Target Tesla: How Audi, BMW, Mercedes-Benz, and Porsche Plan to Shock Tesla

This reminds me so much of the launch of the iPhone.

During all the buildup to the release, all the other phone manufacturers were talking about how ridiculous it was for Apple to even attempt to get into the phone market, and that they are decades behind them (Nokia, etc…). Then, after the phone was released all the manufacturers took a ‘wow.. that’s so expensive for a phone, only the rich will buy it as a plaything but it will never acheive true market penetration’. Then as the iPhone began to show such amazing growth, all the other manufacturers began to put out inferior ‘mee toooo’ products. The only thing that even came close to leveling the playing field was Google’s Android OS which switched mid-development to copy iOS and was able to get on board early enough to join Apple in the market with various device mfgs.

The auto industry was amazingly blind not to see the same curve for Tesla. Nobody got out in front of this and they are all reacting to Tesla. History has shown that that is not the best position to be in (current market leaders, chasing new a technology leader).

jhs_7645 said:

This reminds me so much of the launch of the iPhone.

During all the buildup to the release, all the other phone manufacturers were talking about how ridiculous it was for Apple to even attempt to get into the phone market, and that they are decades behind them (Nokia, etc…). Then, after the phone was released all the manufacturers took a ‘wow.. that’s so expensive for a phone, only the rich will buy it as a plaything but it will never acheive true market penetration’. Then as the iPhone began to show such amazing growth, all the other manufacturers began to put out inferior ‘mee toooo’ products. The only thing that even came close to leveling the playing field was Google’s Android OS which switched mid-development to copy iOS and was able to get on board early enough to join Apple in the market with various device mfgs.

The auto industry was amazingly blind not to see the same curve for Tesla. Nobody got out in front of this and they are all reacting to Tesla. History has shown that that is not the best position to be in (current market leaders, chasing new a technology leader).

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The only comparison with Tesla would be that Tesla is building its own Supercharger network and nobody else is doing that. But if the German manufacturers have a long-range BEV, in a short space of time, Germany will be covered in high-speed CCS chargers with help from the German government. If Renault did it, France would be covered, if Nissan or Toyota did it, Japan and likely the UK would be covered in high-speed CHAdeMO. (If GM or Ford did it there might be Federal support, there be support from some states, but there wouldn't necessarily be anything consistent.)

The strategic importance makes the situation very different.

ItsNotAboutTheMoney said:

The only comparison with Tesla would be that Tesla is building its own Supercharger network and nobody else is doing that. But if the German manufacturers have a long-range BEV, in a short space of time, Germany will be covered in high-speed CCS chargers with help from the German government. If Renault did it, France would be covered, if Nissan or Toyota did it, Japan and likely the UK would be covered in high-speed CHAdeMO. (If GM or Ford did it there might be Federal support, there be support from some states, but there wouldn't necessarily be anything consistent.)

The strategic importance makes the situation very different.

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I disagree. First, if it were easy to just 'make a long range BEV', then they would have done it. Second, I would also mention that from a 'strategic' standpoint, the existing phone manufacturers pointed to their relationships with the carriers as a strategic advantage over Apple. I really think the parallels are pretty strong.

Did they define "quick service charging"? because some people still think that means as low as about 30kw...

This isn't going to shock Tesla. This is what Telsa's mission is. Elon Musk got involved in EVs because existing manufacturers failed to innovate, and failed to move towards sustainable cars. Now, instead of raking in all that innovation cash, they are going to be anywhere from a half a generation to two generations of EVs behind Tesla, and while they will survive, Tesla is going to take a large portion of their market share.

I would like to hope that companies would look at this and realize that they need to look to the future more clearly to avoid losing business, but I suspect they will remain just as blind.

SpC's are indeed the trump card for tesla. more than the no-dealers, more than the use of a completely new drivetrain, it's the propriatory infrastructure

and anything less than half the SpC's charge rate is laughable. Like, that's not even trying.

dennis said:

http://www.reuters.com/article/2014/12/27/us-germany-electric-cars-idUSKBN0K50FI2014122

"We will set up quick service charging stations along the motorways across Germany," Transport Minister Alexander Dobrindt was quoted by regional newspaper Passauer Neue Presse as saying in an interview published on Saturday. The Transport Ministry paper said German motorway services operator Tank & Rast GmbH was due to set up quick service charging stations and parking spots at its 400 sites by 2017.

