I've come to see Tesla as being very bad at production lines. I've heard almost nothing but bad news about working conditions, safety, output, etc. Top it off with the massive firings that happened right as the Model 3 production was set to ramp up.
However, I'm bullish, because these are solved problems that many other people have expertise in. It's easier for Tesla to find someone skilled in car manufacturing than it is for other manufacturers to build the brand demand that Tesla has. They have solved the hard problem, but failed the easy. And when they figure out how to build cars faster, the demand is there to meet them, which means that when they solve that easy problem, they will be sitting pretty.
> However, I'm bullish, because these are solved problems that many other people have expertise in.
All of Teslas woes make me bullish on companies like Toyota and GM that understand how to build cars.
I'm increasingly questioning whether the electric drive train and the batteries are actual difficult and novel part about building an electric car.
I think it's going to be easier for GM to find people that can build good electric engines than it is for Tesla to get upto speed on how to build their cars at GM scales.
> I'm increasingly questioning whether the electric drive train and the batteries are actual difficult and novel part about building an electric car.
Batteries are made by Panasonic, who can also sell to other car makers. And both GE and Siemens have centuries of expertise in electric engines.
The biggest hurdle for the traditional car makers isn't technical, it's actually changing their mindset from a product they've been making for a century to a new one.
I find myself nodding your head at the first sentence.
I think the second sentence is agreed upon/accepted knowledge. The batteries and electrics are NOT difficult.
I'm not sure if the third sentence is relevant. Maybe it is, maybe it isn't. Tesla-like success required thinking outside of the box. If GM just started cranking out mediocre electric cars like they crank out mediocre gasoline-powered cars, I'm not sure it would have made a difference. It took a new company with a fresh approach like Tesla to drive the market.
Whether it's a GM or a Tesla that ends up winning in the long term is up for argument, and it certainly seems like it SHOULD obviously be the big existing carmakers. But they didn't seem interested in doing more than bolting an electric drivetrain to an existing car, which wasn't enough to get people excited about the revolution that electric cars represent.
You're right, of course. Tesla has made electric cars sexy to people with money, the same way the Prius made hybrids sexy (okay, maybe 'popular' is a better word in this particular example) to the layperson.
Electric cars have mindshare now. But unless Tesla can do something Toyota can't for the mass market, another automaker will likely, eventually, eat their lunch. There's no reason Toyota can't bolt on some sexy electronics; the charging network can be accomplished ... somehow, some other way. That doesn't mean Tesla goes away but it means there's a finite market of people willing to pay the premium for a Tesla the same way there's a finite market for people who want the intangibles of (say) a BMW. Unless we presume that Tesla can get their efficiency and margins Toyota-low, which.. again, they can't simply bolt on.
I suppose it's still possibly Tesla can leverage their battery and charging infrastructure to their advantage for long enough to hold off the competition though. Or at least enough to make themselves an acquisition target, but of course, their value needs to be something affordable.
> There's no reason Toyota can't bolt on some sexy electronics; the charging network can be accomplished ... somehow, some other way.
Tesla's charging network is largely a US phenomenon, really. There are 1200 public charging stations in Ireland (owned by the state monopoly electricity distribution company; there are also some independent ones), a small country (many electric cars could cross it without charging) of 5 million people. Of these, 70 are 'fast' chargers (usually 50kW). Tesla charging stations? 2.
Tesla's fast charging stations are a big deal in the US, a very large sparsely-populated country. They are less of a big deal in many European countries, especially where there are robust non-Tesla networks being deployed. Ultimately, I suspect standard fast-chargers will win out over proprietary brand-specific fast chargers.
I think a Tesla acquisition is a good best-case-scenario for them. Their brand, design, and Gigafactories will be valuable for a company with the manufacturing chops to take them on. I’m more bullish on SpaceX, and I think Musk would be better served to focus on it more.
Brand, yes; it's valuable, though almost certainly not 50 billion valuable. Design, eh, questionable. "Gigafactories", certainly not; as mentioned in the article above their car factory doesn't work. As it stands it's a liability.
Having lived in Nagoya, Japan after growing up in America, I think industrials is one of those areas where Japanese sensibilities and approaches to innovation vs incremental improvement are going to be tough to beat. Like everything in Japan, it’s not simple. My friends who run companies that supply Toyota and Mitsubishi in auto and aerospace absolutely worship the golden age of American industry in a way that I’m not sure many Americans still do. At the same time, they’re brilliant engineers that operate at extremely high standards, and are playing to win.
It will be easier for Toyota and Honda to get up to speed on electric drive train production than for Tesla to get up to speed on mass production of automobiles.
