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adiggs
Well-Known Member
Heh - the hybrid would be bought by the people that don't want to wait through a 1 year queue of people buying the BEV?
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Well said Krugerrand - we don't view the 3-series as a competitor to Audi's A4, in the sense that one is going to put the other out of business. Yet somehow, in the EV business, that's the kind of language being used in the media, and sometimes here. The reality is that competition WILL create situations where people substitute one make/model for a different make/model, and that's what has been going on in the car business for decades. It's an indication of a healthy and competitive market, not that a company is going to shrivel up and die.
I'm looking forward to seeing what Tesla is like when they have actual competition.
Merrill
Merrill
The market will dictate the future and when there is a nice looking all electric vehicle that can go 200 to 300 miles on a charge and costs under $40k things will take off for EV's. The common comment I get when someone see the Model S and learns it is all electric is why is it that all the other EV's on the market are so ugly. Most people still look at what is available in their price range and continue to buy ICE cars.
Many may recall that it was Elon's intention to spur the development of electric vehicles from other manufacturers. Competition is good . . . the America way, even if the competition comes from Germany, Japan, China or India.
As a stockholder and vehicle owner, I want a Tesla to succeed, but as a human being, I want EVs to succeed in helping to alter the energy utilization paradigm. Tesla can't do this alone.
It appears that the Supercharger network will boost Tesla sales when intercity travel is considered, but we all know that 95+% of our driving is very easily accomplished with home charging. I think that many 'two car families' are apt to have one comfortable long-range EV (Tesla or hybrid) and another short-range EV for city driving. Tesla may want to bring back a small battery pack for the ME to address the second car demand for just a city car.
Not everyone is comfortable buying a car from a new manufacturer. They may have had BMWs for decades and want to stick with what they know. I'm not saying it would be a better car and it wouldn't have to be for some people. It would be a BMW.
dirkhh
Middle-aged Member
The biggest challenge is battery supply. When one of the big car makers starts building their own giga-factory or massively invests in a battery maker, that's when it's worth to pay attention. Until then we'll see compliance cars (Ford, Chevy) and concept cars (BMW, Audi, Mitsubishi, Renault).
Nissan seems like the only one even trying, but they have the same battery supply issue. Where will they get 4* the battery supply if they are planning a successful Leaf2 with 50+kWh battery?
Nissan seems like the only one even trying, but they have the same battery supply issue. Where will they get 4* the battery supply if they are planning a successful Leaf2 with 50+kWh battery?
Krugerrand
Meow
Tesla competition developments
In that case nothing is a threat to Tesla. The 3 series BMW is number 2 all time on Car and Driver's 10 best list with 22 wins
Car and Driver 10Best - Wikipedia, the free encyclopedia
It's a very popular model.
So you're saying if BMW made a 3 series EV that didn't suck it wouldn't sell? Tesla basically has zero competition so if anyone comes up with a compelling alternative it is a threat. That doesn't mean it's a big threat but going from zero threat to a small threat is still a threat.
In that case nothing is a threat to Tesla. The 3 series BMW is number 2 all time on Car and Driver's 10 best list with 22 wins
Car and Driver 10Best - Wikipedia, the free encyclopedia
It's a very popular model.
So you're saying if BMW made a 3 series EV that didn't suck it wouldn't sell? Tesla basically has zero competition so if anyone comes up with a compelling alternative it is a threat. That doesn't mean it's a big threat but going from zero threat to a small threat is still a threat.
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I think you're both right?
I have a hard time wrapping my head around how a credible 3 series EV won't cannibalize itself first though. In order to become a measurable threat to Tesla, they would literally have to produce every iteration of the 3 Series in compelling EV form. Otherwise, BMW's internal limitations will only allow them to take a slice of the very large entry-level luxury car pie, which I think was what Krugerrand was alluding to.
It it would be interesting to see an established manufacturer slowing crash into the rocks trying to create products that compete with themselves and burn engineering/marketing dollars far faster than they bring them in.
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I am plotting in my head the most likely scenarios and timeline of the car making businesses switch to ev. I have outlined some basic scenarios below. The scenarios represent broad possible futures. Going into details adds a lot of complexity but may be of a limited value. My assigned timelines and likelihoods of each possible future are in relation to each other and have no other basis.