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Well, what you didn't quote was that he said the government would basically just subsidize the building costs and the on site owners of restaurants / gas stations would have to operate and maintain them.

As discussed in the German Tesla forum (tff-forum.de) this either means

a) poorly serviced/out of order stations like most of the current public charging stations nowadays in Germany,

b) ridiculously high prices per kWh since there won't really be more than a million electric cars in Germany by then (Germany's goal is 1 million by 2020 and that includes all the variations of hybrids) - meaning: not a big enough customer base for any business case whatsoever, especially since the restaurants and gas stations on German Autobahns can only be reached from the Autobahn itself. This way only long range travellers are the customer base for this project.

As a German I'm assuming that a) as well as b) are likely to happen.

Just like the "research project" of BMW and others where the government paid 20 million EUR for building and analyzing about 20 CCS chargers along the A9 between Munich and Leipzig (150 km to Berlin from there, nobody in CCS cars should actually be able to drive from Munich to Berlin). That means about 10 locations in each direction with only one charger per location and, to protect the German auto industry: no CHAdeMO outlets...

Those chargers are notorious for breaking down, not reaching their backends for authorizing a charge etc. Thus nobody can use them for long distance travel, since one charger not working means you're stranded on the Autobahn. Plus, you need a charging card from a company operating those exact chargers which is only available as a yearly subscription with monthly fees even if you do not charge.

That's what we can expect from transport minister Dobrint's proposal...

And another thing:

CCS as a system is capable of delivering up to 170 kW if charging power, but everything that's being installed now and the foreseeable future is able to deliver 20-50 kW (since the German producers' electric cars have batteries with capacities not bigger than 20 kWh).

Tesla's Supercharger system is way ahead of that even today.

Cheers

Frank

I like the parallel with Apple and their iPhone, as described by jhs_7645. I, too, was thinking the same thing back then, until I tried the iPhone. Apart from one Ericsson, I exclusively had Nokia phones from 1993 to 2009. Then I jumped on the iPhone 3, then 3Gs, skipped the 4, went on to 5 then 5S, skipping the 6 as well.

Sure the iPhone was simple, but it was so easy to use. And then it dawned on me: Just before I switched to iPhone, I had the latest, craziest HTC. 4G, WiFI, infrared, GPS, full keyboard (physical), camera and much more. It could do skype, navigation and much more. Well, in theory it could. In reality, nothing really worked well. Skype would overheat the phone in a few minutes, and there was no video calls, only normal calls or texting. Calendar sync was a nightmare, so was connecting to any WiFi or roaming phone network. I ended up only using that phone for solitaire, calling and SMS! So the revelation was: Better have a smaller set of features that work well in reality, rather than a huge list of options where most of them are unfinished, not working together and cumbersome to use.

To extend that parallel - it's no secret that Tesla Motors are borrowing certain philosophies from Apple, or even Steve Jobs. Less is more. It doesn't take much effort to beat up something complicated, but it takes an almost endless amount of investment to make something that works well, and is easy to use. I am convinced that that Elon Musk is a great fan of the (late) Mr Jobs. And compare Apple to Microsoft: Looking back, Microsoft kept promising and promising. Delivering things that worked in theory, the specs looked nice on paper. After multiple delays, and it finally released, it was never as good as promised, and an endless amount of service packs tried to patch up the faulty code. Service patch, maybe? Apple didn't promise, they surprised. After any of the renowned Apple Events, the products were ready to deliver shortly after.

So here we are: Tesla Motors actually have a product that is working well, and well received. User friendly, awesome performance, and a network to go with it. Still much can be improved, yet it's a step up like going from horse carriages to the Ford Model T. Sure there are promises: Model X is coming (but delayed), Model III is coming, and so far into the future we don't even know yet if delayed or not.

