Porsche CEO Makes a Classic Mistake that Could Cost the Brand Dearly
You should never underestimate the other guy…by Robert Moore, on
So, when it comes to long-range electric cars, Elon Musk is the pretty much the godfather, the don mega, and the man that pretty much made it happen with models like the Tesla Roadster, and even more so with the Tesla Model S. Fast forward to today and there’s now the Tesla Model X and the Tesla Model 3, with a Semi truck on the way and a smaller SUV that will mirror the Model 3 in pricing. Despite Tesla’s slow but continuous move to become an automaker for the masses (and it has come a long way) it’s still not able to keep up with the big boys quite yet – profits are still virtually non-existent and it takes an excessive amount of time to cut down the initial waiting list for new cars. But, in time, Tesla could be just as busy and successful as any of the big boys, including Chevy, Ford, Chrysler, Audi, BMW, and yes, even Porsche. As electric cars become more standard around the world, the effect will increase drastically until Tesla is practically a household name (not that it isn’t in mine already)
Now that the big boys are all about to step into Elon’s self-made niche, it’s time to start thinking about automakers that should be worried a brand like Tesla that already has an insanely massive cult following and is getting more affordable as time goes on. All of the major brands are about 30 seconds away from unleashing a serious EV offensive. Meanwhile, Porsche is over here, about to knock some heads with the Porsche Mission E and about to make a huge, huge mistake. CEO, Oliver Blume – the man that replaced Matthias Muller and was once Porsche’s head of production – doesn’t think that Tesla is a competitor.
Talking to The Financial Times in a recent interview, he even went so far as to say that the production version of the Mission E, which is due for production by 2019, “is not a Tesla fighter.” He went on to say that “it’s not so important what Tesla does. Porsche is going to follow its own way.” He chalks off his lack of concern for the brand that practically dispatched range anxiety for the masses by assuming that he doesn’t have to worry about it because Porsche’s main concern is making profit. OF course, we all know that he’s at least partially right, as Tesla doesn’t really know what profit is in the grand scheme of things, but just because the brand operates as more of a tech startup than a true-to-life, mass-production automaker doesn’t mean that he shouldn’t be concerned.
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The Arrogance Runs Deep Over at Porsche
Blume has even said that should the production version of the Mission E be successful (and he seems to think it will be,) that Porsche will then move to launching an all-electric Porsche SUV. So, we’re talking about a car that will, whether Blume likes it or not, sit in a market that is dominated by the Model S and later on an SUV that will sit in a market currently owned by the Tesla Model X. What it boils down to is what I like to call Porsche ignorance. Some of you, if you don’t drive a Porsche, have seen it. Like the owners of other expensive German marques, Porsche drivers and execs alike think they are better than the rest of the world (even though they can’t use a freaking turn signal.)
If Musk really wanted to put an end to the Mission E, he could easily drop pricing, advertise like crazy, and make Blume wish he hadn’t overlooked the competition
Just because a brand like Tesla isn’t as big as you and doesn’t make enough money, doesn’t mean that it won’t wipe the floor with you, urinate on what remains, and ship you back home in the cheapest box it can find. If Blume doesn’t wise up, all the brand loyalty in the world won’t save him from a war with a brand like Tesla. Tesla has investors that will shell out money on a whim, and Musk’s word is referred to as being more valuable than gold on any given day of the week. If Musk really wanted to put an end to the Mission E, he could easily drop pricing, advertise like crazy, and make Blume wish he hadn’t overlooked the competition. Never overlook the other guy, and never underestimate the competition – that’s when you get caught with your pants down and a car you just can’t sell. Oh; Poor Poor Oliver Blume.
Why Porshce is Being Arrogant
So, thanks to a report from The Financial Times, we can give you a pretty good idea of why Blume and anyone else over at Porsche thinks’s their fecal matter doesn’t stink in terms of competition. It’s not because Porsche sales are up or they sell a better product because they don’t. It’s not because they are a better company than the next brand because they aren’t. Nope, it’s because they make a ridiculous amount of money – and it is the root of all evil, right? – on every Porsche sold. To sum it up the “average” Porsche sells for about $99,000 and manages to generate a profit of $17,250 after everything is said and done.
At $17,250 for each one sold, we’re talking about $2,182,073,250
Do you know how many Porsches were sold between Jan 1 and June 30, 2017? Well, we do. The grand total comes to 126,497 examples. AT $17,250 for each one sold, we’re talking about $2,182,073,250. That’s “BILLION” folks not million. And, you can assume that means the company will profit close to $5 billion by the end of the year of all of the models sold. Of course, they don’t hang onto all of it, it gets spread out among ventures and expansion, etc., but we’re still talking about dirty, greedy amounts of money.
OF course, Porsche isn’t worried about Tesla. When you bring in more than $2 billion in a matter of six months, wonderboy Musk himself couldn’t touch you with a 10-foot pole. And, with that kind of cheddar coming in, Porsche could easily win a pricing war as well, but Musk has one big advantage. When you make billions like Porsche does, greed becomes a serious factor and there’s no way in hell Porsche would sell a Mission E at a loss just to prove a point. Instead, it will hope brand loyalty comes in. But, because of that arrogance, I sure hope that the Mission E fails miserably, and Porsche future holds nothing but struggle as it tries to venture into the inevitable future of all-electric cars. The ICE won’t be around forever, Blume, you better wise up and quit making these rookie mistakes.
Read our full review on the Porsche Mission E.
Read our full review on the Tesla Model S.