16 ms·

The Secret Tesla Motors Master Plan (2006)

244 points by Jarred 11y ago

JayHost 11y ago
I remember their plan is basically how Ford operated. It's just crazy to see them beat the competition so badly. I remember seeing the concept car for the Chevy Volt a few years ago and thinking how cool it was. Then they released it and made it aerodynamic and thus BORING. It's pretty nuts this car is 35k and the list of advantages to disadvantages can be summed as. There's no reason to buy any other car.
- tajen 11y ago
  The lifetime of most cars is 14-20 years (half of it on the second-hand market). Tesla's is 8 years, if I understand. It makes their cars twice as expensive in effect.
  - sudhirj 11y ago
    8 years for the battery or the car? The batteries are replacable in a minute or so.
    - green7ea 11y ago
      The batteries are the single biggest cost in an electric car. The rest is all much cheaper than a conventional car. Replacing a your batteries would be a significant cost compared to buying a new car. It might even be 1/3 of the new ticket price.
      - akmiller 11y ago
        Last I saw the battery expectation is around 15 years. In 15 years, at the rate of development of EV's and research/development being put into batteries, it would be reasonable to expect that batteries would be significantly cheaper with much better technology.
    - NickM 11y ago
      8 years, unlimited miles for the battery and the drivetrain. 4 years and 50k miles for everything else.
  - bronson 11y ago
    The warranty is 8 years. Cars don't just die the moment the warranty runs out, including Teslas. https://www.teslamotors.com/blog/infinite-mile-warranty https://www.teslamotors.com/blog/infinite-mile-warranty
    - jedmeyers 11y ago
      The is no practical way to service a Tesla yourself or in a 3rd party repair shop, like you can a 15 year old Civic. Therefore used Teslas would quickly become financially disadvantageous to service and their price would approach zero on a secondary market.
      - _ph_ 11y ago
        Which current production car is easily serviceable at third party repair shops? They are pretty much all closed down computers. Also, most services required on the engine and support for older cars are just not required on a Tesla. So it is not obvious that it would be more expensive to maintain than any other car, most likely the opposite.
        gambiting 11y ago
        Things are really not as bad as you think. Even in brand new cars you can replace the brakes, suspension, wishbones, dampers, steering column, oil pans, all filters, oil&fuel pumps, service the air conditioning unit and I am reasonably certain you could do full engine maintenance as well. Most importantly, parts for any new vehicle are publicly available, be it a Fiat 500 or a Mercedes S-Class. On the other hand, Tesla will not sell you the parts. Tesla can at any time deactivate your vehicle if they think it's not fit for driving(as they already do in case of accidents), even remotely, and you have to bring it to their dealership to have it reactivated after it passes their tests. I can't think of any conventional car that you have to do that for, I've seen Range Rovers after horrible crashes that have been fixed and put on the road again, and no one had to ask Land Rover for permission to do that. But even if we forget about that - the biggest cost of owning a second hand Tesla is always going to be the battery. As the value of a Tesla falls down with time, the cost of a new battery for it will remain constant, making a purchase of a second hand Tesla prohibitive. Think about it this way - a cost of 2009 MacBook might have fallen down to around ~$100, but a new battery for it will cost you ~$150. The computer got cheap with time but the parts remained the same price, making a purchase of a 7-year old laptop a bad idea, unless you can do without a battery(and obviously you can't do that in a car). In conventional cars, if you have a 20-year old Mercedes with a dead engine, you go online and find the same engine, with fewer miles on it and in running condition, you buy it for a few hundred dollars, get it installed and you are back on the road. In a Tesla, no one is going to fit you a second-hand electric motor if your old one dies, because Tesla won't allow it.
- Hermel 11y ago
  >It's just crazy to see them beat the competition so badly. The BMW electric cars (i3 and i8) are quite successful, beating Tesla sales-wise in Germany and selling half as many world-wide. The great weakness of the Tesla S in the German market ist the German autobahn, where it runs out of energy very quickly (after an hour or so for aggressive drivers). The Tesla S is not designed for sustained high speeds.
  - jvm 11y ago
    Surely you have never tried to operate an i3 at 80 MPH, I can assure you it has at most 50 miles range at that speed.
