Electric Vehicle Startups versus Established Auto Makers

Part 4 of our 'CHARGED UP' Series on E-Mobility


It’s a tech race about whose wagons will one day dominate the prairie…and control the purses of their drivers.

The race to build the car of tomorrow pits established automakers against electric vehicle startups.


Established car companies have valuable assets in their armories: they perfected high-quality mass production, they built strong brands with loyal followers, and they retain manufacturing footprints around the globe. They have robust retail networks and supply chains. But to succeed in the new electric vehicle era, they must integrate cutting-edge software with hardware. They must provide exciting products at competitive prices. And eliminate organizational silos so their corporate culture doesn’t sabotage their ambitious electrification strategies.

Young electric car companies and EV startups, in contrast, have no legacy regarding product, operations footprint, or mindset. This gives Tesla, Rivian and Lucid wide latitude to do things differently than the traditional manufacturers. What separates these young powerhouses from the rest is their vertical integration. From the outset, that’s how they were set up. Key technologies and software are developed, tested and perfected in-house, instead of sourcing them from suppliers. The energy consumption of the car's powertrain, climate control and other systems is optimized in the process, aided by sophisticated power management and 'smart' distribution. Component 'light weighting', down to car seats, gets rid of extra pounds and reduces the amount of auto mass that needs to be moved.

Tesla makes its own power electronics and motors. Its proprietary SuperCharger network is the world’s best and largest. The company’s over-the-air updates, which ‘rejuvenate’ everything from suspension to range and navigation, are the envy of the industry. The world's most valuable auto maker is widely seen as setting the standard for EV powertrains and most importantly for its software and centralized control unit. This is the digital brain for the car’s ‘autopilot’ and infotainment. Market and tech analysts predict Tesla will likely remain the cost and technology benchmark for some time.

Rivian built a unique connected ‘skateboard’ platform – a slim chassis holding battery pack, powertrain and suspension – that is used for the company's soon-to-debut R1T pickup truck, the R1S SUV, and a delivery van, of which 100,000 units are on order to boost Amazon’s ‘last-mile’ delivery capabilities. Powertrains, battery packs and other core components for these vehicles are designed and built in-house.

Lucid, too, swears by vertical integration for the design and development of its electric powertrain technology – motors, battery packs and all.

The focus on vertical integration gives manufacturers significant advances in the overall energy efficiency of their vehicles and it explains why a Tesla Model 3 scores up to 141 MPGe (an acronym for miles-per-gallon equivalent, the EPA’s way of quantifying the efficiency of electric vehicles). This compares to the electric flagship of the Volkswagen group - the Porsche Taycan Turbo S - which gets an EPA-rated 68 MPGe. Audi's e-tron drives off the lot with a 78 MPGe rating while VW's latest U.S. market entrant - the ID.4 - claims 97 MPGe.

This is one more reason why traditional auto makers are watching the competition with eagle eyes and are not shy to take more than just a page or two from the playbooks of these young market intruders.

Of course, Tesla, Rivian and Lucid have their own unique challenges to deal with. There is the difficult transition from startup to manufacturer (Tesla has already gone through self-proclaimed ‘production hell’). They need to build brand appeal, retail channels and a global footprint. Capital markets and investors require constant TLC; so does company culture. Daunting tasks, no doubt.

The stakes are high for both camps. Time will tell if the prairie is big enough for all these wagons. Then again, to quote a distinguished colleague from Apple, the more the merrier…

Let’s keep charging!

- Christian Koenig


Electric Vehicles and the Future of Retail

Part 3 of our ‘CHARGED UP’ Series on E-Mobility

For more than 100 years, we have bought our cars at independent dealerships.

That’s because state franchise laws prohibit auto makers from selling their cars directly to us consumers. This arrangement worked out well for dealers over time. But the competitive landscape is changing. In the dawning Electric Age, new market players and technologies are beginning to challenge today’s retail model and its bottom line. New market players and technologies are beginning to challenge today’s auto retail model and its bottom line.

Rather than sell through franchised dealerships, electric-car companies and EV startups such as Tesla, Rivian, Lucid and Polestar follow a direct-to-consumer model, building their own retail studio and service footprint. Cars are sold online only, which greatly simplifies the buying process. Prices are set centrally, with no room to haggle. This business concept cuts out “the middleman” and allows manufacturers to control the entire customer journey – from purchase to delivery, maintenance and ownership. Auto makers now have complete say in how their brand and their vehicles are presented…and serviced. Wouldn’t you prefer to have your car looked at on your driveway or at work? It’s already happening, thanks to a fleet of mobile service units for maintenance and repairs.

