Published on 8 November 2020 |
by Johnna Crider
November 8, 2020 by Johnna Crider
During the latest earnings call, Toyota̵7;s president, Akio Toyoda, had some thoughts on Tesla. He hesitated, but in the end, he shared his opinion. “I’m hesitant to say this – the Tesla business, if you want to use analogies, like a kitchen and a chef,” he said. “They haven’t created a real business in the real world yet. They are trying to trade recipes. The chef said ‘Our recipes will become the world’s standard in the future!’ At Toyota, we have a real kitchen and a real chef who is also creating dishes. There are customers who are very picky about what they like to eat. In front of us, we have finished our food.
Toyoda also pointed out that Toyota makes and sells a much higher variety and volume of vehicles than Tesla does, and mentions that 100 million Toyota cars are on the road today. Taking a different shot from Tesla, Toyoda calls his company’s products the “full menu lineup,” which alludes to a combination of fossil fuel-powered vehicles, hybrid, electric batteries and fuel cell by Toyota.
Comparing the car to the restaurant industry can be laughable
My first job was as a banquet and waitress in a casino restaurant. Since then, I’ve worked with a number of other restaurant jobs, including a pizza shop in Atlanta. One thing about the restaurant industry is that everyone has their interests and food is an industry that will survive almost any kind of disaster. During the pandemic, many mother and baby restaurants closed, but chains and franchises were thriving.
This is why comparing a dying industry to a thriving industry is absurd. I mean companies that sell fossil fuel products – companies like Toyota, for example. Sure, there are customers who are picky about what they eat or consume, but the idea that the customer just wants what they ate, as his claim implies, is absurd.
If Tesla’s business plan resembles that of Toyota, his metaphor might make sense – but it doesn’t. Tesla doesn’t even have the same values or goals as Toyota.
What do Tesla and Toyota want?
According to Toyota’s customer service help page, Toyota’s mission statement is “Attract and reach customers with high value products and services and the most satisfying ownership experience in America. And its vision statement is “Become the most successful and respected car company in America.“According to its website, its global vision is to“ lead the moving society of the future, enriching life around the world with the safest and most responsible transportation ways ”.
Now, there is nothing wrong with wanting to be the best, want to attract customers and want to be the most successful. However, this is not Tesla’s mission, and Toyoda is comparing Tesla to his own company while not even considering Tesla’s values or its own business plan. Essentially, he judged Tesla as “not a real business” and used his own success for decades to justify his arguments. If Tesla went bankrupt, didn’t sell any products or just messed up, for sure, he would be right. But this is not the case with Tesla.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. Tesla was founded to solve a problem. That problem is contributing to our climate warming through the emissions from vehicles on the road. Tesla was founded by a team of engineers who believe that you don’t need to make compromises to drive an electric vehicle. They also believe that electric cars can drive better, faster and more enjoyable than ICE cars.
Elon Musk has outlined a Master Plan (in fact two of them) that ultimately aim to make electric cars for the mass market and accelerate the transition to sustainable transport and energy. . Looking back 17 years since the company was first founded, one can see why Toyoda was targeting Tesla, but it was too early and fundamentally irrelevant.
Yes, Tesla is still new compared to the old car manufacturers. And yes, Tesla may not have as much traffic on the road today compared to Toyota. This is the truth. However, quantity doesn’t always beat quality. Toyota may sell millions of cars a year, but Toyota’s cars don’t solve the problem that Tesla is trying to solve. In fact, Toyota makes a few EVs, but again, these EVs are for the demand for EVs, not the response to the ongoing problem.
Comparing a cat to an orange makes no sense
Let’s say Tesla is an orange and Toyota is a cat. Cats are cool, cute and funny. Oranges are food – you can eat them, turn them into juice and drink them, or even throw them at someone. You can throw a cat too, but that would be cruel. The problem is that the two are completely different, and Toyoda is looking at Tesla through the lens of one of its products.
Tesla isn’t just a car manufacturer. Tesla, as Elon Musk has stated a few times, is like a group of tech startups, “many of which have little or no correlation with traditional car companies.” Toyota is a traditional car company. Tesla doesn’t. Comparing two things is like comparing a cat to an orange and getting angry with the orange for not yelling when you rub it and thus treating it as priceless or not real because it doesn’t do these things. What do you expect a cat to do.
Compare a few products between the two companies to further explain what I mean. Toyota makes cars. Toyota also produces material handling equipment and textile machines. Material handling equipment includes forklifts and other material handling equipment involved in transporting, sorting of goods and even storage. Weaving machine refers to things like Sakichi Toyoda’s automatic loom, which he invented, as well as spinning machines and looms.
These are great products and they have value, but they are not the same as Tesla products. The only product that Toyota and Tesla have in common are electric vehicles. Other Tesla products include batteries of various sizes and purposes, solar panels, solar roof tiles, insurance, Tesla’s FSD chip, and Autopilot.
Although Tesla doesn’t mine lithium to market like a regular miner, Tesla is also starting to mine lithium for its batteries. The problem is that these are two very different companies with very different goals and for each company a different business plan applies.
To say that Tesla does not have “a real business” because Tesla is not doing what Toyota is doing is illogical and shows that Toyoda has not done proper research on Tesla. Tesla doesn’t trade in recipes, as Toyoda has stated. Tesla is redesigning the entire meal plan with the aim of increasing sustainability.
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