Please feel free to criticize and add new scenarios. I am very curious how people here see the future of car making business. Our collective wisdom may give far better outcome than individual thinking.
The timeline is relevant as it marks time points for one’s long position exit strategy, for people holding shares. I would like to be able to exit TSLA long position over several years, to optimize (or minimize) tax. Good time to start the exit might be different for each investor, but having in mind various timelines may be helpful in each individual’s decision making process.
Timelines and likelihoods will become more defined as events unfold.
My assumptions: Drivers have a preference for ev over ice car. Drivers will keep buying ice cars because evs are unavailable. Once evs are available, the switch to evs will happen in all geographical markets where they are available.
Scenario 1:
Ice car makers behavior stays the same as it is at the moment, with no changes to their main business of making and selling ice cars. Making and selling compromise technology hybrids is a peripheral compliance business. The forces that can change such behavior are regulation and evs competitiveness/availability. In this scenario regulation as a force is nonexistent.
In this scenario evs will be scarce until Tesla builds new car making factories around the world. Once evs are increasingly available, that will gradually drive price of ice cars down. At this point, ice car makers will start adopting ev technology, incurring huge cost simultaneously with loosing income. They might not survive this scenario. Tesla buys out their facilities. Tesla grows, may split into numerous businesses. Variation to this scenario is that Tesla never reaches size that can satisfy worldwide ev demand. Consequently Tesla and ice makers coexist.
Likelihood: 30%;
Timeline: 20-30 years to play out.
Scenario 2:
All car makers develop competitive ev models in the next few years as a part of sustainable business strategy. They may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice cars making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers are likely to survive the event of worldwide ev availability.
Likelihood: 15%;
Timeline: 12-20 years to play out.
Scenario 3:
All car makers develop competitive ev models in the next few years, due to regulatory pressures. They may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice car making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers are likely to survive the event of worldwide ev availability.
Likelihood: 5%;
Timeline: 12-20 years to play out.
Scenario 4:
Some car makers follow S.1, some follow S.2 or S.3 script. Some car makers develop competitive ev models in the next few years. Such businesses may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice car making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers have a chance to survive the event of worldwide ev availability.
Relevant point in this scenario is the split between car makers following the scenarios 1 or 2 and 3. That split will have an effect on the timeline. I kept the split factor out for simplicity.
Likelihood: 50%;
Timeline: 16-26 years to play out.
Scenario 5:
Tesla is out of business. Likelihood very low.
Please feel free to criticize and add new scenarios. I am very curious how people here see the future of car making business. Our collective wisdom may give far better outcome than individual thinking.
The timeline is relevant as it marks time points for one’s long position exit strategy, for people holding shares. I would like to be able to exit TSLA long position over several years, to optimize (or minimize) tax. Good time to start the exit might be different for each investor, but having in mind various timelines may be helpful in each individual’s decision making process.
Timelines and likelihoods will become more defined as events unfold.
My assumptions: Drivers have a preference for ev over ice car. Drivers will keep buying ice cars because evs are unavailable. Once evs are available, the switch to evs will happen in all geographical markets where they are available.
Scenario 1:
Ice car makers behavior stays the same as it is at the moment, with no changes to their main business of making and selling ice cars. Making and selling compromise technology hybrids is a peripheral compliance business. The forces that can change such behavior are regulation and evs competitiveness/availability. In this scenario regulation as a force is nonexistent.
In this scenario evs will be scarce until Tesla builds new car making factories around the world. Once evs are increasingly available, that will gradually drive price of ice cars down. At this point, ice car makers will start adopting ev technology, incurring huge cost simultaneously with loosing income. They might not survive this scenario. Tesla buys out their facilities. Tesla grows, may split into numerous businesses. Variation to this scenario is that Tesla never reaches size that can satisfy worldwide ev demand. Consequently Tesla and ice makers coexist.
Likelihood: 30%;
Timeline: 20-30 years to play out.
Scenario 2:
All car makers develop competitive ev models in the next few years as a part of sustainable business strategy. They may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice cars making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers are likely to survive the event of worldwide ev availability.
Likelihood: 15%;
Timeline: 12-20 years to play out.
Scenario 3:
All car makers develop competitive ev models in the next few years, due to regulatory pressures. They may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice car making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers are likely to survive the event of worldwide ev availability.
Likelihood: 5%;
Timeline: 12-20 years to play out.
