Tesla's Pricing Strategy - A Modern-day Take on Henry Ford's Assembly Line Legacy?

April 23, 2023

By Kevin Armstrong

Ford introduced the assembly line in 1913

Ford (edited by NATA)

In 1913, Henry Ford introduced the assembly line in Highland Park, Michigan, revolutionizing the automotive industry and drastically reducing the price of the Model T. This groundbreaking innovation led to the collapse of hundreds of rival car companies, unable to compete with Ford's cost-effective production methods. Fast forward to 2023, and we witness a similar dynamic unfolding in the electric vehicle (EV) market, with Tesla leading the charge.

Tesla's continuous advancements in technology and manufacturing and strategic price reductions have raised questions about whether history is repeating itself. Are Tesla's actions, reminiscent of Henry Ford's assembly line legacy, catalyzing Darwinian forces in the EV market and forcing competitors out of the game?

Adam Jonas from Morgan Stanley raised this question during Tesla's Q1 2023 earnings call. Elon Musk, Tesla's CEO, clarified that the company's pricing actions are not aimed at deliberately undermining competitors. "We really don't think about competitors that much," he stated. Instead, Tesla focuses on improving its products, making them more accessible, and enhancing customer service.

Tesla's Unique Strategic Advantage

Musk acknowledged that Tesla does have a unique strategic advantage. The company is developing cars with potential autonomy, which may be worth significantly more in the future. This factor allows Tesla to sell its cars at zero profit while benefiting from the net present value of future cash flows associated with the asset. Tesla also enjoys ongoing revenue streams from service, charging, insurance, and other areas, which competitors may not have.

Tesla's Supportive Approach to the EV Market

Elon Musk emphasized that Tesla's actions are not malicious or intended to destroy competitors. The company has made its patents available for free and opened up its supercharger network to other manufacturers. Tesla's approach is to support the growth of the entire EV market, not to monopolize it.

As the electric vehicle market continues to expand, it is essential to recognize Tesla's role in driving innovation and adoption. While the company's pricing strategy and technological advancements may draw comparisons to Henry Ford's assembly line, Tesla's commitment to supporting the growth of the entire EV market sets it apart.

Despite similarities to historical precedents, Tesla's current approach fosters a collaborative environment and encourages competition. This strategy ultimately benefits the global transition to sustainable transportation and pushes the entire industry toward a greener future.

Tesla Is Now Offering Cybertruck Test Drives [List of Locations]

July 26, 2024

By Karan Singh

@brandonhd

Tesla has begun to reach out to customers in the United States and is offering demo drives of the Cybertruck on an invite-only basis. @brandonhd on X shared the first invite image, and it looks like it's going out quite quickly to multiple locations that have Cybertrucks on display.

Up until now, display vehicles have been for just that – looking, but no touching. Some Tesla delivery centers and showrooms have also allowed viewers to take a seat inside and open it up, but most are still locked away behind the velvet rope.

It’s exciting to see that Tesla has begun to demo them – and it can only be so long until demo drives open up to everyone.

Advisor-led Demo

This Demo Drive is led by a Tesla Advisor – while you’re driving, the advisor will be in the passenger seat, walking you through the experience. They’ll explain steer-by-wire, off-road controls, and will introduce new-to-Tesla buyers to all the features that are currently available.

Once FSD V12.5 comes to the Cybertruck, we’re sure they’ll be demoing its capabilities FSD capabilities as well.

Locations

The list of locations so far for demo drives appears to be fairly limited, but we will hopefully see demo drives roll out throughout the United States, and eventually Canada too. Here is the current list of city/state locations that have seen demo drive invites.

Manhasset, New York
West Covina, California
Los Angeles, California
Houston, Texas
Orlando, Florida
Westmont, Illinois
Tucson, Arizona
Phoenix, Arizona
Delaware

Musk Confirms 'Actually Smart Summon' is Coming in a Revision of FSD V12.5

July 26, 2024

By Karan Singh

Not a Tesla App

Actually Smart Summon, the successor to Tesla’s Smart Summon feature, has been confirmed to be coming as soon as next month as per Elon Musk. Colloquially known as “ASS”, Actually Smart Summon is supposed to improve on the regular Smart Summon capabilities, which have historically used ultrasonic sensors (USS) to navigate parking lots.

We’re looking forward to Actually Smart Summon, and we’re quite excited about what other features will be unlocked once it finally shows up at our doorstep.

Vision-based Improvements

ASS is supposed to bring Smart Summon to vehicles that don’t have USS – using Tesla Vision. Most recently, Tesla has brought Autopark to vehicles without USS, and Vision-based Autopark has been a huge success. It is faster, more reliable, and smoother than the older USS-based solution. It can also park and maneuver in tighter locations.

Just recently, Tesla returned the Model X’s self-presenting doors, using Tesla Vision. Vision has seen some fantastic improvements, and many people are waiting for ASS to bring forth these improvements to Smart Summon.

Smart Summon Today

Today, Smart Summon is sometimes useful at best, usually a party trick, or downright dangerous at worst. It’s excellent and best used in straight lines, where you have a clear line of sight of the vehicle, and can stop it if doesn’t see an obstacle.

I used Smart Summon today, just before writing this article – my 2022 Model Y (with USS) – did manage to show up just fine – in a straight-line location from where I was parked, after exiting the parking spot fairly cleanly. However, I’ve previously used Smart Summon and have had the vehicle turn towards obstacles, such as cart returns or curbs. Overall, it’s a sometimes-useful feature that has a lot of drawbacks right now.

Smart Summon is also restricted to a certain distance – and it's pretty small. The max distance is shorter than most parking lots, being only about 215 ft (65m). If you’re lucky enough to park close, it's very useful to bring your car right to you.

Actually Smart Summon

ASS will bring FSD V12-like capabilities to Smart Summon – the vehicle will primarily use Vision to drive toward you (or the location you’ve indicated). ASS has been supposed to be coming since about September 2022 and has seen many delays – we’re almost at the 2-year point today.

We’re looking forward to Actually Smart Summon being able to bring the vehicle – safely – right to you. ASS is also one of the key steps towards bringing some other cool features that Elon Musk has previously mentioned – Park Seek and Banish Autopark.

We’re also hopeful that Actually Smart Summon will increase the maximum range a vehicle can be summoned, because the current range is fairly small. Alongside Park Seek and Banish Autopark, we’re closing in on a Robotaxi-based future.

Park Seek and Banish Autopark

When the FSD v12.4 showed up, Elon also mentioned that going forward, vehicles would automatically park themselves when arriving in a parking lot – Park Seek – and that if you got out of the car at the entrance to a business, you could get it to automatically park itself in the parking lot – Banish Autopark. These are two features that are needed for Robotaxi to work – which itself is delayed to October 10^th of this year. We’re looking quite forward to them – as in combination with Actually Smart Summon, Tesla has reached the cusp of vehicle autonomy.

A vehicle that arrives, driverless, at the location you’re at, then drives somewhere, parks itself there, and waits for you – is the definition of a Robotaxi.

While we’re likely to have to wait for Banish Autopark and Park Seek just a bit longer, Actually Smart Summon being around the corner is exciting! Gone will be the days of having to run out to your car when you forgot your umbrella – your car will just come right to you instead.