Consumer electronics like smartphones have been operating on a yearly product cycle for some time now. The winners in this game – like Apple and Samsung – choose this time of year for their new product announcements, largely to provide for the “holiday” buying season before Christmas. It’s become an expected annual event. Sometimes the changes are incremental, other times there’s some major step-change. At Apple at least, there’s a distinct seasonality to their business model driven by this yearly rhythm. The December quarter results typically outshine all the others.
About 10 months ago, Tesla Australia transitioned from being a low-footprint importer to having a more fully-fledged presence down under. Around that time, they let me test-drive the Model S. Around the same time, they announced an enhanced version of the car with two motors giving it all-wheel drive. Several other features were also announced. Importantly for Australian customers, the Supercharger network deployment plans were also published.
Over the months since then, the products, services and infrastructure have been rolled out across the world. Tesla showrooms, service centres and charging facilities cropped up here in Australia as well as many other places in the world outside the US. Major announcements about Tesla’s battery products drew enormous media attention and extreme launch-day demand. Over-the-air updates to existing cars, like the “Ludicrous Speed Update” were released. The excitement and marketing hype was extensively covered by the worldwide media.
Last week, the AWD product was launched locally to much fanfare. Instead of showing up to a downtown hotel to get a test-drive, I went to a nearby showroom. So did my father, a retired auto executive. We went to different locations: one in the inner-city for me, the other out in the suburbs for Dad. We had fundamentally different experiences: Dad had a short first-time drive while I had a longer second-time go. Dad’s been driving the locally-produced GM product for over forty years, I’ve been driving BMWs and Audis for the last thirty years. Most importantly, I was there to see what had changed in the last year where as Dad was there to see what all the fuss was about at all.
One thing we had in common was that our expectations were far-exceeded. The difference between the extensive research we’d both done beforehand and direct experience was extraordinarily positive. For me, there’s been lots of technology – automotive and otherwise – where the announcement and the experience happened inside 12 months. For Dad, not so much. The world of IT and the world of cars ran at essentially different speeds. Most impactfully, Tesla said that they would be at this stage in their development here in Australia about a year ago. They are, if anything, a bit ahead of schedule. I didn’t expect that at all and Dad certainly did not.
This is not something even Tesla is well-known for: there have been delays before. The forthcoming Model X – an SUV form factor based on the Model S – is much anticipated. The release of the vehicle has been postponed time and time again. It’s meant to be available sometime before Christmas in the US and later according to a worldwide rollout schedule. As always, Australia will be some time afterwards. But Tesla are not alone in this respect. Technology firms and many companies in many other industries have a pre-announcement syndrome that invariably disappoints.
What’s changed my expectations of what can happen in a year is coloured by the accelerating pace of change in the technology business. But the delivery of Tesla’s declared plans of last year down here have been spectacularly successful. Driving a 2-ton, 5 metre long car like a Ferrari in “Insane Mode” is quite unlike anything I’ve ever done before. Seeing the Superchargers around, witnessing the pop-up showrooms in shopping malls is something I expected. Seeing dedicated service facilities in the inner-city was not. The sensation of 0-100 km/h in 3 seconds rather than 4 seconds is much more than a dry and analytical “25%” cold ever convey. Feeling it rather than thinking, reading and talking about is the main difference.
It seems the car business really is changing. Everyone in the up-market segment from Aston Martin and Audi to Mercedes and BMW want to become more like Tesla (and, I suspect, like Apple). The acceleration of the change along these lines over the last year is clear and plain to see. Car dealers everywhere should be worried. Auto manufacturers who’ve yet to place their bets on these new technology platforms may already be too late. For all the attention that Uber is getting, for all the focus on autonomous driving vehicles and all the chatter on flying cars, the greatest change has probably already been accomplished. Many people now expect the kind of yearly change they’re used to in smartphones from everything else, like cars.