Tesla’s One Core Advantage

Credit to Author: Zachary Shahan| Date: Sun, 25 Oct 2020 06:18:54 +0000

Published on October 25th, 2020 | by Zachary Shahan

October 25th, 2020 by  

“If it ain’t broke, don’t fix it.” That’s a maxim that I imagine could get you fired from Tesla. Tesla is obsessively focused on “fixing” what is working fine but not working as well as it could be. Tesla is obsessively trying to take products and systems apart, whittle them down to their core, and build them up again in a smarter, more efficient way. Tesla is obsessively trying to innovate in order to advance its mission: accelerating the world’s transition to clean, sustainable energy.

I’ve been covering Tesla since 2012. In those first few years, I learned a great deal about Tesla and CleanTechnica became a top website to follow for Tesla news and analysis. We’re way past 2012 (we sort of feels like a different lifetime), and each year covering Tesla, I’ve learned much more about the company and put many more puzzle pieces together to understand what it’s doing, how it’s doing it, and what it’s doing differently from other companies. Almost every step deeper has given me the impression that Tesla is even more different from “competitors” than I had assumed, and even further ahead of the competition.

As I wrote at the top, the one big thing that keeps standing out is Tesla is absolutely obsessive about innovation. Tesla CEO Elon Musk tweeted something along these lines in September 2018 (which I can’t believe is more than two years ago now) in response to one of our articles:

Pace of innovation is all that matters in the long run

— Elon Musk (@elonmusk) September 26, 2018

That line that “pace of innovation is all that matters in the long run” was a potent insight into the matter. Elon tweets many interesting things, and reveals an enormous amount about Tesla on Twitter — big-picture things as well as tiny matters. That line above is one that cuts through all levels of Tesla, from what I have seen, and I think is now the quote of his that we have referenced the most. The author of that article wrote an entire piece on that matter this year, and I highly recommend it if you haven’t read it yet: “7 Reasons Why Tesla Will Benefit From The Crisis — #5: Pace Of Innovation (New Video).” Side note: I think at this point that you can say Alex absolutely nailed it with that series about how Tesla would come out of the coronavirus crisis in a better position than going into it — not that the pandemic is over of course, but it’s clear that Tesla is doing far, far better than the rest of the industry.

We’ve also toured a couple of Tesla factories (its main Fremont factory and its seat factory in Fremont) and interviewed President of Automotive Jerome Guillen. I’ve done several podcasts and had many more conversations with David Havasi, who worked at Tesla from 2012 to 2019. I’ve spoken with current and former Tesla employees at all different levels and in different sections of the business. The theme throughout is innovation — trying to start on a goal from the ground up, trying new things, dropping one system and switching to another if it seems like there could be a notable boost in performance, efficiency, effectiveness.

Elon Musk used to talk often about solving problems from a first principles perspective, and all kinds of people — from his brother Kimbal to Jim Kellar to Larry Ellison to Ron Baron to factory employees — have spoken about his superb and highly unusual ability to look at a problem, dismantle it to its basics, and find a solution others couldn’t find.

But Elon Musk is not Tesla. These days, it seems like the thing he is most likely to say — whether publicly or in private chats — is the Tesla team deserves all the credit. No doubt — Tesla is achieving amazing things because it has a huge number of extremely passionate, hard-working, talented people on the team. However, even if you have Michael Jordan and Dennis Rodman on the team, if you tell Jordan he can’t shoot more than 10 shots a game and you tell Rodman to stand on the perimeter half the time and forget about rebounds, you’re going to do much worse than you would otherwise. That is not a perfect metaphor, but the point is that Musk is coaching his superstars in a way that encourages them to do their thing, find innovative ways to solve the extremely hard challenges in front of them, and rapidly move the ball around until they find the opening (solution) the team (company) needs.

Musk is famous (or in some cases or to some people infamous) for throwing normal processes, corporate management flows, MBA assumptions, Wall Street norms, and employee expectations in the trash in order to sharpen Tesla’s pointed objective — innovate faster.

When you look at other large companies that Tesla is competing with in 12 to 17 different industries, even the more nimble ones do not seem to have as thorough an obsession with innovation. The older, more “established” competitors are in an entirely different world, a world that puts up numerous barriers to change at the same time as a company makes claims of rapid innovation and cutting-edge leadership.

Tesla has a path to autonomous driving that no one else has because of its rapid evolution and outside-the-box-lidar approach to the problem. Tesla is getting into “revolutionary” insurance because the status quo just doesn’t cut it for where Tesla is today and certainly not for where it’s going. Tesla is rapidly rolling out solar panel roofs and glass solar roof tiles because it cut entire processes other companies rely on and also decided to spend years on an engineering challenge many in the industry had written off as pointless. Tesla has the best selling electric car in the world by a large margin because of dozens upon dozens of things Tesla decided to do that had never been done in the auto industry — or sometimes in any industry — before.

A normal corporate giant has many levels of management review, many levels of incremental approval, many levels of hesitant “don’t shake the boat” employees slowing things down, and various levels of “let’s discuss this for 30–70 hours before making any changes” before innovation can be implemented. I think that Elon looks for opportunities to chop at and excavate those barriers more than any other major CEO.

As a result, whether it’s with battery design, mining, where and how to stick batteries in a car, insurance, the machine that makes the machine, solar installation, solar shingles, self-driving software, supercomputers and other self-driving hardware, infotainment, how to create the body of a car, service & sales, internal communication channels, PR, company meetings, charging, or corporate marketing, Tesla is obsessed with looking at the topic afresh, considering new options, and innovating. This is the one core advantage that is spread throughout the company, an advantage that makes it exceedingly hard (impossible?) for competitors to catch up with Tesla. It can also come with challenges and drawbacks at times! That is one reason high levels of innovation are so unusual. But it clearly moves Tesla forward on a conveyor belt at a pace that is sometimes hard to believe.

Interested in buying a Tesla vehicle or Tesla solar? You are free to use my Tesla referral code — https://ts.la/zachary63404 — for some bonus Supercharging miles and/or $100 off the solar power system. Don’t worry — it doesn’t bite.

Full disclosure: I own stock in Tesla [NASDAQ:TSLA]. However, I do not offer any investment advice of any sort and neither does CleanTechnica. 
 


 

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is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in NIO [NIO], Tesla [TSLA], and Xpeng [XPEV]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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