One of my favourite bloggers is Mr Enrique Dans. He started his blog on IT and technology in February 2003. Since April 2004 he writes daily on these topics (his articles are also available in English).

In his entry of today “El mercado de la automoción está cambiando” he gives me the material to write about the Competitiveness of a product, the automobile, and about the Competitiveness of countries in Europe.

The history of cars is one with the history of the combustion motor. We are all aware that burning fossil fuel has not been a healthy election for our environment, but for decades, it was the only possibility in hand.

Electric cars were a better solution from many points of view, but too expensive to become an alternative for the broad public. Besides, the technology challenge implied was so large that, for manufacturers, it was much more comfortable to sit down, relax and not to try the effort. Many factors have come together to induce a change in directions, thou for many producers it might be a bit late.

Tesla Model 3 became in the 1stQ 2020 with 18.856 units the best-sold car in California according to the California Auto Outlook report. In the Golden State, total Tesla’s share of the market is still modest (4,6%), but consistently growing in absolute numbers in a market with falling sales. The second best has been Honda Civic with 18.001 units.

It is equally interesting to read the comments posted by the readers at the end of Mr Dans’ entry. While some of them express their wish to change their car, they put a hold on the move. They want their next car to be electric and will wait until they can afford it or it is easier to recharge. These potential buyers believe that electric vehicles will be cheaper in the future and will enjoy a more convenient use, with many more recharge points in their cities. The announcements made by authorities and electric companies about the installation of thousands of points of recharge in all Europe, support this idea.

Limit dates for the use of diesel in Europe have been approved. The consciousness of environmental responsibility is an increasing reality. The friendly use of alternative transport systems in cities (bikes, for instance) reduces the urge of the daily use of cars. These and other factors spread a dark shadow of doubt on the future of a historical industry that many consider deadly injured.

Is the Tesla Model 3 cheaper now than its fuel-powered competitors? No.

So, how can it be the best sold? Because electric cars are becoming more and more competitive, the electric car industry is growing in Competitiveness and, the traditional one is dying. Many buyers do not want the risk of investing in something, a combustion motor car, that they will not be able to use soon fully. The price difference is not high anymore in some markets. Consumers see electric vehicles as more modern and user friendly, and the message that global warming has to be stopped has actively been adopted by many. Electric cars are very sexy.

The Competitiveness of the electric car will fully unfold in the coming years. Many European car producers have not seriously invested in it because, either it was too disruptive for their production model, either it was cheaper to fake the emissions control. When they realized their mistake, it was too late.

Hundreds of thousands of jobs depend on a technology that, today, is obsolete and has little future. Traditional car manufacturers are in panic and make desperate attempts to gain time and to develop their product. Good luck!

It is very significant to see that, while Nissan closes its factory in Barcelona (Spain), Tesla constructs a new one in Grünheide (Germany). The first will dismiss around thousands of employees, and the second will hire about 12.000 people to produce 10.000 units daily. Many countries strove to bring the Tesla factory to their territory. Germany was the most competitive one (read here why). Mr Elon Musk did not base the decision on the cost of labour, for sure. Almost every other country in Europe would have provided lower costs for employees. Germany offered location, reputation, excellent engineers, stable support from a stable government and a significant market.

The value of the already high Tesla shares soar, the company sales hit new records with their “more expensive than average” models, and Germany wins the battle for the Tesla Gigafactory.

Now, who wants to support that to be competitive is about reducing the price?