Audi, Porsche and Mercedes preparing a rival for Tesla

[Adm]

German OEM's have been stuffing their trunks with government subsidy's for decades always promissing market proof, production ready cars are just around the corner. They will milk this cow to the last drop before producing a competitive EV. If Tesla had received only 10% of that money, the Gigafactory and Model III would have been in their 2nd generation already.
I also believe that the German OEM's have endless trunks of cash reserves to develop a very good EV in a very short time if they would want to/be forced to. There are very interesting times ahead.

 

[Johann Koeber]

I wonder where the Germans are to get all the batteries from.

We have speculated here that the world production capacity is a limiting factor for EV production. Tesla has a cure for this: their Gigafactory. Plus plans for more of these, as the need arises. Tesla has a long term plan and I have no doubt it will execute it.

Never have I heard similar plans from VW, BMW or GM. Please educate me.

Whatever the competitors are doing, it is all just chasing Tesla. They are 4-8 years behind. And Tesla will not stand still.

 

[WarpedOne]

Never have I heard similar plans from VW, BMW or GM. Please educate me.

There are none.
People just belive in unicorns, nothing new.

 

[Kandiru]

Model S is like Model T was for Henry Ford at the time. By the time GM and the other woke up he had already made billions.

Good to see that the even Mercedes, the perennial herd caterer, is waking up.

By that time the Superchargers will be everywhere, Elon will sell them the plug if they buy the batteries from Nevada, lets
face it, they missed the start big time.

 

[sandpiper]

Who are 'the Germans'? Different companies with different strategies and different markets, they just happen to have their headquarters in one country. Manufacturing and development is all over the world. BMW already did what you say would take them a long time. They developed a completely new electric car and a new manufacturing process for carbon fiber for the mass market. Yes the i3 is a short range car, but that's a marketing/sales decision, not a technical decision. They saw more selling and profit potential in a city car than a luxury sedan. But there is obviously no lack in ability.

I also see a lot of comments how other manufacturers are 'behind'. Tesla is certainly ahead in making selling a higher end EV, but the sales numbers are peanuts compared to the numbers of ICE cars and this won't change dramatically in the next 5 years. We all love Tesla, but when it comes to making decision on the level of a top car manufacturer and what makes them profitable, a car that sells 20-30k units a year is really a low priority.

I wish all manufacturers would focus on EVs right away and phase out ICE cars as fast as possible, but they are thinking in numbers and profit. Tesla has nothing but EVs so yes they are going full force and trying to make it as successful as possible. Other car manufacturers have different products and decide based on profit on those. They are not in a hurry.

I think EV vs ICE is like CTR vs flat screen TVs. It took many years for the market to completely change. Now the CRTs are history. TVs have a much shorter life span than cars and cost much less, so the market for cars will change slower.

The i3 looks like a great car - but, to me, it seems to be far more like a serial hybrid Volt than a true EV. And I suspect that they started developing it around the same time that the GM got going on the Volt. That was 5 or 6 years ago now, I believe? The carbon fibre and aluminum manufacturing processes are great to see, but all of the manufacturers are at varying points of switching away from standard steel bodies. When Ford produces an aluminum F150, you know that steel is on the way out.

I really hope the i3 is successful. But it's a half-measure - or maybe a 3/4 measure at best. Like the Cruze/Volt, it's easily capable of utilizing sharing components with vehicles in the future. Going to a long range all-electric is a different animal. You need to build the vehicle from scratch, intending it to be ALL-ELECTRIC and nothing but. The entire frame & body geometry has to be built around the batteries, allowing means for them to be easily removed & replaced. There is nothing that Tesla could ever do to convert the S to an ICE engine or hybrid. Tesla landed in the new world and burned the boats.

 

[mrdoubleb]

I wonder where the Germans are to get all the batteries from.

We have speculated here that the world production capacity is a limiting factor for EV production. Tesla has a cure for this: their Gigafactory. Plus plans for more of these, as the need arises. Tesla has a long term plan and I have no doubt it will execute it.

Never have I heard similar plans from VW, BMW or GM. Please educate me.

Whatever the competitors are doing, it is all just chasing Tesla. They are 4-8 years behind. And Tesla will not stand still.

I have a feeling LG and Samsung will step up their game and make huge investments in the near future. I thnik these 2 already supply some car companies (LG fort sure does) and if they think this industry will be for the 2020s what the smartphone explosion was for the 2010s, they will shift focus. You can already see that Samsung is in a bit of a trouble as they can't keep delivering the quarterly profit increases from TVs and smartphones like they used to. They have lots of cash and may be looking for the "next big thing". Jus my 2 cents, no proof...

 

[tga]

To the "Tesla isn't standing still" crowd:

For the sake of argument, let's accept the Audi 2018 and MB 2021 dates.