Tesla, which spearheaded the direct auto sales model in America, already owns more than 160 stores and galleries in the United States. EV startups Rivian and Lucid are expanding their bricks-and-mortar presence, with Rivian to open 10 ‘retail experience’ centers and 41 service facilities by next year, while Lucid plans for 20 studio and service locations. Polestar, the new electric-only car brand owned by Volvo, is opening another 15 new showrooms by end of this year.

There are bumps in the road ahead for auto dealers. Upgrading dealerships to service electric cars is expensive. Installing charging stations, heavy-duty lifts and dedicated service bays, and retraining technicians to work safely on high-voltage electric systems requires investments of several hundred thousand dollars.

Unlike their gas-guzzling counterparts, electric cars hardly classify as ‘cash cows’ in terms of service. With fewer components, they require less maintenance than conventional cars: an electric drive train has one-tenth of the moving parts of an internal combustion engine. Electric cars don’t have spark plugs or catalytic converters. They don’t need mufflers, fuel filters or fan belts. Adieu to oil changes…and to the revenue streams dealers were used to in the good old days, when on average 50 percent of dealership gross profits came from parts and service.

Here’s yet another threat to dealer profitability: over-the-air updates. Pioneered and perfected by Tesla, this wireless delivery of software ‘refreshes’ your auto’s systems – from suspension to brakes, range and infotainment – overnight and while the car is in your garage. No need to drive to the dealership for that two-day update via cable.

Ever thought about the collision avoidance system in your car, designed to keep you and your loved ones safe? Deployed in large numbers, this technology will eventually help reduce the number of accidents and put a dent in the lucrative high-margin collision repair business of dealers.

There’s no doubt these developments are 'stress-testing' the current dealership revenue and profit model. It’s time for established auto makers and their dealers to rethink the future of retail.

We’ll be back…in the meantime, stay safe and charged!

-Christian Koenig


The ‘Masters of Code’ for the Electric Vehicle of Tomorrow

Part 2 of our 'CHARGED UP' Series on E-Mobility

Software is rapidly reconfiguring the auto industry. Data is the new oil in tomorrow’s electric, connected and autonomous car.

Demand for software engineers will likely increase three to four times by 2030, says consulting firm McKinsey.

Massive programming is needed for an electric vehicle’s operating system and for automated driving. The car’s adaptive cruise control, its cloud-connected services, automated braking and night vision systems all require sophisticated software. Lane-keep assist, infotainment and over-the-air updates also require code, and lots of it. In the race to build ‘laptops on wheels’ (Elon Musk), attracting and retaining software-development talent is a key priority for automotive organizations and their suppliers. It’s the start of a golden age for the ‘masters of code’.

If you’re a software engineer then your future looks bright! Demand for this profession will likely increase three to four times by 2030, says consulting firm McKinsey. More and more, businesses realize they need to build strong internal expertise in software architecture, integration and validation.

Recruiting talent is a challenge for auto makers, who compete globally for UX designers and AI experts with tech giants such as Apple, Google or Microsoft and other industries.

Executive recruiters point to a rapid rise in demand for software engineers that exceeds supply. Already today, top developers can ‘pick and choose’ between employers in Silicon Valley, Detroit, Munich or Shanghai and ask to work from anywhere in the world. The ‘masters of code’ know they can command a premium for their expertise – including high six-figure salaries, stock options and the coveted U.S. ‘Green Card’ residency permit – much to the dismay of hiring managers and HR departments at automotive companies, who are used to determining compensation based on more rigid salary bands.

Auto makers are learning they need to ‘pay to play’ if they want to attract top talent. Career paths, growth opportunities and a strong culture will help companies retain the experts they need to build tomorrow’s software-defined car.

Join us again this time next week – in the meantime, stay safe and charged!

-Christian Koenig


How Far Should Electric Vehicles Really Go?

Part 1 of our 'CHARGED UP' Series on E-Mobility

How far can you go on one charge with your electric vehicle (EV)? Let’s talk about it.

Approximate driving range for select electric vehicles (model year 2020).

