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Comments
NM at least isn't all Red. Those states are in the running because lithium ores are relatively close (the only US mine is in Nevada, although there's a big discovery up in WY). But I think Elon wants to go solar in the SW for the factory.
Yep, solar and wind power for the factory. NM might be good for that, and it is an economically depressed state last time I checked. Nevada is, of course, closest to the Tesla factory in Fremont CA, and in NV you can do ANYTHING you want pretty much. I think Elon needs a couple of square miles for his plans. Texas already has auto plants so that's a plus I guess. Lots of hot air in Texas for windmills.
First off both Toyota and Honda are producing EV's. Secondly Hybrid technology can only go so far and there are some major issues with hydrogen that puts that technology way out in the future. In the next 5 - 10 years the EV will continue to grow. In the future we won't see any one type of fuel source dominating cars but rather a mixture of maybe 4 or 5 different technologies.
I would think that Tesla making hybrids would be a mistake on their part. They could join with another manufacturer for a joint project to make one using the best technology from both companies to make the hybrid.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Whats to say that in 10 years there wont be many companies building EV's that are better than what we have today?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I'm seeing very limited EV launches by Toyota and a deep commitment to plug-in hybrids; and Honda just dropped their lease pricing on the Fit EV from $389 to $259 to stimulate lagging interest. So.....did I miss something?
I also took Toyota's "EV Compatibility Test" and I failed. Basically, they told me not to buy one.
I'm not clear about the subsidy to which you're referring. Are you suggesting that the subsidy on, say, a $30,0000 Leaf could remain, while the subsidy on the amount over that figure, just to cite an example, should be removed? Not judging, just asking.
Subsidy - another name for local or federal tax credits.
I'd easily cut it off around 40K or so.
If I were Musk I'd consider the "Ferrari Strategy" of building fierce brand loyalty and maximizing profit per car. I wouldn't push for massive expansion in the EV market, because then you'll have a very full swimming pool in no time. But Ferrari swims in its own pool.
In a sense, Ferrari thinks that quality in the sale is as important as quality in the product.
That might work. However, the business model of building a network of Supercharger stations and the giga-factory is base on Tesla selling a lot of Model Es, in addition to S and X models. Also, most ultra high end brands today are owned by mass market automakers (eg. Ferrari/Fiat, Lamborghini/VW. etc.). It might be difficult for Tesla to compete in the ultra premium segment on its own. Given Tesla's current market valuation vis-a-vis the world's major automakers, it's hard to imagine one that would invest in Tesla, unless the price of its stock dropped substantially.
On the other hand, what if Tesla DOES figure out a battery "breakthrough" (I think that's still 10 years off)? Then all the supercharging infrastructure is for naught.
True, a battery breakthrough (more compact, lighter, more powerful, cheaper) could be the game changer of game changers, for numerous industries.
How would a battery breakthrough make the supercharging infrastructure "for naught"? The supercharges are there to deliver power into the battery at a faster rate. Any battery breakthrough wouldn't effect that at all.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I think it would. If your advanced battery system had the same range as a car, why would you waste 30 minutes recharging when you could do so at home? Would you spend 30 minutes filling up your gas tank?
If that were the case then superchargers would be useless now. Think about it, most people usually drive less in a day than any EV's range. That means most people can use an EV almost every day and charge at home over night. In the case of the Tesla many people can drive up to a week on a single charge (it comes close to the city range of a lot of vehicles). So why the superchargers?
The purpose of the superchargers is to let the Tesla owner drive much longer trips. I will use myself as an example. My family usually takes a trip to a resort in Wisconsin. That resort is just out of range of a Tesla so I cannot just charge up in my garage for that trip if I use a Tesla. However there are two superchargers along the route to the resort, the farthest one from me is well within range of my house and well within a round trip distance to the resort. So I can drive to the supercharger, top off the battery while resting, drive to the resort and enjoy my vacation then drive back to the supercharger and top off the battery for the drive home. At this time thats the only time I think I would use one if I owned a Tesla.
So contrary to your thoughts I would think the use of superchargers would increase as the range of the EV's increase as the longer ranges and fast charges would encourage more people to take long trips with their EV's.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
That would only work if there were as many charging stations as there are now gas stations. Also, we'd have to presume that people won't be "charged" for their electric fuel.
But you have to take some downtime to use the supercharger Snake. That means planning. Some of us like to have a general destination in mind but often change course in mid-stream. Our last trip south to Chicago wound up taking us over to the rural NE corner of Iowa from Madison WI for a two day detour.
