USA and China manufacturers scramble to steal Tesla designs

The USA and Chinese auto manufacturers are not good enough to out-design Musk's Tesla cars so they pay to steal their designs. Have they no integrity?

Tesla Inc. was absent at the annual auto show here this month, but its new Model 3 sedan was still a hot ticket writes Tom Higgins of the Wall Street Journal.

Tucked away in the convention hall’s basement, far from the new Chevrolet Silverado pickup and Toyota Avalon sedan displayed on the main floor, Caresoft Global Inc., an engineering firm based in the Chicago area, showed off a Model 3 chassis.

It is one of several sedans Caresoft has purchased from third parties since November, with the goal of studying them and selling data and technical insights to Tesla competitors–for upward of $500,000.

“There are people who flew down from China just to have a test drive with us," said Caresoft business manager Prideep Subramaniam.

A shortage of Model 3 sedans has created a frenzy among curious competitors, Tesla enthusiasts and auto reviewers to get their hands on the electric car, which starts at $35,000. Tesla was supposed to be making over 5,000 Model 3s a week by now–instead it delivered fewer than a total of 2,000 the past two quarters.

The production bottlenecks mean few people beyond employees, family members and company insiders have seen the Model 3 in person. The cars only recently arrived to a few Tesla showrooms, drawing big crowds. Tesla, which declined to comment for this article, has received about a half-million reservations for the Model 3, but the wait for a car is projected at 12 to 18 months if ordered now.

Investors and competitors are devouring any morsel of information. Tesla shares shot up more than 6% earlier this month after automotive website The Drive published a lengthy Model 3 review.

Writer Alex Roy took the sedan on a cross-country trip with its owner, writing a generally positive review and calling the Model 3 “the most important car since the Ford Model T." The owner, however, tried to sell the car on eBay, saying it was too small for his family of five. Bidding went up to $57,100, but the reserve price set by the seller wasn’t met. The owner said he later sold it through a private sale to a European buyer for more than the highest eBay bid.

USA Today rented a Model 3 it found listed on online marketplace Turo, concluding: “A day spent with a Model 3 leaves one itching for one more day."

Caresoft said it has been buying up Model 3s from early buyers, paying about $100,000 a vehicle. The firm takes CT scans to create digital designs for companies that plan to run through virtual simulations to understand the Model 3’s design.

This month Caresoft brought one to the CES trade show in Las Vegas and again to the Detroit auto show, where Caresoft’s booth was busy during special days held for automotive-industry attendees.

Around the red Model 3 skeleton, a Ford Motor Co. employee was measuring the windows, while men with European accents were crawling underneath for a closer view.

“Everybody is dying to actually see one and experience one," Mike VanNieuwkuyk, a senior vice president at research firm Ipsos, said after checking out the booth.

[Tesla] Car teardowns are nothing new. In 2016, Ford attracted attention when Tesla’s Model X sport-utility vehicle appeared in the Detroit area with license plates belonging to the “Blue Oval." Bloomberg News reported then that Ford paid almost $200,000 for an early version of the SUV.

In May, UBS released a teardown of General Motors Co.’s all-electric Chevrolet Bolt, a competitor to the Model 3. The report estimated GM was losing $7,400 on each vehicle sold, largely because of a lack of scale. From this, UBS estimated that Tesla would lose $2,800 on the base version of the Model 3 and might break even on versions that sell for $41,000 or more.

For clients, Caresoft quietly offered test drives around downtown Detroit in a black Model 3. After a day of meetings with auto executives, Caresoft Chief Executive Mathew Vachaparampil recapped at a hotel bar in Detroit the reception he received from leaders trying to figure out the magic behind the Model 3. He said 10 auto makers are customers.

“They’re very excited" for the data, he said. “I can get a meeting with any [car] CEO on earth." Tom Higgins of the Wall Street Journal