Tesla’s dominance is causing other companies to adopt a ‘fake it ’til we make it’ strategy

Tesla’s dominance in the automotive sector has proven to be one of the industry’s biggest surprises in its long and storied history. Because of the whirlwind of support that Tesla and its initiatives have received, along with the increasingly dominant numbers that the company displays quarterly, Tesla is undoubtedly the biggest influencer in the car industry today. After the company’s increasingly apparent dominance has been recognized by the long and storied auto manufacturers of the American vehicle market, a “fake it ’til we make it” strategy has been adopted by several of these entities, and it has not always worked out in the most favorable fashion.

Legacy automakers have spent over a hundred years dominating and influencing the look, design, and overall appeal of “the car.” Before 2008, electric cars were never a huge deal. They weren’t available for purchase, and many car buyers figured that buying Hybrid vehicles was enough for the environmental concerns to go away in the short-term. As a result, nobody, including some of the most seasoned and informed automotive executives, figured that for the foreseeable future, business would carry on as usual. People would continue buying gas-powered cars that fit their bill of needs and their finances, and that would be that. People would accept the constantly-rising gas prices and continue to drive cars that were manufactured by companies that have been in business for decades, simply because they’re trustworthy, and that is what was most ideal.

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And, who could blame them? In 2007, nobody truly thought that EVs would be a major player in the automotive market within 5-10 years. Nobody knew that a little-known entrepreneur from South Africa had a plan to disrupt the automotive industry as a whole. Nobody knew that eventually, gas-powered cars would be exposed as inferior to battery-powered vehicles because nobody had figured out the innovation.

In reality, when the tech bubble began to burst, it was only a matter of time before cars became less of a transportation means and more of a software device. Tesla really drove this point into fruition with its electric cars, especially when software updates and Over-the-Air upgrades became available to owners. But while Tesla continues to uncover the secrets behind the disruption of the automotive sector, it continues to extend its lead in the development of electric cars. The lead has gotten to a point where car companies are coming up with ways to “fake it until they make it,” and it has cost some of the most notable names in the industry, and some up-and-comers, their spot as potential forces in EV production.

The most notable is Nikola, who was exposed in September 2020 by Hindenburg Research. Earlier this morning, General Motors, who had announced a partnership with Nikola on September 8th, completely scrapped any partnership involving EVs and noted that their jointed effort would only deal with hydrogen fuel-cell vehicles. This ultimately led to Nikola announcing that its all-electric truck, the Badger, had no timetable for completion. Ultimately, the faking strategy paid dividends in the short term, as Nikola had gained some momentum on Wall Street before the Hindenburg report was released. Now, the company has been exposed, and GM bailed out of a multi-billion dollar partnership that would have established Nikola as a player in the EV pickup game.

Other automakers who have promised to initiative efforts to transition to BEV development and production are out there. Ford, GM, and Volkswagen have all worked toward establishing electric vehicle production lines in an effort to move away from petrol-powered engines. However, only time will tell if these companies remain serious about their efforts. While Volkswagen has been extremely vocal about its support for electrification, Ford has also outlined plans to begin battery cell manufacturing efforts, and GM has plans to expand its line of electric cars with the upcoming Hummer EV.

Ultimately, nobody likes to be lagging behind, and the car companies that have long dominated the automotive sector are more than likely not used to being second-fiddle, especially to a company that has only built cars for twelve years. The lesson in the development of EVs is that adopting the technologies must be done efficiently. There is no room for dragging feet. There is no time to delay the efforts. These companies must adopt the realization that EVs are the future of the auto sector. Without a plan in place, Tesla’s lead will continue to widen, and the long-standing American car companies will be, for the first time ever, left in the dust.

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