JRP3
Hyperactive Member
Neither does pretending range issues don't exist, especially when they loom large in the eyes of the public. EV's simply will not catch on in real volume until their range increases, probably 150+ miles at affordable prices.
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Long-Term Fundamentals of Tesla Motors (TSLA)
- Thread starter Robert.Boston
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- elon is an ass investing TSLA
Neither does pretending range issues don't exist, especially when they loom large in the eyes of the public. EV's simply will not catch on in real volume until their range increases, probably 150+ miles at affordable prices.
jhm
Well-Known Member
My basic view is that comparability and parity really are in the eye of the beholder. Is the buyer willing to buy when priced at a reasonable gross margin? There are a myriad of factors that go into how cunsumers decide which cars are preferable to others. Reputation, prior experience and brand certainly factor in. It will take time for consumers to warm up to new technology, and it seems like too many EV makers only want to sell into a limited compliance market.
On the other hand, Tesla cannot expand supply of compelling cars fast enough. This is actually proof that Tesla has already gone past parity in the eyes of many buyers. Keep in mind that Tesla's ASP not going up because it costs too much to build a cheaper car. It's going up because demand is advancing faster than supply can be increased.
So the key indicator that your product is better than parity is not that you can sell it for a low price. Just the opposite, you can sell it at a high margin. About a year ago, the Chevy Volt was not selling so well, so GM decided to cut the price. At a lower price, sales picked up. Thus, they learned that the Volt was not at parity with what they had originally priced, and they had to accept a lower margin than they had hoped for. Fiat claims they lose money on every EV they make. These are the marks of products that are below parity. So some of this could be poor execution or weak product design, but the other problem is that the batteries are just too expensive. If the 85kWh pack cost Tesla $40k, they would be hard pressed to make a 25% margin on the Model S. So it really does matter what the components cost. But it appears they can make this pack for less than $20k and deliver enough awesomeness to customers that they can gross more than 25%. But the question is open whether they can make a car priced at $40k that delivers enough value to support a 25% margin. How much do they have to shave off the price of its drivetrain to make that happen? If they've got the cost of the drivetrain down low enough and the rest of the car at a reasonable cost, then they can do it. So that's the first point of parity.
The second point of parity is where it does not matter how cheap gas is. If the price of gas per mile came down to the same as the price of electricity per mile, about $1.00/gallon, would the Model S still command a 25% gross margin? If the answer is yes, then the second point of parity has been achieved. We can't really test this, because gasoline is not anywhere near that cheap. But if, as the price of oil comes down, we observe that gross margin declines for the Model S, then this could be evidence against the hypothesis that Tesla has achieved the second point of parity. Theoretically, it is possible that declining oil prices could reduce the cost of production or increase demand (more discretionary income) such that the gross margin actually improves.
In sum, the first point of parity is whether, given current energy prices, consumers are willing to pay a high enough price for an EV that gross margins are sufficiently high to induce the maker to grow capacity. The second point of parity is whether, in the absence of favorable energy price differentials, cunsumers are still willing to pay a high enough price to induce the maker to grow capacity. So this is about demand, what's it worth in the eye of the buyer, and about how contained the costs od production are. The conditions of both supply and demand need to be favorable for growth; otherwise, the product is below parity.
On the other hand, Tesla cannot expand supply of compelling cars fast enough. This is actually proof that Tesla has already gone past parity in the eyes of many buyers. Keep in mind that Tesla's ASP not going up because it costs too much to build a cheaper car. It's going up because demand is advancing faster than supply can be increased.
So the key indicator that your product is better than parity is not that you can sell it for a low price. Just the opposite, you can sell it at a high margin. About a year ago, the Chevy Volt was not selling so well, so GM decided to cut the price. At a lower price, sales picked up. Thus, they learned that the Volt was not at parity with what they had originally priced, and they had to accept a lower margin than they had hoped for. Fiat claims they lose money on every EV they make. These are the marks of products that are below parity. So some of this could be poor execution or weak product design, but the other problem is that the batteries are just too expensive. If the 85kWh pack cost Tesla $40k, they would be hard pressed to make a 25% margin on the Model S. So it really does matter what the components cost. But it appears they can make this pack for less than $20k and deliver enough awesomeness to customers that they can gross more than 25%. But the question is open whether they can make a car priced at $40k that delivers enough value to support a 25% margin. How much do they have to shave off the price of its drivetrain to make that happen? If they've got the cost of the drivetrain down low enough and the rest of the car at a reasonable cost, then they can do it. So that's the first point of parity.
