Is Tesla A Game Changer?

gagrice

I was going by what my uncle told me. He started at the end of the war ordering a new Packard every few months. He would take the train back to the factory and pick it up and drive it to Los Angeles. He would put it up for sale and make money. When the Tucker came along he ordered one. He seemed to think it was ahead of its time. He owned so many luxury cars in the 1940, 50s and 60s I can't name them all. I don't think he ever kept one more than two years. When ever I would go visit him we went out looking at new cars even into the 1970s. There at the end he mostly bought Oldsmobiles. Like all the wannabe Tesla buyers, he took chances. If Tesla is losing a lot of money on every car now, I don't see them making any on a cheaper model.

stever

I think Tesla is a game changer even if they fail. They've put 200,000 vehicles on the road and have "orders" for 325,000 copies of a brand new vehicle. They can take out loans against those reservations and pay for the R&D.

"Carmakers typically have to drum up enough interest in a car to pay for its R&D and production costs. Tesla has essentially the opposite issue; it has to figure out how to profitably produce one of the most anticipated cars in history." (Mashable)

So let's assume Tesla fails, either because they can't make them cheaply enough, or because they don't have a dealer network or the warranty costs kill them.

Meanwhile the demand for EVs with decent range is going to get met by the Bolt and every other manufacturer who wants to compete in this arena. And that's most of them.

Elon may get the last laugh by focusing solely on battery production.

Mr_Shiftright

I don't see that working. For one thing, the Tesla Model S has gone into Consumer Reports "Worst of the worst used cars" list.

Secondly, about 40% of the people who put down money to "reserve" a Model X have not acted upon it. No bank is going to loan on that level of "pre-order reluctance" seems to me.

In my opinion, the bare facts are that battery technology still basically sucks. A totally new kind of battery will have to be invented for any EV to become a "game changer".

EVs are still a toy. To use your Tesla, or your Bolt, you have to treat it like a pet going on vacation. You have to plan ahead to make sure it will have everything it needs to travel.

People (most) may love their Teslas, but there is no spontaneous use about it.

If I tried to sell you a cell phone that you could only charge at home or at my charging stations, you'd throw it back at me.

stever

Maybe if you were within six feet. Be hard to get much more (throwing) range with the early suckers.



"Motorola DynaTAC 8000X. This was the first handheld mobile phone made available to the market in the United States." (link)

slorenzen

stever said:

Maybe if you were within six feet. Be hard to get much more (throwing) range with the early suckers.



"Motorola DynaTAC 8000X. This was the first handheld mobile phone made available to the market in the United States." (link)

Yeah, but if you HIT him with that thing, Shifty's toast...

Mr_Shiftright

I missed that era--I just remember laughing when I saw people using them. You'll always have people who will buy the first of anything new, no matter how inconvenient, expensive or impractical it is.

stever

I remember getting my first phone call from someone with a real car cell phone in the late 80s/early 90s. Before that I had gotten a call in the 70s from some ham radio guy with a repeater setup in his car.

It takes a while for this stuff to hit critical mass, but EVs sure have that same feel about it.

fintail

I wonder how supercharger capacity is slated to deal with a volume of new cars, if the 3 hits the production hinted at by deposits. The only thing worse than having to stop 200 miles into a trip for a 30 minute recharge, then do it again in another ~3 hours, is to wait for 2 other people in front of you to get their juice before you can fill up.

Mr_Shiftright

I don't believe EVs are going to hit any kind of critical mass until a new type of battery appears.

Right now, I look at the EV as the steam car of 1910---highly capable in its own way, but not able to compete with a gas engine, a self-starter, and an affordable MSRP.

gagrice

Mr_Shiftright said:

I don't believe EVs are going to hit any kind of critical mass until a new type of battery appears.

Right now, I look at the EV as the steam car of 1910---highly capable in its own way, but not able to compete with a gas engine, a self-starter, and an affordable MSRP.

Agreed! The Tesla sells because it is pretty and a lot of rich people want to commute to work looking green. Musk has been promising to deliver an EV for the masses since 2012. Now late 2017 if you give him a $1000 loan. If those 325k people fork over a grand, he will have $325 million to play with.

I'm with you, until a different battery is invented the EV is a limited use vehicle. As I mentioned before a neighbor with a LEAF has already run into issues with charging. His wife commutes 35 miles each way to the Navy terminal. More than once she has come out to find her car unplugged from the charging station. Fortunately it stops charging until it is plugged in again and a CC swiped. It caused her to not make it all the way home once. I don't think AAA has fast chargers on their trucks.

Lastly I posted an article about people in Norway where the Tesla is extremely popular. They are having 4-5 month waits for repairs. I think the main Power unit is less than reliable.

Mr_Shiftright

Brilliant though he may be, if Musk thinks he's going to sell 500,000 cars a year without an extensive franchised dealer and service network, well...good luck with that.

fintail

Interesting Tesla tax data - I wonder who did what to who to create this unnecessary and undeserved idiocy in the first place

hpmctorque

I just got back from a trip to Europe, which included four days each in Amsterdam and Berlin. I saw several Teslas in each city, including two Tesla S taxis in Amsterdam. Those taxis really surprised me. Their owners must have concluded that the cost of ownership would be cheaper than for an IC or hybrid powered vehicle. Or, maybe they had a fleet and were just testing the Tesla. Don't know what tax break they got in Holland or Germany.

