The news yesterday that GM would stop funding robotaxi arm Cruise and integrate the San Francisco-based company back into the Detroit-based one was a surprise to no one even casually paying attention to the auto industry. Amazingly, it caught some of the people who work at Cruise off-guard. It’s yet another sign of the disconnect between West Coast tech companies and traditional automakers.
Today’s Morning Dump is all about automakers trying to figure out the future. GM isn’t alone in seeking outside help, of course.
Volkswagen is looking to exterior partners like Rivian in the United States and, in China, companies like autonomous firm Horizon Robotics. Mercedes isn’t in VW-levels of trouble, though it doesn’t have big trucks like GM to fall back on for profits during this tough transition. It’s developing its own platform in-house to try and win the future, which is a big bet.
Nissan is in the middle of its own reckoning, though not because it’s trapped between dueling philosophies. Nissan has no obvious philosophy right now and is in the executive-shuffling game at the moment as it tries to survive this next round of automotive transformation.
Public Automakers Make Bad Tech Investors
I think the success of Tesla CEO Elon Musk is due in no small part to his ability to outlast his own investors. If you watch The Big Short you’ll remember that all the characters in the film, and especially the Christian Bale character, had to deal with investors or partners uncomfortable with enduring month after month of poor returns even with the promise of a big payday at the end.
Tesla’s board is controlled by Musk and Musk is ok with seeing investors panic and lose money in the short term because he thinks he’s creating value in the long term. So far, he’s been correct. Almost no other publicly traded automaker is structured in a way that it can withstand long-term stock price disruptions.
The greatest example of this happened during the pandemic. Almost every automaker saw its margins rise as they used the chip shortage to justify marking up cars. What did Tesla do? It lowered prices in order to disrupt its competitors and hold onto market share, especially in China. This screwed companies like Polestar and made life difficult for pretty much everyone else. Tesla’s stock price was none the better for it, but it didn’t matter.
GM pulled the plug on Cruise last night, which is wild since it once expected Cruise to bring in $50 billion in annual revenue by the end of the decade. Whether it’s car subscription services or electrification, big automakers have not historically exhibited the backbone to withstand years and years of losses in order to eventually make money. Tesla was a huge money-loser for years, even while it was buoyed by all sorts of public money and carbon offset credits, but it had to make its strategy work.
Again, this isn’t just a GM thing. Ford and Volkswagen got out of Argo after years of investment, for example. Car company execs are always at risk of being replaced in a way Musk is not. The companies themselves are not immune to activist investors and there’s always a Kirk Kerkorian waiting in the wings.
After all the tsuris caused by Cruise, it should have been clear to everyone that GM did not have the desire to lose billions of dollars every year in pursuit of robotaxis, even as the company was planning to roll out robotaxis in Houston next year. According to this TechCrunch article, some employees were blindsided by the news at a quickly-organized all-hands meeting:
That meeting was short and unsatisfactory, according to one source, who noted that the senior leadership team was also surprised by this turn of events. Whitten, president and chief technology officer Mo Elshenawy, and chief administrative officer Craig Glidden, led the all-hands.
Several Cruise employees who spoke to TechCrunch on condition of anonymity said they were “surprised” and “blindsided” by the decision. One source told TechCrunch that employees learned about GM’s plans the same time the media did.
Staff were told they “should be proud” of themselves and that “the technology will live on,” noting there would be a restructuring and that it would take several months for Cruise to transition to GM’s team.
I don’t blame the employees for being surprised. If your experience is at tech companies like Apple, which spent ten years and billions of dollars not building an electric car, then it might not seem strange for a rich company like GM to keep pouring money into a money-loser.
GM is not Apple and the bed was made last November when GM announced it would focus on returning value to shareholders and increase dividends in 2024. There was no way for GM to do that while also continuing to lose money on Cruise.
Cruise could have been a success and was ahead of a lot of would-be cybertaxi companies, but there’s no guarantee it was going to work. GM just didn’t have the appetite to find out and probably never did.
Not like trying to be a tech company ever really works out for automakers. Volkswagen tried to build its own in-house software unit and it was such a disaster the company had to partner with Rivian and outsource its software development.
I think Ford has the best approach here. It’s good at making cars and it’ll keep making cars, trucks, and commercial vehicles. It’s decent at commercial vehicle software and will keep doing that as well. Its brand-new, cheap, world-beating electric car? Ford set up its own team in California and left them alone. Rather than trying to merge cultures, it’s letting the cultures be distinct enough to find success.
