How Lehman, Obama and Tesla Changed the Car Business – By J.R. Anderson



 

 

Early in the recession, after President Obama bailed out the auto industry, I noticed the largest shift we have ever seen in the auto industry. The majority of vehicles produced before 2010 featured cheap plastic interiors, faux wood grain, uninspired designs, and confusing electronic equipment systems. In those days, most vehicles had terrible handling and very little effort to better fuel economy.

In fact, for a while I questioned whether manufacturers and dealers were in cahoots to make vehicles that would ensure customers return for repairs.

Then, a few things happened simultaneously.

  • 2008 we experienced the worst recession ever.  Trillion-dollar giants Bear Stearns then Lehman Brothers failed spectacularly, four months apart. Even Goldman sought liquidity.
  • President Obama bailed out major auto manufacturers. A few called it quits. (Saturn, Hummer, Oldsmobile)
  • Gas prices were hitting peak numbers.

Amidst this turbulence, Tesla Motors released their first car, the Roadster.  This was a hand built carbon fiber sports car that was 100% electric beautiful sports car and had a 244-mile range. This was our glimpse into the future. It sounded like the millennium falcon going hyperspace whenever you punched the accelerator. It had one gear and the motor spun as high as 14000 rpm, and within about 30 minutes you could learn to drive it with mostly one pedal due to the regenerative braking which restored power to the batteries and brought the car to almost a halt. Take your foot off the accelerator and the brake lights come on immediately so people wouldn’t run into you.

This isn’t only about enhanced performance and bells and whistles, though. This was a whole new take on how to conceive, design, and even sell cars that had a great impact on the entire auto industry.

  • First 100% electric production road legal vehicle that you could buy
  • < 20 moving parts versus tens of thousands for ICE vehicles
  • Over air updates-similar to Apple products-they actually improve and can completely change your vehicle
  • Manufacturer sold-no dealer markup
  • Mechanics can make house calls and can monitor remotely if you want
  • Full transparency-you can buy one and take it apart if you wanted to (what’s in the battery pack or if you can determine what is inside of one that makes it work)
  • A huge network of high speed charging stations around the country
  • The first semi-autonomous and fully autonomous capable driving cars on the road (more on this later)

The industry wasn’t ready for it, neither were most consumers. Why? Because we are creatures of habit and we have been trained to be reliant upon fossil fuels, the sound of internal combustion exhaust, and multiple gears. Aside from that, not many could afford this car. The smart ones took notice. Mercedes Benz outsourced Tesla to build battery packs and motors for the Smart Car and the B class crossover that is now being sold. Despite the resistance from oil companies and the vehicles that rely on them and those of us that think we need to hear exhaust sounds to give us a true driving experience, all new vehicles were being designed with more features, better design elements, and better performance.

In 2010 the Model S was Elon Musk’s first fully designed and built vehicle and it completely obliterated the competition in almost every category except for top speed. What do you compare a 7 seat electric sedan with autonomous driving, 2 trunks, a 17” touchscreen control center, with the capability of out sprinting supercars to 60mph, needing virtually no maintenance, and is the safest vehicle on the road by far to? Even at $130K for a fully loaded vehicle, it still surpasses the competition by far.

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About The Author

J.R. Anderson has been a car enthusiast since he was a young boy and is finally living his dream of writing about cars. He lives in NY, has traveled a bit, and would love to explore the globe on wheels.