What magic, exactly, do you foresee Tesla performing in the next 4-7 years? Adding wings to the Model S? Teleportation? Because all I think you can count on is incremental increases in capacity (what's the figure, 7% per year?), and a 30-50% improvement in price/performance from the Gigafactory. Not exactly rocket science.

Discounting your competitors as stupid and incompetent is dangerous...

And if Tesla's real goal is to increase EV production, don't be surprised to find Tesla packs in some of those cars (back to the "Tesla is a battery company that happens to sell cars" theory).

 

[ckessel]

What magic, exactly, do you foresee Tesla performing in the next 4-7 years?

Steady improvements to range and cost. Plus steady improvements towards autonomous driving. The problem is the competition is announcing items that'd be competitive today on the core items of cost and range, but they'll be competing against Tesla (and perhaps Nissan) cars that have had 4-7 years of improvement.

Because all I think you can count on is incremental increases in capacity (what's the figure, 7% per year?), and a 30-50% improvement in price/performance from the Gigafactory.

That's probably all Tesla needs, but they'll also have improved software that I noted and quite possibly brought down the cost of AWD to the point it's the standard model.

Not exactly rocket science.

They seem to think it is since they've steadfastly avoided doing anything significant so far. And they keep tearing down Tesla's to figure it out, so clearly there's something there the other vendors haven't figured out.

Plus, it requires a huge financial commitment to build something like a Gigafactory. Other vendors aren't doing that and they're definitely not doing it in house, which means they'll be late to compete and be limited by their suppliers willingness to make that sort of huge commitment.

Discounting your competitors as stupid and incompetent is dangerous...

Stupid, no. Afraid and tentative, yes. Brains isn't the problem, it's the nerve to believe EV is the future and commit the resources necessary. The longer they wait, the harder it's going to be to make up that gap because Tesla will only get stronger and harder to catch.

Firms like Kodak died not for lack of brains, but for being afraid and/or unwilling to make the sacrifices necessary as the market changed.

 

[JohnQ]

Stupid, no. Afraid and tentative, yes. Brains isn't the problem, it's the nerve to believe EV is the future and commit the resources necessary. The longer they wait, the harder it's going to be to make up that gap because Tesla will only get stronger and harder to catch.

Firms like Kodak died not for lack of brains, but for being afraid and/or unwilling to make the sacrifices necessary as the market changed.

This is really well stated. Tesla has several core strengths that existing automakers won't be able to match unless they fundamentally change their approach:

• Integrated platform that leverages the benefits of an electric drivetrain to the hilt
• A new approach to interacting with the vehicle--that big-a** screen. The natural touch, swipe and pinch approach to navigation is so much better than any other OEM solution I've seen.
• Manufacturer owned supercharger network
• A fundamentally different approach to sales and service--proactive monitoring of vehicle status and repairs is a game changer
• A solution to the battery supply problem

Those are enormous hurdles for any established company to overcome without incredible vision, leadership and influence from the board and CEO.

 

[RichardL]

So apparently (see Short Term TSLA Price Movements thread) Porsche are stating that they will have a new 5 door vehicle and there will be an all-electric version to compete with Tesla. Obviously some way away, but I see all these announcements as a very good thing building momentum towards Elon's goal of an electric revolution.

@JohnQ's points above are all valid and very big barriers to entry - but ultimately we should want Tesla to be very successful AND everyone else to be building competitive EVs - its not a zero sum game

 

[Phil Seastrand]

I forget where I heard it, but the other big problem with mainstream car manufacturers is that they have outsourced so much of their manufacturing and design that very little is done in-house anymore. So they either have to coordinate a very large group of suppliers to commit to a massive change or bring everything back in house. Neither option is going to happen fast or efficiently.

 

[ckessel]

I forget where I heard it, but the other big problem with mainstream car manufacturers is that they have outsourced so much of their manufacturing and design that very little is done in-house anymore. So they either have to coordinate a very large group of suppliers to commit to a massive change or bring everything back in house. Neither option is going to happen fast or efficiently.

Indeed, this is where Tesla's tight integration is running circles around them. Particularly US auto makers. I can't speak much to others, but I'd guess it's true for them as well.

You constantly hear (bear) arguments that the big boys could throw a ton of money at EVs and take away Tesla's market, but those same folks are so distributed in their design and manufacturing process that trying to make that shift is a massive undertaking on just an organizational level, never mind the actual work.

 

[Johan]

I forget where I heard it, but the other big problem with mainstream car manufacturers is that they have outsourced so much of their manufacturing and design that very little is done in-house anymore. So they either have to coordinate a very large group of suppliers to commit to a massive change or bring everything back in house. Neither option is going to happen fast or efficiently.

Have a look towards the end of this video with Tarpenning (one of the founders of Tesla, not with them anymore), last 10 minutes. He says he is basically flabbergasted by learning how little in-house skills are left with the big auto maker except for combustion motor engineering.

