1/1/2015
guest There are different challenges for each company so now two will be exactly alike.
Model S had pentup demand being new to the market.
Porsche starting production in 2010. I think all automakers have an advantage in their domestic market.
- - - Updated - - -
And Model S did not have demand cannabilized by a crossover twin.�
1/1/2015
guest Excellent commentary. If anyone wants to complete with a disrupter like Tesla, they have to become just as disruptive. They have to put forward their best effort to cannibalize their own line up and go after the market share of their conventional rivals. So if Porsche wants to survive, they will need a no compromise digital car that is clearly to every other car they have made to date. This will kill their own conventional line, but it gives them the product they need to get share from the likes of Audi and BMW. This is the market share they should be focused on.�
1/1/2015
guest I posted about some of this in the short term thread, but the competition has recently been outlining future BEV plans:
http://arstechnica.com/cars/2014/10/porsche-mercedes-building-electric-cars-to-challenge-tesla/
Porche says to expect a Model S competitor based on its standard platform in 2018 at earliest.
Mercedes Benz says 2021 for its large BEV. I'm surprised at this because MB is one of Tesla's close partners, and MB uses Tesla powertrains in the B-series.
Audi claims 2017 for its Q8 e-tron.
No competitor appears to have been specific about how they intend to address the battery cost issue or the need for DC fast charging networks for long trips.
The luxury automakers are worried first, because Tesla is stealing their market share first. The big mainstream brands like Ford and Toyota are not yet there in deciding to compete in the BEV space.
In summary, the established automakers anticipate having a Model S competitor in the 2018-2021 timeframe. By then, Tesla will likely have moved far ahead with both the S and X. It may take until Model 3 to make the higher volume mainstream brands realize that they are threatened. I don't think the people at Toyota worry that Tesla will eat their lunch� yet.�
1/1/2015
guest Anticitizen, this article really highlights what an advantage Tesla has over the competition. Thanks for posting! Imagine where Tesla sales and Tesla stock price will be by the time these two competitors have cars on the market. Tesla will have Model 3 available, and by then you will see Ford and GM scrambling, but again late to the party. Then they have to think about a supercharger network if they wish these electric cars to be practical as transportation devices. Again, Tesla holds a commanding lead. Checking the sofa for loose change in an effort to buy even more TSLA stock.�
1/1/2015
guest While some of these announcements may be real, at least some exist to prevent loyal customers from leaving. I held off on my Model S until it became clear that Audi wasn't going to have anything, so I imagine others might do likewise.
The Porsche announcement shows how tepid the company is about EVs. An EV "variant"? So, it's not built from the ground up as an EV, but instead they slot one drivetrain or another into the same body. Recipe for failure.
Another serious problem the established brands have is their dealers. We have lots of reports of Nissan, Ford and BMW dealers steering customers away from their EVs.�
1/1/2015
guest I'm a longtime reader of Ars Technica and generally appreciate their journalism on many topics closest to my interests. However, I find it fascinating that this kind of comment is one of the top-ranked for the linked article:
What this tells me is that even among the most die-hard techie / early-adopter crowd, there is still such a disconnect between the reality of Tesla not just "panning out," but achieving complete dominance of every product sector it enters (Model S/X), and much of the world still doesn't believe that the Model III car will literally be the best and most desired sub-$40k car ever made with potentially millions of people waiting in line to get one. It will shock the world, and change history.
And I would expect, the market will be equally shocked. Holding my core shares for TSLA $1000.�
1/1/2015
guest I have to pinch myself regularly. I can't believe 'they' don't get it yet. It's like a flashing neon sign from where I'm standing and it's blinding. So, I pinch myself to make sure I'm not the one dreaming this up, because it just doesn't make sense that 'they' can't see!�
1/1/2015
guest I find myself thinking a lot about paradigm shifts the last year or two. There are two areas where I'm on the other side of a paradigm shift - a new way of looking at the world that is so different, people who haven't yet experienced the shift just don't see it yet. The auto industry is unique, thus far anyway, in that these kinds of technology shifts happen so fast normally that there's no time to react. I'm willing to predict right now, today, that in 20 years, people will be looking back at Tesla and saying stuff like "if I had a time machine, I'd go back to October 2014 and put everything on Tesla; I'd be rich!". (Note - there are other paradigms where I'm on the pre-shift side of things too; the competing perspectives can be disorienting at times).
This paradigm shift, and the inability of people to understand the world after, is the basis for my investment.
This gets into all sorts of interesting topics - why do people resist change and innovation, and how do you overcome it? Tesla's approach with the galleries / showrooms is exactly right - it's all about education. When people learn more, then they'll be better able to make the translation to their circumstances, and better able to put themselves mentally into one of these cars. Actually I'm with Flux - the number of people I meet who are ready to buy a Tesla today at $40k that can't act at $80k is astounding to me. I run into way more people that can't afford a Tesla but can't wait, than people who view Tesla ownership as an elitist thing.
If Model X is 25-30k reservation list on the day of the first delivery, I think 250k reservations for a 2 year reservation period for Model 3 is low; I'm taking the over on that one. My next prediction - if Tesla DOES take reservations for Gen 3 for a couple of years before initial delivery, then my prediction right now is that so many people will reserve a Model 3 and postpone buying a car because of that deposit, that we'll see Model 3's impact on auto unit sales in the 2 years leading up to initial delivery. Everybody else will see their sales for that vehicle class go down in the 2 years leading up to Model 3 because people will be waiting to buy. It will be that good and that big.
Heh - and we can sit here today, gaze out on the landscape, and see it all unfolding in slow motion. I find myself hoping for a "disappointing" Q3 earnings report and a subsequent drop in the stock price - I'd like to own a bigger piece of the company�
1/1/2015
guest Many, maybe most, seem to fear change and cling to tradition, because it's comfortable and "safe". I suppose the rest of us find change interesting and challenging. We have to pave the way and show everyone that not only is doing something a different way better it's also "safe" for others to try. It may be better for a stable society for the majority to resist change, and could be why we've evolved in such a way. You don't want society as a whole jumping on every one of our latest and greatest ideas in case they don't pan out.�
1/1/2015
guest I find that people who aren't in engineering/science fields and don't follow the automotive industry tend not to think about transportation issues too much. They don't see it because they aren't looking. Most people who use a car to get to work might think about the high gasoline bill once in a while, but don't know of any alternative.
I learned about Tesla in the mid-to-late 2000's because I was reading every car magazine I could find on the Internet, and I came across an article about a sports car powered by thousands of LiIon cells connected to an induction motor: the Tesla Roadster. I thought the idea was crazy. Although I was convinced that some form of electrification was the future for personal transport, I didn't think that the battery would prove reliable enough to work. This was probably around 2006 or 2007, when Tesla was also having development problems with the Roadster 2-speed transmission. I thought Tesla was most likely doomed at that time.
It wasn't until the car mags reviewed working Roadsters that I began to think that Tesla's model of implementing an EV just might work. However, the Roadster was still in my mind a toy car, like a Porche 911 or Honda S2000: fun but generally impractical. The Model S concept really got my interest in 2009, because it represented an automobile that would be useful to almost anyone, but it wasn't until Elon revealed the Model S Beta in late 2011 that I was thoroughly convinced that Tesla would mostly likely succeed. I was paying attention and I have a decent amount of intelligence (not quite MENSA material, but not far off), and it took me 4-5 years to get it, even when I already had a preconceived notion that electrification of some kind was necessary in order to break the dependency between oil and personal transport. In this context, I'm not surprised that the median person of median intelligence, and probably most people within 1 standard deviation of this, likely doesn't get it and won't get it for many years. Even many smart people won't get it. That's the bad news. The good news is that if you do get it, you have likely made a lot of profit on shares, and will continue to see large future gains :biggrin:�
1/1/2015
guest Status quo bias. It's a huge problem with current level human intelligence and society. Even when you do "get it" (with regards to electrification of transport and TSLA's way of doing things) you still have to actively resist being sucked back in to the black hole that is status quo bias.
On a related note my "discovery" of Tesla, TSLA, Elon Musk and actually this bulletin board has coincided (or prompted?) personal growth for me in my life in a big way. I try to apply the principles that are the opposite of status quo bias namely open mindedness, thinking without imposing unneccesary limititations on my thinking and always looking for good outcomes in other aspects of my life and it is really working out well!�
1/1/2015
guest I also am hoping that a less than stellar Q3 report will cause the stock to tumble to below 200 and then I can buy more.
I have a high degree of confidence that Tesla will wow the world with the Model 3. After the Model X is out the company will have a seasoned design and production team that can apply their knowledge and experience to ensuring the Model 3 meets its price, quality, and design goals. I expect they will introduce a sedan, coupe, and small SUV all at the same time on the same platform. And by 2017 the Supercharger network will be everywhere in North America, Europe, and East Asia. There will still be no comparable long-range EV competitors and certainly none with an extensive fast DC charging network. The demand for the Model 3 will be huge and Tesla will continue their "take deposit, build to order, deliver upon full payment" model for years to come. By 2018 the stock will be over $400 and keep rising.�
1/1/2015
guest That's funny because I first read about the Tesla Roadster in '06 and immediately thought "That's my car. That's the future. I need to start saving for one of those."