That said, an hour of downtime isn't too bad for a couple of hundred miles, assuming a site is handy. I can kill that much time on my laptop, easily.
2013 Tesla Model S: A Typical Supercharger Dinner
Just to give you an idea---a 1919 Detroit electric has a range of 75 miles (true, only 25-30 mph, but still---that's almost 100 years ago!!)
but still---that's almost 100 years ago!!)
Yeah, but that was with the A/C on!
Actually with 3,000 lbs+ of gross weight and mechanical brakes, you wouldn't want to go much faster than 25 mph in one of those!
Well, okay, but 0-25 must have been a neck snapping experience.
In those days, electrics were "ladies' cars", as they offered no muss, no fuss for the well-dressed urban woman. They were also among the few cars that were fully enclosed in the early 1900s--which is why they were very heavy and rather expensive.
In a way, one could argue that things haven't changed all that much in marketing EVs. They are still for people who really don't like "cars" as such, (even though they like THEIR EV just fine)--I guess you'd say they wanted a car that wasn't like a car--more like a high tech device.
No oil changes! No pollution! Simple to operate! Fewer moving parts!
You could read that right off a 1918 brochure.
Just like my electric lawn mower. What's not to love?
New Jersey joined Arizona, Colorado, Virginia and Texas in banning the direct sale of Tesla cars. I think this is just plain wrong. I don't think it's the government's role to decide how companies distribute their products. There may be exceptions that I can't think of at the moment, where safety is an issue, but this law doesn't protect the consumer. On the contrary. This is a case where the state has permitted the dealer lobby to protect its interests, at the expense of its constituents and fair business practices.
I know that money talks, and that this kind of thing happens all the time, but that doesn't make it right.
I think it's fine to set out some limits to help protect a franchised dealer from the factory. Levels the playing field a bit.
But it's hard to justify kicking Tesla out of the Jersey when they only had factory owned stores.
Think this will become a political issue?
Tesla to Stop Selling Electric Cars in New Jersey (Yahoo)
the dealer franchise system was created by the automakers. They wanted it, and they still seem to prefer it. Direct sales have been tried before in the USA, and never succeeded, so....I don't know....I'm all for letting Tesla try it, though I don't think it'll work for them. But laws will have to be changed and that can grind on forever.
P.S. This isn't about > @MrShift@Edmunds said:
It should be up to Tesla to decide which distribution is best for them, based on consumer preference, not the state government. As a for profit company, if something doesn't work they'll likely change it. Tesla is smart enough to decide whether dealers add enough value to justify their cost.
Here's what I'm thinking. The first round of stations are just a sunk infrastructure cost for Tesla. not even a particularly large one. But- as they sell more cars, and build out the network, the next set of stations each get put next to a restaurant. So, instead of stopping, filling up your car and grabbing a McDonalds or Subway, you'll stop and eat at an Appleby's, Chili's or Pizza Hut. A mid level restaurant, rather than fast food. These restaurants might happily help pay for building the station or at least the energy costs, just to have a steady stream of business in their door from Tesla owners. 20 cars a day, each dropping $40 at your business- that's almost $300K/yr that you wouldn't have otherwise gotten.
I don't know if this is truly the case... but it might as well be.
It's an interesting idea.
Another source of revenue is that Tesla owners must pay $2,000 up front for the privilege of using the supercharge stations for the life of the car (or maybe that privilege isn't transferable to subsequent owners, I don't know). Of course, Tesla could change the terms of usage at any time for owners who aren't under this original plan, and my guess is that they will at some point.
Well if you crank out a large number of cars and your scheme of selling directly to owners "doesn't work", you are screwed as an automaker with inventory and storage and depreciation. If it's just factory stores they want (they become the dealer in other words) that might work, but splitting up sales and service and parts is pretty risky. I really don't know the details of their plan.
Someone please correct me if I'm wrong, but I think Tesla only builds the cars after they've received customers' deposits. If true that eliminates the inventory issue. I don't know how they handle service and parts.
Well Tesla doesn't sell very many cars. GM and Ford lose more cars in shipping than Tesla sells. Ferrari also pre-sells all their cars and they sell what?...3X as many? And unlike Tesla, they make a profit on each one. And yes, with dealers. In fact, Ferrari is quite interesting---they consciously cut production while raising overall profits. Neat hat trick.