Scenario 4:
Some car makers follow S.1, some follow S.2 or S.3 script. Some car makers develop competitive ev models in the next few years. Such businesses may suffer losses due to Osborne effect. With time, these businesses gradually increase their ev production and decrease ice car making. Their expenses related to new technology will be spread over number of years helping to keep their businesses viable. Some car makers have a chance to survive the event of worldwide ev availability.
Relevant point in this scenario is the split between car makers following the scenarios 1 or 2 and 3. That split will have an effect on the timeline. I kept the split factor out for simplicity.
Likelihood: 50%;
Timeline: 16-26 years to play out.
Scenario 5:
Tesla is out of business. Likelihood very low.
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SebastianR
Active Member
Not sure this would be a clear cut "threat" or "no threat" situation: often times having at least some competition is good for business: it shows that the market/product idea itself is viable etc. One of the problems I encounter discussing with Germans are statements like this: "its easy to build an electric car, if Audi wanted to, they could do it, too". Thus, if we had an electric 3 Series, Tesla would gain massively as electric cars would be vastly more accepted and popular. So while I agree that if miraculously every car maker tomorrow would offer compelling electric cars would be a massive threat to Tesla, I think having an i3/i8 on the market, a slightly better Nissan Leaf etc. is actually good: these cars are clearly not compliance cars and thus help to validate that electric cars are viable cars.
EarlyAdopter
Active Member
If I had the only bar on a street I'd welcome, not resist, another one or three opening up on the same street. In fact, I'd worry if over time no one else opened another one up.
dennis
Model S Plaid
In order to build a competitor to the Model S, the current manufacturers would need to develop a 200+ mile range BEV and a fast charge network. With current battery technology and costs, we know that is at minimum a $70K+ car, which puts it in the luxury segment. While that segment provides some additive revenue for MB/BMW/Lexus/VW Group, it is not the volume part of their business. Ford/GM/Nissan don't really participate in that segment. So the Model S does not really represent a competitive threat to the ICE manufacturers because it is only seen to be taking sales away in a niche part of their business, if at all.
Gen III is a whole different ball game since it attacks a large and profitable part of the ICE companies' business. We need to look no farther than the ongoing efforts of most manufacturers to develop a car that effectively competes against the BMW 3 Series to understand the importance of this segment. So to the extent that the other companies believe that Tesla will be able to produce a $35K-$40K BEV with a 200 mile range, I would expect them to attempt a competitive response. I don't think that BMW, for example, would be worried about cannibalizing their existing 3 Series business if they perceived that Tesla would be taking sales away from the 3 Series anyway. So the limitation I see in the competitive response to Gen 3 is Tesla's experience lead in battery tech, charging infrastructure, BEV platform design, etc.
Gen III is a whole different ball game since it attacks a large and profitable part of the ICE companies' business. We need to look no farther than the ongoing efforts of most manufacturers to develop a car that effectively competes against the BMW 3 Series to understand the importance of this segment. So to the extent that the other companies believe that Tesla will be able to produce a $35K-$40K BEV with a 200 mile range, I would expect them to attempt a competitive response. I don't think that BMW, for example, would be worried about cannibalizing their existing 3 Series business if they perceived that Tesla would be taking sales away from the 3 Series anyway. So the limitation I see in the competitive response to Gen 3 is Tesla's experience lead in battery tech, charging infrastructure, BEV platform design, etc.
I agree; I'd been trying to figure out a way to express this "opening up the market", but failing. Thanks.
I believe it is very clear indeed what is happening out there in the competitive landscape and respectfully most are looking in the wrong place.
At this juncture one component of Elon Musk's publicly stated vision has failed spectacularly: That is the encouragement of Big Auto to transition to making compelling EVs at low price points in order to try to compete with Tesla.
The laws of disruption would appear to be unbreakable because that is not what is happening.
Instead, what is happening is a concerted effort to get rid of Tesla with the aim of returning to business as usual.
Playing Dirty with Hydrogen.
What Tesla is up against is Hydrogen given away for free for leased and subsidised FCVs. Obviously an FCV costs a lot more than an EV and Hydrogen costs a lot more per kWh that the Natural Gas feedstock - at least as expensive as gasoline probably between 10 and 100 times more expensive owing to complexity and extremely poor economies of scale. Nevertheless all of the major car makers with the possible exception of Nissan are rushing FCVs to market under false and misleading banners of abundant element, water vapour exhaust, green, clean, totally emissions free, energy of the future, better for the environment, for our children's future blah blah blah, lie lie lie.
