If you ain't first, you're last
Ricky Bobby’s dad might have been high when he said that, but in the auto industry, it’s true.
Legend has it than when the upstart Kaiser-Frazer car company emerged in the late forties, and its founder announced millions of dollars in funding at the introductory press conference, someone sarcastically yelled, “give that man one white chip.”
This might not have actually happened - the phrase was a punchline to urban legends as far back as 1890 - but it made the point that even a well-financed challenger to the “Big Three” automakers would have a rough go of it.
And that’s what happened: after a promising start, sales of Kaiser-Frazer automobiles (alongside those of other independent carmakers which had been around much longer, like Studebaker and Hudson) plummeted as GM, Ford and Chrysler introduced newer models and used their economies of scale to beat the little guys on price.
K-F was largely done with the mainstream car market by 1955, though its purchase of another small independent company, Willys, meant it was able to keep making Jeeps until American Motors (itself formed by a merger of independents Hudson and Nash, kept afloat for years by its budget Rambler brand, and ultimately absorbed into Chrysler) bought them in 1970. It would be established Japanese car companies that brought down the Detroit Three, and even that took decades.
Other dreamers who introduced new car brands, like John DeLorean and Malcolm Bricklin, learned the hard way that if you’re going to come at the big guys, a good product is not enough. (Whether the DeLorean or the Bricklin were good products is for another post.) You have to produce something revolutionary that no one else has successfully built and brought to market.
Because of the long, sad history of new American car companies, I was skeptical that Tesla would hang around as long as it did. I would have been even more skeptical had the face of the company owned Twitter back then.
But I’m darned if they didn’t pull it off. Even if Tesla collapses tomorrow, they lasted much longer and sold many more electric cars than I would ever have predicted - many of them exported to countries where American vehicles were niche products at best.
Tesla wasn’t even close to the first electric carmaker, but they were first to market with stylish electric cars that were actually rewarding to drive, with decent range and relatively reasonable prices. If GM and VW and Toyota already had such products on the market - no disrespect to the Nissan Leaf, from all indications a good vehicle especially by Nissan standards, but no one aspires to own one - Tesla would have been just another start-up without the benefit of first-mover advantage.
Which brings us to the inevitable end of the Lordstown Motors story:
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