Tesla’s Hero Cycle Leads To Nürburgring Confrontation With Itself
Tesla’s Nürburgring exploits have provided much entertainment, but they also reveal a deep truth about this much-debated company.
Andrea: Unhappy is the land that breeds no hero.
Galileo: No, Andrea: Unhappy is the land that needs a hero.
~Bertolt Brecht, Life of Galileo
The pissing match between Tesla and Porsche over Nürburgring lap times has made this an entertaining week in the world of cars. In yet another example of a weird but persistent paradox at the heart of Tesla's identity, this most forward-looking and futuristic automaker has dragged us all back into the auto industry's past of gigantic ego-battles over meaningless motorsport trophies. In fact, the only thing that could make this car guy soap opera feel like it is actually taking place in 2019 is if it all turned out to just be viral marketing for the upcoming film Ford v Ferrari.
This ability to embody a bold future while fitting perfectly into the well-worn archetypes of the past is one of the keys to Tesla's popularity, along with its ability to push EV technology forward in intense creative bursts and generate massive global media attention out of thin air. In other words, getting into publicity-driven 'ring lap contests with Porsche is exactly where Tesla belongs. With all due respect to Robb Holland, and the good people at Jalopnik, the Nürburgring is precisely the place for Elon Musk's bullshit.
Having combed through Tesla's 15-year history and spoken with company veterans from almost every time period and division, certain patterns of behavior recur again and again. Working at Tesla is one frantic "hackathon" after another (in the words of one source, Tesla's theme song is "Yakety Sax"), strategy floats about on the winds of Elon Musk's whims, publicity and furthering the company's narrative is always top-of-mind, and pushing technology to the bleeding edge is consistently the overriding priority. If this makes Tesla sound like a stereotypical Silicon Valley startup, that's because it is one... that just happens to have more than 30,000 employees and operate in the industrial manufacturing space.
This creative, free-wheeling, frenetic culture is the source of everything that people love about Tesla as well as everything that people hate about it. If you had to pick one car company to get one fast lap of one track on short notice and with limited resources, you'd be crazy to pick any other company. At the same time, if you had to pick one company to operate an efficient and high-quality manufacturing, supply chain or service operation over multiple decades you'd be crazy not to pick literally any other car company.
This is the point at which a certain percentage of readers will stop reading and leave a comment ranting about how I've been trying to tear down Tesla since 2008, how I'm short the stock, and how I'm the enemy of all that is good and righteous in this world. Less emotionally- and financially-invested readers may, however, notice that this is not simply a diss. I'm not trying to describe why Tesla is bad and you shouldn't buy their cars or their stock, I'm trying to describe a fundamental tradeoff at the heart of Tesla's culture. And not just Tesla's culture either: every automaker has to confront the tradeoffs between freewheeling creativity and regimented efficiency and find the balance that works best for them.
Tesla stands out in the modern auto industry because a century of evolutionary pressure has pushed the remaining automakers to choose ruthless efficiency and consistency over mercurial creativity on the operations side and stolid durability and profitability over daring design and cutting-edge tech on the product side. These choices aren't good or bad or right or wrong, they are simply what the market has rewarded, both in terms of what people care about from their cars and what investors care about from the capital-intensive, low-margin companies they invest in (or don't).
For a whole host of reasons, Tesla has simply been able to play by different rules than the rest of the industry throughout its decade and a half of history. When big risks haven't paid off, like the design of the Model X or the manufacturing system for the Model 3, investors have continued to throw billions more onto the fire. Like every other company in history Tesla's culture has oriented itself around the things that keep it alive, which in this case are: its heroic narrative, and the hero who is both narrator and subject of its hypnotic tale.