  - martin_bech 11y ago
    The i3 is a nice small car, but warranty of the battery is horrible, and the range is only so so, specially in cold weater. The i8 is really a plug in hybrid, looks really amazing, but is slower, holds fewer people, and has less space than my Tesla Model S85D. The autobahn is very valid point, driving at 200km/h+ for sustained amounts of time will drain the battery(the amount if sheer wind resistance, makes power used pr km. skyrocket), but driving at 130-150km/h, and stopping and charging when you are low (10% chargeish) is quite effective, as you charge quite fast, when the battery is warm, and low. Thankfully the autobahn always has sections of roadwork, and here the Model S powertrain is very effective at cruising :) .
    - Reason077 11y ago
      The i3 is a nice small car, but warranty of the battery is horrible The battery on the i3 is warrantied for 8 years or 100,000 miles, with a drop below 70% of the original capacity considered to be a battery failure. Tesla also have an 8-year battery warranty, with unlimited miles, but (afaik) they do not explicitly specify what level of capacity loss would be a warranty failure. Considering most people are unlikely to exceed 100,000 miles in 8 years in a "city car" like the i3, is this really a horrible warranty?
      - martin_bech 11y ago
- _pmf_ 11y ago
  > It's just crazy to see them beat the competition so badly. They have not made a single dollar of profit. Yes, it's an incredibly successful and impressive technology demonstration, but production at the scale that is now required is completely different from the development stage. One example: regular manufacturers are only able to keep their high production numbers because they are able to compensate for hiccups in the supply chain for one model by having evolved to be able to switch a factory to another model in a very short timeframe. A monoculture like Tesla (only model 3 in significant numbers) prevents this.
  - illumin8 11y ago
    Correction: every car they sell is profitable, but they've chosen to reinvest those profits to increase future manufacturing capacity.
- kelseyfrancis 11y ago
  > There's no reason to buy any other car. This seems beyond out-of-touch. There are plenty of good reasons. Cost, size, and the fact that you might need a car now and can't actually buy a Model 3 yet would be chief among them. It seems like a pretty great car if you're in its particular market though.
- _fizz_buzz_ 11y ago
  > It's just crazy to see them beat the competition so badly. This amazes me so much. I cannot believe that companies like Volkswagen basically ignore the EV market (except some half-assed E-Golf or something). I mean even if it really turns out to be fad - which I don't believe - don't they want to hedge their bets a little bit? Has nobody there ever heard of companies like Nokia, Blackberry, etc.?
  - adwn 11y ago
    It's the innovator's dilemma [1] in action. [1] https://en.wikipedia.org/wiki/The_Innovator's_Dilemma https://en.wikipedia.org/wiki/The_Innovator's_Dilemma
  - mikeash 11y ago
    Toyota is the one that really baffles me. I can sorta understand car companies ignoring electric and just continuing to plod along with fossil fuels. I don't think it's wise, but it's what they know. But Toyota seems to be ignoring electric and instead focusing on hydrogen, which just makes no sense whatsoever. It's like they read a collection of EV myths (there's nowhere to charge, you can't take road trips, it's worse for the environment than a normal car) and decided to build a car that made them come true.
    - tamal 11y ago
      Meanwhile Toyota partners with Tesla to produce the minimum required number of zero-emissions vehicles in California: https://en.wikipedia.org/wiki/Toyota_RAV4_EV#Second_generation https://en.wikipedia.org/wiki/Toyota_RAV4_EV#Second_generati... All the while denying that it's a good idea. Baffling.
      - mikeash 11y ago
        I'm not sure I see your point. Of course Toyota is going to build EVs if they're required to by law. It's not like they're going to give up the entire California market just because they don't believe in EVs.
- ZeroGravitas 11y ago
  > It's just crazy to see them beat the competition so badly. There's a video talk on youtube by one of the original Tesla co-founders, Marc Tarpenning: https://www.youtube.com/watch?v=hf15nMnayXk https://www.youtube.com/watch?v=hf15nMnayXk and his take on it (in amongst lots of other cool info), learned from later consulting for those same companies, was that the car companies outsourced everything but the engine. Then tesla came along, bought all the standard parts (windscreen wipers etc.) from these third party companies, and have no need for ICE engines. So now you have people, who built their entire corporate status hierarchy around ICE engine experience, trying to start afresh.
  - jzwinck 11y ago
    Outsourcing everything but the engine is an interesting concept and I'm sure it applies to some cars. But I have a striking counterexample. The Ford Taurus SHO from the 90s had a Yamaha engine and a Mazda transmission. This was a flagship car, and from its inception Ford outsourced design and manufacture of the main thing that made it unique.
