At this stage, no automaker will be able to seriously compete with Tesla without securing 50+ GWh / yr. in battery supply. Tesla’s lead in building such capacity is 3.5 years and counting.
Bidding for for LG’s scraps is not a viable strategy.
VW group has been leading the world in electric vehicle press releases while Tesla has secured control of half the world’s lithium ion battery supply and crushed every “Tesla killer” — Bolt, Volt, Leaf, i3, ELR - and is pulling away from the pack at an ACCELERATING pace.
Wait, what? How are they prohibited from having dealerships? If anything, the problem they have run into is that some states require them to have dealerships and sell through them instead of selling directly to the consumer.
Right. It's an ancient dumb law that seems pretty unique to this industry going way back. How many other industries are prohibited from having their own stores and selling the products they produce themselves? It's like telling Apple they can't sell their hardware at their own branded stores and must only sell them from 3rd party retailers - at an additional markup so the retailer can make a few bucks too. It's anti-consumer and anti-competitive. If Ford wants to open their own stores to sell their own cars (not "dealer franchises"), why shouldn't they be allowed to?
It originated as protection for franchisees. Early on, manufactures didn't have the resources to set up dealerships everywhere they wanted to sell cars. So they used the franchise model. The argument is/was, that the franchisees needed protection so they could be assured that their investment in a property, facilities, and developing a market in an area could not be taken away by a manufacturer moving in with a company-owned dealership.
Very similar to the complaints about Amazon moving in on sellers with their own products once they see what is selling well with independent sellers.
This is what I've been thinking for awhile. A huge number of the detractors predicted that Tesla would get crushed by commoditized goods that they spent the R&D dollars on, namely batteries. But I don't think the capacity is even remotely there for other manufacturers to come in and just buy up energy storage on the open market.
Eventually it'll show up due to demand but the flywheel is slow to turn. I think a 3-4 year head start is about right and also in line with most technological head starts (Bezos famously talked about it some time ago and why AWS is the reason they are winning since it had no viable competitor for 7+ years), but like Amazon/AWS, if it takes any longer than that... you're handing Elon a huge amount of time.
> I don't think the capacity is even remotely there for other manufacturers to come in and just buy up energy storage on the open market
If this is the case, doesn't it destroy the arguments of renewable energy advocates that "utility scale" batteries to store solar/wind energy are anywhere close to being realistic?
In the short-term, I'd say so. But I think it's realistic on the timescale that people care about large-scale renewable energy, which is the end of my generation (30ish year old) and the middle of the next, so like 2040-2050.
I think there's a great deal of uncertainty about whether lithium ion is the right solution or whether we'll be able to online solid-state batteries or other alternatives. So it's a situation where if lithium ion persists, Tesla gets huge dividends for early investment, and if alternatives come online, others get in on the ground floor and have a fighting shot. I have no idea how feasible non-LI batteries are in the medium future.
Well that's a nice diversion however do we have any credible hint that solid state batteries are a) viable and b) mass producible ?
It's not like the late 00s where SSDs were viable but deemed not yet cost effective. Solid state batteries IIRC don't even have a proof of concept much less any adoption.
Good enough for 99% of civilian cars, maybe, but I'm a lot more skeptical about the ability of battery-electric power to replace trains, long-haul trucks, etc. The expectation as far as range for those is high enough that enough batteries would either add too much weight or just flat-out not fit.
I expect long-term we'll probably settle on something like 75% batteries / 25% hydrogen for ground transportation, and the reverse of that ratio for aircraft (although I wouldn't expect hydrogen planes to be using fuel cells).
Electrification is great, but it's also been declining for decades in the US, to less than one percent of route miles.
Taking a figure of half a million dollars per mile (which is less than the numbers I could find, but let's be conservative) you're looking at ~130 billion dollars. That's theoretically affordable for the government, maybe, but never going to happen politically speaking.
Hydrogen is not viable. Production is inefficient, energy density is low, and handling is difficult. For long-range transportation where batteries are insufficient the real alternative will be carbon neutral synthetic liquid fuel.
How many other automakers are investing deeply into materials research? Toyota and Honda seem to be playing with fuel cells, everyone else in the latest headlines is just laying off people and trimming the product lines.