This. Since buying my car almost 4 yrs ago, a lot of my friends, neighbors, etc have seen how well it's worked out. Almost half the people I talk to now want one "as soon as it's affordable." Model 3 will get the first yr of production reserved in about an hour. OK, maybe a day. If you think Tesla is production constrained now, you haven't seen anything. I've said it before, Elon has said it, I'll say it again: Tesla's biggest hurdle going forward is ramping up fast enough.�
1/1/2015
guest (sorry for big post) Porsche and Mercedes can manufacture all the electric cars they want... but they can't get hold of enough batteries.
Tesla already uses up about half of the world's supply of Li-ion batteries. (thanks to Panasonic's re-opened factories) This is to make just 35,000-50,000 BEVs per year at present.
Where do Porsche and Mercedes expect to get the batteries for their cars? (Mercedes got its B Class batteries from Tesla)
+1 to the commenters who say that the Porsche "EV variant" won't be an effective competitor. The key to success for the Model S is its efficiency. Everything from chassis weight and aerodynamics to battery mass, location, center of gravity, motor and power electronics are critical. The Model S was designed with every one of those components fresh off the designer's desk, each one specified to complement the other components it will unite with to create a great car. If Porsche, or anyone for that matter, hopes to compete... taking a gasoline car and converting it into an electric one is nuts. Porsche makes great cars, and they're custom-built to be exactly as they are. They didn't take a Panamera and convert it into a 918, for example. Neither is the Panamera simply a stretched 911. So far, Porsche's advantages have lain in the combination of a large number of original parts that are incrementally better than those in inferior brands' cars. When put together, the car is amazing. It would be highly irregular and surprising if Porsche veered away from this philosophy for its first pure BEV.
But, perhaps its first pure BEV may simply be a test, to see how popular it will be. If it sells like crazy, they will replace it with a ground-up BEV design that has much lower center of gravity. Like one chap said above, he decided to go for the Model S when he became convinced Audi was not going to produce anything - after they had said they would. There are a lot of Porsche fans who are heartbroken about having to buy an American car! (not surprising) If they could get something from Porsche that has the same advantages, they would. So... perhaps this sort of announcement delays the process of brand loyalty destruction via customers jumping the fence over to Tesla - while they scramble to create BEV variants of the Panamera. Or perhaps they really haven't started yet at all.
One thing to consider is that Porsche makes out-and-out sports cars. The Cayenne is certainly a family hauler for some people, but Porsche don't shy away from the vehicle's sporting capability, and honestly, the Cayenne doesn't have that much storage space unless you fold the rear seats down. Porsche may opt to convert a Panamera to BEV operation, and not really do anything to improve the cargo space. Think about it... people who complain about the cargo space in the Panamera are going to be met with confused looks
I noticed this...
Porsches baby Panamera delayed until 2019 or later - Autoblog
No doubt these plans are in turmoil, raging due to the "Tesla problem."
Finally, the subject of fast DC charging. Porsche is backed by Volkswagen and has the wherewithal to install proprietary fast chargers of their own design around the world. But would they? It would take ages and ages to put them all in, and Tesla's Superchargers lie everywhere already, available to use. It would be the best solution for the planet for other brands to adopt the Tesla Supercharger. I can't say if these corporate entities will get that, but I hope they will!�
1/1/2015
guest Traditional manufacturers don't even realize that EVs don't have ICE engines inside them, so who knows what they'd actually come up with anyway. Things like the i3, i8, volt, ELR are all marketed as EVs and claim to be "Tesla killers", but not one of them has the appeal of a Tesla, and I don't think the manufacturers even grasp why.�
1/1/2015
guest Regarding Porsche - some unit sales numbers I was looking at over the weekend for class research tells me that Porsche's US sales are roughly double that of Tesla's this year, in the US. A big hunk of that double units comes from their SUV. If Porsche's response to the Model S and X is a 2018 car, the Porsche of 2018 might not be recognizable. I don't really think Tesla will pass Porsche is unit sales next year, but the year after? And a decent hunk of that increasing Tesla market share is going to come from Porsche. They should be worried.�
1/1/2015
guest Daimler, Porsche and Audi are planning a long range EV
Original article:
Daimler und Porschen setzen eigene Elektroautos gegen Tesla - manager magazin
English media:
Porsche, Mercedes building electric cars to challenge Tesla | Ars Technica
All things considered, if this is true, this is great news!�
1/1/2015
guest you do know that two of those three companies are actually the same company?�
1/1/2015
guest exactly, and they are really hybrids, gas/electric�
1/1/2015
guest The BMW i3 is all electric if you don't add the range extender (something over $4000 add on).�
1/1/2015
guest The world isn't just USA... VW e-up, VW e-Golf, Nissan Leaf, Mercedes B-class electric, Ford Focus Electric, BMW i3, Kia Soul Electric, just to mention some pure, electric, battery only Cars.�
1/1/2015
guest Really!? Are you sure? Because I thought the World and USA were synonyms.�
1/1/2015
guest But... if you don't get the range extender, the space that would have been occupied by fuel tank, gasoline engine, radiator, fuel & water pumps, exhaust & pipework, catalytic convertor etc. etc. is still in the car - but it's not available to the owner, it's just wasted space. Further, there are bulkheads in weird places and holes in them, that aren't contributing to vehicle strength/safety. No doubt the i3's carbon fibre bodywork is a masterpiece, but with the capability to store all that gasoline engine stuff, the i3 is still missing out on the efficiency and capability that a ground-up pure EV can achieve.�
1/1/2015
guest 
I think from this chart it is pretty safe to suggest that with exception to the Leaf and MAYBE the i3 (assuming no REX) none of the other ones out there are SERIOUS attempts at selling an EV whether from a US perspective or a global perspective (as is shown by this chart... that is global sales for 2013). Most of these other "options" aren't even taken seriously by the company making them (they are generally offering them because they have to... the fiat 500e is a great example there). And none of them are marketed as "Tesla Killers" which was the point of the poster whom you quoted.
The whole thing was framed under to scope of what Martin was talking about regarding Porche and Mercedes targeting vehicles that were specifically lined up against the Model S.�
1/1/2015
guest I agree that there are no alternative to Tesla when it come to range, but to suggest that the other makers "don't get it" is a bit naive. The battery argument is valid, but I think the main reason is economical and lack of risk-taking in the car industry.
My USA-comment (blame it on my rude, nordic-sarcastic debate technique
�
1/1/2015
guest I get that, but these are at best "city cars" which says that they don't get it. They are making golf carts marketed as personal transportation and wondering why they don't sell at all and then making plug-in hybrids in huge earnest and wondering why people are buying regular hybrids or random other cars instead. Well no wonder! Because you aren't giving people enough range or making the cars very dull to drive.
The only company that "gets it" is Tesla. Nissan and BMW are close in as much as you can be close to missing the bullseye or the hole in golf... but everyone else is just way out in left field (Although, the kia looks promising, and I will be interested to see how that fairs, it was just released so I might add to that list of people who are "close" to getting it). Everyone else, it is all talk and no action until such time as I see a real car actually released from them... not some hypothetical concept car.�
1/1/2015
guest I'd like to ask you all about your stance on the GF effect on gross margins or price tags for Model S and X. The reason is, that I have found something in form 10-q of the quarterly report which I wasn't aware of before:
"We plan to use the battery packs manufactured at the Gigafactory for our vehicles, initially for Model S and Model X, and later for our Model 3 vehicle, and stationary storage applications."
During the conference call Elon reassured that they aim for at least 30% cost reduction for battery packs, so as an investor I have asked myself, how using Nevada battery packs in S and X would impact gross margins? And, can we expect prices for Model S and X to drop considerably (>10%) in 2017?�
1/1/2015
guest Newb,
There are others on this forum who have better ideas of the battery costs in Model S. Let's just say that it's $20,000. A 30% decline in the cost of the battery would yield a $6,000 cost savings to Tesla. That savings equates to about 6% of the average sales price of a Model S. My guess is that a 6% reduction in the cost of a Model S or X would not have a huge impact on sales numbers. On the other hand, increasing the gross margin by 6% would have a huge impact on profitability. I would expect S and X prices to stay relatively stable but to see margins rise as the GF batteries come into use. Tesla's plan is to use the Model 3 to reach buyers who cannot afford S and X. You will likely see lower gross margins on Model 3 for this reason. You would then see a mix of S and X models with high gross margins and Model 3 with lower gross margins.
A price reduction in S or X would only be needed as a competitive response to a vehicle of similar attractiveness, and I don't see that competitive response succeeding in the next few years.�
1/1/2015
guest This statement from the 10-Q is also interesting:
"We believe that the Gigafactory will allow us to achieve a major reduction in the cost of our battery packs of greater than 30% on a per kWh basis by the end of the first year of volume production of Model 3"
So, if 2017 is the first year of volume production, then perhaps the cost savings will come in the following year.�
1/1/2015
guest Thanks a lot for the numbers, Papafox. That makes me feel even more secure with my long-term investment. Even in an unlikely scenario in which Model 3 is delayed until 2018/2019, with GF battery packs, Tesla can easily make huge profit by selling Model S and X to ever more markets around the globe with higher margins. Demand for S and X won't peak anyway until Tesla stops expanding to new markets. And I'm also considering yearly hardware updates to S/X (new features, hardware improvements, innovations).�
1/1/2015
guest I wholeheartedly agree with Blip on this one. Other car makers are just making rational economic decisions that serve their businesses best.