The second point of parity is where it does not matter how cheap gas is. If the price of gas per mile came down to the same as the price of electricity per mile, about $1.00/gallon, would the Model S still command a 25% gross margin? If the answer is yes, then the second point of parity has been achieved. We can't really test this, because gasoline is not anywhere near that cheap. But if, as the price of oil comes down, we observe that gross margin declines for the Model S, then this could be evidence against the hypothesis that Tesla has achieved the second point of parity. Theoretically, it is possible that declining oil prices could reduce the cost of production or increase demand (more discretionary income) such that the gross margin actually improves.
In sum, the first point of parity is whether, given current energy prices, consumers are willing to pay a high enough price for an EV that gross margins are sufficiently high to induce the maker to grow capacity. The second point of parity is whether, in the absence of favorable energy price differentials, cunsumers are still willing to pay a high enough price to induce the maker to grow capacity. So this is about demand, what's it worth in the eye of the buyer, and about how contained the costs od production are. The conditions of both supply and demand need to be favorable for growth; otherwise, the product is below parity.
no. The LEAF is an electrified Sentra Hatch,
The Versa Hatch (Tiida) is not the Sentra Hatch (Pulsar)
Tiida wheelbase 2600mm, front track 1480mm
LEAF, Sentra Hatch, Sentra Sedan (aka Pulsar) wheelbase 2700mm, front track 1540mm
Compare Vehicles
back to topic, electrified vehicles (both EVs and PHEVs) find it easier to reach parity with higher priced ICE equivalents
ie Tesla Model S vs premium luxury but not general market full size
ie Mitsubishi Outlander PHEV vs 4x4 diesel but not 2wd petrol.
but even though battery improvements are more important for EVs than PHEVs, the improvements will occur faster for PHEVs (ie power, longevity and SOC range improve faster than energy) and manufacturer's also can do better with PHEV drivetrain optimisation.
I have a Leaf and I can tell you why
1. People are afraid of new tech
1a. Nobody knows how long that battery will last or how much the range will degrade. Lots of news about people losing battery capacity and low range in winter/summer.
1b. People dont understand that the range is probably enough because of the full charge every morning
1c. People think they need an expensive charging station added to the house (I dont have one)
1d. People assume that hybrids drive worse than gas cars so EVs will drive even worse than hybrids. I've driven a Versa and it drives like crap. In fact, it was the worst car I've ever driven other than a Dodge Caliber(? - I felt that was going to fall apart on me on the highway). Assuming that the Leaf drives worse will get people to never even try it.
2. Better EVs are just around the corner. That means the current EV price will plummet more than a gas car. Thats why I'm leasing because the Gen 3 is just around the corner.
3. What if I'm stuck somewhere?
4. TCO, whats that? This one is cheaper to buy now
5. If you go to buy a small car, will a dealer steer you towards a Leaf?
chickensevil
Active Member
Everything points to the Versa being the better comparison and most likely put in the same platform. Both Edmund's and TrueCar used the Versa as their TCO comparisons.
Unfortunately your link isnt working for me, so I can't use that to help inform me. It might be worthwhile to just take the hatchback versions of either car, though, as the real comparison against the sales since people who might by the sedan won't buy a hatchback and the other way as well. But in any case I still think limited range is limiting their market potential.
Are there plenty of people who can make an 80 mile car work for them? Sure... Just as there are millions of people who could theoretically afford a Model S. But you aren't going to turn the tide with a small target audience. Which is why Tesla is trying to get to a cheaper car and why Nissan needs to get to a more versatile car.
In September some analysts reduced their bullishness of the industry following Tesla's lead in going EVs. (please correct if wrong)
http://www.arb.ca.gov/msprog/zevprog/2014zevreg/140714%20eVMT%20Proposal.pdf
Toyota
Ford
GM
Honda
note their opinion
'The Urgency For e-VMT Adjustments to ZEV'
there is a strong lobbying to eliminate the no tailpipe aspect of EVs
this is why Tesla and Nissan need to provide sufficient ZEV credits for the entire industry, so the rules won't be broken
http://www.arb.ca.gov/msprog/zevprog/2014zevreg/140714%20eVMT%20Proposal.pdf
Toyota
Ford
GM
Honda
note their opinion
'The Urgency For e-VMT Adjustments to ZEV'
there is a strong lobbying to eliminate the no tailpipe aspect of EVs
this is why Tesla and Nissan need to provide sufficient ZEV credits for the entire industry, so the rules won't be broken
Does anyone think that this GSAT company Elon wants to launch a bunch of mini satellites with could have something to do with Elon's long term plan of having fully connected Tesla cars?
