Let's get this out of the way upfront, "Tesla is more than an electric car company" (or at least it should be thought of as such).
Traditional car manufacturers shouldn't think of Tesla as "another car company competitor" at all. They simply can't afford to ignore it or make the same mistake that early PC manufacturers made with Apple by dismissing it as a niche company.
Tesla like Apple?
The parallels (only listing a couple here):
When Apple introduced its first computer, it wasn't the first personal computer ever made. It simplified the approach and made it easier to adopt as a platform. They didn't just come out with a better computer, they provided an easier OS and approach for the community. They opened up the possibility of folks having a computer at home AND having a way to use it. Likewise, Tesla isn't the first electric car company. It simplified the concept and made it easier for folks to engage with it. How so? Tesla didn't just come out with a car, they also came out with a SuperCharger network, a different sales channel, and a comprehensive service approach. In other words, they came out swinging at most of the concerns people had with purchasing an electric car.
As Apple grew, it didn't just focus on new software and hardware, it also focused on interoperability with other hardware and software, it improved the user experience (all the way to the aesthetically pleasing look of the devices). Tesla, like Apple in the early days, also continued to improve its software and hardware (better motors, Self driving tech, etc.). However, also, like Apple, it continues to improve the driver interaction (like "Ludicrous speed", "Summon feature", etc.) and user experience (even providing Easter eggs for entertainment - after all, what other auto company provides "Romance mode" or "Emissions Test mode... aka Fart mode"?).
Steve Jobs (the visionary of the company) was forced out by the "more conventional" board members and replaced with a "traditional" CEO. Elon Musk (the visionary) was recently almost forced out of the CEO role, was able to retain the CEO title (though he had to cede the Chariman role). Hopefully, this will be a move with a better outcome than Apple's "lull years" ( a time where PC manufacturers dominated and Apple fell into a "niche" computer company serving specific industries like graphic-dominated industries, education sectors, etc. Its rebirth didn't come until Jobs' return and refocusing many years later). Herein lies the opportunity for Tesla to avoid the mistakes made by Apple and focus on what made Apple a dominant player in recent years (though I fear that Apple may nowadays be floundering a bit; but I digress.. I might have to write a separate article on Apple's dilemma).
Why traditional Companies should take note:
Most automobile companies have, by now, ensured that they have a pathway to more "green" transportation like electric cars. That said, electric cars are NOT new. As matter of fact, I believe that they pre-date the traditional automobile with combustion-engine (see History of the Electric Car).
Why then is Tesla causing such a stir? Of course, one of the major differences has to do with the advent of new battery technologies and Tesla's innovative design/placement of the battery "pack". This approach garnered Tesla superior travel-distance and added perfunctory benefits like great handling. But innovative batteries and more-effective electric motors aren't the only differences that Tesla provides. Like early worries about combustion engines (think of what it must've been like for folks used to horse buggies to be sitting on a fire-breathing-engine that required oil and gas to run), Tesla had to address concerns such as running out of power. Tesla endeavored to lay that fear to rest by rolling out a national "supercharger network". Lastly, and probably more important for traditional companies, is what I call, "the Tesla Difference". Tesla's integration of technology is masterful. Aside the bells and whistles mentioned above and the sizzle of retracting door handles, motorized gull-wing doors, touch-screen command module and the like, is the continuous improvement provided by "over-the-air" updates. Traditionally, if there are new features or functionality, or even firmware changes needed on your car, it means that you need either a brand new car or need to make a trip to the dealer, which, is accompanied by inconveniences, scheduling issues, and potential time off. With Tesla, over-the-air updates allow its users/drivers to enjoy updates without these hassles. Not to say that traditional car manufactures haven't been moving into "tech-dom". Afterall, more and more are incorporating Apple's iOS CarPlay or Android's Auto and some are taking steps to include more functional touchscreens and even some over-the-air software updates (e.g. Mercedes Benz's MBUX infotainment system). BUT, a fundamental paradigm shift is needed for these traditional companies if they wish to survive in this century.
Although Tesla could probably benefit from some traditional manufacturing processes (to reduce costs and improve "manufacturability"), and still has questions about resale values and battery-life, it is a worthy competitor to traditional cars even in most "traditional" aspects measured today (performance, safety, etc.).
So, what's next [for Tesla]?:
Like Apple, Tesla has a bit of runway with new product(s) (sports car, pickup, Big Rig, etc.). BUT, Tesla will soon face serious competition in the auto market. It's already built a brand following and now needs to, quickly, ensure that it provides a unique and robust eco-system that makes users/drivers want to remain with Tesla. Apple provides iTunes and iCloud and other eco-system incentives that keep its users "dependent". Another, more profitable, example is Amazon Prime. It not only guarantees Amazon billions of recurring dollars, but it ensures that members don't have a desire or necessity to leave.
In short, Tesla needs to develop a brand-ecosystem that provides intrinsic value in such a way that the experience makes the user/driver captive. This member-like dependency on a brand ecosystem is novel for the auto industry (though there are brand aficionados) but I believe it is the necessary, short-term "next step".
Longer term, urban areas are certain to move folks away from automobile ownership altogether. Auto-services will be more prevalent; especially with increasing adoption of self-driving vehicles making the "experience" more important than the device. I predict that the brands that will have built worth-while (& valuable) ecosystems today will be the leaders of that next wave of personal transportation.
Onward and Upward !
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