Toyota Motors is doing quite well, TM's Q3 profit rose to $4.2b, sales rose 6.9% in October, and sales in China rose 27.1% in October. The BOJ recent decision to increase the monetary base at an annual pace of about 80 trillion yen will boost TM profits even more in the near future. It would be insane for TM to forgo established business path and not milk the last penny from their well-established business model, ie make and sell good ice cars.
TM, with ice car business model, is undoubtedly doing well now. The question is, at what point will their business model cease to be sustainable and profitable?
My guess is that they have at least a good decade of profitable business ahead of them, most likely longer than that. The decision to trade off today's profits for the sake of ensuring far away future business does not benefit today's TM shareholders, management, employees and many other stakeholders. Only some powerful outside force may bring change to this entrenched ice world.
I pinch myself to make sure that Tesla does exist. Without enormous (bordering on insane) risks, hard work and personal sacrifices taken by many individuals that contributed to Tesla's conception, growth and today's success and relatively safe position in the market, there would be no one to challenge the world of TM and others that would never change because it does not suit them to do so.
Tesla is not in a position to enforce the change yet. I also believe that we have passed the point at which the change can be stopped.�
1/1/2015
guest Given the time it takes to bring a good vehicle to market, the longer they refuse to see the future the more it will hurt them at that time when they scramble to shift and play catch up. I strongly believe that the 35k vehicle will be that turning point in the new car market. Why would you buy anything else? Unless you are stuck in that brand loyalty which will be hard to sway. I briefly talked to a guy who had driven the roadster on a track but didn't own a Tesla. All of his cars were Porsche. Those will be the ones that we cant force to switch until their company makes a car. If Porsche and Mercedes are seeing enough of a decline to push out that they are going to make a model S competitor (their claim remains to be seen... But that is the stated intent) what is toyato going to do when Tesla releases a Camery killer? Because its coming sooner than Toyota is clearly planning for.�
1/1/2015
guest I agree with your point chickensevil, but in fairness to Toyota, we only have what they talk about and do in public to go on. From their words and actions thus far, I agree completely with your point. It's also possible that internally, Toyota has their Model S / Gen 3 competitor hard at work in research, and they aren't as far behind as both of us think.
I mean - it's POSSIBLE!
(If I was them and I had a program going to try and close the gap, would I talk about it to create FUD around Tesla's offering, or would I be quiet about it so I don't emphasize what I can't do? H'mm...)�
1/1/2015
guest For some people, status quo is too good to worry about the distant different future. That does not translate into refusing to see the future, rather into enjoying the present. My guess is that once the future is here in the shape of Model 3, Toyota decision makers will be happily retired. Their retirement packages are heavily dependant on todays' profits, so they are very astute and prudent about their future.:wink:�
1/1/2015
guest Not to rain on your parade, but I don't necessarily think that the packs the gigafactory (GF) will initially produce will use cells made at the GF, if they are for Models S/X; current pack production would likely have been moved from Fremont to GF to make room for other production lines, INCREASING transpo expense unless GF is directly in the line of travel of the cells from Panasonic to Fremont.
Or have I missed something (very possible) somewhere?
That said, I still feel VERY secure with my long-term investment in TSLA.
Happy uh... Sunday?! (why am I still awake?)�
1/1/2015
guest It was stated in either the shareholder letter or the 10-q I don't recall which off hand, but that the initial 2016 production that they are bringing online will go into the Model S and X packs. They aren't going to see the cost savings in 2016 anyway since they said it will be 30% (or more) by the first year of production on the Model 3.�
1/1/2015
guest TM cannot get battery cost reductions of 30% when they get their first cells produced from scale.
The initial factory module is supposed to be equal to the largest factory now in existence anywhere in the world, but not equal to the entirety of all production in the world.
From the recent Q3 2014 conference call:
Rod Lache - Deutsche Bank
It sounded like most of your projection [cost reduction due to Gigafactory] was related to logistics and location and the scale of the cell and things along those lines.
Elon Musk
Yes, to be precise about our prediction was that we felt comfortable with at least a 30% improvement in cost or reduction in cost just based on the location and economies of scale. That's without taking any technology improvements into account and we will certainly do technology improvements. If we can't get to 30% even without technology improvements, somebody should shoot us because that would be in complete defiance of economies of scale and obvious cost savings.
http://seekingalpha.com/article/2647055-tesla-motors-tsla-ceo-elon-musk-on-q3-2014-results-earnings-call-transcript?page=2&p=qanda&l=last�
1/1/2015
guest Did you just say "cannot"? Is that a typo? :tongue:
But on a serious note, I doubt Tesla will launch Model 3 in 2017 without a battery pack that is (at least) 30% cheaper than the current one. And in 2017 the gigafactory will only have that initial factory module, so we can expect the 30% cost reduction to be effective in 2017.
For me, it remains an open question if S and X will get the new Nevada cells in late 2016/early 2017 prior to Model 3 launch, or - as GLDYLX suggests - it will only be the battery packs to be built together at GF from the current Japanese cells. If the former is true, Model S and X will benefit from technological improvements on cell and pack level from late 2016/early 2017 onwards, perhaps with higher energy density, less weight and thus higher range. Maybe I'm getting too excited about it, but this is only two years from now.�
1/1/2015
guest One other factor seems to be very important to me. The success for the other companies will depend on their ability to construct a drive train that will be as good or better than Teslas. So here is the problem I see today with their EV�s: Nada. Isn�t one reason for Tesla being so successful that they adopted the ideas of Nicola Tesla ? I think the other companies overlook the elephant in the room by trying to reinvent the wheel (so to speak) when Nicola Tesla has it already done for them. So instead of copying this marvellous piece they try to invent a new one. It�s right there before their eyes. Why is the companies name Tesla again ? Exactly. Trying to invent something better ? Go ahead and try. Good luck. At least Daimler has stuffed their B-Class with it. But they haven�t yet declared a price for it, as far as I know. I don�t see a way for them to sell it in the 35.000 � range.�
1/1/2015
guest Yanno, I've been mulling over the whole spinning up of the reactivated Panasonic factories and the supply commitments. Do we have info on the length of the off-site supply contracts? Is it possible that Panasonic could fold those contracts into GF production or will they be separate from their GF operations until they expire? And then, is it possible that one (or more) of these previously mothballed factories (factories exist in China and Europe as well as Taiwan and Japan) could become part of future Gigafactories (assuming there's available real estate around any of them to build on/repurpose)?
Just stuff that's been roiling up my grey cells.......�
1/1/2015
guest Maybe better way to say is that I interpret Tesla's previous pronouncements as indicating that 30% savings will come from scale which will not be achieved in 2016. :tongue:�
1/1/2015
guest
Long Term Auto Market Growth Rate
3% Long Term Market Share Plugin Vehicle
100% Maximum Annual Growth Rate Plugin Vehicle 60%
Year Auto Market plugin Deliveries Market Share Growth Rate Doubling Months 2014 85,000 339 0.40% 59.77% 17.8 2015 87,550 542 0.62% 59.65% 17.8 2016 90,177 865 0.96% 59.45% 17.8 2017 92,882 1,379 1.48% 59.15% 17.9 2018 95,668 2,194 2.29% 58.69% 18.0 2019 98,538 3,482 3.53% 57.99% 18.2 2020 101,494 5,502 5.42% 56.91% 18.5 2021 104,539 8,632 8.26% 55.29% 18.9 2022 107,675 13,406 12.45% 52.90% 19.6 2023 110,906 20,498 18.48% 49.47% 20.7 2024 114,233 30,637 26.82% 44.71% 22.5 2025 117,660 44,336 37.68% 38.52% 25.5 2026 121,190 61,414 50.68% 31.11% 30.7 2027 124,825 80,523 64.51% 23.23% 39.8 2028 128,570 99,229 77.18% 16.01% 56.0 2029 132,427 115,113 86.93% 10.45% 83.7 2030 136,400 127,145 93.22% 6.87% 125.2 2031 140,492 135,877 96.72% 4.87% 174.8 2032 144,707 142,497 98.47% 3.87% 219.0 2033 149,048 148,012 99.31% 3.40% 249.1 2034 153,519 153,039 99.69% 3.18% 265.8 2035 158,125 157,903 99.86% 3.08% 274.2
logisitc growth model of global plugin vehicles based upon 2013 actuals and 2014 forecast
note well that 50% mark is reached at 2026.�
1/1/2015
guest Hey, this model looks familiar. Glad to see it getting adapted. How sensitive is the timing of half market to the annual rate? Would 40% or 50% rates make much difference?�
1/1/2015
guest Tesla future competition to Ford F-150
Dee-Ann Durbin, The Associated Press writes:
Ford bets it all on aluminum-bodied F-150, which heads to dealers next month - Yahoo Finance Canada
"Ford thinks a truck that is lighter and more fuel efficient, but even more capable, will win buyers while its competitors struggle to catch up. Aluminum � which is lighter than steel but just as strong � isn't new to the auto industry, but this is the first time it will cover the entire body of such a high-volume vehicle. Ford made 647,697 F-150 pickups at its two U.S. plants last year; that's one every 49 seconds.
