GM and Ford take cues from Tesla, but try to avoid Musk’s mistakes

People visit Ford’s all-electric SUV Mustang Mach-E at the 2019 Los Angeles Auto Show in Los Angeles, the United States, on November 22, 2019.

Xinhua via Getty Images

DETROIT – “Respect …” It was a simple statement from Ford Motor CEO Jim Farley, who acknowledged Tesla CEO Elon Musk’s tweet that the two companies were “the only American automakers that didn’t go bankrupt from thousands of car starts went”.

Farley’s retweet from Musk earlier this month was a blow to his Detroit rivals while realizing what Tesla has accomplished. Ford has often campaigned for its survival in the Great Recession after rivals General Motors and Chrysler, now part of Stellantis, went bankrupt in 2009.

It was also one of the recent examples of senior automaker executives showing some appreciation for Musk. They have also adopted at least some of his company’s strategies to catch up on Tesla’s worldwide sales of electric vehicles.

“What I take away from Tesla’s success is that there is a huge market for electric vehicles, and they confirmed it,” said Mary Barra, GM’s CEO, during an online discussion Thursday for the business club’s Women in Business event from New York.

Tesla is credited with pressuring old automakers to accelerate plans for all-electric vehicles, but Musk and his company were also ahead of the curve on other technologies, such as wireless software updates and localized battery cell production.

Here’s what they take from Tesla’s success – and what to avoid.

Battery cell production

Tesla has been producing battery cells domestically since 2017 as part of a partnership with Panasonic. This was just recently announced by GM, while Ford likes the idea but has not announced any specific plans.

“We need to bring battery manufacturing to the US,” Farley said during a Wolfe Research conference last month. He said it was an “important” problem to support logistics and avoid problems in the supply chain.

Tesla makes the batteries for its vehicles on one side of its Gigafactory in Nevada, while Panasonic makes cells for them on the other. However, Tesla announced to investors in September that the company had also started producing its own cells at a pilot facility in Fremont, California.

Industry insiders, alarmed by the impact a semiconductor shortage had on automakers last year, warned that battery cell shortages could hit U.S. automakers next, citing the plethora of new electric vehicles entering the market. Making cells in-house or collaborating on production like at Tesla is expected to help automakers make profits and control production.

“We want to be in control of our own destinies by not only making sure we have the cells we need but also working on cost and technology improvements,” Barra said during the company’s latest earnings call.

GM is expected to quickly become a major player in battery cell production through a joint venture with LG Chem. As part of their Ultium Cells joint venture, GM and LG are currently spending $ 2.3 billion on a new battery cell plant in Ohio. The facility is expected to be completed in 2022.

GM also confirmed earlier this month that it is evaluating sites for a second facility, underscoring the importance GM is placing on ramping up battery cell production in the US. It also signed a deal last week with a Massachusetts Institute of Technology spin-out to jointly develop next-generation electric vehicle batteries that are expected to reduce the cost of the technology by 60%.

The German car manufacturer Volkswagen announced on Monday that it would build six production plants for battery cells in Europe by 2030. As part of a “Power Day” highlighting the company’s advance, the plants were also referred to as “gigafactories” in electric vehicles. The event has been compared by some to Tesla’s “Battery Day”.

technology

If imitation is the ultimate form of flattery, Musk must have blushed when Ford launched the all-electric Mustang Mach-E crossover. The vehicle was immediately compared to the Tesla Model Y, particularly for its performance and its modern and minimalist interior with a large screen.

The new Tesla Model Y is presented. Tesla has expanded its model range to include an SUV based on the current Model 3.

Hannes Breustedt | Image Alliance | Getty Images

The main difference in the interior of the Mach-E compared to the Y model is the addition of a driver-mounted information screen. The Tesla Model Y only has a center-mounted screen.

In addition to interior design, the Mustang Mach-E also offers wireless or remote updates – an emerging trend in the automotive industry developed by Tesla.

While GM has had radio links (OTA) in its vehicles through its OnStar division for decades, Tesla has made significant changes to its vehicles since 2012, including vehicle characteristics. This is something most automakers have shown interest in only recently.

