are daunting for the industries they are threatening, but perhaps the most ominous thing about both is pricing. Although the Semi is yet to have a price announced, Tesla have claimed that the fuel savings alone will pay back the purchase cost within 2 years. The Roadster is faster and more fuel efficient than a Bugatti Chiron by 92.5%. Rather than this announcement simply being Musk showing off, this is very much the point at which electric vehicles becoming genuinely more affordable than their traditional competitors. Would a right minded haulage company owner now buy a truck that runs on diesel and would somebody looking for a super fast car now spend $2.5 million more than they needed to?

It has been predicted that by 2021 electric cars will be cheaper to buy than traditional combustion engine cars, which makes sense given that the Roadster will be available in 2020 and the Semi in 2019. They are getting close to that 2021 prediction, but it looks like they may beat it. Combustion cars will be the bastion of those who either like to spend more for a lesser product or are too stubborn to change, either way, Musk's announcement may well be calling time on the traditional combustion engine. 

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