How iPhones helped Elon Musk crush Detroit

Way back in 2011, major American automakers were slow to realize that "companies in Silicon Valley have for some time been looking at cars just like another mobile device or app." When the disruption, hit, it hit hard, writes Nick Bilton:

Teenagers salivated over the notion of turning 16, getting a driver’s license, and earning independence from their parents. By the time of my conversation with these Ford executives, the auto industry had already withstood countless threats—the rise of Japanese carmakers, the advent of new manufacturing practices, and the aforementioned financial crisis—but none were as pressing as the fact that a new, relatively inexpensive device now appeared to offer teenagers a newfound digital freedom that trumped any analog competitor. “The car used to be the signal of adulthood, of freedom,” a Ford executive told me at the time. “Now, the signal into adulthood for teenagers is the smartphone.”

Lots of other interesting tidbits in this piece.

How Elon Musk crushed Detroit (Vanity Fair)

Images: Maurizio Pesce and Steve Jurvetson

Notable Replies

  1. Tesla has only turned a profit in two quarters since its founding in 2003 and their cars went from top quality ratings, to among the worst very shortly after they started to gain market traction. I understand that the article is talking about how some other Silicon Valley company might knock Tesla off of its position, but its position is completely illusory. We're not talking about how profitable the company is (not) or how good the quality of their product is (also not so great) but how valuable people think it is. That could, and has in the past, change overnight for reasons entirely unrelated to Tesla's potential competition because it's merely a matter of people's opinion of the company. It could come out tomorrow that Musk has a basement full of sex slaves or something and that valuation would drop to nil even though nothing about the company has actually changed, other than the founder being ousted.

    And at the end of the day, that's what people are valuing, and that's why Musk does what he does. It's not about saving the world, or making things better for anybody, it's about feeding is massive ego and being the center of the world's attention. He's arguably the biggest publicly visible egomaniac in the world today, putting even Putin and Trump to shame in terms of sheer unbridled need for attention. All of his ventures are about being showered with praise, and making money off of them is secondary to that.

  2. The problem I have with the opening idea of the article [smart phones provide different freedom for teens, which is troubling to car makers] is that it's overlooking one thing: cars are hella expensive now. Even overlooking the fact that most teen summer jobs are paying less and are usually taken by desperate adults, used cars are a ticking time bomb of further expense and new cars are usually only available to those with credit. Not to mention gas, insurance, and registration.

  3. But but but ...disruptive! Paradigm shift! You have to lose billions to be a successful entrepreneur - just look at the President!

  4. Wait, what forbidden knowledge do you know?

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