If we're going to make fun of companies leading with press releases before actual product, we can't ignore the fact that Tesla has been pretending they can make a $35k car, when it has now been several years and their cars are nearly twice as much as that for the cheapest model.
You can "preorder" it and give them that much money, but they will then follow up with you and tell you that you won't get your car unless you buy more upgrades to push yourself further up in the backlog. So realistically, you can't buy a car at that price.
Tesla has been upfront about saying they are still looking at next year for the 35k version. At now point, will they (or have they) told anyone that they won't get the car unless you buy the mid-range or the long range versions. I was a day one reservation holder, and have never received such a message.
And also, you can't pre-order it - you can put the same deposit down, if you want, as everyone else - that's 1k, and can apply that to a LR/MR and in the future SR.
Also worth noting, the MR and the LR have different inverters, with the MR sharing the same inverter as the SR.
They weren't really upfront about this when they were taking preorders in 2016. And I say this as a Model 3 reservation holder, Model S owner and TSLA shareholder.
Which is a true statement. It's the above that isn't.
At this point, no one is locked in on that deposit. Anyone can cancel at any time - until you click purchase with a additional payment for the car, which is only after the car is available for purchase.
Nothing you have said is untrue, they were just a little misleading with timelines on day one. I'm also a day one reservation holder (in Australia so timelines were different). They never lied, but the have stretched the truth with the occasional weasel words. I'm forgiving since they have never lied, but I'd appreciate them being a little more accurate with information.
I mean, they are supply constrained at the current price point. Even if they could hit the $35k price point, why do so when it just means taking in less money?
Judging by Elon's tweets, they do expect to be able to produce cars for that price in the near future. Whether or not they will sell them near the cost of production probably just depends on demand vs supply.
Sure, good point, why do so? But then why put out press releases and marketing material that imply that Tesla has performed the miracle of creating an "affordable" (well, $35k USD is still beyond 90% of people's pricepoint in reality) car for the masses?
They've done no such thing. They've made another vehicle to compete with BMW, Audi, and Mercedes. Which is fine, but let's call it what it is. There is no such thing as a $35k Model 3, and it could still be many years before we see one.
I don't think Elon musk or Tesla fans will ever say that.
Truth is, Tesla sells well. Chevy bolt does not sell that well. And one of the major reason Tesla sells so well (50k model3 at 50k$ in a quarter) is because of the futuristic hype and image. So they will never admit that Tesla makes just another premium car, or that autopilot is just another driver assistance program.
Good. Name one major technological innovation that was not largely or wholly a product of government subsidies. The only ones I can think of were out of Bell Labs and Bell was a government backed monopoly so they don't really count. They were so profitable and protected they could spend like a government.
Nothing new is ever profitable until you get past the early prototype and scaling stages. For big capital intensive stuff only government historically has pockets deep enough to burn enough money to get big stuff off the ground (sometimes literally). Rockets, jet engines, microprocessors, huge scale power grids, the Internet, genomics, supercomputing, nuclear power, solar power, the list goes on and on.
Private investors just have too low a risk tolerance and too short a time horizon.
I actually wish this weren't so, but it is so.
It's also terribly hypocritical to bash Elon for taking government contracts when everyone does it. Why do you think Amazon's HQ2 is going to be in the DC area?
how am I personally benefitting from Elon Musk being a billionaire, taxpayer dollars shouldn't be reaching his pockets at that volume (meanwhile he prevents his employees from unionizing and suppresses injury reports at the cost of employee health...)
To be fair Musk was a billionaire before Tesla, and considering a company like fox Conn getting 3 billion or $230,000 a job to make a plant in Wisconsin, Tesla getting a subsidy is par for the course.
Tesla proved the EV market and made EVs sexy and cool, which is helping tip EVs into the mass market. Without Tesla you wouldn't see BMW, Mercedes, VW, Nissan, etc. making mass market and luxury EVs. They'd be making no EVs at all or awful "compliance cars" designed to be undesirable. (The traditional auto industry is full of ICE heads and hates EVs. They have to be dragged kicking and screaming.)