Just rcvd my January Automobile and read the article. Sorry, but I seem to get ADHD trying to read long articles electronically. Several observations:

1) I won't ridicule, but I'll applaud - this is what we all wanted: electric cars taken seriously and getting serious r&d investment, focus, market share.
2) The performance target these manufacturers are setting themselves seem pretty unambitious. Same price point and performance as today's MS, but intended delivery 2019. If I wanted to produce a Tesla-killer, I'd be aiming for 400+ mile all-electric range... and I would not even be thinking about range extenders.
3) Volume capacity projections for each of these appears to be in the tens of thousands per year vs. hundreds of thousands. With Model 3, Tesla should be in hundreds of thousands by then. So, cumulatively, these German manufacturers are looking to split 50% market share?

It will be very interesting to see the value to Tesla of a 5 year technology/experience lead plus complete electric focus (vs. competing with other factions for attention/euros). At the same time these companies hope to be introducing MS, MX competition, Tesla should be into M3 delivery, and announcing their "next big thing(s)". Plus huge supercharger network. Plus who knows what improvements to S and X? Plus a very large trained/experienced service network.

I'll be rooting for the upstart. Nothing against the others... if they weren't taking it seriously and competing, then it would be meaningless on the larger stage!

I find that Tesla more closely mirrors Google, not so much Apple. Like Google, Tesla came out of nowhere to compete against long-established companies. Google went from IPO to majority market share in the mobile OS space in something like, what, 8 years? Apple at that point was already over 34 years old. It's going to be interesting to revisit this assertion 4 years from now and see how much market share Tesla has secured.

I just want to caution everyone to believe that Google and Tesla would follow similar time frames: I still believe the product cycles of the car industry are a good deal slower and manufacturing challenges (hence e.g. the investment in the Gigafactory) for a car are not the same as for mobiles (or even software deployment). Still, the overall parallels are striking and amazing.

On Audi, VW and Porsche? I essentially have given up. Winterkorn (the head of the VW Group) is a 100% petrol head. He doesn't believe in BEVs, and claimed - even while Tesla was delivering the Model S - that it is technologically impossible to have a BEV with more than 200km of range. That these guys simply don't get BEVs can easily be demonstrated with the fact that Audi spend +4 years "optimizing the sound of the R8 e-tron". Bottom line: I believe it when I see it, not a second before.

Franko30 said:

Well, what you didn't quote was that he said the government would basically just subsidize the building costs and the on site owners of restaurants / gas stations would have to operate and maintain them.

As discussed in the German Tesla forum (tff-forum.de) this either means

a) poorly serviced/out of order stations like most of the current public charging stations nowadays in Germany,

b) ridiculously high prices per kWh since there won't really be more than a million electric cars in Germany by then (Germany's goal is 1 million by 2020 and that includes all the variations of hybrids) - meaning: not a big enough customer base for any business case whatsoever, especially since the restaurants and gas stations on German Autobahns can only be reached from the Autobahn itself. This way only long range travellers are the customer base for this project.

As a German I'm assuming that a) as well as b) are likely to happen.

Just like the "research project" of BMW and others where the government paid 20 million EUR for building and analyzing about 20 CCS chargers along the A9 between Munich and Leipzig (150 km to Berlin from there, nobody in CCS cars should actually be able to drive from Munich to Berlin). That means about 10 locations in each direction with only one charger per location and, to protect the German auto industry: no CHAdeMO outlets...

Those chargers are notorious for breaking down, not reaching their backends for authorizing a charge etc. Thus nobody can use them for long distance travel, since one charger not working means you're stranded on the Autobahn. Plus, you need a charging card from a company operating those exact chargers which is only available as a yearly subscription with monthly fees even if you do not charge.

That's what we can expect from transport minister Dobrint's proposal...

And another thing:

CCS as a system is capable of delivering up to 170 kW if charging power, but everything that's being installed now and the foreseeable future is able to deliver 20-50 kW (since the German producers' electric cars have batteries with capacities not bigger than 20 kWh).

Tesla's Supercharger system is way ahead of that even today.

Cheers

Frank

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Great insight!