Every EV buyer has a minimum range in their head when considering a new car. Most consumers want at least 250 to 300 miles per charge. The more the better. Back in 2012 Tesla introduced its groundbreaking Model S. The company knew it had to address a key concern among drivers – how far will this car go? To disperse fears, Tesla launched it with an EPA-rating of 265 miles. This was a real coup at the time.

Fast forward to model year 2020: the Porsche Taycan Turbo S gets 192 miles of EPA-rated range. Audi’s e-tron makes 218 miles. The Jaguar I-Pace clocks 234 miles. Chevy’s cheeky Bolt clinches 259 miles – and puts three premium brands to shame. But not one 2020 model year contender can take the range crown from Tesla’s 2012 Model S.

Sly marketers want us to believe that 200 miles or so per charge is really all we need. But consumers want more range. Fortunately, there’s pushback, including from three Californian tech powerhouses – Tesla, Rivian and Lucid – who maintain that good, solid range is a deciding factor in the ownership experience at a time when the charging infrastructure is in its infancy and charging is slow.

To rescue consumers from the ‘range anxiety’ front, Tesla dispatches ‘Model S Long Range Plus’ with an impressive 402-mile EPA rating. Not to be outdone, Rivian moves into the fray with a pickup truck capable of 400 miles and the ‘zero to 60’ acceleration of a Porsche 911 (count to three). That’s right – in America electric trucks are now as fast as sports cars! So, watch out for the ‘Rivian R1T’ which debuts this summer along with its long-range sibling, the ‘R1S’ SUV. And then there’s the third Californian – Lucid – who wants to set a new range record with EPA-estimated ratings of 406 and 517 miles for the ‘Air Touring’ and ‘Air Grand Touring’ sedans.

Of course, we all have strong opinions on range. Don’t settle for less when we can have more. As the competition heats up, we’ll see the overall range of EVs in the U.S. increase to 300 plus miles in the next few years.

The race to build the car of the future is a marathon, not a sprint. And today’s record may well be tomorrow’s norm!

We’ll be back…with a new post this time next week – in the meantime, stay charged and safe!

-Christian Koenig


You Can’t Manage What You Don’t Measure.

Fortune 500 executives on what distinguishes A-Teams in Government Relations and why businesses expect more metrics.

Government Relations teams work the ‘corridors of power’ to advance and protect the agendas of their businesses. But what characteristics stand out among the best of the best? We talked to a dozen executives of Fortune 500 and German stock index DAX companies about what sets high-performing government relations teams apart. Here’s what these leaders had to say:


Top teams have a firm grasp of their company’s strategy, products, and services. They’re adept at translating key business objectives into effective lobbying, and they know when and how to introduce company positions in the legislative process.


High-performance teams embrace a customer-centric approach. For best results, they ‘em- bed’ with their business units and work with the Executive Office, Business Development, Tax and Legal to identify threats and opportunities early on. On the public relations front, teams coordinate closely with communications and trade groups to maintain a consistent narrative.


Top teams define and prioritize legislative, regulatory, and budget advocacy activities. They use metrics to measure their deliverables and those from trade groups and lobbying firms. Team members commit to annual target agreements which determine bonuses.


A-teams work to improve “early warning” capabilities of their companies to detect threats for the business. They are data-driven, tech-savvy analysts who work across the aisle and take pride in honing their coalition-building skills.

The Achilles Heel of Government Relations

All this said, if there is one recurring grievance among top management, it is the reluctance of GR teams and trade groups to embrace metrics in their line of work.

Says the Chief Operating Officer of a global technology company: “I keep hearing that government relations is a ‘people business’ for which there are no good metrics, and my res- ponse is that you need to find ways to measure what you’re doing. Our sales, tax and marketing departments use metrics to set goals and track progress, and we expect the same from our public affairs team.” Fortunately, the industry has made significant progress on measurement since the days of counting “meets and greets” on Capitol Hill and tallying how often company representatives write their members of Congress. While limitations remain on how to quantify the extent to which a company’s actions moves the needle on a certain issue, today’s metrics are more solid, especially when used in concert with technology.

Thanks to sophisticated tracking software, government affairs pros can analyze legislation to determine if it is good or bad for business and respond to emerging legislative threats in a timelier fashion. Cloud-based analytics provide key data points and insights on how to engage key constituencies in campaigns.