  - coredog64 11y ago
    Third party should be in quotes. Visteon, Delphi, Denso et al aren't really what you'd think of when you think third party. They're more of a way to split up parts of the same business for tax/labor advantages.
madads 11y ago
As he says in short the masterplan is to: "Build sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. While doing above, also provide zero emission electric power generation options. Don't tell anyone."
- jakobegger 11y ago
  They clearly underestimated the cost of the Model S (it's a luxury car, not a "sporty affordable family car"). But overall their strategy seems to be working out beautifully.
  - MrFoof 11y ago
    No, I think they changed the strategy somewhat. Who has the best margins in the automotive industry? Porsche. In fact, it's almost always been Porsche since their recovery from the mid-90s. Porsche's margins are so good, investors are complaining that the high-volume Macan is dragging down margins to a "terrible" 16% from their typical 19-20% -- which (the 19-20%) is double what Audi's (#2 for industry margins) margins are. To put this in perspective, Porsche brings in as much profit (in Euros) as the Volkswagen brand, despite selling 2% as many cars. Porsche commands their premium by finding a niche and trying to be the most desirable in it. They have competitors, but they offer a package people are simply willing to pay a lot more for. There were never a lot of competitors to Porsche's sports cars in their price range -- Corvette aside, Porsche still commands a huge chunk of the traditional $50-150K sports car market, and has a very devoted fanbase. They also carved out a significant chunk of the high-end SUV market. What competes with the Model S and Model X? Nothing from a powertrain perspective. Add in clever packaging and other features that are largely exclusive and they've created a niche for themselves. The Model 3 is Tesla's Cayenne/Macan. The volume play to ensure their top-end electric vehicles can continue to command their prices, and to provide cash for general operations. Being the mass market player is admirable, but if someone (or several companies) outplay or match you, you could be in for a rough ride. To me, Tesla made the smart play by focusing on higher-margin vehicles.
    - 11y ago
rgawdzik 11y ago
First they ignore you, then they laugh at you, then they fight you, then you win. Mahatma Gandhi
- Fluid_Mechanics 11y ago
  "Misattributed quotes taken out of context can be used to defend anything" -Mahatma Gandhi http://www.snopes.com/first-they-ignore-you/ http://www.snopes.com/first-they-ignore-you/
  - rgawdzik 11y ago
    Why are you obsessing over the origin of the quote? There is nothing to defend here.
- kybernetikos 11y ago
  This quote is not very useful as an indicator of the future. Not everything that starts ignored will be laughed at. Not everything that is laughed at will be fought. Not everything that is fought will win. It's not even the majority of things that follow that path.
  - rgawdzik 11y ago
    You are taking the quote too literally. > First they ignore you Tesla Roadster > then they laugh at you http://www.spike.com/video-clips/c3neux/top-gear-reviews-the-tesla-roadster http://www.spike.com/video-clips/c3neux/top-gear-reviews-the... > then they fight you Tesla Model S + EV clones > then you win. Tesla Model 3
    - vinay427 11y ago
      What are these EV clones that are fighting the Model S? Also, the Model 3 hasn't won anything yet, except a lot of refundable preorders alongside a soon to be expiring tax credit.
doctorcroc 11y ago
I am a fan of Tesla and am excited for the Model 3, but some of the hype around the car is a bit much. I think this is a good counter-perspective: http://www.thedailybeast.com/articles/2016/03/31/tesla-s-model-3-could-destroy-elon-musk-s-company.html http://www.thedailybeast.com/articles/2016/03/31/tesla-s-mod... Creating an affordable EV at mass consumer scale is a much harder problem than creating a luxury EV at modest volume. However, if there was anyone I would bet on making this work and building an amazing car, it would be Elon Musk and team.
- gchokov 11y ago
  The hype is too much indeed. It's actually concerning - I believe that a lot of people will get their $1000 back, once the first negative review hits, and this is going to backlash. And we are definitely going to see such reviews, because the negative and "something-gate" news sell well. Disclaimer: I am a fan of Elon. p.s. Why am I being downvoted without a response?
  - Artistry121 11y ago
    History will tell. Calculated bets move us forward.
    - gchokov 11y ago
      Yes, I agree. The bet is high and I hope it will produce nice outcome for everybody in the long term!
