With a number of magazines coming out with their “Car of the Year” issues, here is today’s pop quiz: What do Tesla and De Tomaso have in common?
Answer: A lot more than you think.
We’ll start with the “obvious.” Tesla’s Model S was just named “Car of the Year” by Motor Trend and Automobile magazines. Four decades ago, De Tomaso’s Pantera was named “Sports Car of the Year” by Road Test, so both constructors have a machine that won a major award (with both decisions being called “controversial” by their respective publications).
Now, let’s take a look at the men behind the marques. In the 1950s, Alejandro De Tomaso thought he could build a better mousetrap than the established GT and sports car manufacturers in Modena and elsewhere. Five decades later Elon Musk felt he was craftier than the established automakers in Detroit, Stuttgart, and beyond. Both were around 30 when their firms were formed, and they’re ambitious, strong-willed, unique characters.
How about the marques? De Tomaso was at the forefront of the 1960s’ performance technological trends, for its first three road cars were mid-engined when hardly anyone outside racing circles knew what a mid-engine car was. When De Tomaso expanded beyond sporty two-seaters, it’s first offering a fast, luxurious sedan.
Tesla went after lithium-ion battery power when hardly anyone beyond Silicon Valley was aware there was something called “lithium.” Tesla’s first EV (electric vehicle) was a mid-engine sports car, which was followed up by—now obvious, thanks to that MT award—a fast, luxurious sedan.
Musk and De Tomaso weren’t the only ones to pursue their visions of “performance.” Some of the names are familiar—Ferrari, Lamborghini, the Maserati brothers (twice—first with Maserati, then OSCA)—some not. This latter group finds men such as Adolfo Orsi (diversified industrialist who bought Maserati), Giorgio Billi of ATS (his fortune came from machines that made panty hose), the Rivoltas of Iso (refrigerators, heaters and motorscooters), Cisitalia’s Piero Dusio (textiles, machine tools), Aston Martin’s David Brown (gears and tractors), and countless others. Like Musk, those listed here made a fortune before tackling limited production cars.
The common threads between the 1950s and ‘60s sports car & GT manufacturers and today’s electric carmakers extends far beyond the check writers. For the past several years another new EV company has seemed to pop up every week or so, just as sport & GT car constructors did five decades ago. If history follows the same course (which it almost certainly will), the high extinction rate of EV producers is just beginning. For instance, most of the GT makers in the above paragraph are gone, and below we’ll deal with how the others survived.
What caused so many GT builders to go under, especially at a time when the world embraced them? A perfect case study is ATS. Their gorgeous 2500 GT blew the roof off 1963’s Geneva Show with its introduction, and Automobili Turismo & Sport could have realistically claimed it was the most advanced production car on the planet. The 2500 GT had smooth aerodynamic coachwork, a centrally mounted all-aluminum engine, 5-speed gearbox, rack & pinion steering, independent suspension front and rear, and more. Rave show and road reviews soon followed.
With all that going for it, why did ATS fail? The short answer is they came to market too soon. As former chief engineer Carlo Chiti told me, despite all the orders they took at Geneva, the cars (and factory) were nowhere near production ready. And when they were more than a year later, Billi had problems elsewhere in his empire. In today’s financial parlance, ATS simply “ran out of runway.”
Now lets take a look at what CEO Paul Wilbur said when EV constructor Aptera declared bankruptcy in late 2011: “After years of focused effort…we have never been closer to realizing our vision. Unfortunately, though, we are out of resources.”
Governmental assistance often weaves its way into both EV and GT industry history. Aptera pinned its future on a federal loan that never came, while ATS chose the site of their factory based on the promise of cheap regional government loans. I could go on with other parallels, but for the sake of brevity we’ll stop here.
So what ensures an upstart constructor better odds of long-term survival? Though Musk probably didn’t realize it when he started conversations with Daimler AG in 2007, his trip to Germany to speak with Mercedes’ executives about Telsa’s technology was much like Enzo Ferrari’s conversations with Fiat in the mid-1960s. When Musk returned to California he had his engineers install their electric drivetrain in a Smartcar, and had it ready when the Mercedes executives paid him a visit several months later.
The result? Daimler ordered a large number of battery packs from Tesla, and took an equity stake in the firm a number of months later. Which sounds an awful lot like Ferrari’s engines finding their way into 1966’s Fiat Dino, and Fiat buying into Ferrari three years after that.
And therein lies the key to longevity. Four decades ago all the sports & GT constructors were being battered by unexpected elements beyond their control. Public sentiment had turned against gran turismos as much of society viewed them as wasteful products, not the sign of success they had been through the 1950s and much of the ‘60s. In fact, that “wasteful product” designation was actually used by a banker in the early ‘70s when speaking with one gran turismo executive about a new business loan; it mattered not that many of the constructor’s clients used their GT’s to travel to their far-flung factories spread across their country or the continent (commuter flights so common today didn’t exist back then). Then came the first oil crisis and the global recession, sounding the death knell for all those constructors who didn’t merge with a “mother ship” (as the constructors called the major manufacturers).
Today’s hybrid and EV market eerily parallels that history. For years the public scolded Detroit that their offerings were old and out of touch because they were perceived as gas guzzlers. So Chevrolet (which was inspired by Tesla) came out with the sequential hybrid Volt, only to find the car the object of public scorn because the Volt had somehow taken on the stigma of being wasteful spending.
And we must not overlook the commodity at the center of both the 1970s’ GT death march and ongoing electric car market contraction: oil itself. Four decades ago no one foresaw the price spike, just as several years ago not one auto manufacturer predicted the price crash in 2008-09.
In short, we’ve seen this movie before, just in a different theater. So to all you aspiring EV constructors, pay close attention to the GT market, or you too will learn the lesson former Iso president Piero Rivolta knows too well.
“You know how you made a million dollars in the car business back when I was doing it?” he asks jokingly. “You started with ten million.”
Then he says, taking on a serious tone: “Today the numbers are so much bigger. To develop a car in the 1960s we thought in terms of budgets in the hundreds of thousands. Now you need to think in the tens and hundreds of millions.”
For more on De Tomaso, see this blogpost.