Tesla is the only player on the market that focuses solely on the EV currently. I kind of agree that electric cars will eventually end the "oil age" of the cars, but as said above, it will happen in few decades and not over the night. Tesla only builds luxury vehicles. Before EV take over, they must evolve to the point where average people can afford them. And it is questionable how much time it'll take to come there.
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Have Tesla and Apple disrupted the auto industry past the point of no return?
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Of course Tesla's next car is aimed at a more affordable car for the masses, but there are bigger stumbling blocks than just an affordable long range BEV available. The infrastructure to support large numbers of plug in cars is not there yet and will take decades to complete. Think about how long it took the US to finish the interstate highway system. The original plan was drawn up in the 1950s and wasn't complete until the 1990s. The hurdles to the last steps was mostly political, but the system took at least two decades to get to 90+% complete.
Another stumbling block is battery manufacturing. By 2020 the entire world battery building capacity won't even be capable of build 1% of the cars built every year as BEVs. It will take 200 Gigafactories to build the 100 million car and light trucks built every year. It takes 5 years to build a Gigafactory and nobody is seriously talking about building the second one yet. If the political will suddenly changed and we started building them en masse in 2016, it will still take a couple of decades to build the 200 Gigafactories necessary. Each Gigafactory costs around $5 billion, that's $1 trillion for 200 of them. Nobody has that kind of money lying around. Additionally the resources needed to build that many batteries is there in the ground, but the mining capacity to extract it isn't there. It will require a shift in the mining sector to bring the necessary resources online so massive production of that many batteries can happen.
I would argue that Tesla has already disrupted the over $100K car market. They are the top selling brand in that niche since introduction. However, it's a very, very tiny niche of the car market.
wdolson:
I respect the thoughtfulness and insight in your responses. I believe I would be largely in agreement with your assessment and predictions, if not for:
A) MASSIVE VW scandal that continues to unfold...
and
B) COP21, UN Climate Change Conference beginning in 25 days.
Because these two events are so closely linked, and the global media attention on VW, I believe governments will ensure that this is the tipping point toward sustainable transport.
Following COP21, I anticipate significant global government policy that will accelerate the wide spread production and adoption of EV's.
Hundreds of Gigafactories can be financed and built in a few short years, we can all be driving EV's by 2025-just like Norway:
Norway wants all new cars to be electric by 2025
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We'll see how things unfold. Norway is a pioneer in this, but it is a small market even compared to Canada (3 million vehicles compared to 21 million) and barely a blip compared to countries like China (207 million), India (115 million), of the US (259 million). Without those countries on board, not much is going to get done. The private sector in the US is very creative, but the governments on all levels is paralyzed. Here locally we badly need a new bridge across the Columbia River, but a relative handful of people in one county involved refuse to cough up their share, no matter how it's pitched.
The data for car registrations per country:
http://apps.who.int/gho/data/node.main.A995
The VW scandal is causing trouble for the ICE lobby, but they also employ legions of lobbyists who do a good job of selling their position to politicians. The vast majority of the world's population is also fairly conservative (small 'c' conservative) about change and will say "no" to any new ideas that aren't well proven until the data is overwhelming that the new idea is not more dangerous than the old. These people will stay with the proven car technology until the BEV has completely proven itself and they will not put any pressure on their politicians to do anything different until the new technology is proven.
Exciting times...China is making moves:
US 'playing catch-up to China' in clean energy efforts, UN climate chief says | Environment | The Guardian
Hello, Gigafactory! Samsung Moves To Compete With Tesla - Asia Stocks to Watch - Barrons.com
By 2020, Samsung will bring its capacity to around 35GWh. Analysts are not missing a beat – this capacity is “interestingly the same ‘cell’ capacity” of Tesla‘s Gigafactory,
First announcement of many, I believe. I'm curious to know who they will be supplying.
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Ron Barron:
http://www.cnbc.com/2015/11/06/why-tesla-stock-may-grow-4x-billionaire-ron-baron.html
Elon Musk just said Tesla could become bigger than GM
Elon Musk: Tesla could become bigger than GM - Tech Insider
In the next 60 months the automotive industry will see more change than in the last 60 years. European car manufacturers should commit to electric cars now or Europe will be in economic trouble.
The Autowende has begun — Medium
DrGuest
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200 Gigafactories just for cars, then there are all other forms of Transport, excluding rockets, all the batteries needed for storage got homes, buildings, etc. Tesla Energy will be busy selling Gigafactories forever. They are zero emission, need no natural gas pipeline, independent, duplicatable and scalable Products of Tesla Energy. Maybe.
Some great quotes in that article
Yeah, we are still really on the cusp of this transition and fragile. Overall, TSLA has made a mark, no doubt, but will it last and will it continue to push the innovation curve. I can tell you that there seems to be no other thought in Elon's mind than pushing this curve. All other thoughts are passing or pushed there momentarily by others when in some fleeting moments he is willing to compromise.
@wdolson, with respect, care to revive this thread? I'm not one to gloat...but F I'm on point above #COP21!
"In fact, pace is now the key word for climate. Not where we’re going, but how fast we’re going there. Pace – velocity, speed, rate, momentum, tempo. That’s what matters from here on in. We know where we’re going now; no one can doubt that the fossil fuel age has finally begun to wane, and that the sun is now shining on, well, solar. But the question, the only important question, is: how fast."
Climate deal: the pistol has fired, so why aren’t we running? | Bill McKibben | Opinion | The Guardian
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"The company expects demand to increase rapidly as the range of battery-powered vehicles is growing and costs are declining substantially, VW brand chief Herbert Diess said, according to a transcript of an interview with the internal staff newspaper “Insight” that was obtained by Bloomberg. The newspaper will be sent to workers on Monday."
