Oh man, this is just too good. If you read one article today, make it this one. In this amazing feature length cover story for German weekly news magazine Der Spiegel Germany begins to wake up and ask itself: Is it too late to save the German auto industry?
You can read the full article here, but of course we have to go over the best parts together. 😁
But it was only very recently that the German automobile industry finally came to the realization that it is going to need to radically adapt. The industry, led by Volkswagen, believed it could solve its problem in two ways: first by creating better, less-polluting and more efficient (diesel) cars and secondly, when the first approach failed, by cheating or denying reality.Der Spiegel
Yes, what a genius master plan. I can’t believe it didn’t work.
But they didn’t reach that realization until very late. Now, companies that were industry leaders in the last century face the real risk of straggling behind in the new era, a development that would have serious consequences for the German economy and the country’s future prosperity. It would be the beginning of a new and uncomfortable era. Because as German companies were busy manipulating their diesel engines and placing their bets on ever bigger SUVs, as they half-heartedly studied and tested alternative drive systems, and as they collected arguments against self-driving cars instead of testing them, a whole new paradigm was unfolding elsewhere in the world. In California and China, private and state-owned companies emerged that are now surpassing Germany’s former technological leaders.Der Spiegel
Ouch. Someone get the German auto industry some cream for that burn! It’s so obvious that the German auto giants are being surpassed. I’m glad someone in the German media finally had the courage to say it.
In recent weeks, DER SPIEGEL has been exploring the colliding worlds of the automotive industry — at the Tesla factory in Fremont, California; in a Chinese model city located south of Beijing; at companies in southern Germany that make car supplies, and in the research departments of German automakers.
The findings are alarming. All signs point to “disruption,” a word that has become fashionable these days, even among managers.Der Spiegel
Here, “disruption” means “legacy auto goes bankrupt”.
“We need a wake-up call,” says Khan. “We have to change fundamentally — as individuals, as departments, as a company, as a country. If we don’t, we’re going to be facing tough times ahead.”Der Spiegel
It would be so great to see the German giants compete seriously. This Daimler executive is right –– in regard to the auto industry, the whole country is asleep.
Khan also addresses fears that upstart competitors from Silicon Valley and China are faster and hungrier for success than Daimler. The company has given itself a new, albeit slightly desperate slogan: “We invented the automobile. Now we’re shaping its future.” But what’s that supposed to mean?Der Spiegel
It means “We invented the automobile. Now we just shit our pants”
Daimler is putting considerable efforts into improving its “Hey Mercedes” voice assistant, which customers can use to control the infotainment system. Commercials are currently running worldwide advertising the gadget. Together with South Korea’s Hyundai and two Chinese technology companies, Daimler has invested $100 million in the American startup company SoundHound, which develops speech-recognition software.Der Spiegel
$100 million?!? SoundHound is a Shazam clone that tries to guess what song you’re singing. What could they possibly need $100 million from Mercedes for?
Daimler fears that Amazon’s Alexa or Google Assistant might one day spread beyond peoples’ homes and find their way into cars. Khan wants to make sure people to use “Hey Mercedes” when they order a pizza on the go and not other companies’ services. That doesn’t really sound like the dawn of a new era — at least not at first.Der Spiegel
Good luck making “hey Mercedes” better than Google and Alexa. We are rooting for you to shock us all by building a better voice search than the world’s biggest search engine.
[Tesla]’s self-proclaimed mission is emblazoned in silver letters at the entrance, as unwieldy as it is mighty: “Accelerate the world’s transition to sustainable energy.” Every employee who passes through the barriers and security has to go by the sign each day.Der Spiegel
It’s a bold move, if you consider that politicians and executives at car companies in Germany are still debating whether electric cars are the right step and, if so, who is responsible for financing and managing the necessary charging stations. Tesla has built up the necessary infrastructure on its own.Der Spiegel
By the time they realize electric vehicles are the future, they’ll be on the verge of bankruptcy.
It’s the Musk way: Many thought he was crazy when he bought the gigantic Fremont factory from Toyota. And executives in Germany at VW, BMW, Daimler and Audi all found it amusing when he announced he planned to create a new automaker. Nobody is laughing now.Der Spiegel
Not true! I am dying laughing reading this article 🤣
For a long time — too long — the established car companies viewed Musk as a pompous man burning through loads of cash with his billion-dollar investments in charging stations, and car and battery factories. But they were wrong.Der Spiegel
So wrong. Man, seeing people finally start to understand this is like music to my ears 🎵🎶
Last month, Musk reported a surprising profit for the last quarter. The company’s cash reserves fluctuate, it occasionally operates on the verge of financial collapse, and Musk has had big problems with the kind of mass production that VW and Daimler can handle confidently, but the quality product Tesla delivered shocked everyone.Der Spiegel
Shocked everyone? Everyone who wasn’t paying attention, I guess. 😂
Companies like VW got a hold of Tesla’s new mid-range Model 3 before it reached the market and dismantled it into its individual parts. Their findings were shocking: They discovered their small American rival was years ahead of them in important areas. In addition to having more efficient batteries, Tesla’s cars also have better network connections. It turns out the Musk’s aspiration to turn cars into rolling computers was more than just talk.Der Spiegel
More than just talk, eh? Imagine being the team at Volkswagen that has to take apart the Model 3. “Ah shit”.
Indeed, Tesla’s engineers have a different approach to their product. They believe cars can be improved through constant updates, just like a smartphone, and developed what they call the over-the-air update, which allows for car maintenance to be provided without having to take it to a dealer.Der Spiegel
Without taking it to a dealer you say? Well, that’s just crazy. What are the dealers going to do? They make 50% of their money on service.
Although Tesla’s future remains uncertain, Musk has managed to shake up the entire industry. His company now delivers close to 100,000 electric vehicles per quarter, more than VW or Mercedes managed in the past year.Der Spiegel
Uncertain? Read your own article and tell me what it suggests about Tesla’s future.
But the Germans have since shifted their strategy and now want to fight Tesla rather than embrace it. Whether that’s a good idea is an open question.Der Spiegel
Yes, who has the answer to such difficult questions? I guess we’ll just have to wait and see.