There are big risks. F-Series trucks have been the bestselling vehicles in the U.S. for 37 straight years; last year, Ford sold nearly 100,000 more full-size pickups than General Motors. Any quality problems, production hiccups or customer doubts about aluminum could slow sales and hurt Ford's bottom line. Morgan Stanley estimates F-Series trucks account for 90 per cent of Ford's global automotive profit."
Take-aways from this article:
1) Ford's fortunes are tied to one vehicle alone, the F-150 (so is Tesla, the Model S). Ford is breaking even or losing money in manufacturing most of their other vehicles.
2) Perhaps Tesla should make the truck market a priority goal (in advance of Model 3). Now wouldn't that be something. This would fit Tesla's goal of getting the high gas guzzlers off the road.
3) Ford manufactures one F-150 every 49 seconds. Tesla has a long way to go to catch up. At this point Tesla's growth is limitless.�
1/1/2015
guest thanks for the spreadsheet
50% pushes it back to 2028
40% pushes it back to 2032
this is the global outlook, China will probably ramp faster to pluging vehicles than this!
India will probably ramp much slower than this, yet ramp up in vehicle market.
Shai Agassi had said that when the monthly cost (including electricity) of a new EV is less than the monthly cost on a 3 year old petrol car (including petrol), then financing new petrol cars will not be a bankable proposition. (ie collapse of financing for new ICE cars from lending institutions) think about it.
- - - Updated - - -
FWIW, the 2014 numbers were manufacturer's volumes to August, multiplied by 2.
EV Sales: September 2014
of note about fast charging
2014 338,996
Nissan 76,574 80% Chademo
China spec. 50,000 GBT China standard
Mitsubishi 46,082 100% Chademo
Tesla 35,288 95% supercharger, future 50% Chademo
Ford 32,508 0% Combo/ Frankenplug
GM 31,630 5% Combo/ Frankenplug
Toyota 30,914 0% Chademo
Misc. 36,000 mix of Combo/Frankenplug or Mennekes AC
There is an immense amount of political support for Combo/Frankenplug, but the commercial reality is that Chademo and Tesla Supercharger are the only 2 DC fast charge systems with willing manufactures to supply cars for. As Combo/Frankenplug seems to Galapogosing the German/Detroit manufacturers to the EU market only or a petrol station. Similarly the pursuit of Hydrogen is simply burning Toyota/Honda/Hyundai to do nothing in regards to vehicle electrification.�
1/1/2015
guest Of course this makes sense... But I don't know when we would ever see that happen? The best selling car is the Toyota corolla and you can easily get a 2012 for around 14000 or less (260$ a month) it gets an average of 29MPG so assuming 1,000 miles a month at 3.50 (gas prices are falling so this is also being generous) gives you a monthly cost of 121$. We will give a generous monthly maintenance cost of 50$ which comes to 421$ a month. That is going to be one tough cookie to crack. Especially talking new car price. 1000 miles a month on 10 cents a kW assuming 300wh/mi comes out to 30$ and assuming no monthly maintenance gives you a car payment of 391$. So a new BEV will have to be priced at roughly 23,000 which is assuming a 5yr loan at 0% interest.... I don't know when we will see a sub 25k BEV that gets 200 miles of range.
On the bright side that should tell you roughly that if you are buying a car at around 15k when you switch you can get a 25k car for about the same price!
But yeah, I think we have a long way to go before we get to that point.�
1/1/2015
guest Why 200 miles of range? The leaf can currently be had for 18k post incentives in California. I think we have a short way to go before that point. But people will keep making and buying inferior ICE cars anyway, most likely.�
1/1/2015
guest 200 is being nice, I really think most people want more range than that. Note that I live in a major metropolitan area and I drive in to work. I have no hope of ever getting charging at work which means I would need to make a round trip in a car work with some extra range because we operate out of multiple buildings in the area but I am at just one building 95% of my time. All this comes out to me just BARELY being able to make a 100 mile car work, and I would certainly need a second vehicle for other purposes. The Model S is versatile enough that I have never been in a situation that it couldn't handle and WITHOUT being a major inconvenience I might add (there have been some minor inconveniences... but I would consider major to be "show stopping can't go there because my car sucks" kind of break down.
I am not alone, at least not in this area. A GIANT majority of people living in the NOVA area commute into the DC Beltway from 25+ miles away. So much so that the population of DC itself (and I don't even work in DC) doubles during the day. This means round tip of no less than 50-60 miles all year round which knocks the Leaf out of the question for most people, especially as performance degrades and you face big losses in the winter time. And the DC metro area is no small place. With close to 6 million people (as classified by the census) we are the 7th largest metro area in the country. I don't know about the other places... maybe they are more tightly packed and can therefore handle it... but here? I haven't seen a Leaf owner on the roads as soon as you get just a little ways away from the beltway... and for good reason. I am sure they exist, but are more rare than Model S which is saying a lot... because Model S are pretty rare this far south.
This doesn't even start to get into the psychological issues of "range anxiety" and how people want cars that have more range even if they never use it... EVER. This is all just on the practicality of trying to make a Leaf work. So this is why I say 200 mile range. Because then you can have round trip commutes of upwards to 150 miles and still feel confident that your car can handle it plus any crazy side trip that might come up throughout the day. Cause you sure aren't going to tell your boss, "oh sorry, I can't go to that meeting that is 5 miles down the road because I don't have enough range".
So yeah, 200 mile range car for 25k... when that happens, then we can talk about fully overtaking the ICE world in most all situations.�
1/1/2015
guest Why are you comparing a used ICE to. New BEV?�
1/1/2015
guest Because of this comment:
I believe the assumption here is that at that point it is going to destroy the resale price of 3 year old cars coming off leases which make them a losing proposition for banks to give good lease deals which will bring that whole part of the car market to its knees. At least that is the assumption I am getting from the comment.�
1/1/2015
guest Ah thanks � I had skimmed over that comment.�
1/1/2015
guest exactly
at the depths of the GFC, financial institutions froze car financing, leading to sales collapse in some country's car yards. (not the US, they only had about a 30% drop)
as far as range is concerned, it varies, currently there are 80mile lease EVs and 200mile full range EVs and nothing in between. what will change is that the lease EVs range will improve and that fast charging will improve, how much is required? I don't know, I suspect there is a continuum and it is price sensitive, so that an increasing number of people will accept the EV vs the ICE at increasing ranges.
recently Mitsubishi sold about 3000 Outlander PHEV in EU Mitsubishi Outlander PHEV Sales In Europe Surge To Almost 3,000 In September
that would be significantly more than its diesel 4x4 twin, which costs a similar amount to buy...
thats with a 12kWh battery�
1/1/2015
guest I agree that when the total cost of ownership of a new EV is lower than the TCO of a used ICEV, this would be a problem for institutions leasing ICEVs. But it seems this is a pretty remote parity level that may not need to come. When TCO of new EVs is obviously lower than that of new ICEVs, why would the customer want to lease ICEV in the first place? It seems the ICE makers would have to cut prices on their cars just to make the sale, and a low new price would be consistent with a lower residual value. So it makes little difference to the lease underwriter; it's just a cheaper car both new and used. I'm having difficulty seeing why finance companies would necessarily be thrown off by this? But of course, if they were caught off guard in this manner, that could trigger a crisis for auto makers.
Anyway, thanks for the sensitivity analysis. I looks like pluggins just need to stay in the 50% to 60% range to turn the market in a timely manner. It will take pure EVs a little longer, another 4 to 6 years because they are starting from a smaller base. But I do think they will come to dominate. Specifically as battery cost comes down, it will become cheper to extend range by adding more battery than by adding an onboard generator. At that point, the uptake on gas range extenders will fall off, and pure EVs will dominate pluggins. Additionally, cheap aluminum batteries might serve as a range extender. So if the market moves to pluggins in the near term, I see this as no impediment to BEVs longer term. Anything that cuts gas consumption right now is a good thing. These vehicle are changing expectations and attitudes.�
1/1/2015
guest skepticism
TCO of a LEAF is cheaper than a Sentra, why aren't the sales figures reversed? (2,589 vs 13,129)�
1/1/2015
guest This is what I was getting at above. The leaf isn't winning the hearts and minds of car buyers because it is too "limited" for many people (whether that is a real limitation or just something in their heads doesn't matter)
Even better you should compare the Versa against the leaf since it is the exact same platform one is electric and the other is not. If it can't even best out itself how does it ever hope to topple anything else? (I actually don't know the sales for the Versa... So if it is already outdoing the Versa, Great! If not... How sad!)�
1/1/2015
guest
Because it's still less capable with it's range limitations and not equivalent.�
1/1/2015
guest Or more capable because you don't have to take it to gas stations. And all sorts of other reasons.
Or alternately, and the probable explanation, is that dealers don't want to sell it. Which is the strength of teslas model.
