A new vehicle type like a van may help Tesla more than an affordable car
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Tesla is known for its luxurious, high-end electric vehicles with cutting-edge technology and impressive performance. However, the company may be planning a significant pivot to produce a more affordable car that would cater to a broader audience. This move would undoubtedly shake up the automotive industry, but one renowned industry expert thinks a cheap vehicle, while doable, is not the right move for Tesla.
Sandy Munro recently shared his insights on the future of electric vehicles, specifically Tesla, with Tesla Owners Silicon Valley. Munro sees a path that Tesla could achieve this less expensive car. According to Munro, it would need to use lithium iron phosphate (LFP) batteries, which are cheaper and still good enough for most of the population. Tesla currently only uses LFP batteries in a portion of their models today.
Sandy Munro Discussing Tesla
The Risk with Small, Cheap Cars
Munro says no one makes much money on small cars, especially in North America. Furthermore, Tesla would have to be more frugal in its approach to creating a more affordable vehicle. This approach means the company would have to consider what features are not essential. For example, Munro suggests that cheaper drum brakes could be used instead of disc brakes and that Bose stereo system might not be necessary for a more affordable car.
Munro says Tesla could get down to $24,000 to $28,000. But he cautions, "coming out with the cheap car, what does it really do for you? Not much, because people are still willing to put their hand in their pocket and pull out 40 grand and say I want that one. That is the risk with small cars." He also says small cars make a few hundred dollars per unit sold, considerably less than Tesla's current margins.
However, Musk must see some advantages in offering a more affordable car; he told the B20 conference in November, "Musk responded to the question familiarly, "I can't speak too much to the future of Tesla product development, except to say that we do think that making a much more affordable vehicle would make a lot of sense and we should do something."
A No-Risk Proposition with High-Profit Potential
Nevertheless, there is a significant gap in the market that Tesla could not only fill but dominate, "if I were Elon Musk, I'd be looking at making a minivan or something like that. He can still make a shitload of money and not take any risk. That is a no-risk proposition, making a minivan." Musk has floated the idea of a "highly configurable vehicle" in the past, and Munro sees a gaping hole. "When Dodge and Chrysler walked away from the minivan, there was no minivan out there. There is one, Kia Carnival and these guys can't keep them in the showroom."
Munro thinks it is the marketing people who killed the minivan, "everybody in marketing says, 'oh, we don't want to produce a car like that because it emasculates men and it gives women the image of being a soccer mom.' Guess what? There are a lot of guys out there who like that car because it was the biggest selling thing they had, and on top of that, there are a lot of soccer moms! So why not try and take advantage of that?"
A Tesla minivan would have all the amenities expected from the brand, but it could also sell the safety factor. Teslas are repeatedly awarded for their rigorous design and commitment to safety. Given that minivans are synonymous with transporting young families, it would be a perfect match.
Tesla’s plan to brand its autonomous network of taxicabs has found an interesting little snag. The US Patent and Trademark Office (USPTO) has issued a “nonfinal office action” regarding Tesla’s application to trademark the term “Robotaxi” specifically in connection with autonomous electric vehicles.
This is an initial refusal by USPTO’s examining attorney and is very particular for autonomous electric automobiles. A separate trademark application by Tesla for the term “Robotaxi” as it relates to its upcoming autonomous ride-hailing service is still under examination and has not yet received a similar rebuttal.
Understanding the Refusal
A “nonfinal office action” means the USPTO has found potential issues with the trademark application, as stated, which prevents its immediate approval and subsequent granting to Tesla. Tesla now has a three-month period to file its counterarguments and address the USPTO's concerns.
If Tesla’s response satisfies the examiner, the trademark could be granted.
While the exact content of the office action isn’t detailed in the initial report, such refusals for terms like “Robotaxi” often occur if the USPTO considers the term “merely descriptive” or “generic” for the goods in question. In this particular context, “Robotaxi” could refer to any autonomous taxi vehicle.
Trademark law generally prevents the exclusive registration of terms that competitors would need to use to describe their own similar products. For a term to be trademarked, it typically needs to be distinctive and act as a brand identifier rather than just a descriptive name of the product’s class or type.
Separate Application for Ride-Hailing
Tesla still has a distinct, separate, and still pending application to register “Robotaxi” as a trademark for “transportation services, namely, autonomous ride-hailing services.” The criteria for trademarking a service can differ from those on trademarks for goods, and it’s possible Tesla may have more success securing the name for the service itself, which would allow them to brand the network as “Tesla Robotaxi.”