Bottom line Fossil Fuel and Big Auto are going after Tesla's customer base and Tesla's media and political support base (and investor base), with the falsehood that hydrogen is something other than Fracking and Steam Reforming, and by offering hydrogen at Supercharger prices - i.e. free. (See Hyundai Tucson, can pretty much bet that Toyota will launch with the same model and all the rest).
What they are not doing is going after Tesla with elegant EVs.
It is vitally important for Tesla to shut down this BS. If it wins it wins the auto market - or at least it has a whole decade of monopoly and as many NUMMIs to pick up for a song as you can shake a stick at.
None the less, I am certain that the hydrogen fraud is life or death for green energy in general. This is the way Big Oil an Big auto want to come at Solar and EVs.
At this juncture one component of Elon Musk's publicly stated vision has failed spectacularly: That is the encouragement of Big Auto to transition to making compelling EVs at low price points in order to try to compete with Tesla.
The laws of disruption would appear to be unbreakable because that is not what is happening.
Instead, what is happening is a concerted effort to get rid of Tesla with the aim of returning to business as usual.
Playing Dirty with Hydrogen.
What Tesla is up against is Hydrogen given away for free for leased and subsidised FCVs. Obviously an FCV costs a lot more than an EV and Hydrogen costs a lot more per kWh that the Natural Gas feedstock - at least as expensive as gasoline probably between 10 and 100 times more expensive owing to complexity and extremely poor economies of scale. Nevertheless all of the major car makers with the possible exception of Nissan are rushing FCVs to market under false and misleading banners of abundant element, water vapour exhaust, green, clean, totally emissions free, energy of the future, better for the environment, for our children's future blah blah blah, lie lie lie.
Bottom line Fossil Fuel and Big Auto are going after Tesla's customer base and Tesla's media and political support base (and investor base), with the falsehood that hydrogen is something other than Fracking and Steam Reforming, and by offering hydrogen at Supercharger prices - i.e. free. (See Hyundai Tucson, can pretty much bet that Toyota will launch with the same model and all the rest).
What they are not doing is going after Tesla with elegant EVs.
It is vitally important for Tesla to shut down this BS. If it wins it wins the auto market - or at least it has a whole decade of monopoly and as many NUMMIs to pick up for a song as you can shake a stick at.
None the less, I am certain that the hydrogen fraud is life or death for green energy in general. This is the way Big Oil an Big auto want to come at Solar and EVs.
I think you hit the nail on the head Julian, excellent analysis. We are all too familiar with how Big Oil and Big Auto works, and they never work for anything else other than their own interest.
gg_got_a_tesla
Model S: VIN 65513, Model 3: VIN 1913
Indeed. For those watching the TV series, Cosmos, last Sunday's episode tackled the lifelong battle waged by Dr. C.C. Patterson against Big Oil and Big Auto about lead poisoning thanks to leaded gasoline. This episode's a must-see to understand how they use shady tactics including getting "scientists" to back their choices.
The amazing thing about disruption is that old industries will die trying to protect the old way of doing things.
The super obvious thing for big oil to do is buy up the solar industry and become an energy company in the round. But no - they will fight the tide instead and fight to the death, as will big auto.
This time they will lose but the battle will be nasty and best anticipated as far in advance as possible. Truth is that the hydrogen scam is already relatively well embedded and to a large extent embraced by otherwise sensible organisations.
Shell is sponsoring National Geographic and pushing hydrogen on green consumers.
Union of Concerned Scientist website carries some positive articles for Hydrogen.
California Air Resources Board has sunk $200 Million into distributed steam reforming stations for local CO2 pollution (for heaven's sake) - that is despite getting defrauded over the EV1 by the same scam in the late 1990s.
The reason for Hydrogen is extremely straight forward to understand.
Unfortunately the green-hoax surrounding it is very complex, too complex for the average level of scientific education in the US both consumer and politician.
Many idealistic scientists with no clue about economics can and have been bought for the promotion of trojan horse methods of hydrogen production that are easily overwhelmed economically by steam reforming of natural gas.
It goes on and on. I will post a large article on the subject shortly.
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