This is why I'm not convinced that Agassi's idea will hold perfectly, consumers will continue to buy the inferior product even after the aforementioned price points have been met for various reasons. Though the change will happen fairly rapidly, I (and those of us with lungs) would certainly like it to be more rapid.
That said, they've sold well over 100k Leafs (that was in January, I wouldn't be surprised if it was close to 200k by now...at least closer to 200k than 100...), so it seems to be winning the hearts and minds of car buyers quite well. That may seem like a blip compared to overall car sales, but sales of the Leaf are growing very quickly, along with other EVs, and the Leaf is leading the way in terms of EV sales. It's crushing every other EV out there, except for Tesla, which it's still beating in terms of raw units (though Tesla can be considered the sales winner there since the cars are selling much better as compared to the market they're in).
As for versa comparisons, the base leaf is similarly optioned to a high end versa, so the price comparisons should start there. According to a quick truecar estimate you can get a Versa SV for ~200/mo leased. Leafs are 200/mo base (truecar estimates lease payments to be much higher though, because it doesn't account for incentive passthrough). So it looks as if the Versa is not significantly cheaper, plus add gas.
Of course, a 3 year old versa would probably still be cheaper than a new Leaf. But the Leaf and Versa are significantly different cars anyway.�
1/1/2015
guest Anyone who has actually driven an electric car knows that the silent thrust and convenience of fuelling is the "killer app" for this new vehicle class.
Therefore, I challenge the assertion that an electric car built on the same platform (Versa vs Leaf, Volt vs Malibu, Focus Electric vs gas, Smart ED vs gas Fortwo) is somehow "comparable". Bull.
They aren't comparable, one takes off with urgency from a stop light in silent glory. Whereas the "comparable" gas car sputters, roars and lurches and otherwise feels completely outclassed.
One can be refuelled in your comfortable weather proof garage while you sleep, the other leaves you at the mercy of the elements and smells as you wait minutes at the pump on a freezing winter morning.
Bottom line, they are not comparable no matter how hard you want to try.
My Smart dealer strenuously objected to letting me test drive a gas Smart Fortwo when he was still waiting to get a Smart ED demonstrator ready, telling me that there is no comparison between the two cars, except for the body shell. He was worried I would never come back after the gas car test drive!
And yes, range is just one of the "easy to quote" inhibitors, and the other is warranty/longevity of the battery.
Tesla has already substantially solved these "problems", without only the dimension of price remaining for mass adoption.
For me, my Smart ED is "already there", as it is perfect for it's intended function, namely, my short daily commute.�
1/1/2015
guest The majority of the car buying public still expects a vehicle to have the range and fast fueling similar to an ICE. If not EV's would be selling in far greater volumes. For all the LEAF's success it's far below initial projections from Nissan.�
1/1/2015
guest This is precisely why Agassi's timeline is unfortunately not going to result in an immediate paradigm shift - because people will continue to buy inferior vehicles for the reasons you've stated, and probably others as well. Nevermind that I've spent less time fueling my EV than I've ever spent on any of my previous cars, and mine isn't even capable of quick charging. And of course, when EV people constantly talk about how EVs aren't very good, as I see far too often from Tesla people, that doesn't help anything either.
But I do also think that the dealer angle has more to do it than most people realize. See this survey in case anyone here missed it: Dealership Survey | Electric Cars - Consumer Reports News
It really speaks to the strength of Tesla's model. George Blankenship (and the way he set up the Tesla retail strategy) may well end up having been the most important person in the EV revolution.�
1/1/2015
guest Neither does pretending range issues don't exist, especially when they loom large in the eyes of the public. EV's simply will not catch on in real volume until their range increases, probably 150+ miles at affordable prices.�
1/1/2015
guest My basic view is that comparability and parity really are in the eye of the beholder. Is the buyer willing to buy when priced at a reasonable gross margin? There are a myriad of factors that go into how cunsumers decide which cars are preferable to others. Reputation, prior experience and brand certainly factor in. It will take time for consumers to warm up to new technology, and it seems like too many EV makers only want to sell into a limited compliance market.
On the other hand, Tesla cannot expand supply of compelling cars fast enough. This is actually proof that Tesla has already gone past parity in the eyes of many buyers. Keep in mind that Tesla's ASP not going up because it costs too much to build a cheaper car. It's going up because demand is advancing faster than supply can be increased.
So the key indicator that your product is better than parity is not that you can sell it for a low price. Just the opposite, you can sell it at a high margin. About a year ago, the Chevy Volt was not selling so well, so GM decided to cut the price. At a lower price, sales picked up. Thus, they learned that the Volt was not at parity with what they had originally priced, and they had to accept a lower margin than they had hoped for. Fiat claims they lose money on every EV they make. These are the marks of products that are below parity. So some of this could be poor execution or weak product design, but the other problem is that the batteries are just too expensive. If the 85kWh pack cost Tesla $40k, they would be hard pressed to make a 25% margin on the Model S. So it really does matter what the components cost. But it appears they can make this pack for less than $20k and deliver enough awesomeness to customers that they can gross more than 25%. But the question is open whether they can make a car priced at $40k that delivers enough value to support a 25% margin. How much do they have to shave off the price of its drivetrain to make that happen? If they've got the cost of the drivetrain down low enough and the rest of the car at a reasonable cost, then they can do it. So that's the first point of parity.
The second point of parity is where it does not matter how cheap gas is. If the price of gas per mile came down to the same as the price of electricity per mile, about $1.00/gallon, would the Model S still command a 25% gross margin? If the answer is yes, then the second point of parity has been achieved. We can't really test this, because gasoline is not anywhere near that cheap. But if, as the price of oil comes down, we observe that gross margin declines for the Model S, then this could be evidence against the hypothesis that Tesla has achieved the second point of parity. Theoretically, it is possible that declining oil prices could reduce the cost of production or increase demand (more discretionary income) such that the gross margin actually improves.
In sum, the first point of parity is whether, given current energy prices, consumers are willing to pay a high enough price for an EV that gross margins are sufficiently high to induce the maker to grow capacity. The second point of parity is whether, in the absence of favorable energy price differentials, cunsumers are still willing to pay a high enough price to induce the maker to grow capacity. So this is about demand, what's it worth in the eye of the buyer, and about how contained the costs od production are. The conditions of both supply and demand need to be favorable for growth; otherwise, the product is below parity.�
1/1/2015
guest
no. The LEAF is an electrified Sentra Hatch,
The Versa Hatch (Tiida) is not the Sentra Hatch (Pulsar)
Tiida wheelbase 2600mm, front track 1480mm
LEAF, Sentra Hatch, Sentra Sedan (aka Pulsar) wheelbase 2700mm, front track 1540mm
Compare Vehicles
back to topic, electrified vehicles (both EVs and PHEVs) find it easier to reach parity with higher priced ICE equivalents
ie Tesla Model S vs premium luxury but not general market full size
ie Mitsubishi Outlander PHEV vs 4x4 diesel but not 2wd petrol.
but even though battery improvements are more important for EVs than PHEVs, the improvements will occur faster for PHEVs (ie power, longevity and SOC range improve faster than energy) and manufacturer's also can do better with PHEV drivetrain optimisation.�
1/1/2015
guest I have a Leaf and I can tell you why
1. People are afraid of new tech
1a. Nobody knows how long that battery will last or how much the range will degrade. Lots of news about people losing battery capacity and low range in winter/summer.
1b. People dont understand that the range is probably enough because of the full charge every morning
1c. People think they need an expensive charging station added to the house (I dont have one)
1d. People assume that hybrids drive worse than gas cars so EVs will drive even worse than hybrids. I've driven a Versa and it drives like crap. In fact, it was the worst car I've ever driven other than a Dodge Caliber(? - I felt that was going to fall apart on me on the highway). Assuming that the Leaf drives worse will get people to never even try it.
2. Better EVs are just around the corner. That means the current EV price will plummet more than a gas car. Thats why I'm leasing because the Gen 3 is just around the corner.
3. What if I'm stuck somewhere?
4. TCO, whats that? This one is cheaper to buy now
5. If you go to buy a small car, will a dealer steer you towards a Leaf?�
1/1/2015
guest Everything points to the Versa being the better comparison and most likely put in the same platform. Both Edmund's and TrueCar used the Versa as their TCO comparisons.
Unfortunately your link isnt working for me, so I can't use that to help inform me. It might be worthwhile to just take the hatchback versions of either car, though, as the real comparison against the sales since people who might by the sedan won't buy a hatchback and the other way as well. But in any case I still think limited range is limiting their market potential.
Are there plenty of people who can make an 80 mile car work for them? Sure... Just as there are millions of people who could theoretically afford a Model S. But you aren't going to turn the tide with a small target audience. Which is why Tesla is trying to get to a cheaper car and why Nissan needs to get to a more versatile car.�
1/1/2015
guest In September some analysts reduced their bullishness of the industry following Tesla's lead in going EVs. (please correct if wrong)
http://www.arb.ca.gov/msprog/zevprog/2014zevreg/140714%20eVMT%20Proposal.pdf
Toyota
Ford
GM
Honda
note their opinion
'The Urgency For e-VMT Adjustments to ZEV'
there is a strong lobbying to eliminate the no tailpipe aspect of EVs
this is why Tesla and Nissan need to provide sufficient ZEV credits for the entire industry, so the rules won't be broken�
1/1/2015
guest Does anyone think that this GSAT company Elon wants to launch a bunch of mini satellites with could have something to do with Elon's long term plan of having fully connected Tesla cars?