Volkswagen Is Going To Let China Run China
Volkswagen CEO Oliver Blume went to China this week and talked to the kids at Shanghai’s Tongji University to tout what VW is calling its “in China, for China” strategy, which is code for: Don’t be so arrogant as to think we can always do better than the locals.
From Bloomberg via The Detroit News:
“We’ve realized that in such a price sensitive market as China, you must cut costs,” he said. “This poses a big challenge to our engineering technology development, as well as manufacturing.”
Through VW’s investments in and partnerships with companies like battery maker Gotion High-Tech Co., autonomous driving solutions firm Horizon Robotics Inc. and EV maker Xpeng Inc., the group can innovate its vehicle platforms and brand faster and more effectively, Blume added.
The automaker last month renewed its joint venture contract with state-owned manufacturer SAIC Motor Corp., and Blume said he looked forward to a new beginning. VW will become more nimble and turn to newer drivetrains that are popular with Chinese consumers, including plug-in hybrids and range-extended EVs, both of which are powered by batteries and conventional internal combustion engines.
Volkswagen is obviously also doing this with Scout and Rivian in the United States, which makes a lot of sense to me. It’s a huge department from the Piech/Winterkorn eras of the company and the belief that the best decisions are made in Wolfsburg.
Mercedes Maybe Gets One More Chance At EVs
The Mercedes EQ series of cars was the wrong idea at the wrong time. The cars look like weirdo futuristic Dodge Intrepids. The prices are too high for vehicles that are covered in plastic and screens. An EQS does not feel or look like an S-Class.
There’s a long and fascinating profile of Mercedes CEO Ola Källenius in Manager Magazine that comes in the footsteps of the company reshuffling its management board, and it includes a lot we could talk about, including:
“The pressure is increasing,” says one top executive, who prefers to keep her name secret. Employee representatives criticize Källenius, saying that his constant cost-cutting is only serving the shareholders. “The mood is bad,” says one supervisory board member. “But that’s hardly surprising when I’m constantly pressing the panic button and want to solve all problems with cost-cutting,” says another supervisor.
Even investors are dissatisfied. They have long been spoiled by Källenius and CFO Harald Wilhelm, who have paid out around 20 billion euros in dividends since 2019 and invested almost 7 billion in share buybacks. But the share is not performing, and Moritz Kronenberger , fund manager at Union Investment, expresses his displeasure very clearly: “We consider the strategy to have failed.” He says that Källenius lacks consistency, for example in the luxury strategy, explains Kronenberger. “If I focus on luxury, I have to do it right and reduce production capacities accordingly.”
This will all sound familiar to people who took a ride on the Carlos Tavares Stellantis Good Time Bad Time Roller Coaster.
But I’m more interested in how much Mercedes has tied up in the success of the new Mercedes CLA platform:
A whole family of models will follow on its basis, replacing the A and B classes. In 2023, Mercedes sold around 620,000 cars in this segment; Källenius needs the CLA and its derivatives if he wants to keep costs under control. This is another reason why the boss is so keen to tell visitors what the car can do: 750 kilometers of range, only twelve kilowatt hours of power consumption per 100 kilometers – and thus finally less than Tesla’s Model 3, for example. The CLA is the first Mercedes to be controlled by the in-house developed operating system MB.OS – not yet with quite as few computers as Tesla or some Chinese competitors, but still significantly faster than previous models.
If the CLA also flops that’s probably the end for this current round of Mercedes leadership.
Nissan Reshuffles Leadership Deck
Nissan is in a bad way and recently announced that, while it’s keeping CEO Makoto Uchida, it’ll move its current CFO out to deal with China. In his place, the current head of Nissan Americas Jeremie Papin will be taking the job.
That means there’s an opening here in America and it’ll be Christian Meunier slotting into that role. You’ll remember him as the guy who was Jeep’s CEO for a hot minute. He was also chair of Nissan’s luxury brand Infiniti after a long time with Nissan.
I’ll be honest, I barely remember Meunier and I don’t feel like Jeep did that great of a job during his brief tenure there, though that’s possibly not his fault given the larger issues at the company.
Given how pissed off dealers are at Nissan right now, the best thing Nissan could do is pick someone who dealers won’t hate. According to Automotive News, that might make this a smart choice:
Meunier, who previously also worked at Mercedes-Benz, Ford Motor Co. and Land Rover in North America and Europe, is an experienced operator and a known entity to Nissan’s U.S. retailers. He didn’t return a request for comment from Automotive News.