If EVs weren't tipping we'd still be talking about how peak oil (the depletion of easy/cheap oil) means the end of modern transportation.
Tesla didn't make Musk a billionaire. The PayPal acquisition did that.
Does Tesla even still get subsidies? They got that DOE loan years ago but they paid it back and lots of other auto makers got government loans back then too. Or are you referring to EV tax credits? In that case those are also subsidizing Nissan, BMW, GM, and any other company selling a mass market EV.
this reminds of investments in research and I'm quoting from somewhere but cannot locate at the moment...
If Balmer hadn't studied spectral lines, Planck may not have proposed the quantum. Then Bohr may
not have conceived his model of the atom, which means Heisenberg and Schrödinger wouldn't have
developed their formulations of quantum mechanics. That would have left Bloch without the tools he
needed to understand the nature of conduction in metals, and then how would Schottky have figured
out semiconductors? It's hard to imagine, then, how Bardeen, Brattain, and Schockley would have
developed transistors. And without transistors, Noyce and Kilbey couldn't have produced integrated
circuits.
Almost every major technological advance of the 20th and 21st centuries originated with basic
research that presented no obvious or immediate economic benefit. That means no profit motive, and
hence no reason for the private sector to adequately fund it. Basic research isn't a waste of tax
dollars; it's a more reliable long-term investment than anything else in the Federal government's
portfolio.
You're comparing scientific research to for-profit industry.
Solar City, Tesla, The Boring Company, and Space X aren't releasing public research, it's all private IP and manufacturing.
You literally could not benefit from their progress if you wanted to. You'd be sued. Their employees can't even work in related industries due to somewhat spurious non-competes.
everyone benefits from Tesla's progress [0], they may be an outlier but I think they are leading the way. More importantly, the progress helps society as a whole. I see their progress as directly benefiting every human and the planet.
you have changed your original comment a few times so it is difficult to respond to, but I'm not sure large tech companies would succeed with unions, people need to educate themselves and learn how to negotiate in highly skilled areas, I look at a local railroad company near me that employs a lot of people and does not invest money in improvements because they cannot afford due to how the union has negotiated, it has stopped innovation entirely. Engineers are still learning light switches, this should be completely automated so we stop having mistakes of train engineers texting people and causing accidents... what a shameful loss of life.
I have not changed my original comment in over 12 hours.
Their progress is not available for public use, period. Go ahead, try to use any technology developed by Tesla and see what happens. They're simply popularizing their own products.
Most major car manufacturers in the US received hundreds of millions of government money to not go bankrupt in the aftermath of the 2008 crisis; Tesla was not one of them.
Tesla was not and is not a major automaker. Their market cap may be large but they don't employ all that many people or ship all that many cars (so less people upstream are dependent on them) Tesla was founded in 2008. They would not have been eligible for loans the .gov gave to GM/Chrysler. That would have been like a small town bank asking to be bailed out along with the wall street banks.
Fair enough, but they're still selling a crapton of Model 3's, and they're now one of the biggest luxury car companies in the US, purely off of electrics.
Their currently cheapest model is $45k so while it's true that they aren't there yet, they're closing in. And I'd say building $45k vehicles today is much closer to $35k than building an eGolf with 200 km range today and claiming that you will build $25k in 2020.
Are you for real? Bolt outselling Model 3? That was numbers from last year.. For the record bolt seems to have peaked at 2000+ cars per month last year and decreased to under 2000 per month since. GM seems pretty content with that.
Or maybe the demand for EV seems to start and stop with Tesla. I wonder how Tesla will do without the lies and hype of futuristic self driving technology
That article is dated September 1, 2017. Last years news. This year, Tesla Model 3 is selling more than BMW or Mercedes cars in the US and ten times Chevy Bolt.
Your comment sounds a bit like a gorilla pounding its chest. unfortunately it doesn't bear to reality. Regarding the press releases, Volkswagen is a bit more trustworthy than Tesla's.
In contrast to tesla they don't have an unfiltered musk on an official twitter channel. So their official statements are still closer to reality in the general case.