Right now he is at the mercy of bandwidth from other providers and poor areas of connection, but perhaps this new technology of mini satellites he's planning to help GSAT put in space will also benefit all Tesla cars somehow with a much improved constant internet connection somehow.
Anyone have any thoughts on ths possibility?�
1/1/2015
guest I have not considered that but I do like that possibility a lot�
1/1/2015
guest Yes, I thought that was the general consensus.�
1/1/2015
guest BMW Only Trails Tesla In % of Car Sales That Are Electric
About 5% of BMW's cars sold are EVs, the i3. Nissan is about 2% of Nissan. Of course, Tesla is fully committed. It will be interesting to watch these stats over time. Which traditional automaker will reach 50% EV sales first?�
1/1/2015
guest Boy, I was about to complain about headline writers having trouble parsing the English language, but it appears they fixed the headline.�
1/1/2015
guest Tesla Keen to Enter India, But Says High Import Duty a Roadblock - NDTVProfit.com
The issue with India: high import taxes with no provision for EVs.�
1/1/2015
guest the real trouble with India, vehicles need to make noise, its how they maintain safety in India.
EVs don't make noise, therefore Indians feel scared while driving them in India.
Buyers of EVs don't want to add big noise makers to EVs.
Its a major difference between Indian and Chinese market. In India a silent car is an unsafe car.�
1/1/2015
guest Unsafe car in whose view? the public or the govt.? We do care about noise levels when inside a car and at least individual car buyers in metros(those who spend good amounts on cars) consider this in their purchase decision. For the public on road, drivers sound horn more frequently than you think and not a big deal for majority of public to sound horn at someone so silent car in not a big deal. FYI, we do have an electric car running on the metro roads for more than 5 years. It is not received well because of purchase cost and the reliability concerns(1 year warranty on battery which negates whole purpose of low maintenance when you need to change battery every 3-5 years). As the article says, the most valid concern for Tesla including model 3 is the import taxes which is 125% of the retail price. A Honda Accord which is imported as completely built unit attracts this tax and sells very poorly and Honda stopped selling this where as Audi which shares the assembly lines with local VW plant, has usual luxury tax of ~25% and sells in decent numbers and tops in luxury segment. I don't think govt. is even thinking to cut the taxes on the imported ones and they think any car is a luxury item as we have decent public transport and until that changes Tesla has to partner with a local manufacturer or have a plant to assemble in India.�
1/1/2015
guest And here what big boys invest: Volkswagen Group to invest $106 billion over next 5 years in Automotive Division
Tesla with it $5 billion gigafactory looks tiny, nvm Tesla will invest only half of those 5 GF billions.�
1/1/2015
guest That is how the big boys piss away money.
Because the vast majority is being spent on 20th century tech and dead end bridge technology.
In the 50's and 60's General Motors led the world in R&D budgets.
Mostly turned into uncommercialized patents.
Budgeting $10M with brilliant highly motivated people incentivized to do great things is worth more than budgeting $1B to mediocre minds where the penalty for failure is greater than the reward for spectacular success.
Model S attracts the best and brightest that want to work on the cutting edge and do great things.
eGolf attracts people who want a steady income and are afraid to do much more than incremental improvements.�
1/1/2015
guest From the article:
It looks like most of their investment will go right into ICE. EVs are are PR window dressing, not a priority.
I'd rather invest is one Gigafactory in Nevada than in all the ICE factories of the world.�
1/1/2015
guest Interesting link, thanks for posting Zzzz.
My take away from reading it, for VW, it is business as usual for the next 5 years.
Tesla looks so tiny because it is very, very tiny. Baby Tesla.�
1/1/2015
guest And yet, look at how much you can do with so little! It's overwhelming to think what Tesla could do with $100B. Such waste.�
1/1/2015
guest Edison vs the Wright brothers is a great example of pissing away money and not amounting to anything. When the Wright Bros "discovered" flight it wasn't a surprise to anyone. People had been researching flight for years. Edison and his DoD connections being one of those groups. Edison had tons of money, hired the "best" people for top dollar and two no name people got it to work for pennies. Money doesn't replace passion. Tesla Motors is a company full of passionate employees. It is built into their hiring process. I am not saying these other companies don't have passionate people but I am willing to bet that their hands are tied behind their back through layers of company control forcing them to research specific things.�
1/1/2015
guest Tesla: The Origin Story - Business Insider
Very interesting article describing the origin of Tesla. Lots of cool stuff I hadn't heard before.�
1/1/2015
guest I could post this either here or in the "General Macro" thread. I'll put it here.
(Happy Thanksgiving, all you other USA folks....)
Today's (yesterday's?) announcement by the EU has the potential of being nicely important for Tesla Motors. Here are the two salient paragraphs from the AP, emboldeneds are mine:
This would play directly into Tesla's quasi-formally announced plans (1) to build a vehicular factory in Europe (adding to Tilburg, possibly?), and (2) to construct a gigafactory in Germany. Either or both of these projects fit the Commission's proposal to a tee (cue in Tesla "T" here....�
1/1/2015
guest European Union unveils $380-billion investment plan to kickstart growth - Economic Times�
1/1/2015
guest So I sent a question to Jeff Evanson of Investor relations a question about European expansion and financial reporting. Here was the body of the question:
I did get a response that clarifies what we have conjectured here on TMC, although it was a bit vague:
?
�
1/1/2015
guest Marc Andreessen talks about Disruption in 17 tweets. I tried applying it with Tesla and it makes a lot of sense.
Marc Andreessen teaches startups what disruption is really about (in 17 tweets) | VentureBeat | Entrepreneur | by Jordan Novet�
1/1/2015
guest Northland and Stifel reiterated their price targets
Northland Securites' Colin Rush reiterated his "outperform" and PT of $298.
Stifel his "buy" recommendation and PT of $400.
�
1/1/2015
guest Colin Rusch is making two very important points. First, he is identifying the target for disruption in the stationary market as specifically diesel power generation. That is, Tesla is going after ICE using transport fuels. This is where Tesla has an energy arbitrage advange. This enables him to size the market. It would be helpful if he specifically price diesel power prices for comparability batteries. Instead he goes round about to say that current storage alternatives start at $650/kWh.
Second, he introduces a very important metric, GM/kWh. (Note I am translating from Wh to kWh because this is more conventional at TMC.) He speculate quite conservatively that Tesla can produce a pack at $300/kWh cost, whence selling at a price of $600/kWh yields a GM of $300/kWh. While many of us here belive the Gigafactory can produce at half that cost or lower, the essential point is the GM/kWh that can be realized.
GM of $300/kWh is a critical value for Tesla. It is the return that puts stationary at parity with automotive. Consider that Tesla sells the average MS 85 at about $100,000 with a GM of about $25,000 / car. This works out to $294 GM/kWh (= 25000/85). So at $300 GM/kWh, Tesla is pretty indifferent to selling packs into the automotive or stationary markets. Either way, Tesla is making the same money by displacing ICE burning diesel to make power or displacing ICE burning gasoline to propel cars.
So long as there are not yet enough Gigafactories in the world, it makes sense for Tesla to price all products roughly at GM/kWh parity and let competing markets determine the product mix. An application of this is to consider the Model 3 with a 50 kWh pack. This should be priced so that GM/car is $15,000. If the ASP $50,000, this would imply pricing at a 30% markup. At such a price, Tesla becomes indifferent to selling more MS, MX, M3 or stationary and will be content to allow consumer demand to decide the product mix. I think Tesla leadership may be inclined to price this way. Currently, Tesla prices the Model S internationally on a GM/car parity basis. They could, for example, price their cars higher in China where that market is more willing to accept a premium for imported cars. From a customer relations point of view, they speak of pricing fairness, but from a GM point of view this approach means Tesla values each order the same regardless of which national market it comes from. This gives Tesla the freedom to more or less fill orders as they are recieved and not worry about the profit margin implications of which orders get filled first. So the relative consumer demand in each national market determines the allocation. If the Chinese place twice as many orders as the Amaricans, then twice as many deliveries will go to China. Of course, there are ramp up issues for the whole support network that presently constrain China deliveries, but my point is about a longer term equilibrium. Eventually, the support network in China will be built up so that the Chinese will be just as well served as the Americans at which point the allocation of deliveries will reflect the frequency of orders. As as Tesla moves new products into new markets, there will always be short term ramp up issues. Pricing on a GM/kWh parity basis simplifies the situation by removing certain product profitability considerations as drivers of logistical complexity.�
1/1/2015
guest EV sales robust in declining oil price environment
Latest figures from EVObsession.com reveal that November BEV sales (excluding Tesla which refuses to report monthly sales) are 4616, up 87% from a year ago and up 5.4% from October. This shows little suggestion that declining oil prices inhibit demand for BEVs. The story for PHEVs is different. Sales in November were 3609, down 26% from a year ago and down 3.4% from the prior month. The longer term trend is that consumers are choosing pure electrics over plug-in hybrids, and oil price declines over recent months is not impairing electrics.
