You can be well funded, make an awful lot of cars, and still go out of business.
A lot of people are wondering whether Elon Musk is the Preston Tucker of the automobile world. That is an incorrect assumption. Elio Motors is the Preston Tucker of the automobile world, trying to sell stock and taking deposits on cars that were never made.
But the post War era was full of other oddball brands that never made it past the 1960s or in some cases, the 1980s. Hudson, Nash, Rambler, American Motors and of course Kaiser-Frazier. All had their brief day in the sun and then faded away.
Kaiser-Frazier bears special mention, as the founder of the company, Henry J Kaiser, was a multi-millionaire if not billionaire, from all the profits he made from building Liberty ships during World War II. He owned Kaiser Aluminum and also started Kaiser Permanente as a healthcare plan for his workers. His name lives on today, there.
But even though he had lots of money and a reasonable car design, he couldn't keep up with the big three. Right after the war, he sold an awful lot of cars because there was an automobile shortage. People didn't mind so much that they were buying an old flathead engine car from the 1930s that was woefully out of date.
But very quickly the other automakers upped their game. Overhead valve engines and small block V8s became the norm, along with automatic transmissions. Particularly the latter made it hard for smaller manufacturers to keep up. Automatic transmissions were very complicated devices for their era and only big companies like General Motors or Ford could develop and manufacture them.
Hudson actually came up with its own unique automatic transmission known as the Ultramatic drive. And apparently it wasn't a bad automatic for its era. However, Hudson was still saddled with Flathead engines from the previous decade, and it only was toward the end of their lifespan that they developed an overhead valve V8 - but by then it was too late.
Meanwhile Henry J Kaiser's big idea was to develop a small car. It was a good idea in an era where Volkswagen Beetles were starting to take off along with weird French cars and British imports. However the so-called "Henry J" was a stripped down econo-box that punished its owners and for only $100 more you can buy a base model Chevrolet with an overhead valve in-line 6 and a real trunk lid that opened.
The writing was on the wall. Frazer left the company leaving Kaiser to himself. The only thing kept keeping Kaiser afloat was their purchase of Jeep. And that was bought out by American Motors in the 1960s. Kaiser got out of the automobile business for good.
What is interesting to look at in terms of the old brochures that are online is that Kaiser had very ambitious ideas for a post-war car. The Frazer brand would be there luxury upscale model with a conventional front mounted engine and rear wheel drive. But the Kaiser car would be a front wheel drive car with unibody construction.
However, even with all the money Kaiser had, he couldn't afford to pay for the development costs of such a unique design. So the Kaiser-Frazer cars entered the market being virtual clones of one another and virtual clones of 1930s technology.
Of course, today, transverse mounted front wheel drive cars are pretty much the norm. But back then it was considered radical technology, unproven and undeveloped.
It makes me wonder whether Elon Musk is the Henry J Kaiser of our era. It is true that he's been very successful with his automobiles so far - and in many ways, they include cutting-edge technology - or what was cutting-edge technology when they came out. I recently ran into a French Canadian who was towing a travel trailer with his Tesla Model X. He says he can go about 150 miles a day before having to recharge which is pretty impressive considering he's towing a 3,000 lb trailer.
But he paid over $100,000 Canadian for that SUV which is an awful lot of money. I only paid $40,000 for a pickup truck, and $60,000 buys an awful lot of gasoline over the years. In fact, the price difference would buy enough gasoline, at $4 a gallon and 15 mpg, to go over 200,000 miles. As I noted before, hybrid and electric cars might not make much economic sense for most people - for now, anyway. The prices have to come way down in order to make them work.
Meanwhile, Ford, GM, Chrysler, Volkswagen, BMW, Toyota, Honda and everyone else in the world is starting to build Electric cars. I wonder if the Tesla will become an interesting oddity, much as an old Henry J Kaiser was by the 1960s. And by the 1970s, most of the Kaiser-Frazier cars were long in the junkyard.
My Canadian friend also has a deposit down for the "cybertruck" which seems to be as elusive as the Elio three-wheeled car. With a production date of "next year" (always a convenient timeline, as you needn't update it on your website!) and oddball styling, one wonders whether Musk has grown bored of Tesla and finds manipulating stock prices a better deal. And maybe he sees the writing on the wall as the market becomes flooded with better-made and lower-priced electric alternatives. While the "cybertruck" remains to be seen, Ford and GM already are selling their electric models.
We'll have to wait and see how this drama plays out. Quite frankly, the thought of buying a new car scares me to death, as I hear these stories about how you have to pay a "subscription fee" with some brands (such as BMW) just to use your heated seats. This strikes me as very wrong - and anyone who signs up for it, is a blithering idiot.
But then again, people today plead poverty while tapping at their new iPhone to have DoorDash deliver some cold french fries from McDonald's - for a $15 delivery fee. People are idiots, it seems!