Humans have been telling stories about heroes for as long as we've been humans, and in an age that finds it increasingly difficult to sustain its heroes Elon Musk and Tesla stand apart. But if our modern cultural landscape seems bereft of heroes, the reason shouldn't be too hard to discern: literally every hero emerges from times of great trouble, and for all our modern problems we live in a time of relative (compared to the sweep of human history) prosperity and placidity. Certainly the auto industry, for all its problems, is too mature, predictable and collaborative of a space for a hero to thrive in.
I've heard several stories now, from people in both what you'd call the "traditional automotive" space and the "mobility technology" world, about Tesla veterans applying for jobs and trying to impress the interviewer with tales of their heroic exploits. What these products of Tesla's tumultuous and hero-worshiping culture don't realize is that outside of Tesla, the entire goal of large, complex manufacturing, supply chain and service operations is to avoid heroism. Good leadership means planning and organizing everything such that there is no need for heroic exploits, which are seen as the unfortunate product of some profound fuckup. Needless to say, the heroic job applicants in these anecdotes typically don't end up getting the job.
Tesla has become the phenomenon that it is today because most of our society sees cars as a consumer good first, entertainment second and a giant, complex business a distant last. Tesla's creative startup culture beats the competition on the design of its products, blows them away in their ability to entertain the public with their exploits, and barely scrapes by on the operations side thanks to near-constant heroics from a young and hungry labor pool that must be continually refreshed. This has worked out well for them because the first two things seem like the only things that matter in our modern deindustrialized society; 60 years ago, when much of the American middle class worked in factories and had some sense of what they should be like, Tesla would have been seen quite differently.
Of course, Tesla is hardly the only automotive company that favors cutting-edge technology and design over efficient but unexciting operational fitness. The farther up the price point you go, the more companies look like Tesla: Ferrari, Maserati, Pagani, Jaguar, Land Rover, Aston-Martin and others all lag the industry in quality, operational efficiency and service time/parts availability because they too choose to optimize for the more emotional qualities that matter at the price points they serve. Their customers are eminently sensitive to the details of design, image, performance and prestige and utterly indifferent to pragmatic considerations like cost, efficiency or practicality.
Tesla's core problem is that it has always been caught between the two poles of this intractable tradeoff, having been founded on expensive premium products but with the desire to move downmarket. Six-figure sportscars and SUVs were always a means to the company's "real" end, affordable mass-market EVs, but as almost always happens the means have become the end. By operating at the high end of the market for so long, and by orienting everything around the charismatic leadership of a publicity-happy billionaire, they have almost inadvertently acquired the culture of a high-end automaker.
As the Detroit automakers have learned so painfully, changing the established culture of a company with tens of thousands of employees spread across the globe takes decades, not years or months or weeks. If Tesla really wanted to be a mass-market automaker, it needed to build its culture to succeed in that space from the very beginning... or at least in the leadup to the Model 3. And in the ultimate tragic twist, it hasn't even needed to be a mass-market automaker in order to affect the market and the industry in a way that fulfills its mission of advancing the transition to zero-emissions vehicles.
Though Tesla probably needs to establish a culture that is more independent of Elon Musk than it has been, even to survive as a premium brand, it's time to recognize that it is a premium brand. Its image, culture, priorities and leadership are those of a premium brand, and its biggest failures have come as it's tried to move away from that business model. Accepting this won't be easy, especially for investors who have bought the hype and expect decades of further "hypergrowth" until Tesla becomes a 10 million unit per year behemoth. But ultimately even they will come to appreciate a smaller but sustainably profitable Tesla that pushes the industry forward by relentlessly advancing electric car technology.
Tesla faces other challenges as well, particularly in the field of automated driving, but pivoting to a smaller-volume, higher-margin business is the first step toward a mature Tesla. That's the way for Elon Musk's personal heroics production shop to not become a bunch of bean counters squinting at spreadsheets and lawyers reviewing functional safety analyses, but to instead chase publicity and glory by doing things like beating Porsche around the Nürburgring. That's obviously what motivates Elon Musk, and it's obviously what Tesla is set up to be best at. The sooner we all accept this reality, the better off we'll all be.