One theory is that hybrids of all sorts will take a bigger hit from declining oil prices than will pure electrics owing to the fact that electricity is much cheaper than oil. So the fuel savings for electrics is much bigger than for hybrids. As gas prices come down the spread for hybrids becomes negligible while it remains substantial for electrics. So for all the FUD about cheap gas putting the brakes on Tesla it may be the hybrid makers that need to worry.
Nissan LEAF Breaks November EV Sales Record
Nissan LEAF, Chevy Volt, BMW i3 Electruc Car Sales�
1/1/2015
guest According to Clayton Christiansen, Tesla is not a disruptive innovator. He sees the electic car as a sustaining technology, and his theory presumes that disruption is always from the low end of the market. I've read his book, but I think he's off the mark here. When the iPhone came out, he thought it was not a disruptive technology, but later he amended his view when he realized that the target of the disruption was not Nokia, but rather the PC. I think he is making the same mistake. Tesla is not disrupting BMW by making high end cars. That is the wrong target. Tesla is disrupting the internal combustion engine with laptop batteries. Batteries are the low end technology from another market that was never intended to replace high end automobile engines. To the extent that automakers tie their business model to the ICE, they will be disrupted by EVs. I just do not think Clayton has looked deeply enough into what Tesla is actually doing to make such pronouncements, even if he is the originator of the concept of disruptive technology. Someday when it becomes clear that nobody wants a gas engine anymore because batteries are cheaper and have better performance, he will have to recognize that a major disruption has taken place.
Innovator's Dilemma: Clayton Christensen on Truly Disruptive Ideas - Businessweek
Another disruption that is going on is that as ICE is displaced by battery packs, this enables cheap electricity to displace relatively more expensive transportation fuels. So this disrupts the whole oil industry. While I can see Clayton arguing that the EV is just an enabling technology for BMW, I can't see the EV as enabling Exxon. Cheap, mobile, and high performance battery packs just do not fit neatly in to the business model of an oil producer.�
1/1/2015
guest While we are discussing the Innovator's Dilemma, I think there is a core principle in that book that people seem to forget when they try to identify a disruptive technology. Christensen takes great pain to show how the incumbents are held hostage by their customers. The new technology always sells to a new set of customers with different needs.
You might think in the case of Tesla that the customers are the same, but the truth is that the incumbents don't sell to car buyers, they sell to dealers. And, in classic fashion, the dealers don't want the disruptive technology. This is at the core of why Tesla has succeeded where other EVs have failed. The big auto companies are held hostage by their customers: the dealers.�
1/1/2015
guest Hold fast guys. If You want to go long, now is a good time to add. I will buy some more on monday.�
1/1/2015
guest I have a theory on why this is - BEV buyers are still early adopters, while PHEVs and hybrids sell to people who buy to save money. If this is true, it will unlikely affect Tesla any time soon (except the stock price), but it will limit the potential market if / when Tesla will want to introduce a 25k $ EV, that is, if oil prices are not back up by then. To check this theory, it will be worthwhile looking at what models took the most hit.�
1/1/2015
guest Disruptor today, likely to be disrupted in the future (very distant I hope)
Agree with you that dealers do not welcome disruption in their business. No one does.
I disagree that car makers are held hostage by their dealers. Imo they are in a self inflicted hostage situation, being held hostages by the profitability of their current business models.
That is a self inflicted trap that is too familiar to many individuals on a personal level. Choosing a secure career path rather than a risky venture is quite common choice on a personal level.
Profitable businesses are even more risk averse than individuals, stakes might be higher and constraints much tighter.
One distant day Tesla is likely to find itself trapped in its own business model and size, unable to move and change quick enough to stop disruptive newcomer from taking its customers away with a better offering.
It is very difficult hence unlikely to build a profitable capital intensive business whilst simultaneously developing technologies that will disrupt the same business within the same organization.�
1/1/2015
guest Everything you've said is discussed at length in the book.
I didn't say that being held hostage by your customers is the only reason that the Innovator's Dilemma is so hard to beat. There are a number of aspects to the theory and being held hostage is only one. I pointed it out only because we were talking about why people that are well aware of the Innovator's Dilemma (such as Clayton Christensen himself) mistake Tesla for a business with a sustaining technology rather than a disrupter. Many people miss the subtlety that traditional automakers (in the U.S. at least) sell to dealers, not to drivers. It is so telling that in order for Tesla to find success they had to find a new customer for their product. Elon has said, this would never work if they had to sell to the dealers. That is classic Innovator's Dilemma.
The traditional manufacturers are absolutely being held hostage by their customers as it is described in the book. That doesn't mean it is their only challenge. You pointed out some others. There are even more layed out in the book.
As for Tesla's future, I agree that it will eventually be on the wrong side of the Innovator's Dilemma. I just hope that they have the vision to see it happening, and that, either Elon is still there and has the ability to strong arm his company through the change (like a Steve Jobs). Or, if he is not there, that management has the presence of mind to take the easy road and spin of an entirely separate entity which is sized appropriately for the new market and made up of the best and brightest from the company with the intention that one day this new entity will overcome Tesla and that Tesla's shareholders will profit handsomely from it.
We can see both of these strategies at work today with Carlos Ghosn playing the role of the strong willed chief executive that has the vision and through pure will tries to force his company to follow him to the future, the whole time under fire from the media, the shareholders, the board, and his own employees. Unfortunately for him, I don't think he has the power to do it. It is an incredibly rare power. I think Elon could do it, Steve Jobs certainly could. I wish Goshen the best, but (as Elon would say) I don't know that success is one of the possible outcomes. On the other hand, we see Toyota and Daimler taking one of the easier routes by investing in a completely separate entity (Tesla). Though, both invested far too little and have recently pulled back or out of those investments and decided to address this new market from the within the main company (history says that won't end well).�
1/1/2015
guest
Regarding Tesla or any other business trying too hard to change to accommodate non fitting disruption, I am not sure that the fight for survival is worth it.
It might be a better business choice to fold off as a business and let the new businesses emerge unencumbered with unfitting structures and legacy costs. When a business realizes that some parts of it might be on a dead end track, then they wrap up the dead end bits and sell off or 'divest'. If such choice truly makes better business sense, then ice car makers current choices are easier to understand.
Business disruptions and transformations may be undesirable to affected businesses but we as consumers greatly benefit from the changes.�
1/1/2015
guest The cycle of disruption/growth/mature has different rhythms in different industries. In the restaurant scene, it's measured in seasons; software, years. The auto industry? At a minimum, the cycles in the auto industry are measured in decades. We have a sample size of one, since the last "disruptor" was Henry Ford. It's taken a century for the situation to be set up for disruption, and the rare combination of talent, vision, and wealth that Elon brought. Whilst I'm sure that Tesla will itself be disrupted, I think there's a reasonable chance that it will take another century.�
1/1/2015
guest I'm not sure. Tesla's biggest disruption is probably how the car is propelled (electricity). Second tier would be how it's fueled, how it's sold, how it's updated, how it's internally controlled (screen), etc.
But right on the horizon is a big one - how it's controlled, meaning autopilot or self-driving cars. Tesla might get there first and best as it makes sense that an electric car is more precisely controlled than an ICE car, but it may not. It might be disrupted by a legacy company but I highly doubt it. It will more likely be disrupted by a company (Google, others?) that doesn't deal as much on a day to day with the actual pains of making cars. That was Tesla's model to get to electric cars. I think self-driving cars will be a bigger innovation than electric vs. gas, and I think they are coming in the next 5-20 years, not a century.
But I've been wrong a lot on these forums...�
1/1/2015
guest We are all looking at a crystal ball here when talking, all equally wrong...:smile:
My crystal ball disruption predictions:
Car wireless recharge
Car ownership restructuring, away from private ownership
Car control system advancements
Timeframe perhaps in decades�
1/1/2015
guest Perhaps for the industry as a whole, but for American manufacturers the Japanese entry into the USA market in the 70s was certainly disruptive. The Honda Civic, being a very small fuel efficient car hit at exactly the same time as the 1973 Oil embargo. And it didn't rust into dust after 3 years like most American cars at the time.�
1/1/2015
guest I was talking with a fellow EV enthusiast who was a Volt owner and I think his description of why he is adimant that he will never drive a non EV again should help with this discussion.
To frame this, this is a guy who has put something like 26000 mi on his volt with like 22000 of them being all electric miles. He says he doesn't have range anxiety, he has gasoline anxiety, because it pains him to have to put fuel in his car.
The reason he goes to such pains to stick to EV only mode? Because it is just an all around better driving experience. Even with the slower volt it still gives him that giddy feeling and there is still some of that pure torque and drive even in the volt.
I have talked to Leaf owners who have expressed similar comments. Tis counters to his very own conversation about owning a Prius. He hated it. Every minute of it. Drove it to save money, but that was the only reason. It wasn't a fun ride at all. And that is the problem with most straight hybrids. This experience is even more transcendent on pure EVs as opposed to the Plugins but I think it is there all the same. When Tesla pushes their 35k car it is not just going to be cheap to own, and also look fantastic, but it is going to be a blast to drive.
