Wow, what nonsense. This is a very low volume car at best. This is not Tesla competition, VW is.
There are already tons of EV companies and all the big automakers are already producing EV as well. Just in terms of pure electric vehicle you have Rivian, Lucid in the US, there is Xpeng, NIU and others in China, and those are already valued in the billions.
Tesla skeptics have been saying 'competition is coming' for literally 6 years now. I literally read that story every single year. And in those 6 years Tesla increased its global market share every single year.
Comparing Tesla and GM makes no sense what so ever, GM was toppled like 100 years, like 30 years after it has peaked in sales. Tesla on the other hand is more like a startup growing year over year by around 40%.
Based on your other comment you have some believe that some other companies might simply show up with superior batteries and massively improve on what Tesla (and others have). This will not actually happen if you understand how the battery industry works. And even if it does, it would take year and year after the first car with a new battery is produced, to reach anywhere close to real volume production. (You seem to believe they are 'ramping up production now, which is simply false no idea where you got this from).
Go look at QuantumScape manufacturing plan and even if you assume Toyota or somebody will get there twice as fast (not very likely) the numbers will not actually be enough to be mainstream. Toyota has been talking about their solid state tech for years and no car with it will come out for years.
Tesla on the other hand has a 30ish% silicon anode battery going in huge volume production this year and the amount of silicon will grow every year after tat. And the main advantage of silicon anodes is that you can put them into traditional factory, you know all those 10s of billions of factories that are being built right now (compared to 10s of millions for solid state factories). That is why Tesla and many others, including just as many startups (SILA for example) bet on silicon anodes and not solid state.
My bet is that by 2030 the majority of EV produced will not be solid state, rather traditional but with a high silicon graphite anode.
Availability of batteries will be the moat and will continue to be so for many more years. Just in terms of material sourcing alone there is a huge bottle neck.
> Where are they now?
GM still exits and still produces a huge amount of cars, like millions, including electric cars. They are building a copy of the Tesla Nevada factory (ie 35GW per year plant)
What people don't seem to understand is that the market for EV is fundamentally limited by batteries. We know about how many batteries will be produced in the next 5-10 years.
The EV market will grow as fast as the battery market can support it, and Tesla is by far the largest current buyer of batteries and they will continue to expand that. While at the same time also attempting to be one of the biggest battery companies in the world.
The Tesla 'pilot plant' they have in California, is targeted to be the 15 biggest battery factory in the world by end of next year. Its the same size as the plant VW and Northvolt have planned in Germany by 2026.
Tesla will in start building multiple huge battery factories next year, in Berlin and in Austin, Giga Nevada (biggest battery factory in the world, with Panasonic cooperation) will continue to grow and they will also continue to be one of the biggest costumers for LG and CATL.
We are quickly at the point where the raw material inputs will have a seriously hard time keeping up. Massive amounts of new nickel, lithium, cobalt and battery grade graphite need to be minded and refined. Nickel is the best investment, as there is basically no way around massively increasing nickel in the next 10 years.
This is before we even consider grid batteries. Li-Ion grid batteries, even when not able to be a backup for the cities are seriously useful for basically every grid operator in the world. While other storage mechanism exists, li-ion batteries are arguable the best in the market and will be for a long time.
Tesla is already a serious contender in that market (largest market share by far) both in terms of home and grid batteries. They already have all the software and electronics required, and already are in contact with utilities around the world.
People are very fast to claim 'bubble bubble bubble' but I would push people to seriously consider the market dynamics at play and how the transition EV and renewable energy will play out in the next 15 years. Tesla if you like them or not, is well positioned, in terms of EV, Grid Batteries and Solar installation, all of these will grow globally and exponentially over the next 10-15 years.
The problem everyone has is producing enough batteries. Tesla secured supply early when people thought they were crazy for wanting so much capacity. As it turns out, they need much more and they are building their own cells and factories. VW recently announced they have enough batteries to build ~1 million cars until 2023. Tesla might be hitting that as the annual production before that time. Other manufacturers are struggling to secure access to batteries and are supply limited even if they have interesting models that people want to buy (like some Honda or Hyundai models).
IMHO, most manufacturers need another five years to straighten out their supplies and then another five to scale down their legacy business. That's why you see the likes of Toyota talking about hybrids a lot because they simply can't scale up EV production right now even if they wanted to. Because they lack access to enough batteries.
Some manufacturers have wisened up. It looks like VW and GM have pretty solid plans and are expanding production as fast as they can. But they are talking about keeping up with and not overtaking Tesla. At least VWs CEO is.
I think it's quite the opposite, battery production is the key.
The problem is that no one can mass produce batteries for cars at this scale. As of now the projected capacity of the Gigafactory is enough batteries for 500k cars / year. By 2020 it will be 1.5M cars / year. This is more batteries than the whole world produced in 2013.
By 2020 Tesla is gonna have a lot of experience how to do this efficiently so the cost will be much lower. They are gonna have a new gigafactory in the EU. Lithium mines can't produce enough lithium at this scale so Tesla already makes deals with them to ramp up the production.
