Tesla BEV Competition Developments

[RobStark]

Does that hurt BMW, Mercedes, Audi, etc? Tesla isn't trying to sell a Yaris competitor. I don't think the connection between the oil industry TV ad and the tax hike is as clear as you imply, and I don't think Tesla should alter their plans because of such.

The German luxury companies all want to be exclusive and not ubiquitous.

So no it does not harm their goal.

That is not Tesla's goal. Tesla's goal is eventually to sell as many vehicles as they can,not to protect margins for their premium offerings, and force mainstream companies like Toyota,VW and GM to transition to electric vehicles.

The intermediate goal is to sell millions of Model 3s(including variations like Model Y) per year not hundreds of thousands. That requires Tesla take sales from top spec Camries, Accords,Alitimas,Fusions,Malibus, 200s etc not just 3 Series,C Class, and A4s.

And if the mainstream companies don't offer a compelling ~$23k electric vehicle in ~7 years Tesla will go further down market.

The TV add did not cause Brown's initiative to fail but it is indicative of the perception of Tesla in the wider culture.

I think Tesla's plans align closer to my suggestion than yours. So they will not need to alter their plans.

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That's only a short term effect though (1 year at most). If Tesla needs to release the more expensive version first to make cash flow work, I don't think they should hesitate. It is a long road ahead to 500k vehicles by 2020.

Once perceptions take hold it takes more than months to change. It takes decades to change. And it makes that change much more difficult without paid advertisement.

 

[lango]

The German luxury companies all want to be exclusive and not ubiquitous.

So no it does not harm their goal.

That is not Tesla's goal. Tesla's goal is eventually to sell as many vehicles as they can,not to protect margins for their premium offerings, and force mainstream companies like Toyota,VW and GM to transition to electric vehicles.

The TV add did not cause Brown's initiative to fail but it is indicative of the perception of Tesla in the wider culture.

I think Tesla's plans align closer to my suggestion than yours. So they will not need to alter their plans.

They do have as their line "Premium Electric Vehicles", though. And I think only a few manufacturers count to the premium segment. That would be the Audi, BMW, Mercedes, Jaguar, some americans, Acura, Lexus, Infinity and then Jaguar, Land Rover etc. I don't think you would call VW or Toyota a premium brand.

Also, they can force the industry to go electric if other premium brands are forced to go electric. Most automobile tech started in the premium segment and then trickled down or was copied by the rest.

 

[Crowded Mind]

The German luxury companies all want to be exclusive and not ubiquitous.

So no it does not harm their goal.

That is not Tesla's goal. Tesla's goal is eventually to sell as many vehicles as they can,not to protect margins for their premium offerings, and force mainstream companies like Toyota,VW and GM to transition to electric vehicles.

The intermediate goal is to sell millions of Model 3s(including variations like Model Y) per year not hundreds of thousands. That requires Tesla take sales from top spec Camries, Accords,Alitimas,Fusions,Malibus, 200s etc not just 3 Series,C Class, and A4s.

And if the mainstream companies don't offer a compelling ~$23k electric vehicle in ~7 years Tesla will go further down market.

The TV add did not cause Brown's initiative to fail but it is indicative of the perception of Tesla in the wider culture.

I think Tesla's plans align closer to my suggestion than yours. So they will not need to alter their plans.

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Once perceptions take hold it takes more than months to change. It takes decades to change. And it makes that change much more difficult without paid advertisement.

I don't agree with this. Perception does not equal reality. If a car is perceived as exclusive or premium, that adds value in my mind. It makes the car more desirable to the consumer. Model 3 doesn't have to be exclusive, but if consumers perceive it to be more valuable (50k vs. actual 35k price) that is a good thing and helps sell cars and drives profitability allowing Tesla to fund further advancement of sustainable transport. Tesla will not be demand constrained on 3 for many years, so there is no reason to try to destroy the value of having premium brand image early in the life of the Model 3.

 

[RobStark]

They do have as their line "Premium Electric Vehicles", though. And I think only a few manufacturers count to the premium segment. That would be the Audi, BMW, Mercedes, Jaguar, some americans, Acura, Lexus, Infinity and then Jaguar, Land Rover etc. I don't think you would call VW or Toyota a premium brand.