Amusing that childish fanboyism normally reserved for things like Mac vs. Windows, AMD vs. Intel, PS4 vs Xbox, etc... has now spread to the car industry.
At the rate China is building and planning to build battery factories, it's also quite possible there will be a glut and a price crash in a couple of years.
A related question: if China builds battery factories, surely they would also build car factories to use those batteries. What would be the impact on Western car manufacturers? Would software increasingly become the key differentiator between car manufacturers?
China is already leading the world in EV manufacturing and consumption. It's just that almost none of those vehicles will ever be exported. They're made for the domestic market. There's brands we never hear about here, pumping out pretty decent looking vehicles, but they're made for China.
I'm visiting China right now; Chinese-made electric vehicles are absolutely everywhere. NIO in particular seems determined to challenge Tesla here and possibly worldwide.
Tesla has done an amazing thing by showing that electric cars can match ICE ones and even be better than them in several regards. Before Tesla we all thought electrics were much more of a compromise.
> Bolt, Volt, Leaf, i3, ELR - and is pulling away from the pack at an ACCELERATING pace
But this is way too breathless. The Nissan Leaf is the best selling electric car of all time. They've sold 350k of them and by all accounts it's a very decent small car. And that's great for everyone because it pushes the infrastructure to adapt and creates the market. I expect Nissan-Renault to keep moving upmarket and Tesla downmarket to a point where we will be more or less fully served in 4 or 5 years. That wouldn't have happened as fast without Tesla but lets not ignore the existing manufacturers that have already done incredibly well on this and give them credit over the ones that are still sitting on their hands.
> Tesla has done an amazing thing by showing that electric cars can match ICE ones and even be better than them in several regards.
What? I've been following the market and Tesla has not brought no new innovation in any aspect of the car (engine, battery technology etc). They've just hired some great designers and invested a lot in marketing. You can't even say that their cars are competitively priced. I've seen way more innovation from Chinese electric car builders.
Also, wrt to software, Teslas are basically hacked together, according to multiple reports and analyses, teardowns.
Except they actually spend more as a percentage of revenue than GM. Ignore the puffery and go read the 10-Ks. If you're going to give such curt and dismissive replies, I think you should at least make a token effort to be correct.
"Marketing, promotional and advertising costs are expensed as incurred and are included as an element of selling, general and administrative expense in the consolidated statement of operations. We incurred marketing, promotional and advertising costs of $66.5 million, $48.0 million and $58.3 million in the years ended December 31, 2017, 2016 and 2015, respectively."
He talks about advertising there, which is a subset of marketing.
The 10-K states the truth in black and white. If Musk makes a contradicting statement in an interview, the 10-K is correct and he is not. If the 10-K is fraudulent, people are going to jail.
I believe that their cars having a single central ECU vs. the general trend of multiple interconnected modules is fairly novel for a major car maker? Their battery technology is also years ahead of competitors, according to teardowns.
Anyway... as with discussions of the iPhone ad infinitum, it's not about developing innovations de novo, but rather about taking different features and incorporating them into an offering that holistically beats everything else.
We'd seen all of the iPhone's features in earlier phones... but their combination and integration in the first iPhone revolutionised the industry.
Likewise, we've seen electric cars before, but Tesla shook the industry up by creating an electric car which had no major compromises and could --together with the revolutionary Supercharger network-- could completely replace an ICE car for almost all use-cases.
>I believe that their cars having a single central ECU vs. the general trend of multiple interconnected modules is fairly novel for a major car maker?
Ford was doing that in the late 80s when they started making electronically controlled transmissions (and I doubt they were the first). I doubt they were first.
Functionality gets integrated to the ECU. Then engineers decide that the ECU doesn't need to care about the windows and the HVAC so it gets its own module. Then they decide that there's no reason to have all these extra modules when the ECU can just do it. Wash, rinse repeat. Everything old is new again the cycle time is just long enough that most people don't remember.
They do decide back and forth, and where I worked the cycle was in large part driven by the dynamics between what features the market wanted (safety classification being an interesting one - this inherently pushes towards dedicated MCUs) and how well a single MCU offering at that moment in time could handle all the features wanted.