BMW makes 2.5 million cars a year. So what's the plan exactly? Just buy the batteries? From whom? When every other large car manufacturer wants to buy batteries and there is not enough on the market the price will go up.
Every time I read something like Volkswagen|Mercedes|Audi|whatever plans to sell x ev cars by 2020 I never see any mention about who is going to make the batteries.
I think the large car manufacturers are already behind, they should start working on their battery factories right now.
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.
Battery production seems like a problem that can be solved right now with money. VW and Toyota could partner with a 3rd party (like Tesla and Panasonic) and build factories.
Custom silicon seems like a much harder problem for VM/Toyota. Unless a supplier can build something for them I don’t see either company innovating like Tesla. Basically Tesla’s secret sauce is the Tech not the EV components.
Not an investor, but Tesla is looking increasingly like a money printing machine to me with so much untapped potential that they could pivot to in many ways.
The genius of the whole setup is that it's a car company that is basically a battery company but also a power infrastructure company.
IMHO, any battery produced in the next decades will have some way of being sold profitably. It just so happens that cars are a very profitable way to monetize them right now. But there are lots of other places where batteries could be equally useful (which Tesla has been exploring). When EVs commoditize over the next decade, they are ready to start pivoting to other things that will have a similarly insatiable demand for battery. Tesla using the same batteries in cars, semis, and grid storage means that any penny invested in more production capacity for batteries is not lost.
The reason semis are delayed is that they lack production capacity because it's maxed out. They're adding capacity as fast as they can at a jaw dropping pace and it's maxed out. That's not bad news but good news for Tesla.
Solar is a risky but genius move as well. I know they've gotten a lot of criticism for that and the so far underwhelming adoption rate. But it's a smart move if they can get that working. Pairing solar with batteries and car charging options (and maybe car to grid/house) is going to be a killer deal. And that's just the consumer market.
There are a lot of solar panel manufacturers out there but not a lot that are also selling grid storage solutions, mass producing cars, or have experience with building out direct sales to consumer type organizations. Add to that their approach to innovating mass production of batteries, cars, and indeed factories & machines. Tesla does all these things for the very simple reason that the sum of these things is more than the value of them individually. IMHO they'll bang on this until it starts working just right in a couple of years while dropping production cost at a pace that basically very few will be able to match and own the solar market as well.
There's a reason Tesla built the Gigafactory and has a second one coming on line in China. None of the other major western car manufacturers have invested in the infrastructure to be able to produce battery packs in volume. There's a lot of lip service being given to electric cars from traditional car makers but none of them can produce electric cars in any meaningful volume, and are realistically years from being able to produce packs by the tens of thousands per month. I guess their take is build the demand and then ramp up production. Then there's the issue insuring a supply of raw materials, Tesla has taken pains to insure they have a long term supply of Lithium, and have all but removed Cobalt from their batteries, which as far as I know is unique to their cells. The other manufacturers are going to have a hard time getting the raw materials in volume when they try to ramp up battery production, unless they've been making moves years ago to insure their supply.
I absolutley agree regarding the development of EV tech. The main reason I have my doubts about tesla fulfilling all the visions people seem to have about them is manufacturing. This is a well solved problem for existing car makers, so tesla's real value would be as a brand. I dont see batteries being the USP, same as I don't see engines right now, no matter what certain engine fanboys say. Also, Panasonic is usually not getting the credit it deserves when people talk about Tesla's battery tech. As long as Elon is at the helm and manages to sell the vision peopl what to hear, tesla should be fine so. the last two years taught me as much.
There's good reason to believe that electric cars are the future and will soon be a massive market. I think there's also good reason to believe that Tesla has a big head start on the competition and has the opportunity to dominate this market if they execute well.
For example, just look at the battery packs which are essential to an electric car. Tesla was unable to find a supplier that could meet their requirements, so they designed and produced their own batteries and now have a $5 billion gigafactory to increase production volume and decrease costs (with more gigafactories on the way). If you're another car company trying to enter the EV market, what are your options? Buy inferior battery packs at a higher cost from a different supplier? Try to replicate Tesla's battery technology and then convince your board to build a gigafactory so you can produce them at the required volume and cost?
This is FUD bullshit from a company that will probably be extinct in a decade because they dragged their feet on EVs.
Here's the current economic reality of batteries and EVs:
LFP at 200 wh/kg is in mass produciton now, and 230 wh/kg is on the roadmap in 1-2 years. That is a 400 mile range car (because LFP has superior pack density) with no cobalt/nickel.
Sodium Ion at 150 wh/kg is in mass production now, and 180-200 is on the roadmap. THAT is a 300+ mile range car with NO LITHIUM. Expected bill of materials will be $40/kilowatt-hour (not sure if that is cell or pack) once they get production really scaled.
These achievements are the true revolution in transportation electrification. And with Lithium-Sulfur and Sodium-Sulfur chems in the wings, it's likely that in ten years there is a battery with 2-3x the density with no cobalt, nickel, or lithium needed.