I think the franchise issue is too big a cookie for Tesla to bite into---the company has the money for a long dragged out battle but dealers are not going to lay down like newspapers did for Craigslist. Car dealers generate about 780 Billion dollars---and a lot of that is tax revenue for states.
So fighting legal battles in all 50 states (well, except for NY and MASS, where they can sell direct)...that's a bloody uphill fight, and not likely to come out well for Tesla.
By restricting supply Ferrari can keep prices high without discounting, thereby optimizing overall profits.
Regarding direct distribution versus franchised dealers, one important difference between Ferrari and Tesla is that, from what I understand, Teslas require much less maintenance than Ferraris, and maybe fewer repairs too. If these assumptions are correct Ferrari owners derive more benefits (and expenses) from dealers than Tesla owners would.
I think the jury is still out regarding whether Tesla will be able to continue bypassing the franchised dealer system in most states. Musk has said that he'll take this legal battle all the way to the Supreme Court, if necessary. Assuming that Supreme Court judges advocate for the consumer instead of dealership interests, and they can't be bought off, Tesla has a better chance of prevailing in court than through state politicians.
Incidentally, I (unfortunately) don't own Tesla stock, so I have no skin in the game. Also, although I've never driven a EV, much less a Tesla, I'd choose a conventional luxury car over a Model S. However, I think it's really neat that an American car and car company can generate as much excitement and promise as Tesla does. Think of what EVs could do for our energy independence, our balance of trade, and our geopolitical position if Tesla and other EVs (such as mail delivery trucks, UPS trucks and other local delivery trucks, etc.) could use domestically produced battery power instead of gasoline or diesel fuel.
"Sooner or later, almost every state will have to allow Tesla to sell cars directly” because consumers want that option, said Trip Chowdhry of Global Equities Research of Redwood Shores, Calif."
Will NM law affect chances of getting Tesla battery factory? (abqjournal.com)
I don't think the Supreme Court will touch it--this is a states' rights issue. And besides, you were expecting a consumer-friendly verdict from a group of 9 madcaps who thought that corporations were people? Hah!
I think Musk is on a mission to change the way cars may be sold, either directly or exclusively through the "it's the way it's always been done" authorized dealer system. being a billionaire he has the luxury of not yielding easily, and the resources to put up a good fight. Polls suggest that most people hope he'll prevail.
That doesn't mean it's a good idea. The interesting thing about change is that it often changes things in ways you really didn't want.
YAY--let's buy everything from Amazon......HEY, what happened to my local bookstore/coffee shop where I used to hang out and drink coffee and meet authors? HEY!
YAY--let's buy all our tires at a great price from Costco-----HEY, where's Mike's tire shop--it's Saturday and I have a flat....
The reason people think this is a good idea is probably because everybody hates car dealers. But then, most people don't like lawyers (present company excepted), and yet when you are sued, you need one.
AH WELL....
if Tesla goes belly up, you can always do THIS to it:
http://www.detroitnews.com/article/20140114/AUTO04/301140110
lol, and for $200k, maybe Bob can throw in one of those electric bikes he was hawking a few years back. Probably has a few hundred stashed in an old Packard warehouse in Detroit somewhere.
I think Lutz's idea is kinda dumb from a business point of view (he's a great car guy but he has some very goofy beliefs about the world), but I am pleased that some Karmas will be preserved and not scrapped when their batteries go south. They are lovely cars I think.
Hey, I had an electric bike and it was pretty cool---until the battery ran out (about 9 miles if you pedaled alot)--they you had to pedal home on a bike that felt like it had lead wheels.
The idea isn't "let's all do this or that. It's about choice; letting companies, consumers and the marketplace decide which distribution system is best for their particular circumstance, rather than politically connected special interest groups.
That presumes that the consumer makes the best decisions--which is a very heady presumption.
Tesla is just as much a "special interest group" as any other you can name. They are not here to benefit mankind. They are here to make money. And they need to be watched and regulated just like anyone else.
It's not a fair trade issue IMO. Tesla can compete with dealerships from any other car company in any other state. They have the money and a good product---so what's their beef?
I mean, THEY decided to go into the car business. Is this all a suprise to Tesla? He didn't go into aerospace before checking if he could legally launch rockets, did he?
I don't know if Musk's money can fight the combined money of several states worth of dealer groups - many of them ran by very rich men as well.
Maybe the cause will be helped if/when he unveils a more mass market product. The S is still pretty much a rich man's toy, and that might not help gain public sympathy for 2%ers being forced to purchase through the same old middleman system.