I also saw numerous Priuses in Milan, Amsterdam and Berlin, more than in previous visits. In fact, my taxi from the Berlin train station to my hotel was a Prius.

hpmctorque

For whatever reasons, a lot of people hope Tesla will fail. I leaned in that direction for a period because I love IC powered cars. Lately I've become neutral on EVs because the rational side of me wants to see how the automotive power plant competition plays out. That said, I'm not a fan of the government financial aid Tesla was given and the tax incentives for EVs and hybrids. Others will disagree, and I know there are differences, but I put these incentives in a similar category with the Cash For Clunkers program

I think it's too early to predict whether Tesla in particular, or EVs in general, will be major disrupters. With the billions going into battery research in many countries, and research to utilize current (no pun intended) batteries more effectively, I suspect there's a good chance that EVs will ultimately gain significant market share.

In the meantime, like it or not, there's no question that Tesla has spurred every major vehicle manufacturer to speed up research, development and introduction of EVs. Sure, rapidly tightening mileage and pollution standards around the globe are the main reason for this, but wouldn't you agree that Tesla's success has moved the process forward?

fintail

I'd love to see Tesla succeed - without tax incentives given to vehicle purchasers who need and/or deserve it least. It's a good representation of 30+ years of trickle down nonsense.

Supposed "green" legislators and policymakers across the developed world and elsewhere will be lured into this as well - social engineering is their game, and they will do what it takes to put more EV passenger cars on the road. Just don't think about that already stretched-thin power grid, or where the batteries come from, or about commercial vehicles. Or for some Euro places, where the money will come from, as they recently signed up for years upon years of expenses which few can fathom.

Tesla gets a huge break in Netherlands, maybe enough to make a taxi a nice publicity stunt. I think it is the top selling EV there, and EVs are huge there in general. I don't know if the break is as much as Norway, where with the break, a Tesla can cost less than a Passat. I suppose that kind of stuff is easy when you have a big sovereign fund and your defense is subsidized. I think they also get special lane access and parking, as has been seen in parts of NA. I remember seeing Prius V taxis in Germany and Switzerland, although still not nearly as many as E-class and MB/VW vans and tall wagons.

stever

We've been subsidizing ICE cars and trucks for decades, and that's not even including the "green" (brown?) subsidy of having those engines spew all over. At least the EVs have point source pollution that you can monitor more closely (can you say VW?).

"Whether it was the Erie Canal, the first transcontinental railroad, or the interstate highway system, state and federal resources have repeatedly been deployed to build new types of transportation infrastructure that the private sector couldn't, or wouldn't, fund. Over time, these investments paid huge economic, social, and national-security dividends to the country." (Slate)

fintail

But with Tesla breaks, we are subsidizing the socio-economic group who needs it least. Especially in this new Belle Epoque. I sincerely doubt subsidizing plaything EVs for the upper echelons will create the same dividends as developing massive transportation infrastructure projects - which are not the same thing as EVs at all. Of course, that 8 year old opinion piece is about mass transit, which is also not the same thing as fancy toy EVs. Good point in that one anyway, the home ownership subsidy is an undeserved waste and a way to reward an irresponsible industry. It exists virtually nowhere else.

Point source pollution, but don't think about the manufacturing or where the juice comes from Just send it to someone elses backyard, the green movement has been doing it for eons. Bus or dinky EV for you and your shoebox low-E efficiency unit, nice private car and comfortable detached house (bought for nothing) for me, that's the greenie Seattle way anyway.

stever

That was just the first easy hit - there must be dozens of them out there. The point is that new tech trickles down in myriad ways, often with unexpected benefits (and yeah, some not so happy unexpected consequences). I'm hoping for a big battery breakthrough that'll enable me to get off El Paso Electric entirely without having to have grid or diesel backup for a spell of gray weather.

I'm also hoping for big time EV adoption (with decent range) so I can quit going to the dealer for most maintenance.

Finally, I'm hoping Tesla comes to their senses and switches out the rear gulls for sliders.

fintail

I'll believe in those unexpected positive externalities when I see them. And still, they do not justify giving breaks to 100K+ vehicles. I'll also believe the range when I see it, even 300 miles is still pretty much a dream. And you'll still have to go to a shop for maintenance - unlike what many Musk Kool-Aid drinkers think, these things still need fettling now and then.

The X is essentially a fancy AWD minivan, but sliders wouldn't appeal to the target demographic. It's all about image and showing off. Maybe it will come after the 3 is up and running, maybe 2026?

hpmctorque

Special lane access and parking could be an important incentive for taxis, assuming all taxis don't already enjoy these privileges.

Yes, there are certainly more German vehicles than Priuses for taxi and livery service in Berlin. The Prius I rode in was a standard hatchback model.