Why do people loath after and sink tons of money into big gas guzzling trucks or flashy sports cars? Because they are a blast to drive. So what if I told you you could have both? Of course you would instantly go for the EV every time. As long as Tesla refuses to make a golf cart EV, I don't see there ever being a demand problem for them.�
1/1/2015
guest I can only support this with my own experience. Me has one Leaf and one Tesla. I frequently travel for business and get nice rental cars (high end BMWs, Mercs and such). While I look forward to trying these "wonders of engineering", I always end up frustrated and disappointed. My Leaf is at least on par with those guys, and in some respects (gas pedal response) ahead. I will never ever buy a fossil car again.�
1/1/2015
guest Registered just to give a shout out to my fellow K�lsche Jung.
Do you drive a Tesla in Cologne? Living in the UK now and I've not yet seen one in the times I've been back. Maybe I will this Christmas!
Re your post: Bought on Friday and think that even $223 was a good level to enter at. Long term fundamentals haven't changed as far as I'm concerned so this slump really is nothing more than a buying opportunity if you ask me.�
1/1/2015
guest Welcome Gerasimental, great to see new contributors and investors.
I agree with your stock evaluation and I added to my position by buying some leaps on a dip.�
1/1/2015
guest Hi Gerasimental. Thanks for the greetings, Jung. I also agree that it is a good time to enter long. Domet e bessje Jeld noh K�lle k�tt...�
1/1/2015
guest Considern recent turns of events with regards to stock price and the such, I did some long-term musing and started formulating some long-term prognoses for personal use. Came across a couple of statistical images I feel like sharing. They paint a picture of exponential growth, which is an extremely strong pattern to see and very important to recognize early. Exponential growth is so powerful yet decieving, especially in the beginning when the absolute numbers are small. I say just believe what the data tells you.
Norway:
US (first image shows BEV+PHEV+EREV but the second shows clearly that it's the BEVs that make up the exponential growth while PHEVs grow in a linear fashion):
�
1/1/2015
guest Great Stuff, Johan. I think this is good evidence that Hybrid is a dying species.
---
The oil crash seems to lead us into a very new terrain for TSLA: A bear market. I will hold on to my stocks but I am very curious how TSLA will respond to this totally different environmetal mind set. Today TSLA was up good pre market, as was a lot of other stuff but then everything turned red. There are some indicators mentioned elsewhere on this forum that TSLA is oversold. That�s what I think, too. At this Moment the stock is still in the red but I see some strength in a) bouncing back and b) not being pounded in this scenario. I think we have reason to believe that, should this really be the beginning of a bear market, people will go into TSLA if Tesla keeps on to deliver solidly.
Seamine scenario ! Seamine ? Neemiine !
KLONK !
Hot Fuzz (4/10) Movie CLIP - Sea Mine (2007) HD - YouTube�
1/1/2015
guest I hate the last graph and I'm pretty fed up of seeing it. Cumulative sales graphs are good for appreciating how current volume on the road has grown, but if you're looking for actual sales trends, a 12-month moving average is a much better way to do it.
Markers on the timeline indicating releases of some of the updates would also be useful. Leasing has been relatively common for plug-ins, due to the subsidy and financing so we'll see a fair few "sales" that are just cyclical upgrades.
I actually see that last graph as trending towards linear, which means growth is slowing rather than increasing exponentially.�
1/1/2015
guest https://www.google.com/url?sa=t&source=web&rct=j&ei=Wu-QVIq3AcLZsASswYLgBw&url=http://qz.com/313162/heres-how-electric-cars-could-be-cheaper-than-gas-guzzlers-within-a-decade/&ved=0CCQQqQIoADADOCg&usg=AFQjCNEeP1mZWy4LrPGGvnHjdFJynNqVeg&sig2=Xp10EGbE5XPKAB0kP3PrfQ
Nice projection that EV drivetrain will become cheaper than ICE drivetrain within ten years. I think Tesla is much closer than that, but it has to scale up and squeeze the cost out of the rest of the car.
Pardon me if this has been posted already. I've been on vacation (WDW) and am just now trying to catch up.�
1/1/2015
guest Considering that the model s is superior in just about every way to any vehicle that competes with it on price, I think we've already reached the point where it's cheaper.
Heck, the first sentence of that article is so completely ridiculous as to poison the whole article. The internal combustion engine is a moving target? Really? You mean the thing which has taken the last decade to go from ~20mpg to ~24mpg fleet average? Yeah...moving real fast, that target....especially considering some of those gains are from electrification/hybridization of the fleet, which tend to pull averages up a lot since these cars have such high mpg.
Meanwhile the model s battery is 40% better than the roadster battery, the volt battery is like 150% better than the EV1 battery, the P85D is 50% more powerful and a second faster to 60 than the P85 which was already impressive when it came out just two years ago...so which one is the moving target?�
1/1/2015
guest I really am not sure what you mean by that. A high performance electric drivetrain is now cheaper than a high performance ICE drivetrain. That is true. However, the economy ICE drivetrain is still cheaper than an economy electric drivetrain. The DB numbers in there are quite good as well and they use $100/kwh battery costs in their model.�
1/1/2015
guest It's suggesting $5.4k for the battery, which could maybe happen, but suggested that all you have to do is add in the motors for $700 and you have the entire drivetrain. Uh, I think they're missing a piece.�
1/1/2015
guest Yes, my money (literally) is on Tesla's CEO, execs, and board to nail it. Exxon's will looking out the side window at $50 oil for the next while and this will zoom by.�
1/1/2015
guest I think the way to position Tesla and Tesla-grade EVs is as high performance. Performance never goes out of style and is worth paying for regardless the price of gas. Parity with low performance ICE is not a worthy objective. As ICE becomes obsolete on performance, ICE makers will increasingly be pushed into the low end of the market. As long as Tesla has less than 10% marketshare it may as well dominate the top 20% of the market.�
1/1/2015
guest Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?
Seems to me that many investors are sticking their head in the sand, when they want to believe that the current range is enough.�
1/1/2015
guest jhm, you make an excellent point about the best positioning for EVs is as performance vehicles. It just doesn't cost that much more to place a higher-performance-capable motor in an EV vs. something similar in performance to an ICE vehicle. I love my Tesla for many reasons, but especially because it is both an economy vehicle and a rip-roaring acceleration demon for those moments when I really need to get moving quickly.�
1/1/2015
guest The answer to your question is probably 'no" and there's ~70,000 happy Tesla owners out there who'll back that up. But I'm sure you know that.
I've been driving my Tesla for almost 4 years now, my wife has had her Model S for more than 2 years. Only once did we need to rent an ICE and that was before the Supercharger roll-out was in full swing. Apart from the personal example there's plenty of research out there showing average commute distances, average daily driving etc. The notion that current range is insufficient has been debunked so many times I'm not even going to bother looking up all the numbers again; although it seems to me that not researching this might mean you are the one sticking your head in the sand. ;-)�
1/1/2015
guest The word "replace" is ambiguous. If you mean "displace completely," I'd note that the ICE has not replaced horse-drawn vehicles completely, even in New York City. I expect there will continue to be use cases where EVs aren't as good as ICE, so I don't expect to see gasoline disappear as a motor fuel in my lifetime.
From an investor's point of view, the relevant question is whether 200+ mile-range EVs can displace enough ICE vehicles to be successful. As @NigelM notes, the facts say 200+ miles is more than enough to achieve this level of penetration. Here's a simple example why: most U.S. households have two or more cars. Even if people really do like to road trip frequently (which is not true, based on observed behavior), does every car in the household need to be road-trip worthy? So, you've got a huge market for 'second cars' that can be electric -- a market now served by Nissan's Leaf and BMW's i3.
But Tesla is aiming higher, to be the preferred road-trip car. Yes, that requires stopping every 150 miles or so for a 20-minute break, but drivers should be doing that anyway for safety. And with free fuel, the case is pretty strong for many.
Sure, there'll always be some people who drive 500 miles a day and can't be bothered to stop, or for whom those stops really add up. As EVs begin to dominate the landscape, though, these ICE drivers will start worrying about where they'll find their next gas station.�
1/1/2015
guest I echo this verbatim.
I have 45,000 miles on my Volt and have purchased only 150 gallons of gasoline, so 300 miles per gallon of gas.
Every mile with the generator running is a scar on my soul, though! I went 100% electric for 4 months.
Can't wait for my S85D in February!�
1/1/2015
guest Perhaps this article about the potential for Model S range extension in today's "Investor's Business Daily" will cheer you up: Could Tesla Model S Get A Boost In Range — And Sales Too? TSLA TM - Investors.com
Are there still no airplanes in Germany? For long distances, I fly. For those who prefer to drive, free Tesla Supercharger stations are located near restaurants. Meanwhile after a daily commute, being able to inexpensively and conveniently recharge in a home garage is greatly appreciated by electric car owners.�
1/1/2015
guest I would echo what others (Nigel/Robert/Curt) have said but add that they will replace ICE completely (90%) if filling your battery takes 10-15 minutes. Personally, I believe TMs focus should be on shortening charging time vs bigger batteries.�
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