Is the Auto Industry in Trouble?

The rebound of the auto industry has been making headlines globally since 2015’s numbers finally hit the press. In America, auto sales recently set an all-time record for the first time in 15 years. Low interest rates and gas prices¬†after the economic crisis¬†have made 2015’s economic environment prime for the auto industry , but will it last?

tesla motorsIt’s possible that the auto industry’s recent rebound may be short-lived; despite the blue skies hanging over today’s markets, members of the auto manufacturing establishment including Ford Motor Co., General Motors Co., Honda Motor Co., and Toyota Motor Corp. may be heading steadily towards their doom.

So where is this hint of failure coming from? Turns out sales aren’t the only indicator of a company’s long term success. It’s important to also take into consideration where the industry’s most powerful and inevitable trends are gaining steam, and if a company seems to be primed to commit in a changing market atmosphere.

When one takes the ambition and game-changing nature of Tesla Motors into consideraiton, for example, it becomes clear that some automakers may be steadily losing ground in an industry involving towards all-electric vehicles.

Keep in mind that Tesla has been manufacturing all-electric vehicles with ranges of over 200 miles since 2008 when it came out with the famous Tesla Roadster. The company now manufactures two vehicles, the crossover Model X and the sedan Model S, the latter also possessing a 200-mile range.

“Tesla will absolutely have a huge impact” on the auto industry as we currently know it, said Ale Resnic, CEO and co-founder of the online automotive marketplace Beepi.

Resnik said that while innovation is fundamental to Tesla’s entire existence, this is “in contrast to traditional automakers, who are now partnering with technology companies.

chevy bolt“In a world in which cars will have more software and are quickly becoming computers on wheels, Tesla has an advantage,” he continued.

That said, traditional automakers have begun to manufacture all-electric cars. However, they’re getting into the game late, and not horribly well-informed. The only traditional automaker actually making room for itself in the EV market is GM, which is set to release its 2017 Chevy Bolt by the end of the year. The Bolt will have a mile range of over 200 miles and cost a relatively affordable $37,000 before incentives.

Honda and Ford are trying their best to keep up, but each of their first EVs won’t be hitting markets for over a year.

The Tesla Model 3 caused quite a stir when it was pitched as as concept and made available for pre-order; the company’s newest vehicle will also be its most affordable, clocking in at a mere $35,000 before incentives with a range of over 215 miles per charge. However, many industry analysts have become fairly skeptical about Tesla, especially given its consistent failure to reach its manufacturing timeframe goals. Those 325,000 people with Model 3 pre-orders aren’t expected to receive their vehicles until they’re deep into 2017.

That said, no one can argue that the wild popularity of the first ever attractive all-electric vehicle doesn’t signal a major industry change on the horizon.

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