By the way, the foreign, non-English speaking driver drove like a crazy man, flooring it and slamming on the brakes repeatedly. Most taxi and livery drivers in Europe drive in a very professional manner. Well, not so much in Italy, south of Rome sometimes. I had a couple of rides in Naples a while back where the driver blew through red traffic lights and drove the wrong way down one-way streets, even cursing other drivers as he did that (kind of humorous, in a way), but these drivers didn't abuse their cars. This driver in Berlin drove like a New York taxi driver on steroids.

hpmctorque

I should add that the driver who took me from my hotel to the Berlin airport drove in an exemplary manner, and spoke English well. I'm sure he was more representative of German taxi drivers than the first guy. The car was an E-Class 220 diesel, a far better ride than the Prius.

hpmctorque

From today's Automotive News...

"Ford pays $199,950, $55,000 over sticker price, to buy a Tesla Model X SUV." This was presumably so it wouldn't have to get in line for delivery.

This is another sign that the world's major auto makers are anxious to learn about Tesla's designs, its mystique, and why investors are willing to assign such a lofty valuation to this electric car maker. Some say Tesla stock is running on fumes (figure if speech, since EVs don't emit fumes). However, the valuation of Tesla shares has been very high for over two years, compared to that of its much larger competitors, which is a long time for a company with no or meager earnings to command a multiple several times higher than its industry peers. Amazon is another example that comes to mind, but these are very rare.

I'm sure Ford and others would like to learn the formula to Tesla's secret sauce, given that their valuations are considerably below the average for the S&P 500. High valuations make financing easier and more affordable

stever

I had a friend who worked at HP and every time a new printer came out, they'd buy one and play with it, take it apart and try to reverse engineer it as much as they could.

They didn't have to pay top dollar like Ford to get one though.

texases

I remember reading Haley's "Wheels" many years ago, no idea how accurate it was about the auto industry, but there was a section describing how one automaker had a section of their R&D containing stripped-down competitor cars. Sounds like little has changed. Only thing unusual here is Ford was found out.

gagrice

I'll also believe the range when I see it, even 300 miles is still pretty much a dream.

The Tesla website only claims 170 miles after a 40 minute Super Charge. 40 minute pee break every 2.5 hours of driving seems excessive. We try to average about 650 miles a day when traveling. Or about 9 hours is our limit. Leaving at 7AM and arriving at our destination around 4PM. IF and that is a huge IF, we had to find 4 SuperChargers that would add at least 2.5 hours to our daily drive. When they get an EV SUV with a 600 mile range I might consider them. Until then, make mine diesel.

stever

Ideal for us is 300 miles but it seems like we've exceeded all too often in recent years.

Six hours at 50 mph average sticking to blue highways used to our usual goal. That leaves ample time for breaking camp, a nice meal or two and an activity, like a set of tennis or a hike, then plenty of daylight left to sit around camp and read or putz around a lake in a canoe. Don't know why we've sped up in our old age.

gagrice

It always seems we want to get passed the first 600 miles after leaving San Diego, no matter which direction. Especially our trips to Indiana. After we get off I8 & I10 we head for the US highways. Our favorite is US 60 all the way from Globe, AZ to Henderson, KY. We know all the best BBQ joints on that route. Never crowded, no big cities. What road travel should be. And it is only about 50 miles longer than the Interstates. Maybe 3 more hours on the road. That 2000 miles takes us about 3.5 days without 12 stops for Supercharging. And only 3 fuel stops when we are settled into our Hampton Inn Suite for the evening. I don't see a Tesla or any other EV in our future. Strictly a city commuter vehicle.

gagrice

Not only are people NOT buying a second EV, new buyers are getting to be slim pickins'. Nissan Leaf sales are in the toilet, down 28% YTD. Selling less than 1000 per month. The folks that might buy a Nissan Leaf are not likely to have a Federal tax burden of $7500. So that tax credit means little to them. The Tesla buyers I would hope pay far more than that per year. I think the people lining up for the new Tesla are mostly speculating. Sell your number at a profit like during the Condo craze in Hawaii back in the early 1980s.

Despite the enthusiasm the Tesla Model 3 seems to be generating, sales of electric and hybrid vehicles are sputtering in the U.S. and consumers are demonstrating weak loyalty to these powertrain solutions, based on a review of IHS Automotive loyalty data.

http://www.forbes.com/sites/stephaniebrinley/2016/04/21/are-ev-and-hybrid-buyers-loyal-to-the-powertrain-ihs-data-suggests-not/#6285f46b655c

stever

@gagrice, there are certain destinations where we just want to get there. Best not name names, lol.

My understanding is that if you sign up for a Tesla, you can't later sell your place in line.

I can't get to Forbes anymore, but I assume that story is based on today's PR by Edmunds? Still waiting for the home office to post the article online so I can link to it and not some nefarious cookie loving site.

Mr_Shiftright

I don't see how setting out the facts about Tesla represents any "hope" that they would fail. We do know they aren't very good at making money; we do know that by any current standard of financial acumen that their stock is seriously overvalued; and we do know that their products have reliability issues. We also know that all that deposit money is but a drop in the bucket for what Tesla will need to do a ten-fold expansion to meet their projected sales goals for the Model 3.

So a certain amount of skepticism seems healthy at this point, and not mean-spirited.