Teams can also measure company-internal processes to determine the value-add of various initiatives. Government Relations departments, for example, can show the contributions they make during site selection for a multi-billion-dollar manufacturing facility. Want to demonstrate how GR supports Tax in securing work-force training credits? There are metrics for that too.

Businesses Expect a Return on Investment

Businesses understand they “pay to play” the power game in Washington and elsewhere. It’s not cheap. Today, even a modest government relations presence in the Nation’s Capital with a handful of employees and a few thousand feet of class A office space can easily cost upwards of one million dollars a year. Include annual dues for trade groups, the monthly lobby firm retain- er and budget for award dinners and it adds up to a hefty sum.

A-teams in the profession understand that quantifiable goals and deliverables provide a strong justification for these outlays.

There is good reason for Government Relations leaders to have metrics in their arsenal: Measuring your team’s accomplishments will get you the C-suite recognition you need and ultimately the budget and headcount to succeed.

-Christian Koenig


Sharing the Good News.

Communications is critical when entering the U.S. market

Congratulations, you’ve just announced plans to build a high-tech manufacturing facility and create hundreds of new jobs in the United States.

Planting your corporate flag in America for the first time is a big opportunity for your business. You now have a foothold in one of the world’s largest and most diversified markets. You have access to an even larger customer base. But there are challenges. Your company and products are not known in America. And although you need to hire and ramp-up quickly, your lean headquarters in Europe cannot afford to send more than a handful of experts to help build your plant abroad.

A good market entry plan will always include detailed communications activities and deliverables for each one of the four main phases of your Greenfield investment. These are site selection, start of construction, hiring, and start of production. Let’s look at how communications can support your hiring process, help grow your customer base and protect your brand in a meaningful manner.

Hiring the right employees: One of the first priorities is hiring the right people for your plant and building an effective team. For a company entering the U.S. market for the first time, this can be challenging for any number of reasons. Its brand is not known stateside. There is little information on the web about the firm and its products. The design of its website is outdated, and the wording of the English version is awkward. To complicate matters, the new U.S. plant is in a rural setting that lacks the amenities qualified candidates, and their families are used to in more urban areas. A good communications plan will address these challenges and define activities to support your HR team. This will include key messages about your company, its history, products, advanced workforce training initiatives and other value propositions. It will include ready-to-use materials, prepared by seasoned communicators and native speakers, not the main office in Europe, for U.S. career web sites, job fairs, and recruiting firms. Finally, a good communications plan will always identify ways to engage local and state media during the hiring process, in addition to any recruiting support the host state may offer.

Growing your customer base: Companies opening production facilities in the United States typically already have customers stateside. Building a plant is a long term investment. Most market entry plans include targets on growing the customer base and increasing market share. A good communications strategy should specify activities that advance your business the moment you arrive in America. Exhibits and meetings at trade shows are one good way to engage prospective customers. Interviews with trade media covering your industry on, for example, technology trends are another effective, low-cost method of catching the attention of prospects. Develop a compelling story. Tap your considerable in-house expertise and involve your plant manager, product development and sales heads. Ever wondered why most American company executives are so “on message” in interviews? They have been media-trained and know exactly what to say about their products, whether in front of a camera or a microphone, in 5- or 10-seconds sound bites. And their messages are designed to appeal to the specific needs and concerns of American customers and prospects. You have a great product, but make sure everyone knows about it.

Protecting your brand and reputation: Sooner or later, companies will experience problems. It could be a faulty product, a plant fire, or a labor issue. These events put you immediately under the public microscope with potentially negative media coverage around the clock. The good news is, with a bit of preparation, you can weather the storm. When you build your new facility, be sure to adopt effective crisis management policies and procedures and make them part of your Health, Safety and Environment (HSE) culture from day one. And a comprehensive crisis communication plan is essential for success. In the U.S. most companies have crisis plans in place and practice crisis scenarios on a regular basis. After all, practice makes perfect and emergency preparedness is a management responsibility. Better to be ready, than sorry.

Building relationships: Moving into a new market means you should take advantage of every opportunity to build relationships, not just with customers, but also with your new community, and with the media that covers your location and industry. A good communications plan will incorporate a means of building relationships with these and other key groups that are relevant for your business. The sooner you open the lines of communication with them, the better. Think of the process as you would think of moving into a new community where you’re not known – you need to get to know your neighbors. You will need them at some point. The time to make friends is early on, not when you need their help.

-Christian Koenig