Former Nissan National Dealer Advisory Board Chairman Tyler Slade said Meunier is the “perfect executive to lead Nissan back to relevance.”
Meunier’s experience at the highest levels of Nissan Motor Co. will allow him to better advocate for the region’s interests in Yokohama.
“Meunier knows the Nissan culture, he knows the Nissan struggles, he knows the people, and he has a great relationship with the dealers,” said Slade, operating partner at Tim Dahle Nissan Southtowne in suburban Salt Lake City.
Ok, then. Good luck.
Nissan is a historically cool brand with a history of making great products and it’s not impossible for the company to get back to it. The car world is a better place when Nissan lives up to its potential.
What I’m Listening To While Writing TMD
I have to assemble an Ikea dresser today so MSTRKRFT’s “Runaway” is vibey and fun enough to get me moving.
The Big Question
Is it harder for a tech company to make a car, or for a car company to make tech?
I never get over the fact that people seem to think shareholders are supposed to shovel money into the company for payroll and production and not expecting anything in return. If I invest my hard earned money I expect to make money not lose it. I bet everyone here would as well.
Agreed. But devils advocate, everyone on this site gripes over mega corporations chasing quarterly profits over long term outlook and the shareholders you’re seemingly defending very vocally demand for that. Because good enough is never good enough and the shareholders demand unrealistic YOY increases and growth; if a plain and simple steady profit isn’t good enough spending money now for a better later certainly wouldn’t be tolerated.
I’m a shareholder in a lot of companies via my retirement accounts. I’m less interested in big, splashy short term gains and more interested in slow, steady long-term growth that will result in me being able to retire. The focus on short term gains doesn’t benefit a majority of investors. It primarily bets those who are going short and long on the stock trying to make a quick buck, and the executives who are paid on short term results.
And they want to destroy the GM Ren Cen, that’s how its going to look (pictured above) before it gets demolished 🙁
Now they know how some pedestrians felt….
Too soon?
What was GM smoking when it put the €50 billion a year figure into its books? I doubt there is a taxi company in the world which makes a tenth of that…
And unlike some tech companies, which can claim half the population of the world clicks on their pages with no one able to check, if you make cars, or run taxis, they are there on the ground and can be counted.
But but but you can have your car make you money while you are sleeping. Not everyone sleeps at the same time. LOL.
I love your “clicks” analogy. Such an easy way to sell something to the CEO, especially when they have no clue whether you are full of poop or not.
South Park’s Underwear Gnome meme is an appropriate answer.
Car companies “make tech” everyday. They don’t excel at infotainment UX, but they have competent enough software engineers.
Tech companies cannot make cars.
This really begs the question of: why are tech workers paid more than automotive tech workers???
It’s harder to build cars than tech. Building cars involves mostly physical stuff. While, I will modify my statement to read “It’s more expensive to build cars than tech”. There are so many more physical overheads required to achieve an automotive end product than there are in any tech products (exception, Lithography machines).
To me, the automated car solution is a generation length (20+ years) development project. There is no patience in the market to solve it. There is no chance that the market will shift to allow the patience needed to solve it. This is why GM bailed.
Tesla is only in this because of the government subsidies given to them to build the “electric car future”. Those subsidies are shrinking daily, and are likely to fully disappear in a couple months. At that point, no one will be willing to invest in that future until those subsidies come back. Tesla will continue to dominate.
I still don’t understand how “people who write code” are worth so much more than every other type of engineer out there. At this point, that is not a new discipline. There is literally no reason why that demographic is any more special than any other engineering demographic. I feel like the “tech bubble” is about to burst, or already has, and it’s just a slow explosion that hasn’t really taken affect of been identified as a thing.
“People who write code” are worth so much because of the market’s valuation of tech companies that inserts an enormous amount of capital into a company with very low overhead (compared to a mfg company). At the right company, writing code is basically printing money for the shareholders.
Well, yeah, of course it is. People who write code are often not interfacing with hardware. This leads to the “printing money” situation. But, that is only unique to web tech. I would argue that people who code for hardware have a much harder job because of that physical interaction. Not everyone is “mechanical” and can identify the transfer functions needed to make hardware work in real life. As such, a tech worker at an automotive company should make more? I don’t know. At the end of the day, if you make physical things, it’s going to require iteration. Iteration costs money. You can’t skip the iteration steps, only minimize them.
I totally agree with you. I didn’t mean that tech workers should make more! Just trying to parse why they DO make more.
Ah well, there are people who write code without copying and pasting other people’s work and mistakes — and the rest…
Pretty soon the copy/paste crowd will be replaced by AI, and then “the rest” will fix the code the AI spat out.