Tesla has an electric drive train, they have a car production line and they are producing electric cars.
Assuming it takes Tesla three years to reach their output goals on that production line, it will need to take Honda and Toyota less than two years to get up to speed producing fully electric drive trains, installing charging infrastructure around the world, and rebuilding their downstream in order to even have a chance of competing with Tesla in the EV market.
Nissan is the only viable competitor, and they have been competing on price against Model S. The Leaf is not a competitor to Model 3 even in the same price bracket. There simply is not the infrastructure to support the Leaf, or the salesforce willing to sell it.
This race is not just about a manufacturer building electric cars. This race is about who will be first to kill off or convert their traditional downstream to get EVs on the road at reasonable prices.
My arm chair opinion as a millennial that rides a bicycle to work every day, knows nothing about cars, and has no interest in buying an electric car any time soon:
The Bolt looks like a great car for a dorky family man while the Model S is a totally different market. Families have different needs than luxury car owners, and it's likely that these needs are not being effectively met by EVs such as the Bolt despite the a universal consensus that from car critics that the Bolt is an exceptionally good vehicle.
Funny thing, for a family car I think the Model S is perfect, and every other electric car is too small. We're on our second Chrysler 300, just because I can't find another similarly sized, similarly performing car that's half as good for that kinda money. A model S would cost twice as much, although I'd sure love to have one!
The Bolt is TINY! Family car? For what? A family of dwarves?
> Why, in your opinion, is GM’s Chevy Bolt still being outsold by the Tesla Model S?
Because the Bolt’s a boring, though electric, compact car being sold at the price significantly above a similarly boring mass-market midsize plug-in hybrid (the Prius Prime) with sufficient all-electric range for reasonable commuting, and also somewhat above that of a competing boring compact all-electric (the Nissan Leaf) while Model S is a luxury mid-size electric vehicle with far less direct competition.
The Bolt is selling into a segment where utility/price is more important, and it's got strong competitors on that dimension. That's not a sign that GM can't make good EVs, but that GM is attacking the harder segment of the market; whether that's a good or bad business decision is debatable, but if EVs are ever more than a luxury niche item, the space the Bolt is competing in is going to matter a lot more than the space the Model S is competing in.
I'd say it's a failure of GM's marketing department and dealership salesmen that for some reason steer (no pun intended) people to ICEs.
GM should be capitalizing on Tesla's failure to bring the Model 3 out. They could absolutely sell the message of "Why wait 18 months for an affordable electric car when you can drive one TODAY?"
They could devour Model 3 reservations, but for some reason are choosing not to.
Unlike Tesla, GM doesn't own its dealerships. Each dealership tries to optimize their selection for their own profit, each salesperson to optimize their sales for their own income. There's a complicated web of incentives tweaking which models are best for which entity at which time, but as a general rule if they are relatively inexpensive to manufacture and/or there are lots of them in inventory that's what they want to sell you. Trucks and those SUVs built on truck frames are always at the top of the list (Ford's F-150 is rumored to be the most profitable vehicle ever built, I think the Escalade is among GM's most profitable vehicle). If someone can create a cheap to build electric truck it might well grab the interest of dealers and salespeople, but they're never going to be excited to sell you a hard to build, low-margin family sedan regardless of powertrain.
GM is very VERY focused on the bottom line. The Chevy Bolt doesn't have a big margin. It's likely that they'd rather sell Escalades and pickup trucks. Because they have a fat margin.
IMHO I don't believe GM is serious about electric cars yet. They may be, but they haven't demonstrated it sufficiently for me to depend on it. Until they show large commitments and demonstrate that they are betting the company's future on being able to do electric cars well and to continue doing so, I'm more interested in an electric car from a company that I know does have that commitment.
Where are the billions of dollars in contracts for batteries? Until I see that or a gigafactory of their own the Bolt will be a compliance car in my eyes. Albeit perhaps the best compliance car on the market at the moment.
The Bolt might be perfectly competent but it is not "sexy".
Can you see GM making competent electric cars? Yes they can do that all day long. Can they make it sexy?
That begs the question if GM can make any sexy cars. I would say that the Corvette, Camaro ZL-1 and Cadillac CTS-V might be fair examples of what GM is capable of.
So the question is can GM make a sexy mass produced electric car? They haven't tried yet.
It doesn't have to be sexy. It has to attract people that would buy a Prius or Leaf (and neither of those are the least bit sexy). It has to get good consumer reports ratings (the Volt does)..
I was actually surprised by the Volt, since a lot of my friends and coworkers bought them. Those people generally drove Mazdas, Hondas, and Toyotas.