You are basically describing the exact situation that is going on in Norway with regards to both Chademo and CCS - poor up-time, hard-to-manage payment solutions that often don't work, multiple firms where you need to have different subscriptions/RFID badges etc. Government grants being given to firms that don't follow through with regards to failure rate, schedule for building out the network etc. This in addition to the fact that the Chademo chargers are too complex and prone to problems, and the fact that the Chademo standard is not in fact a real standard (some cars work with some types of Chademo chargers, other with other manufacturer's).

Anyway, the Supercharging network is the only example of a working, useful and quickly built out network here in Norway.

Johan said:

... hard-to-manage payment solutions that often don't work ...,

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Avoiding point-of-use payment was such a great decision on Tesla's part. Low cost, reliable, fast and also avoids the legal issues of resale of electricity.

I find it slightly humorous that I've seen some Tesla critics put forth two different -- and incompatible -- arguments about competition.

1. Lots of big, well-established car companies are about to crush tiny Tesla with their own EV offerings (or even better, PHEVs!). OK, perhaps most of those competing cars exist today in the form of rumors, press releases, or auto-show "concept cars" rather than something in showrooms, but they'll be in production Real Soon Now, and boy is Tesla gonna get creamed then!

2. There's no real demand for electric cars. That's why you don't see other car makers piling on Tesla with competing products -- those established companies know the car business, and they understand that normal people (outside the handful of well-heeled eco-geeks) don't want to drive those ridiculous electric cars with all of their many, many serious limitations and problems.

DITB said:

To extend that parallel - it's no secret that Tesla Motors are borrowing certain philosophies from Apple, or even Steve Jobs. Less is more. It doesn't take much effort to beat up something complicated, but it takes an almost endless amount of investment to make something that works well, and is easy to use. I am convinced that that Elon Musk is a great fan of the (late) Mr Jobs. And compare Apple to Microsoft: Looking back, Microsoft kept promising and promising. Delivering things that worked in theory, the specs looked nice on paper. After multiple delays, and it finally released, it was never as good as promised, and an endless amount of service packs tried to patch up the faulty code. Service patch, maybe? Apple didn't promise, they surprised. After any of the renowned Apple Events, the products were ready to deliver shortly after.

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But that analogy is not really true is it? Tesla also keeps promising and promising, and then takes endless time to deliver, if ever:
among others
- Center Console
- Battery Swap
and above all
- Model X

Whereas Apple indeed kept delivering rather promptly, Tesla (and EM especially) is "renowned" for overpromise, underdeliver.

- - - Updated - - -

SebastianR said:

On Audi, VW and Porsche? I essentially have given up. Winterkorn (the head of the VW Group) is a 100% petrol head. He doesn't believe in BEVs, and claimed - even while Tesla was delivering the Model S - that it is technologically impossible to have a BEV with more than 200km of range. That these guys simply don't get BEVs can easily be demonstrated with the fact that Audi spend +4 years "optimizing the sound of the R8 e-tron". Bottom line: I believe it when I see it, not a second before.

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While I will not contest that Winterkorn might not be a fan of BEVs, at least VW has the best everyman EVs out there currently. Especially the e-Golf, while not a Tesla rival, is a fantastic BEV. Top quality, great tech, ample range for everyday use, fun to drive and still relatively affordable. Remember, for one Model S you get two to three well equipped e-Golfs here. How is that for value for money?

Keep in mind that TM had already made it self a target by asking others to speed up the advent of electric cars.

SebastianR said:

Winterkorn (the head of the VW Group) is a 100% petrol head. He doesn't believe in BEVs, and claimed - even while Tesla was delivering the Model S - that it is technologically impossible to have a BEV with more than 200km of range.

Click to expand...

He didn't word it properly. What he meant was it's technologically impossible for +200km range BEV's to have huge profit margins like fossil fuel cars. They are too expensive, heavy, require new factories, low supply of batteries and they most likely wouldn't sell many 200km BEV as they would be too expensive. As they are already making billions every year. The Share holders expect higher dividends and the boss expects higher commission NOW!!! not in 5 years or so. At the moment Winterkorn doesn't see BEV giving him more commission but one day he will and maybe it will be too late by then.