Consider, if you will, Tesla‘s recent “Battery Day”i performance wherein Elon’s prized pig reaffirmed its continued leadership as a military technologyii company rather than yet another blah blah branding company.iii Battery Day was, of course, low-key misunderstood as being “not revolutionary enough” by people who only read Yahoo! Finance headlines for their “news,” but that in no way undermines the significance of the trajectory and the depth of progress revealed this week. Tesla is doing the hard, grueling, unsung work. This is the trench warfare approach.iv
Mercedes, by contrast, is taking the despotism approach. By appealing to those interested in design,v material quality, status, and “culture,” the three-pointed star is on a mission – and a roll – at the moment, as demonstrated by their recent collab with “The Ghanaian Warhol” himself and also with left-field choices like James Cameron and charismatic unknowns like Kelvyn Colt,vi to say nothing of Lewis “I Can Take The Heat” Hamilton and his entire $500 mn/yr F1 marketing extravaganza. The best or nothing indeed! What Idi Amin could refuse?
Back in the trenches, Tesla just doubled the range and horsepower of an 8-plus-year-old design and called it “Plaid,”vii lest any of your bunker-mates think you were being too flashy, before teasing a Corolla-beater and finally going back to the main course: waging war on every other carmaker extant by vertically integrating their manufacturing from raw mined material all the way to the finished product on the customer’s driveway. Oh, and hinting in a very Jobsian way that “in the long-term” they’ll have just “1% of the market,” even if that means that the company will be 50% bigger in terms of annual production than the two biggest car manufacturers in the world right now combined, and that’s before we even talk about the sales of batteries to other car companies, not to mention private individuals for their homes and cities for their infrastructural security.
Even if this takes a decade or two (or three) to realise and is yet another example of Elon somewhat over-promising and under-delivering, he has a funny way of being right over a long enough time horizon so I can’t in good conscience bet against him.viii Tesla just goes so far beyond being a car company in the narrowly defined way that Mercedes is. Tesla is certainly a car company (like Mercedes), but it’s also an energy company (like a utility),ix a software company (like Google), a finance company (like a bank),x and arguably a war machine. Its market opportunities are therefore unbounded from the strictures of any one segment, which is exactly whats being priced into its USD $380 bn marketxi cap in this ZIRP/MMT environment.xii
Mercedes, on the other hand, makes products that feel like the people who put them together cared. That craft and attention to detail mattered. That paint quality, stitching alignment, leather tanning, switchgear movement, and acoustic isolation were prioritised as much as performance figures on a page, if not more.
Now, which you prefer says more about you than anything about the products themselves. Are you the Taylorxiii type who really loves vegan-lined-leather? Or the Muammar Gaddafi type who really love leather-bound-vegans? It’s up to you.
But whips don’t lie.
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- The US DoD is no doubt keeping Tesla’s technological moonshots in its firm sights, and likely even adding a few “nudges” along the way as it aims for a “Third Offset” to both counter and capture the rise of asymmetric weapons like drone swarms and solid state lasers, the kinds of batteries and AI developments that Tesla in particular is leaping so far ahead with will surely prove immensely valuable militarily. Don’t be surprised if Gigafactories and Terafactories of the future are patrolled by Marines, no matter where they are in the world. ↩
- Per JB on “branding” :
What we think of as “Rolls-Royce” today is actually a clean-sheet venture undertaken by BMW at the turn of the century; the firm’s production facilities at Crewe were retained by Volkswagen for its Bentley sub-brand. Not that Henry Royce ever turned a wrench at Crewe, mind you.
In other words, it’s more than a little justified to dismiss Rolls-Royce as nothing but a brand. The modern idea of a brand is substantially younger than the jet plane or the digital computer. The purpose of a brand is to erase meaning via the pretense of creating it. The automakers talk about “brand DNA” which is, of course, a ridiculous idea. It’s all a shell game designed to help you define yourself via your consumption of products which are nearly identical to, but labeled differently from, the products consumed by others.
He’s not wrong. The difference between a BMW, Audi, Volkswagen, or even Hyundai is less than you might think if you were blindfolded and ignorant of their various marketing machinations. And did you notice that none of the aforementioned brands has much in the way of a cult following? Now compare this doleful malaise with the childlike exuberance of your average Teslarati. And why do you suppose that difference exists? Because soldiers of change need a fervent cause to believe in. Despots, on the other hand, are more interested in champagne, caviar, beautifully crafted leather recliners, and map pins. ↩
- As Americans do! ↩
- Tagging an 11-year-old movie is odd at best, but the AVTR concept snagged the Frank Stephenson hook, line and sinker, so that’s a win in the despotism column! ↩
- This is where Mercedes is at vis-a-vis their new all-electric line-up, including the EQC crossover and EQS luxury sedan. I dunno about you, but I can’t stop playing it:
Likewise, The Weeknd is in the mix. ↩
- A family sedan with 850km range, 1100hp, an actually useful charging network, and the handling chops to lap Laguna Seca faster than a McLaren P1 is like something out of a Jules Verne novel. And yet, there it is for a paltry CAD$189,900, or about as much as a Taycan Turbo (not even the Turbo S). Lest you end up with the P-car only to discover that “charging” is more akin to “going down the lane to the pharmacist’s for a litre of petrol for your horseless carriage” than car ownership as you previously knew, ask yourself, what would Pol Pot do? ↩
- Bitcoin, in its first decade, was very much akin to Tesla in this case study. Bitcoin’s “branding” has always been about as effective as a paper airplane in a rainstorm but its technology was just so far ahead of the curve that it couldn’t help but win out over the long haul. Bitcoin is evolving though. It’s getting easier to use, easier to spend, easier to (whisper it) enjoy. As it makes its early zealots into fabulously wealthy young men, the pressures for it to “civilise” are growing. Not that it can be co-opted per se but its adherents still live in a competitively social world, one largely decaying and hungry for hope. The opportunity is therefore all too real for Bitcoin to evolve into a more despotic form, quite contrary to the “democratic” pastiche falsely yet frequently applied to its oil-slicked adamantium hull. ↩
- Tesla is also arguably an energy company in the other sense of the term. That’s positive (sum) thinking for you! ↩
- As a bank, Tesla takes no-interest “deposits” and then delivers products at some point in the undefined future. This is basically sine qua non in modern capitalism but Tesla does it better than almost any other company, automotive or otherwise. So well so in fact that it has an amnestic effect on deposit holders, at least yours truly. When I lost my credit card on the streets of Vancouver this past week, a Tesla dealership that I hadn’t even set foot into called me a few hours letter to let me know they had my card in-hand. They’d punched my name into their system, saw that I had a deposit on the Cybertruck, called me to let me know they’d found the by-then-cancelled card, and reminded me of the pre-order that I’d clearly all-but-forgotten about during my recent search for something more isolationist. Not that this really halts my search. I’m just more the Mercedes 600 Grosser type than the Hennessey VelociRaptor type, simple as that. ↩
- To get a sense of Tesla’s potential, add up the market caps of Volkswagen, Toyota, General Motors, Ford, Boeing, Raytheon, Northrop Grumman, Lockheed Martin, TMSC, Panasonic, and 100 of the world’s largest utility companies. ↩