At Los Angeles Auto Show, Tesla Looms Large

November 28, 2018
Updated 5mo ago

By Carlo Versano

At this year's Los Angeles Auto Show, one of the first booths visitors will see when they enter belongs to Tesla, which is set up right near the entrance to the South Hall of the L.A. Convention Center. But as Cheddar took in the show during Wednesday's media preview, Tesla's presence was felt far beyond its booth.

The young company loomed over the show ー its influence apparent in the myriad of new electric offerings from both legacy auto giants (VW, Audi) to upstarts (Rivian, Bollinger Motors).

Electric vehicles make up about 1 percent of U.S. auto sales, but you wouldn't know it here. Battery-powered production and concept cars were the models auto execs were most excited to talk about with the reporters who milled about the convention halls. And many of them didn't shy away from giving credit to Tesla ($TSLA) and Elon Musk for leading what may one day be considered the biggest change in mobility since the Model T.

"Tesla was innovative, and they pushed the car industry in one direction," said Stephan Winkelmann, the president of Bugatti Automobiles. Bugatti operates within a particular, rarefied niche of the auto market ー its "entry-level" model sells for around $1.7 million ーbut Winkelmann said that even those high-end buyers are attuned to changing attitudes around CO2 emissions. The carmaker has previously said it will develop an electric car, though it's thought to be years away.

Tesla also looms at the opposite end of the market. Masahiro Moro, president and CEO of Mazda North American Operations, said Tesla's ability to "break through" has made it clear that automakers can no longer assume the status quo. "We have to look at ourselves to see if there are unmet needs of customers so that we can innovate our process."

For Volkswagen, the world's largest automaker by sales, Tesla's success in changing the narrative around electric vehicles ー making EVs cool ー is "something to look at and aim for," according to Derrick Hatami, the executive vice president of sales and marketing at Volkswagen of America. "It has presented an interesting window into what the possibilities could be for electric vehicles." In L.A., Volkswagen showed off its updated ID Buzz van, an electrified take on its classic minibus. At the same time, VW's other famous model, the once-trendy Beetle, is making its final curtain call at the show, an indication that the German behemoth sees the future of its business heading in a new direction.

And then there's the big German luxury automakers, with which Tesla competes most directly. Cheddar spoke to executives at both Mercedes and Audi, who credited Tesla with helping move that sector of the market into the future.

Gorden Wagener, chief design offer at Mercedes-Benz, told Cheddar that Tesla has been particularly important in jump-starting the move toward autonomy. "We will change this industry more in the next 10 years than in the 100 years before," he said.

And Anthony Foulk, the senior product manager at Audi of America, gave Tesla props for its stewardship. "They have definitely pushed the entire auto industry forward."

Audi and Mercedes are among the German brands racing to bring their own electric vehicles to market that will compete head-on with Tesla, but they benefit from decades of production experience that Tesla still lacks. While these executives give Elon Musk credit, make no mistake: they want to beat him at his own game.