I think your assessment of automated cars being a generational development project is right on. I also think it’s then going to take another generation to get it fully implemented and in wide/universal use. There’s just too much inertia in the old, non-automated vehicle realm for a fast rollout. It will be glacial.
I could not agree more. I wanted to say as such. If we are being honest, it took ~2 generations to get rid of all the horses. This is equivalent.
And so many of these non automotive programmers or their UX programmers are woefully incapable of doing decent work. The people writing engine control software are tops, but nearly everything else I have to interact with is done with such bloated incompetence that they’d be on a round up list to be assigned the lowest rest stop bathroom cleanup jobs the day after I became emperor because “to each their capability”. Even then, I have little faith they’d excel and I’d expect to have to move them into medical labs to replace animal testing for both moral reasons and to streamline the approval process.
This is endemic of every job category. Just because you have a title, does not mean you are productive or contributing. Not sure I’d move them into the medical labs, but I think I get your point. 🙂
Exaggeration and cynicism are my
onlinelanguages.Auto companies will keep implementing all the worst aspects of being a tech company then run and shot to whoever will listen “Look we are just like them!” and wonder why they can’t hire/retain software talent, or their stock is not valued like a tech start-up all while making the employees who did not want to be subjected to the churn and burn of a tech company miserable in the pursuit of some goal that will never happen.
It’s about time GM realized the foolishness of “robotaxis”. A fleet of humans supervising and intervening in the operations of “autonomous” taxis makes them anything but autonomous. I predict that there won’t be a fully autonomous car in my lifetime. The software hurdles are too great to make a computer respond to every situation (there’s no such thing as an edge case when all cases are edge cases) and the hardware technology doesn’t exist to make a vehicle that can handle real weather. The sooner they deploy their resources elsewhere, the better off they’ll be. Just my lukewarm take.
(there’s no such thing as an edge case when all cases are edge cases)
Very well said
Didn’t Ford fire a CEO in the early 2010s for trying to pivot the automotive company to a tech company?
Alan Mulally was CEO till 2014 and was replaced by Mark Fields, who only made it to 2017, but 2017 isn’t early ’10s
Remember when Ron Johnson, a former Apple executive, became CEO of J.C. Penney and tried to reshape it into an Apple style store? Crash and burn. What works in the tech world does not necessarily work in other environments.
And vicaversa
John Scully of Pepsi fame cratered apple quite handily. He was reputed to be a marketing wizard.
The strategies that are failing are government central planning strategies. The auto manufacturers are just downstream from the bad regulations. Lather, rinse, repeat.
This is true, but they are also ‘suffering’ from the complacency that sets in from generations of existing with near-ironclad barriers to competition from regulatory capture. EV’s got to end-run the most onerous of those (the emissions regs) and new crops of competitors appeared that the oligopoly of the over-consolidated OECD automakers were no longer organized to meet.
Furthermore, insofar as those competitors are Chinese, this is very much a case of their own hubris coming back to bite them. They all collectively spent the last 20-30 years teaching the Chinese how to build competitive cars through the JV’s in China, which everyone knew were giant exercises in IP theft, but the fat vein of profit from an extremely populous and rapidly expanding economy was too much to ignore. The automakers all lied to themselves that they had really good controls in place to avoid getting their competitive advantages stolen, but it was all nonsense. The important stuff isn’t the flashy ‘high tech’ IP, it’s the processes and tolerances that are the cumulative product of a century of hard work of armies of the best engineers on the planet trying to figure out what it takes to build a good car. Unfortunately those are specifically what you need to teach to the local folks that are setting up and running the factories. This was predictable and predicted, but the execs were happy to bury their heads in the sand about it as long as the profits were rolling in.
How they’re going to weather this particular storm is beyond me, but I’m willing to predict that it is going to involve a lot of deferred ‘creative destruction’ coming due all at once.
I agree. The execs were happy as long as the profits were rolling in, but they were really happy as long as their bonuses kept rolling in.
The government needs to do two things to save the US auto manufacturing industry. Ban all Chinese vehicles, and relax the safety and emissions regulations. Cars are clean enough and safe enough. If the government rolled all the regulations back twenty years to 2004, the manufacturers wouldn’t necessarily roll back their corporate safety and emissions standards, but it would give them some leeway to make some interesting cars that might be cheaper and might sell in greater numbers than their current vehicles due to less regulation.