ICE drivetrains will be fundamentally economically noncompetitive. Too many parts, too much complexity. An electric car will be a motor or two and a sodium ion / sodium sulfur battery, and maybe half the cost of the stuff that actually moves the car. Quieter, smoother, faster accelerating, charge at home, etc.
Since the BMW CEO was canned over sqandering their electrification "lead", all CEOs have been on notice that you have a path to EVs ready or you get shitcanned by the board/investors.
All the CEOs from companies that didn't have any plans around this are playing defense. And at this point, the ship has left the port, and you either were on it or probably won't catch up and will either die in bankruptcy or acquired for peanuts.
This is because the main phase of EVs will be vertically integrated production like Tesla has. The OEM model of ICEs is probably a solid 20 years away, and the companies that don't have vertical integration plans in active development (you own battery plants to help guarantee supply in particular) are simply not going to survive until a new OEM model appears for EVs.
The OEM model, for those that don't know it, is that ICE car makers are largely component integrators from a large umbrella of parts producers. Many of these OEMs sell / partner with many manufacturers.
EVs won't be like that. The drivetrain doesn't have a rich array of dozens of OEM companies vying to produce components for your next platform/car. You have to design your own motor, battery pack, and directly invest in your own battery supply (the battery being the most expensive part) to get an economical battary pack for the EV.
If you don't have your own vertically integrated battery supply, the company won't have reliable supply (since EVERYONE will want batteries) and you won't get it at competitive cost.
And yet, the battery production capacity is apparently nowhere near enough to supply companies like Tesla, making them become a battery manufacturer themselves. Which plays right into the parent comment - the battery business is huge, and Tesla could probably pivot from a car company to a battery / energy company easily enough. They kickstarted electric cars, the established companies are trying to catch up, but are doing so in part thanks to Tesla, their open patents, and soon enough, their hugely scaled battery manufacturing capacity.
All of the legacy entrants to the EV market are meaningless sideshows for the simple fact that they don't make their own batteries. Building an EV is a trivial commodity. Manufacturing high energy density LiPo battery cells at a low enough price and high enough volume to build millions of cars is the actual barrier. And Tesla is currently the only manufacturer in the world with this level of vertical integration. Everyone else is just competing for supply from LG Chem and Panasonic, which is why no other manufacturer has come close to Tesla's volume or performance/price.
Interesting to think about, but I still don't see it making business sense for Tesla, even if they follow some crazy optimistic curve and take half the car market.
There are already multiple competing companies whose sole job is to make the best fabs at high production rates.
Tesla doesn't even make most of their batteries in-house, which is way more core to their business of EV manufacturing. They partner with Panasonic, LG, CATL, etc. because they are in the business of building out manufacturing capacity for battery cells.
VW has a massive battery order spread between Samsung, LG and CATL, but yeah, I agree Tesla will have a solid lead on battery production for a while.
I wonder if Tesla/Panasonic will at some point start selling mass produced batteries to the traditional car manufacturers. Once EVs become mainstream, consumers will start expecting choice.
You think Tesla will have cheaper batteries than literally everyone else forever? Incredibly hard for me to believe that at least one company won't be able to create a competing battery. Differentiating on hardware has never been a way to create a trillion dollar company. It requires lock in via incredibly brand loyalty and Tesla doesn't have a big enough customer base atm.
There are already tons of EV companies and all the big automakers are already producing EV as well. Just in terms of pure electric vehicle you have Rivian, Lucid in the US, there is Xpeng, NIU and others in China, and those are already valued in the billions.
Tesla skeptics have been saying 'competition is coming' for literally 6 years now. I literally read that story every single year. And in those 6 years Tesla increased its global market share every single year.
Comparing Tesla and GM makes no sense what so ever, GM was toppled like 100 years, like 30 years after it has peaked in sales. Tesla on the other hand is more like a startup growing year over year by around 40%.
Based on your other comment you have some believe that some other companies might simply show up with superior batteries and massively improve on what Tesla (and others have). This will not actually happen if you understand how the battery industry works. And even if it does, it would take year and year after the first car with a new battery is produced, to reach anywhere close to real volume production. (You seem to believe they are 'ramping up production now, which is simply false no idea where you got this from).
Go look at QuantumScape manufacturing plan and even if you assume Toyota or somebody will get there twice as fast (not very likely) the numbers will not actually be enough to be mainstream. Toyota has been talking about their solid state tech for years and no car with it will come out for years.
Tesla on the other hand has a 30ish% silicon anode battery going in huge volume production this year and the amount of silicon will grow every year after tat. And the main advantage of silicon anodes is that you can put them into traditional factory, you know all those 10s of billions of factories that are being built right now (compared to 10s of millions for solid state factories). That is why Tesla and many others, including just as many startups (SILA for example) bet on silicon anodes and not solid state.
My bet is that by 2030 the majority of EV produced will not be solid state, rather traditional but with a high silicon graphite anode.
Availability of batteries will be the moat and will continue to be so for many more years. Just in terms of material sourcing alone there is a huge bottle neck.
> Where are they now?
GM still exits and still produces a huge amount of cars, like millions, including electric cars. They are building a copy of the Tesla Nevada factory (ie 35GW per year plant)
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