Why This Matters
Securing a trademark grants exclusive rights to use a brand name in conjunction with specific goods or services. This helps prevent customer confusion and to protect the brand identity.
If the refusal for the vehicle trademark becomes final, Tesla may be limited in its ability to exclusively name a good (specific vehicle) the “Tesla Robotaxi.” Other manufacturers could also potentially use “robotaxi” descriptively for their own autonomous taxi vehicles.
The ability to trademark “Robotaxi” for the ride-hailing service is arguably more critical for Tesla, as they’re working to establish a unique brand for their autonomous transportation network, which kicks off in Austin next month.
The USPTO’s office action won’t hinder Tesla’s ability to develop or deploy its own vehicles in June - instead, it’ll just impact how Tesla can brand the app and their vehicles, which could cause some last-minute delays if they have to rebrand.
Cybercab and Robovan/Robobus Trademarks
While Tesla is facing challenges with the broader Robotaxi term for vehicles, the company is also seeking to trademark “Cybercab,” “Robovan,” and “Robobus.” Securing a less descriptive name for the vehicle itself often has a higher chance of success with USPTO, as it is far more distinctive than a more general term like “robotaxi.”
Why Didn’t Tesla Do This Years Ago?
Tesla may have waited too long to file a trademark for the term “Robotaxi.” While the company has been discussing a self-driving fleet since 2016, the concept of autonomous taxis has gained a lot more traction in recent years — and competitors like Uber have also begun using the term.
We suspect there was some strategic timing behind these filings. Earlier versions of FSD — particularly those prior to V12 — may have lacked the progress needed to support Tesla’s robotaxi ambitions. Filing for a trademark that isn’t actively in use or about to be used can make it harder to defend or retain.
Moreover, while the idea of autonomous vehicles has been around for years, a clearer public understanding of Tesla’s specific plans has only emerged over the past 18 months. Filing too early can trigger speculation long before the company is ready to reveal details.
Ultimately, whether Tesla secures the rights to “Robotaxi” remains uncertain — but trademarks like “Cybercab” and “Robovan” seem much more likely to stick.
One of Tesla’s greatest weaknesses, as it has quickly become one of the world’s most ubiquitous cars on the planet has always been service. Escalating issues to managers and sometimes even reaching a Tesla Service employee can be a total coin flip, depending on your Service Center.
Tesla is continuing its push to integrate AI across its customer support channels in an effort to improve customer service. According to Raj Jegannathan, Tesla’s VP for IT, AI Infrastructure, Apps, Infosecurity, and Vehicle Service Operations (that’s a lot), Tesla is launching a pilot program for a new AI designed to improve customer interactions with Service.
Tesla Service’s new AI Agent detects comms delays, monitors sentiment, & auto-escalates to leaders. Starts tomorrow at 10 pilot locations. In 2 weeks, type “Escalate” in ‘message center’ to reach managers. Guardrails in place to prevent abuse. We’ll keep improving!
At 10 pilot service locations, this new AI agent will begin working behind the scenes at Tesla Service, to help with customer communications. It will provide three key features:
Detect Communications Delays: The AI will actively monitor service interactions to identify potential delays in communication or progress. These are often a key pain point for customers who reach out to Tesla Service and don’t receive a response for several days, as Service has nothing new to add. The AI can now step in and let the customer know Tesla is still waiting on parts or something else.
Monitor Customer Sentiment: By monitoring the tone and content of the messages between the customer and Service agents, Tesla will be able to identify situations where a customer might be dissatisfied or facing difficulties.
Auto-Escalate: If either a communications delay or negative sentiment is detected, the AI can automatically escalate issues to human managers for review. This helps to address problems before customers need to seek escalation themselves or become upset about an issue.
Customer Escalation Requests
Alongside the new AI tool, Tesla is also introducing a more direct way for customers to get higher-level attention. According to Tesla, within the next two weeks, customers can simply type “Escalate” in order to have their issue routed directly to management.
Raj’s team is currently working on implementing guardrails to prevent abuse, but this will soon make its way to improving Tesla’s service offerings. We’re glad to see Tesla taking steps to identify and correct deficiencies in the process - it has always been a sore tooth for Tesla in the last few years.
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