Remember that before safety and improved mpg regulations were implemented, there were manufacturers that independently pursued higher levels of safety and gas mileage as their main marketing identity. There’s no reason that wouldn’t happen again.
If GM wanted to sell a new version of the 2002 Trans Am with a manual transmission V8 and the safety and emissions standards of 2002, people would line up to buy it. If Volvo wanted to sell a new ICE station wagon with the current safety and emissions standards, people would line up to buy that. The market should be deciding these things, not bureaucrats in Washington who don’t know how to design or build a car.
The problem the auto industry has with tech is mostly down to how they manage talent, based on my firsthand experience the Big 3 don’t understand how to attract, compensate, and retain tech workers. They are used to hiring fresh college grads push them through their corporate meat grinder for 25 years and retire them out, with moderate levels of compensation and growth. Tech workers expect their challenges to change quickly and projects to go from inception to reality in a year or two, not half a decade, and their compensation expectations are well outside of the automakers human capital budgets.
I was employed by one, and told repeatedly I was “Highly Compensated” yet when I quit I got a 35% pay increase for my new job, and have gotten steady increases since. I never got a pay increase in 5 years as a direct OEM employee.
They all put together panels and sent out surveys and did all the things to make try to make the working environment “like Google”, except the things that actually make it like Google. “well, we can’t set aside time for creative project, or have an afternoon nap time, or be more flexible with work-from-home schedules, or have a beer fridge that unlocks at 5pm, but we’ll get a ping pong table”.
Hell, the Big 3 don’t even know how to retain their core workforce – instead of fostering growth and developing workers, their are happy to lay everyone off when it suits them and then have to offer a bunch more money to the same people to come back after they jumped ship to another manufacturer, then backfill with new college grads.
Bingo!
HR Kicked off 2021 by announcing “we’re giving everyone pay raises!!!” They spent all year fluffing this up with pomp and circumstance, finally in September I get a call from my boss, who starts the conversation with:
“I’m not happy to deliver this news to you, you’re getting a one time payment of 8%”
I quiet quit that day, and left the week of Thanksgiving for much greener pastures. 90% of everyone I worked with either left ahead of me, or did within a year of me leaving.
I don’t get it, why not keep your mouth shut then announce the raises when you hand them out? This sounds like a politician making promises about “something big is coming next week!” every week for years.
Well, the official company policy was “We don’t give raises, we assess compensation yearly; and address gaps when necessary” so this was them trying to appease the unwashed masses. Pretty sure it backfired spectacularly, that or they wanted to reduce the workforce without making even more layoff headlines.
The ping pong table is so spot on. And it sits unused because playing games at work is highly discouraged.
We did have several ping pong tables, and they did get heavily used, the Foosball table was often broken.
This is why we can’t have nice things
We had a ping pong table that was pretty well used, but the “touch down” areas that were supposed to be for work discussions were basically for drinking coffee, which was fine in my department but definately caught flack in others. At my wife’s company those things were actively used against employees that managers already had a problem with.
From what I have read even Google isn’t Google anymore and tech companies are expelling employees at a never before seen rate.
Maybe but most of the tech I use seems to have more bugs than a Chinese Buffet dumpster during a garbage truck. And the plugs seem to just move them around. I don’t trust the tech world to put out a quality product that won’t kill all of us.
“ Tim Dahle Nissan Southtowne”
Man, Tim’s dealerships are getting a lot of publicity recently.
I had the same thought!
Wife saw the back of a Mercedes EV and commented how great it looked so I immediately sped up and said “wait until you see the front!” She no longer thinks it’s good looking.
Mercedes is completely fucked if their master plan is to put all of their resources into their entry level products and make them EVs. BMW and Audi have just introduced new ICE variants in this arena and apparently the next 3 Series will still have ICE powertrains as well. Mercedes is also terrible at electrification.
All of the EQ line has been an abject disaster. You can get into a used EQS in the low 40s at this point, which is appalling even by BEV standards. The C63 AMG and downsizing/electrification combo that’s spread throughout the C class and GLC is a laughing stock. No one wants that godforsaken 4 cylinder, especially when Audi, BMW, and Porsche will happily sell you a competitor with a 6 cylinder.
Does Mercedes even have any commodity hybrids? I guess they just introduced the GLC PHEV so they’ve got that going for them…but I’m a little shocked that a company that went all in and then some on BEVs, put out a miserable product, and lost a veritable fuck ton of money on them is doubling down with another mass electrification push that no body wants.