VW to Add Flat Batteries to Boost Sales of Electric Vehicles - Bloomberg Business
Just because everybody at the conference came to an agreement that doesn't mean every country is going to go along in practice. If you haven't done any reading about how messed up US politics are these days, I suggest you do. I won't go into a lot of detail here, because the moderators would likely remove my post, but there is a lot of resistance in Congress. For non-Americans who aren't paying close attention to American politics, it's probably unbelievable.
Even if China's leadership buys into the agreement, cheating at lower levels is very common. Recall the melamine in pet food a few years ago? When that happened someone I knew on another forum who grew up in China said that it was normal to take your life into your own hands whenever you brush your teeth. China's epic smog problems in the last month or two is spurring the government to do something. The smog is not only an embarrassment but it is also negatively affecting the top politician's families. With or without the agreement in Paris, there would have been a push on to do something to clean up the air. They have a massive chore to do it though.
Nothing has changed from what I said earlier in this thread. Making an agreement is easy, getting your people to follow through when they are either used to cutting corners or massive political resistance at home is another thing.
I cheer everyday for Tesla success, but lets be realistic, Tesla is far from disrupting anything.
They need to increase sales almost an order of magnitude to actually bring real hurt to the competition.
Tesla is however succeeding in making the competition look bad. That is certainly a solid promise.
I hope Model S+X sales will break 250k cars / yr before 2020. It will heavily depend on Tesla turning a profit so it can fund large scale tooling to sustain 50% unit sales growth on a continuing basis without extra debt.
Disrupting the premium sedan/cross over market is far easier than disrupting the car market in the US$ 25k-40k range.
The key question is proving BEVs can be profitable. That would actually force the competition to act fast and push dealers to actually promote and sell BEVs in lieu of ICEs.
They need to increase sales almost an order of magnitude to actually bring real hurt to the competition.
Tesla is however succeeding in making the competition look bad. That is certainly a solid promise.
I hope Model S+X sales will break 250k cars / yr before 2020. It will heavily depend on Tesla turning a profit so it can fund large scale tooling to sustain 50% unit sales growth on a continuing basis without extra debt.
Disrupting the premium sedan/cross over market is far easier than disrupting the car market in the US$ 25k-40k range.
The key question is proving BEVs can be profitable. That would actually force the competition to act fast and push dealers to actually promote and sell BEVs in lieu of ICEs.
The S+X is probably never going to sell 250K cars a year. The price niche they're in is too steep for most people. Tesla does plan to sell 600,000 cars a year between 500K Model 3s and 100K Model S+X by 2020. They may miss that mark by a bit, but I think they will get to that level of volume by the early 2020s. Tesla's long term goal was always to produce a long range, affordable BEV and everything else they produce are just stepping stones towards that goal. By making an expensive sedan first, they established themselves as a premium brand and built up tremendous demand for the more affordable car. I personally know and have met quite a few people who would buy a Tesla tomorrow if it wasn't for the price tag. I don't know of any car brand that has ever had that kind of following. Even the exotic sports cars that cost hundreds of thousands of dollars, even if there was a model that cost $50,000 they wouldn't sell in mass market numbers.
People confuse Tesla's cash burn with the financial problems GM and Chrysler had. The big 3 auto makers were in deep trouble in 2009 because they had huge fixed costs and GM and Chrysler couldn't slash them enough without declaring bankruptcy. Tesla is burning a lot of cash, but in the same way Amazon didn't turn its first profit until 2015. They are shoveling everything they make back into the company and then some. They have massive capital investment programs and R&D efforts going on. All those things are optional expenses. They could turn a profit tomorrow if they cut way back on capital spending, but that would be hurting the long term future for a short term profit which some US companies do these days, but it's stupid in the long run.
Tesla has not disrupted the car market to a dramatic degree yet, but they show great potential to be a disruptor if the Model 3 is a success. By 2022 or so if they are selling 500,000 Model 3s a year with a waiting list, they will clearly be a disruptor and the rest of the car industry will be in trouble.
I understand Tesla isn't burning cash. Its investing in R&D and tooling for higher production levels. Still I would like to see Tesla at least continuously reduce cash burn / unit sold over the next 2 years.
100k MS+MX per year should happen in 2017 unless something really tragic happens. Just look at the backlog of MX reservations.
How many millions of cars costing at least US$ 75k are sold yearly ? Can't Tesla get 1/3 of that market ?
That would be a real disruption (creating significant hurt to the competition).
Tesla is still not making paid ads... There are always the conservative people that won't buy the car until its selling for many years and they're confident it will be trouble free. Sales in Germany, UK, China, Australia and many other countries is still fairly small compared to the total market potential.
I think MS+MX 70D basic model sales will grow considerably over the next years. Specially if Tesla could pass Giga Factory cost reductions onto customers.
I bet if Tesla could make supercharger usage 100% unlimited and free (even for local charging) it would spur a lot of 70D MS+MX sales for shared rides/uber/cabs (it would require quite significant increase in supercharger network). That market is very significant, and at high usage even a US$ 100k Tesla financed over 60 months can pay for itself in fuel savings. The key is cabs run 24x7. You can't wait 4-5 hours to charge everyday. Supercharging would be mandatory for serious usage of Tesla for cabs.
Don't underestimate Musk's solid track record in the marketing arena. Once Tesla can balance supply and demand without ads, they will figure out means to double demand. They just can't do it yet, it would create a mass of pissed of customers waiting in line for their cars.
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