5 Ways Tesla Terrifies the Auto Industry

by Banks

Teesla Auto Industry

Tesla is not your average car company in the same way that Elon Musk is not your average CEO, inventor, serial entrepreneur, investor, and TED Speaker, and as sales of Tesla's electric car continue to garner more attention and more traction, it's starting to look as though Tesla may actually have a shot at changing the auto industry — regardless of how the auto industry feels about changing.

Whether you love automobiles so much you spend every weekend tinkering on them, or your vehicle just provides practical transportation from Point A to a seemingly endless number of Point Bs, because American culture is so car-centric, Tesla's impending revolution stands to affect us all. And it's likely the traditional auto industry is shaking in its boots because of it. Here are five ways Tesla and its fleet of electric cars terrifies the auto industry.

1. The Infinite-Mile Warranty

When Edmunds announced it couldn't recommend Tesla's Model S to buyers due to the 30 service visits it had to put in over the course of driving one for a year, Tesla did something extraordinary. Not only did they address the drivetrain issues responsible for most of the trouble, but they also extended the car's warranty to infinity. If that sounds like a dream come true because you spend hours every month trying to keep a failing vehicle in working order it's because it is.

No car company has ever done this before. The closest example of it is Hyundai, a company that finally broke into the U.S. market with its "10 year, 100,000 mile warranty." Tesla's new warranty is seen as massively increasing the brand's appeal, and it will probably tempt more buyers toward the electric car market — a move the traditional auto industry probably finds incredibly unappealing.  

The only downside is that with a Tesla, you wouldn’t really be able to fix up your car on your own. And not everyone is necessarily ready for that yet, with many still enjoying the ability to go searching for the perfect used part to fix up their car just the way they like it.

The Public Release of Patents

Remember the good old days when carmakers routinely shared their patents and ideas with one another and the public in hopes of sparking innovation and creativity? No? Well, that's because the automobile industry has never, ever done such a thing. Tesla, however, has. In a surprise move in 2014, the company went open source, because they genuinely want sustainable transportation to exist. As they stated on their blog, "If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal." In hopes of speeding up the process of electric car viability, Tesla has invited everyone to participate in the process, without concern for the company's eventual profitability.

Cutting Out the Middle Man

As the Wall Street Survivor points out: The auto industry works according to a business-to-business model, which means consumers are unable to purchase a vehicle directly from the companies making their cars. Instead, the maker sells its vehicles to a dealership, which then sells it to the masses. Tesla is foregoing that model and, instead, is selling their vehicles directly to the consumer through company-owned stores. Not only does this model cut costs to the consumer, but it also ensures a loyal and highly knowledgeable sales staff is interacting with potential customers — advantages the traditional auto industry can't offer.

The Cool Factor

Tesla doesn't make your grandmother's car, and that isn't just because your grandmother's car contains an internal combustion engine. No, Tesla doesn't make your grandmother's car, because, hands down, the company creates cars that are seen across the car industry, culture, and even fashion and design world, as "cool." It's a quality lacking from many of the vehicle makers in the traditional industry, and it's something they would all pay dearly to obtain.

The Use of the Cloud

Tesla makes use of the cloud to update vehicle software — a move that allows for any internal computer upgrades, improvements, and bug fixes to happen without hauling their vehicles in to a dealership — a rarity among more traditional automakers. In addition, Tesla plans on using the cloud to harvest data about vehicle performance that will then inform the company about ways to improve their cars, which will increase the potential speed of improvements.

Tesla is, in many ways, a game changer. From the ways in which they utilize technology to their apparent lack of concern over profitability, the company is shaking up the auto world in ways no one has ever seen before.