If Chevy kept working on their eco-friendly image and continued to produce decent enough quality cars that get good consumer reports ratings, they'll probably do fine.
> It's easier for Tesla to find someone skilled in car manufacturing than it is for other manufacturers to build the brand demand that Tesla has.
If supply was not a problem Tesla would still not sell as many automobiles as other brands. Ford sold something like 5 million automobiles in 2016. The Model 3 has 1/10 that in preorders.
Tesla has a great brand in EVs, and Tesla has great market growth, but it has to double several more times until it reaches the established demand other car companies enjoy.
I'm bearish on Tesla. Everyone ships more units then Tesla. Japanese companies are outselling Tesla on EV units. German companies are 1-3 years behind on luxury EV units in terms of quality.
I'm hedging my bet by considering the gigafactory. If we see 5 gigafacotries by 2022 they'll have a significant position in the entire CE & EV industry for decades.
The Model 3 hasn’t even been reviewed yet. A lot of people won’t buy a product until they’ve seen it deliver on its promises and it is available to buy immediately.
You can’t compare demand for their offering to Ford’s until it’s actually... you know... offered. Model 3 is still basically in a Beta release.
> However, I'm bullish, because these are solved problems that many other people have expertise in.
Which raises the question, why didn't Tesla hire experts, like the company in the article? I suspect because Musk thinks his way is best, and, worse, hasn't yet realised that he's wrong. This would make me very concerned about Tesla's future. Ultimately, if Tesla goes bust, the brand will presumably be sold off, and someone who knows how to make cars will make Teslas, I suppose...
> It's easier for Tesla to find someone skilled in car manufacturing than it is for other manufacturers to build the brand demand that Tesla has. They have solved the hard problem, but failed the easy.
But Mercedes, Audi, BMW, etc., have an incredible amount of brand demand too. They'd have even more if they cut out their entry-level cars and only sold flagships like Tesla has done up to this point.
The reality is building a desirable car brand is not that hard. Just make absurdly expensive cars that few people can own and you're halfway there. Then slowly introduce more affordable models.
Unlike MB and Audi, BMW are invested in electric tech and have already been for a while with the i3 (both full and hybrid trims) and also the X series hybrid SUVs. So for them battery tech is a "solved problem". They already have a production capacity of 2.5m/yr and likely will keep the same capacity in the gas-electric transition.
> Just make absurdly expensive cars that few people can own and you're halfway there.
Not that the GTR was absurdly expensive, but i don't think that car changed the perception of Nissan much.
Other than the i3, which has a 125 mile range, all of BMWs other vehicles are hybrid rather than true EVs. Yes that’s probably the way the market will go (Toyota offer a hybrid option on nearly every model now), but it’s not really the same as a true EV like Tesla.
Also both Audi and MB have hybrid and full EVs (well VW who own Audi, and share the same platforms).
it's more of a cost-efficient, tuner friendly car that's loaded with tech, that can take-on pretty much anything, while offering the reliability of a Nissan.
Exactly. That's what people fail to understand about the car market. It is easy to create expensive cars for high income people once you have a few good ideas and capital. Now, going from there to create a mass produced, high quality car, this is the very difficult part that only a few companies were able to accomplish. It is possible that Tesla can get there, but most people just don't understand how difficult that is.
Not only do they have brand demand, when they do enter the same markets as Tesla with their own EV they will have people flocking to them.
far too many people keep hyping numbers of Tesla's preorders or even sales of S & X while completely ignoring they don't even come close to equaling single lines of some other brands who do this year in year out
Actually building production lines and supply lines is a very difficult problem that needs a lot of experience, fine tuning and time. It's like building a moderately complex software. Getting most features in is relatively quick. But then debugging all issues is very slow and tedious and just needs a lot of time.
Is this really the "easy" problem? I've often wondered to what degree maneuverability or parts availability influences car maker's designs. If the design fundamentally requires parts that are single-source or difficulty to manufacture, as Tesla's design must be, then it's a difficult problem.
Yes, relatively speaking. The difficulty of this sort of stuff ultimately can hit the margin, so you usually are fine and have ample time if you have a relatively high margin (and no competitor in line of sight). For operationally tight businesses, this could prove to be disastrous.
However, I'm bullish, because these are solved problems that many other people have expertise in. It's easier for Tesla to find someone skilled in car manufacturing than it is for other manufacturers to build the brand demand that Tesla has. They have solved the hard problem, but failed the easy. And when they figure out how to build cars faster, the demand is there to meet them, which means that when they solve that easy problem, they will be sitting pretty.