Also, they can force the industry to go electric if other premium brands are forced to go electric. Most automobile tech started in the premium segment and then trickled down or was copied by the rest.

Premium can mean higher price/surcharge or higher/extra value.

If you ask Elon Musk what definition he thinks relates to Tesla which do you think he will chose?

The legacy high priced companies describe themselves as luxury car companies except BMW and Porsche which describe themselves as higher performance car companies. Forcing luxury cars to go electric will force the German car companies to go electric because that is where they make all their profit. German car companies make 15% of world's cars?

Detroit makes their money on full size trucks. Forcing luxury cars to go electric will not force Detroit to go electric.

And Japan makes almost all of its automotive profit from mainstream and economy models. IF Japanese luxury car sales collapsed tomorrow only Toyota would feel a sting from lost Lexus profits but not anywhere near putting them in trouble. Other Japanese companies would hardly notice.

I think Detroit and Japan would prefer a situation where they sell their current amount of Cadillacs,Lincolns,Lexus,Inifitis, and Acuras as electric and the rest of their lineup as ICEv to electrifying their entire lineup. Compliance vehicles in greater numbers but delaying shutting down all their engine/transmission operations in a few short years.

 

[Spidy]

I think a lot of people here are forgetting that there are many people who've been wanting a Tesla, but can't afford one. Not only can't they afford a $70,000, they can't afford a $50,000 car. They can however afford a $35,000 car. So there is a market for the base spec car.

Heck, if you think about it, people are buying CPO Model Ss now in the price range of $40K to $50K. Is the Model 3 going to be so "good" that they are willing to shell out for a up spec. Model 3 when they could get a decent CPO S?

And people who want a Tesla want it for what Tesla stands for. Cool tech, Autopilot, Supercharger acccess etc.. And you are not going to get that all at 35k

 

[JRP3]

The German luxury companies all want to be exclusive and not ubiquitous.

So no it does not harm their goal.

That is not Tesla's goal. Tesla's goal is eventually to sell as many vehicles as they can,not to protect margins for their premium offerings,

Not sure that's accurate. Tesla, (Elon), want's all OEM's to make EV's. Tesla only needs to make enough compelling EV's to create enough market demand so that the other OEM's build EV's.

and force mainstream companies like Toyota,VW and GM to transition to electric vehicles.

Exactly. That does not mean Tesla needs to move all the way down market. I'd be quite happy if they never move much below the Model 3 level, and they can sell millions doing just that. In any case, I don't think a short term impression by certain people who are inclined to dislike Tesla anyway that Tesla is an upmarket vehicle builder is meaningful or even negative.

 

[RobStark]

I don't agree with this. Perception does not equal reality. If a car is perceived as exclusive or premium, that adds value in my mind. It makes the car more desirable to the consumer. Model 3 doesn't have to be exclusive, but if consumers perceive it to be more valuable (50k vs. actual 35k price) that is a good thing and helps sell cars and drives profitability allowing Tesla to fund further advancement of sustainable transport. Tesla will not be demand constrained on 3 for many years, so there is no reason to try to destroy the value of having premium brand image early in the life of the Model 3.

In the automotive market perception is largely reality.

Today's new Cadillacs are just as good BMWs. But the perception is they are higher quality and better performance. Therefore BMWs command a higher price vs Cadillac. This perception was built in the 70s,80's,and 90s and is proving very difficult for Cadillac to overcome.

Honda is currently getting average reliability ratings. The perception is that Hondas offer superior reliability based on 30 plus years where it did offer superior reliability. Therefore it is able to charge a premium versus Mazda which has higher reliability.

Stressing the point that Tesla makes a great $35k car does not destroy Tesla brand equity it builds it.

No one is forgetting P90DL 0-60 in 2.8 seconds anytime soon.

If Tesla stresses the virtues of the P90DL forever to the exclusion of their least expensive vehicles people will forget it makes a great $70k car and in the future $35k car.

And consumers will not put it on their shopping list when looking at their next $35k-$40k car.

 

[JRP3]

Today's new Cadillacs are just as good BMWs.