Of course, by the time the thing is designed, components are sourced and so on, the pendulum might have well have swung the other way.
False. Elon Musk frequently states in interviews that Tesla spends nothing on marketing. There are no Tesla television commercials, no online ads, no billboards and no paid placements. Tesla doesn't even participate in automotive trade shows. 100% of what you passively interpret as "marketing" is unpaid, organic news coverage, social media buzz and seeing actual Tesla vehicles on the road.
Tesla runs a referral program and will even give you its most expensive car for free if you do enough marketing for Tesla. I don't know how much Tesla spends on that program, but "nothing" is not a good estimate.
They also shot one of their cars into space... i wonder what SpaceX would charge other car makers for such an add. They do marketing and are great at it, just in unconventional ways.
I'd be interested in knowing where you've been getting your information from. Teslas don't have engines but the AC induction motors they use are substantially more advanced than anything that existed before [1]. Tesla is also fairly famous for having a $0 marketing budget.
They're the apple of cars. They've designed the cars extremely well (much like apple's products are well designed) and provide a lot of support in case anything goes wrong. And by design I don't just mean aesthetics - the safety, the experience, even the over-the-air updates all contribute to the total package.
Or in other words, the quality of the experience is so high that the product pretty much sells itself.
>What? I've been following the market and Tesla has not brought no new innovation in any aspect of the car (engine, battery technology etc). They've just hired some great designers and invested a lot in marketing. You can't even say that their cars are competitively priced. I've seen way more innovation from Chinese electric car builders.
You're talking past my point. I didn't say they were innovative, I said they showed they could build electric cars that match ICE ones and even surpass them in some regards. That doesn't require that much innovation, just putting very well together existing technology. It's the iPod all over again. Not innovative but it actually put the technology in a usable state for the mass market.
I currently drive a BMW 3 series. It has size/features/range that are enough (and often exceed) what I need. No one except Tesla offers anything I can reasonably replace that car with. Not even BMW themselves who offer the quirky i3 but nothing like the Model 3. While all the carmakers were fumbling around making hybrids a little bit better Tesla went and jumped ahead with getting an electric sedan built. There's no point in me getting a hybrid, I already average exactly 50mpg (4.7 l/100km) with the current diesel, a hybrid wouldn't add much if anything. Switching to an electric can be a 2-4x step for cost and CO2 depending on electricity costs and share of renewables in the grid at your location.
I own a Tesla. It is by far the best car I have ever owned. This is the only car which actually gets better over time. My Tesla now is actually 10x better than the one I bought.
Nissan has sold a crapload of Leafs with a fundamental engineering flaw for those of us who live in a either a cold or hot climate. The battery pack has no thermal regulation. So it's basically built with degradation as a fundamental property. That's terribly negligent from an engineering POV.
VW/Audi has factories all over the world, but they're not battery factories. That's the point posters are trying to bring up here.
It's worth pointing out that it's likely that the constraint on Bolt production out of GM has not been vehicle demand, but battery supplies from LG Chem. They basically made as many Bolts as they could get batteries from LG Chem, and that's all.
Totally agree - The volume of batteries required for even modest EV production is so much larger than any other sector.
I also think the idea that EV batteries are just around the corner from commoditization may be a bit premature. Getting the most out of the batteries (think efficiently, power, and especially reliability) currently means a pretty significant engineering integration effort in power electronics, packaging, and thermal management. Having your own vertically integrated production capacity is huge - you get to precisely control (and also pay the risk for) exactly the batteries that fit your design. It’s exactly the same kind of advantage legacy automakers are defending with ICE engines. In 5 years, perhaps there will be contract battery manufacturers who can churn out massive quantities of high quality batteries at a price similar to building your own factory. I bet that timeframe may actually be closer to 10 years. Clearly Tesla isn’t sitting still... where will they be a decade from now.
Bidding for for LG’s scraps is not a viable strategy.
VW group has been leading the world in electric vehicle press releases while Tesla has secured control of half the world’s lithium ion battery supply and crushed every “Tesla killer” — Bolt, Volt, Leaf, i3, ELR - and is pulling away from the pack at an ACCELERATING pace.
Time to put up or shut up.
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