From the twitterverse:
_Then who makes the best decisions? _
_I agree, but that's not the issue. The issue is whether a car company should have the right to choose whether it can distribute its vehicles directly or is compelled to go through an authorized franchised dealer system. Polls show that the majority of consumers (who also happen to be voters) favor the former. A company that wants to use some combination of direct sales and sales through authorized stores, as Dell Computer currently does, should be able to do that too. Wouldn't you agree that old laws that were legislated decades ago, under very different circumstances, shouldn't prohibit this flexibility? _
**_Tesla can compete, but not in a way that it believes would give its customers a better value proposition than the established "this is the way it's always been done" system. Shouldn't innovation, whether in distribution, marketing or product be encouraged rather than suppressed?
_ I believe the issue is how the system can be improved, rather than preservation of the "take it or leave it" status quo._
Finally, my responses may suggest that I'm not in favor of states' rights. I believe in states rights, but I think that in this case the Christie Administration, while acting legally, didn't act responsibly.
It'll be interesting to evaluate Tesla sales before and after April 1.
My guess is that some people in NJ who are on the fence regarding when to buy a new Tesla will buy this month. Others may be rattled enough to forgo buying a Tesla altogether.
Wouldn't it be fun to look at some of Jersey's government computer purchases? What if they were sourced from Dell, direct. Now imagine you are a Dell reseller who got cut out of the loop. Time to sue. (My guess is that Dell throws their "value added resellers" a bone in cases like this but maybe not).
I can't imagine "voters" would give a fat fig for how Tesla does business. You were expecting street demonstrations about how to "Save Our Billionaires"?
"The ability to repair a car via software is especially important when the vehicle itself consists of so much new technology that traditional mechanics don’t know how to fix. The flip side is that without an internal combustion engine, there’s not as much to fix. I’ve written before that a Tesla without its outer shell looks like a cell phone on wheels. It’s basically just a big battery. That means no spark plugs, no air filters, no fuel pumps, no timing belts. In short, Teslas don’t have any of the parts that force you to take your car in for “regularly scheduled maintenance” — services that can cost dearly at the dealer. But it’s hard to charge for an oil change when there’s no oil to be changed."
Car Dealers Are Terrified of Tesla’s Plan to Eliminate Oil Changes (Wired)
more pixie dust, this time WIRED pixie dust, a most potent brand of PD...remember when they touted that a diesel car needs much less maintenance?...what they meant was, it needs DIFFERENT maintenance. So, too, with an EV. Perhaps it's true with a car like that, that there is less to "go wrong"...BUT...when it DOES go wrong, it's probably going to be catastrophic.
Ever try to fix your flat screen TV, or dig down deep into your laptop? No, you go buy another one.
Diagnostics are helpful but they have limitations. There's not a diagnostic tool in the world today that I'm aware of anyway, that will tell you with 100% assurance what the exact component failure is.
I will say though that WIRED is right on about one thing---without oil changes, there's less opportunity to oversell you.
Now, once you're out of warranty on your EV, instead of having had your credit card pecked away at during every 'service interval", you'll just go in and be hit with one monstrous bill.
Well, yeah Joe. I replaced the hard drive on my other laptop by upgrading to an SSD. I've removed the keyboards on a few laptops to blow out the dust and to try to fix a sticky key.
I replaced the "caps" on one of my cheapo monitors that died and it's still working two years later.
All I do on my electric mower is sharpen or replace the blade now and then.
And I'm not particularly handy. Certainly nowhere near as mechanically inclined as you.
Take an easy example. A TPMS can tell you which tire is low, depending on the quality of the sensor system installed. It won't tell you where the leak is but you'd have to take the tire off to fix it anyway. More of that is coming.
Lots of updates came with the recent software update on Edmunds' long term tester. "The key thing here is new ideas and feature improvements can be pushed out to existing cars as bright ideas are conceived and customer feedback makes its way back to Tesla."
Not the same thing. A laptop is not an entire car and you can either take it to a repair shop, or if that SSD drive cost more than your laptop, you just junk it and buy another one for $750 bucks.
No way you, or I, or even the most clever DIY person, is going to remove the guts in his Tesla in his garage.
When the electronics on an EV go south, the car stops and you have NO CHOICE but to fix it, no matter what it costs, because you're in the hole $80K.
I remember reading a study, quite sobering, that calculated the time in business offices wasted to get fussy electronics to work, vs. the "time saved" by the device itself.