When it comes to charging electric vehicles, Tesla has its own “Supercharger” network. Automakers like GM and Ford have shown no interest in owning their own public charging systems. Instead, they have announced partnerships with companies specializing in EV infrastructure such as ChargePoint, Volta Charging or the Volkswagen subsidiary Electrify America.

Autopilot

One technology that the Mach-E couldn’t compete with on the Model Y was the autopilot driver assistance system. Instead, it took a page from GM’s playbook.

GM’s Super Cruise driver assistance system uses facial recognition to determine whether the driver is paying attention or not. The monitoring also ensures that drivers do not have to “check in” by touching the steering wheel, as is the case with Tesla vehicles.

According to Ford, the Active Drive Assist system enables hands-free calling on more than 100,000 miles of shared highways in the United States and Canada.

ford

The monitoring system reduces the risk of misuse of the function. Some Tesla drivers have found workarounds for “check-in” so they can be less alert or even leave the driver’s seat and move to other areas of their vehicle.

Ford’s Mach-E and other vehicles are expected to have a facial recognition system similar to that of GM’s by the end of this year. Both Ford and GM systems can only be used on pre-mapped highway roads.

The Tesla system can be used on highways and city streets. Also, no pre-mapped roads are used, but a redundant system of cameras, radars and other sensors on board is used to propel the vehicle when it is switched on.

The National Transportation Safety Board on Friday called for stricter federal requirements for the design and use of automated driving systems on public roads in the United States, citing Tesla’s practices and system design as an example of why this is required.

Manufacturing

No company is perfect at making vehicles, but GM and Ford see themselves pretty well versed when it comes to mass producing cars and trucks.

While Tesla has expanded its production significantly in recent years, including a new plant in China, it has had to go through Musk’s self-proclaimed “production hell” and is still learning a few things.

For example, last month Tesla agreed to recall 134,951 Model S and X vehicles in the US due to touchscreen errors that could result in the loss of several safety-related functions while driving.

A view of the dashboard on a new Tesla Model S car in a Tesla showroom on November 5, 2013 in Palo Alto, California.

Justin Sullivan | Getty Images

The root of Tesla’s problem with the screens is that some of the parts were not what the industry calls “automotive grade”. While there is no hard and fast definition, they are usually parts that are rigorously tested and have a lifespan of at least 10 years or 150,000 miles, if not the life of the vehicle.

Tesla said in a letter to federal regulators in January that the faulty portion of the screen should only last five to six years. That said, they weren’t automotive grade, a cornerstone of production for most of the automakers.

“This was a bad decision by Tesla. They should never have used this component this way,” said Sam Abuelsamid, engineer and principal research analyst at Guidehouse Insights. “Electronics should outlast the life of the vehicle. They should never be replaced during the entire life cycle of this vehicle.”

Social media

While Ford’s Farley and GM’s Barra are increasingly using social media to exchange messages and connect with followers – which Musk does all the time – they’re far more conservative when compared to the CEO of Tesla and SpaceX. They also avoided drawing the wrath of the Security and Exchange Commission.

In September 2018, Musk was sued by the Securities and Exchange Commission for allegedly making “false and misleading” statements and failing to properly inform regulators of material corporate events. In response to Musk’s now infamous tweet, he had secured funding to potentially take the company private for $ 420 per share.

Days after the SEC filing, the two sides announced a settlement that included fines of $ 40 million, and Musk resigned his role as chairman for at least three years. The fines were split evenly between Musk and Tesla.

Farley, who joined Twitter in March 2019, has increased his presence on the platform since becoming CEO in October. He also used the platform in the early days of the coronavirus pandemic to chat a little with memes from his late cousin Chris Farley, a comedian made famous by NBC’s “Saturday Night Live” and a number of films in the 1990s Spread laughter.

Farley has more than 31,000 followers while Barra has 55,500. That’s comparable to Musk, who joined in June 2009 and has 49 million followers.

Comments are closed.