Amplify Mentor Event: Marc Tarpenning (Tesla) - YouTube

 

[Phil Seastrand]

Have a look towards the end of this video with Tarpenning (one of the founders of Tesla, not with them anymore), last 10 minutes. He says he is basically flabbergasted by learning how little in-house skills are left with the big auto maker except for combustion motor engineering.

Amplify Mentor Event: Marc Tarpenning (Tesla) - YouTube

That's the quote I was remembering, thanks!

 

[Dutchie]

Might be worth noting that for ages folks called the Model S vaporware. Heck, some folks even say that about the X.

hate to say this but it is almost November and still no sign of the X. So far the X is vapourware too

 

[woof]

Wait. The Klingons are coming out with an EV? Will it have a cloaking device? :tongue: (I'm guessing they have a better chance than the hide-bound Germans or Big3.)

It'll have a cloaking device, yes, but they stole it from the Romulans. Now THEIR EV is gonna be a hit in the neutral zone.

 

[3mp_kwh]

This "marketing/sales decision" also happens to avoid taking sales away from any existing model in their own lineup.

This. I think there is a lot of hubris going around, if the thinking is talent or logistics are more the obstacles, than a lack of will. At some point, they will chose to lose margin in one place, and find their way. LG Chem may already have a better solution than the 18650 variants. Can't say for sure, one way or the other. Can we?

 

[wallet.dat]

I forget where I heard it, but the other big problem with mainstream car manufacturers is that they have outsourced so much of their manufacturing and design that very little is done in-house anymore. So they either have to coordinate a very large group of suppliers to commit to a massive change or bring everything back in house. Neither option is going to happen fast or efficiently.

Absolutely, but you have to keep in mind that by going all-electric the need for outsourcing a substantial number of parts and manufacturing is greatly reduced. So while Tesla's tight integration might stand in stark contrast to the Big 3 (or any other mainstream car manufacturer for that matter) right now, by the time they hop on board and get get their stuff together, the difference will be much less.

At any rate, the fact that other manufacturers are getting with the program is nothing but great news. All else aside, it's going to mean more options for the consumer at the very least.

 

[MassModel3]

At any rate, the fact that other manufacturers are getting with the program is nothing but great news. All else aside, it's going to mean more options for the consumer at the very least.

Not only more options, but the competition will probably drive down the Model S prices, I would think. When the Roadsters were sold, they were super-niche for those who could afford them, and they helped finance the Model S design and production, and the Model S is now financing the Model 3 and the Superchargers. With apples-to-apples competition, I would expect that instead of the Model S being overpriced to help finance those things, I hope that we're instead going to see more competitive pricing.

That being said, I truly have no idea what the profit margins are on Teslas or any other high-end luxury sedans. Maybe everybody makes a killing in the high-end market...??

 

[sandpiper]

Not only more options, but the competition will probably drive down the Model S prices, I would think. When the Roadsters were sold, they were super-niche for those who could afford them, and they helped finance the Model S design and production, and the Model S is now financing the Model 3 and the Superchargers. With apples-to-apples competition, I would expect that instead of the Model S being overpriced to help finance those things, I hope that we're instead going to see more competitive pricing.

That being said, I truly have no idea what the profit margins are on Teslas or any other high-end luxury sedans. Maybe everybody makes a killing in the high-end market...??

Tesla should have an enormous advantage here, as long as they're successful at getting the cost of the batteries down and the volumes up. And driving up volume is a major part of getting the battery costs down.

The Tesla is a vastly simpler car to design and to build than a standard luxury car and (batteries aside) it should also be significantly cheaper. Instead of thousands of individually machined and heat treated mechanical components, you've got one or two dirt-simple AC gearmotors/inverters and a bunch of electronics & software.

As far as I know, raw materials are a relatively small part of the cost of the batteries. Most of the costs are in the manufacturing side - in the labour & equipment required to build the batteries & components. Industry has in incredible track record of incrementally driving down those sorts of costs every year as they incrementally figure out simpler and more automated ways to build these things. The "gigafactory" should go a long way towards this.

I suspect that industry is concerned about Tesla, not just because of their technology, but because their basic vehicle design is conducive to dramatic reductions in manufacturing cost, in a way that is simply not possible with ICE powered vehicles. There is no basic reason why a Tesla style vehicle can't be far less costly than a conventional vehicle.

On the downside, it will eventually take the "art" out of vehicle propulsion systems. There is a sexiness to turbochargers, cam designs, exhaust tuning, electronic ignitions and timing, and all of the fine complexities needed to make the most out of an internal combustion engine. In 20 years, once the design of the electric vehicle "skateboard" base has been more fully refined, there's not so much to do. Electric motors just aren't that complex, and the opportunities for improvement are far less. Vehicle design will be all about the cosmetics & features, and no longer about the design of the drive system.

My 2 cents anyway.