Not as far as reliability. BMW #11 Cadillac #25 http://www.autonews.com/article/201...e-most-in-consumer-reports-reliability-survey

 

[RobStark]

Exactly. That does not mean Tesla needs to move all the way down market. I'd be quite happy if they never move much below the Model 3 level, and they can sell millions doing just that. In any case, I don't think a short term impression by certain people who are inclined to dislike Tesla anyway that Tesla is an upmarket vehicle builder is meaningful or even negative.

It is not just certain people who inclined to dislike Tesla.

It is not only far-right crazies that are hoping to see Tesla fail.

It is everyday average consumers that are affected by mass media and the consensus.

And the consensus,once established, is hard to change. It is not short term.

I am happiest with whatever route gets us to 99% BEV market share.

And my bet is that it will require Tesla to take Corolla's lunch and force Toyota et al into electrification kicking and screaming.

 

[anticitizen13.7]

Honda is currently getting average reliability ratings. The perception is that Hondas offer superior reliability based on 30 plus years where it did offer superior reliability. Therefore it is able to charge a premium versus Mazda which has higher reliability.

http://www.autonews.com/article/201...e-most-in-consumer-reports-reliability-survey

Honda fell to 8th place (out of 28), but the reason is "due to infotainment glitches in its redesigned and freshened vehicles". Their touch screen audio systems have recently been crap, but their powertrains and mechanical systems are still excellent by industry standards. Honda's Acura luxury division plunged because they started using the same garbage outsourced transmissions as German and American brands (in an effort to keep up with the number of gears in the slushbox, haha), plus a new 8-speed DCT that had a lot of initial problems.

 

[lango]

Premium can mean higher price/surcharge or higher/extra value.

If you ask Elon Musk what definition he thinks relates to Tesla which do you think he will chose?

The legacy high priced companies describe themselves as luxury car companies except BMW and Porsche which describe themselves as higher performance car companies. Forcing luxury cars to go electric will force the German car companies to go electric because that is where they make all their profit. German car companies make 15% of world's cars?

Detroit makes their money on full size trucks. Forcing luxury cars to go electric will not force Detroit to go electric.

And Japan makes almost all of its automotive profit from mainstream and economy models. IF Japanese luxury car sales collapsed tomorrow only Toyota would feel a sting from lost Lexus profits but not anywhere near putting them in trouble. Other Japanese companies would hardly notice.

I think Detroit and Japan would prefer a situation where they sell their current amount of Cadillacs,Lincolns,Lexus,Inifitis, and Acuras as electric and the rest of their lineup as ICEv to electrifying their entire lineup. Compliance vehicles in greater numbers but delaying shutting down all their engine/transmission operations in a few short years.

Yeah, there are various ways you can become premium. Status, performance, reliability etc. The difference between being premium or not I think is if you have to compete on volume and price as the main criteria as VW, Toyota and Hyundai do. Cadillac is not really comparable to BMW as BMW is often leading the ICE drive-train development. Cadillac is not good enough to be sold anywhere in volumes except in US.

I don't think it is in Teslas culture to mainly compete on volume and price. They are more like the Germans that it is engineering and tech that is the main focus. That is why I think the Germans have the most to worry about Tesla. I also think they will be the first to make some serious competing models to Tesla's models. The car market is very different in Germany and in northern Europe though compared to US. A large majority of sales of premium cars is to company people that drive a lot between cities. They buy diesel cars every third year. The requirement for long distance charging is therefore higher. Company cars are also purchased strictly on an economical basis and currently Tesla can't really compete there if you factor in time lost when charging and the price of purchase.

Commuting citizens to a large degree either don't have a car and instead use public transport or they buy a used models from the company cars when they are traded in.

 

[JRP3]

And my bet is that it will require Tesla to take Corolla's lunch and force Toyota et al into electrification kicking and screaming.

I think that's going to happen without Tesla building a Corolla equivalent. CPO/used Model 3's plus the offerings from other OEM's will do the trick.

 

[SebastianR]

I think that's going to happen without Tesla building a Corolla equivalent. CPO/used Model 3's plus the offerings from other OEM's will do the trick.