Right now he is at the mercy of bandwidth from other providers and poor areas of connection, but perhaps this new technology of mini satellites he's planning to help GSAT put in space will also benefit all Tesla cars somehow with a much improved constant internet connection somehow.
Anyone have any thoughts on ths possibility?
Right now he is at the mercy of bandwidth from other providers and poor areas of connection, but perhaps this new technology of mini satellites he's planning to help GSAT put in space will also benefit all Tesla cars somehow with a much improved constant internet connection somehow.
Anyone have any thoughts on ths possibility?
JRP3
Hyperactive Member
jhm
Well-Known Member
BMW Only Trails Tesla In % of Car Sales That Are Electric
About 5% of BMW's cars sold are EVs, the i3. Nissan is about 2% of Nissan. Of course, Tesla is fully committed. It will be interesting to watch these stats over time. Which traditional automaker will reach 50% EV sales first?
About 5% of BMW's cars sold are EVs, the i3. Nissan is about 2% of Nissan. Of course, Tesla is fully committed. It will be interesting to watch these stats over time. Which traditional automaker will reach 50% EV sales first?
jhm
Well-Known Member
Tesla Keen to Enter India, But Says High Import Duty a Roadblock - NDTVProfit.com
The issue with India: high import taxes with no provision for EVs.
The issue with India: high import taxes with no provision for EVs.
the real trouble with India, vehicles need to make noise, its how they maintain safety in India.
EVs don't make noise, therefore Indians feel scared while driving them in India.
Buyers of EVs don't want to add big noise makers to EVs.
Its a major difference between Indian and Chinese market. In India a silent car is an unsafe car.
Unsafe car in whose view? the public or the govt.? We do care about noise levels when inside a car and at least individual car buyers in metros(those who spend good amounts on cars) consider this in their purchase decision. For the public on road, drivers sound horn more frequently than you think and not a big deal for majority of public to sound horn at someone so silent car in not a big deal. FYI, we do have an electric car running on the metro roads for more than 5 years. It is not received well because of purchase cost and the reliability concerns(1 year warranty on battery which negates whole purpose of low maintenance when you need to change battery every 3-5 years). As the article says, the most valid concern for Tesla including model 3 is the import taxes which is 125% of the retail price. A Honda Accord which is imported as completely built unit attracts this tax and sells very poorly and Honda stopped selling this where as Audi which shares the assembly lines with local VW plant, has usual luxury tax of ~25% and sells in decent numbers and tops in luxury segment. I don't think govt. is even thinking to cut the taxes on the imported ones and they think any car is a luxury item as we have decent public transport and until that changes Tesla has to partner with a local manufacturer or have a plant to assemble in India.
Zzzz...
Member
And here what big boys invest: Volkswagen Group to invest $106 billion over next 5 years in Automotive Division
Tesla with it $5 billion gigafactory looks tiny, nvm Tesla will invest only half of those 5 GF billions.
Tesla with it $5 billion gigafactory looks tiny, nvm Tesla will invest only half of those 5 GF billions.
RobStark
Well-Known Member
That is how the big boys piss away money.
Because the vast majority is being spent on 20th century tech and dead end bridge technology.
In the 50's and 60's General Motors led the world in R&D budgets.
Mostly turned into uncommercialized patents.
Budgeting $10M with brilliant highly motivated people incentivized to do great things is worth more than budgeting $1B to mediocre minds where the penalty for failure is greater than the reward for spectacular success.
Model S attracts the best and brightest that want to work on the cutting edge and do great things.
eGolf attracts people who want a steady income and are afraid to do much more than incremental improvements.
jhm
Well-Known Member
From the article:
It looks like most of their investment will go right into ICE. EVs are are PR window dressing, not a priority.
I'd rather invest is one Gigafactory in Nevada than in all the ICE factories of the world.
Krugerrand
Meow
And yet, look at how much you can do with so little! It's overwhelming to think what Tesla could do with $100B. Such waste.
chickensevil
Active Member
Edison vs the Wright brothers is a great example of pissing away money and not amounting to anything. When the Wright Bros "discovered" flight it wasn't a surprise to anyone. People had been researching flight for years. Edison and his DoD connections being one of those groups. Edison had tons of money, hired the "best" people for top dollar and two no name people got it to work for pennies. Money doesn't replace passion. Tesla Motors is a company full of passionate employees. It is built into their hiring process. I am not saying these other companies don't have passionate people but I am willing to bet that their hands are tied behind their back through layers of company control forcing them to research specific things.
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