Mercedes is in trouble, especially since they’re explicitly coming for Tesla. I can’t stand Elmo and I have less than 0 interest in ever owning one of his products, but literally everyone who’s tried to dethrone Tesla has failed spectacularly, including Mercedes. You’re just not going to beat them at their own game and it’s way, way, way, way past time for manufacturers to accept that.
Buyers may not really want them – but Euro lawmakers sure still seem to. And the Europeans are much better at forcing “what’s good for you” than Americans are. And while Americans may not want that “God-forsaken four cylinder”, that is largely all the rest of the world actually buys.
So best to plan for a reality where ICE cars are actually banned in much of the world. But I think they are dumb to go completely all-in and neglect ICE in the meantime ala Jaguar. But who knows at this point? Tough times to be in the C-suite at a major automaker.
The problem with Mercedes-Benz EVs is not that they’re bad EVs.
The problem is that they’re bad Mercedes-Benz.
Just because a bunch of former S Class owners bought a Tesla Model S does not mean they wanted a large Mercedes-Benz hatchback shaped like a bar of used soap with nothing but screens inside.
What they wanted was an S Class that does not use petrol or diesel.
Case in point: @ 40% of 7 Series sales are i7s. Despite being ugly as sin – it’s a three-box luxury sedan that looks much like the petrol/diesel versions.
Making me have to google “tsuris“. The Autopian over here broadening my vocabulary.
I would say ditto, but I didn’t even bother googling. I’m just gonna skip that word in my life.
Same, and I should know my yiddish. That’s an oblique one.
Based on the ongoing stories of struggles for Mercedes, Nissan, Volkswagen, and all flavors of Stellantis, I’m not even sure car makers know how to make cars anymore.
The only ones who know how to make cars are the shareholders.
If they’d try focusing on making cars that people actually want instead of chasing Elon’s farts they’d be fine.
No wonder Tavares (not pictured above) got the boot, he couldn’t figure out the correct strategy (in this case for the NA market), and he constantly believed he knew better than Kuniskis. The fact that even VW, one of the most stubborn automakers has been able to figure out and understand that, shows how misguided Stellantis was. Similarly, look at Toyota, with a large group in the US devoted to the truck platforms.
To answer the original question, I have no doubt that it is harder for an car company to make tech than vice versa, or at least for traditional, legacy automakers. This is due to the setups and structures and operating procedures of traditional automakers being so deeply inflexible. Look at the VW CARIAD disaster for all the proof you need. Somewhere on the order of 20 Billion Euros down the drain, just to pony up a few more billion to adopt Rivians software suite.
Traditional automakers (look at Stellantis for proof of this) have become far too arrogant and content with their structures for too long, and just believe they can spend their way into software and tech dominance. Reality continues to bear out this as an impossibility. Meanwhile we see tech-forward companies like Tesla successfully building and growing their automotive market share. Do I suspect the Sony car to ever fully develop and do well in the market? No. But fundamentally there seems to be nothing wrong with the concept, and the building blocks are all there. I just don’t suspect the company to be willing/able to devote the resources needed to get it over the finish line.
Xiaomi asks why not both?
BYD, arguably, as well.
Much harder for a “tech company” to make a car than a car company to make “tech.”
Automakers create develop technology all the time, just not flashy shit that makes headlines. Completely autonomous cars are just a dead end, and at some point, it’s just better to cut the loss than keep trying to scam investors.
The first one is much harder.
There’s a reason there’s only been one truly successful automotive startup since WWII, and even Tesla couldn’t have done it without government support, emissions credits, a factory acquired for very low cost, and many other benefits that don’t come around often.
Meanwhile there have been a million tech startups over that time.
Just because current automakers haven’t been great at “tech” (whatever that means) doesn’t make it impossible. You don’t need capital intensive factories or long supply chains to make software, you just need the right people. It’s not impossible that someday one of the automakers will hire enough of those people.
Truly successful US-based startup anyway, the Chinese, Indian, Malaysian, and Iranian auto industries didn’t really exist until after the war, nor did most of Russia’s (Lada), Honda was founded postwar, and Volkswagen only went into true mass production after
I will revise my statement to 1950 to encompass Honda and VW, but yes I meant US (or Western in general) markets.
The burdens of building to third world standards in third world countries are not really comparable to the West IMO, at least historically. That may be changing in the EV era.
100% agree. Developing, sourcing, manufacturing, and selling an automobile is infinitely more complicated and expensive than creating software (which is one of a bajillion aspects of creating the automobile!). It’s a major reason that wealth in the tech center has been so explosive. Pretty low COGs for an app compared to a truck.