Tesla Model 3 finally available but it will only sell online
Tesla to slash sales force now that the Model 3 electric car is finally ready to order.
I am not saying Tesla should completely abandon making its own cars. Sure, it should make reference architecture vehicles for boutique customers — in the same way Microsoft builds the Surface as an outstanding example for what the other OEMs it licenses its Windows 10 operating system to should be building in the mobile PC space. But it shouldn’t represent the balance of its business.
Licensed production in the auto and aerospace industry is actually quite common, or at least it was in decades past. Typically you would see this happen in wartime. In Germany, during World War I, Opel received a license from BMW to produce aircraft engines.
British Aerospace licensed the Canberra design to the US in order to produce its first medium-range jet bomber, and Turkish Aerospace Industries produced a version of the F-16 fighter jet licensed by General Dynamics.
In the past, it was also not uncommon to see developing countries like India, Pakistan, Poland and other companies in Eastern Europe and South America produce Fiat and Volkswagen designs for cars and motors for their domestic automobiles under license. Yes, some of these countries — such as China — ended up cloning engines and cars with unlicensed production, and that’s certainly a risk Tesla would have to consider under any licensing scenario.
Also: Tesla’s China factory to make 3,000 cars each week
But I believe the benefits far outweigh the risks for Tesla, especially given the significant level of technical complexity and competence needed to replicate the components in order assemble these cars. Plus, the company can act more like a Google in its relationship with Android Google Play licensees, where all source code for the integrated systems would be maintained by it, and could deny non-compliant licensees or unauthorized clones further software upgrades.
Elon Musk needs to swallow his pride…
Would this represent a major paradigm shift for Tesla? Yes, and to do this Elon Musk needs to swallow his pride, or his board of directors needs to think seriously about removing him from his role, which, frankly, has become more of a liability than an asset as of late.
But it’s early in the company’s evolution and it can’t afford to act like an Apple when it can’t claim the same level of customer loyalty and market penetration. It needs to make some important changes to its business model, and do it now.
Does Tesla need to be more of an ARM than an Apple? Talk Back and Let Me Know.
Previous and related coverage:
Elon Musk: $35,000 Tesla Model 3 arrives but job cuts coming as sales shift online
Tesla to slash sales force now that the Model 3 electric car is finally ready to order.
Tesla patent aims to boost manufacturing through augmented reality
The new patent could bring augmented reality applications to Tesla factories.
Tesla fatal crash: Parents of dead teen sue over alleged faulty battery
Tesla accused of providing unsafe, fire-prone batteries.
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