Indeed, I see a "double crunch" for the Toyotas of this world: As I argued before, you buy a new 7-Series BMW since nobody in their right mind would buy a same priced used 7-Series over a new 5-Series (higher running costs, marginally more comfort, the main benefit of the 7-Series i.e. having the "best, the most, the cutting edge" is faded with a used 7-Series). With the Model 3 and the mid-size sedans, the situation will flip: nobody in their right mind would buy a same priced new Avensis/Camry over a used Model 3 as the running costs are vastly more advantageous for the Tesla.

In this scenario new and more importantly used car markets for ICE could collapse quite quickly which affects Leasing rates etc. etc. Already today we see that the Model S is keeping its value much better than comparable ICE cars (also an indication that Tesla is still very supply constraint). I see this effect increasing a lot as more people consider electric cars.

 

[anticitizen13.7]

Of very important significance for the Bolt vs. Model 3 debate:

http://www.greencarreports.com/news/1101774_gm-wont-fund-ccs-fast-charging-sites-for-2017-chevy-bolt-ev

Last week, after the Bolt EV unveiling in Las Vegas, Green Car Reports took part in a roundtable with General Motors CEO Mary Barra, product chief Mark Reuss, executive chief engineer for electrified vehicles Pam Fletcher, and other executives.

we asked whether GM too would fund the expansion of a CCS quick-charging network to let Bolt EV buyers to travel beyond a 70- to 100-mile radius of their homes, where Chevy expects the bulk of recharging to be done.


The answers were swift and firm.


From CEO Mary Barra: "We are not actively working on providing infrastructure [for the Bolt EV]."


From electrification exec Pam Fletcher: "We believe all our customers should benefit from any infrastructure spending."

Basically, they will only invest in infrastructure that benefits both ICE and EV customers. In another thread here, someone joked that GM should just make every car a plugin of some kind, lol.

 

[Bangor Bob]

Basically, they will only invest in infrastructure that benefits both ICE and EV customers. In another thread here, someone joked that GM should just make every car a plugin of some kind, lol.

It wasn't quite completely a joke, but I'm given to dark humor...

 

[dakh]

Yea sure, dealers pay for charging infra not GM itself

 

[LargeHamCollider]

Basically, they will only invest in infrastructure that benefits both ICE and EV customers. In another thread here, someone joked that GM should just make every car a plugin of some kind, lol.

GM actually should do that, it would save them, I'd bet that there's going to be a decent market for Volt style parallel hybrids for some time and the economies of scale that would be achieved could keep the extra costs below 4k/car.

 

[RobStark]

Honda has been knocked off the top tier into the second tier, out of three. I call that average.

Honda Pilot also has that 9 speed ZF auto in top trims.

And a relatively new untested CVT in the Accord and Civic.

Yes, Honda has been using CVTs for a long time. In tiny numbers in niche applications.

Honda has a great history with manual transmissions. Automatics not so much.

And lots of brands are being brought down because of buggy infotainment software.

 

[wdolson]

Honda has been knocked off the top tier into the second tier, out of three. I call that average.

Honda Pilot also has that 9 speed ZF auto in top trims.

And a relatively new untested CVT in the Accord and Civic.

Yes, Honda has been using CVTs for a long time. In tiny numbers in niche applications.

Honda has a great history with manual transmissions. Automatics not so much.

And lots of brands are being brought down because of buggy infotainment software.

In my experience Buick does make very reliable cars. I've been driving one I bought new since 1992 and it's required very little maintenance. The original battery lasted almost 7 years.

 

[GoTslaGo]

In my experience Buick does make very reliable cars. I've been driving one I bought new since 1992 and it's required very little maintenance. The original battery lasted almost 7 years.

I still do not understand why GM chose to make EVs with Chevrolet. I think they would have been better off introducing it as a Buick. I remember many a conversation about the Volt, where the conversation summed up with, "but you're buying a Chevrolet." Sorry if it sounds elitist, but if you want to sell a 35+k car, you need to market it to the folks who want to buy it. Buick is typically in that price range in the US.

Furthermore, Buick does great in China which will be probably be the greatest EV market in the future. The flip argument is that you may not want to "sully" the brand with a flop. Cimarron anyone? Did I spell that right? I grew up with Buicks and still have a certain affection for them.