  - base698 11y ago
    Probably because Tesla has had tons of bad news already: the Model S has had many recalls and reliability issues and the X still hasn't hit its stride in terms of units shipped despite the large backlog. Yet the stock still goes up in periods of obvious trouble.
- dionidium 11y ago
  One minor counter to this is that you shouldn't get too caught up in the hype about this being a mass-produced car. HN and tech journalism is a bit of a bubble. Normal people do not spend $35-40k on a car. We're still talking about a high-end vehicle. Nobody driving a Model 3 is going to be devastated when it needs to go in the shop.
huuu 11y ago
Related is Tesla's recycling program of batteries: https://www.teslamotors.com/nl_NL/blog/teslas-closed-loop-battery-recycling-program https://www.teslamotors.com/nl_NL/blog/teslas-closed-loop-ba... Some people are skeptical about electric cars because the estimate life span of a battery is around eight years. But reading the article above (and others) you can see the batteries are not an issue anymore. I was also a little skeptical about electric cars but I think the absolute pros are: * Electricity can come from any source (coal, nuclear, sun, water, waste, aliens). * No emission (in cities). * No noise pollution. But I still got one issue with a lot of those environment friendly solutions. Because why would you use a lot of energy for sensors, insane mode, automatic doors, displays, computers, and so on? I know you need some of them but in the end environment friendly means: using less energy (in any form).
- Yaggo 11y ago
  > Because why would you use a lot of energy for sensors, insane mode, automatic doors, displays, computers, and so on? Signals electronics (displays, sensors, etc) use so little energy compared to power electronics (the drivetrain system) that it doesn't really matter.
  - huuu 11y ago
    It does matter. 1 W * 1,000,000 cars is still 1 MW. It's like saying a javascript file of 1MB is ok because there are images of 10MB on the same page.
    - ricardobeat 11y ago
      No, it's like saying everyone should cut down their JavaScript files by 1kb to reduce emissions.
      - huuu 11y ago
        I don't think you got my point, but yes, cutting down your JavaScript files will reduce emission.
ripitrust 11y ago
Link to the missing white paper : http://www.evworld.com/library/Tesla_21centuryEV.pdf http://www.evworld.com/library/Tesla_21centuryEV.pdf
harwoodleon 11y ago
Elon Musk is the brand investors invest in, not tesla, not spacex. As he says, he is the pot of money - he is the core driver. I personally applaud his bravery, changing the established order is hard and carries great risk. He is the real consortium of products and can shift money between these industries at will. The risk here for all of his companies is that he is building a house of cards, one company collapse could bring it all down. Or if they all succeed, he may become one of he most powerful entrepreneurs in history. Which is his real 'secret plan'
- jsli 11y ago
  I like the "house of cards" metaphor. After learning how these three companies could help each other in his biography, I think the possibility of collapse is actually pretty low.
- mabbo 11y ago
  He actually gambled the house of cards early on. SpaceX needed money, he bet Tesla, and they got lucky. It's not simply that he's a great entrepreneur, it's that his goals seem to be slightly different from others. Every business owner wants to make a lot of money, but Musk has decided to do that via pushing humanity into a Sci-fi future as soon as possible.
  - infogulch 11y ago
    Musk is definitely going for the Science victory.
  - soared 11y ago
    "Make humans a multi-planet species" "Disrupt the oil industry's hold on america" His goals are crazy. Crazy awesome.
- phaedryx 11y ago
  SpaceX - rocket/aerospace research Tesla - energy storage and AI assisted vehicle research And then there is the miscellaneous stuff like this: https://en.wikipedia.org/wiki/Musk_electric_jet https://en.wikipedia.org/wiki/Musk_electric_jet It's obvious that his real 'secret plan' is an ironman suit.
Cruisedealer 11y ago
Best Cruise ship services http://goo.gl/LDAx3w http://goo.gl/LDAx3w
jamisteven 11y ago
Ill buy one when the windows have solar cells integrated.
westoque 11y ago
Build sports car Use that money to build an affordable car Use that money to build an even more affordable car --- He's definitely a visionary. It's amazing how he followed up his plans to the dot.

244 points by Jarred 11y ago

I remember their plan is basically how Ford operated. It's just crazy to see them beat the competition so badly. I remember seeing the concept car for the Chevy Volt a few years ago and thinking how cool it was. Then they released it and made it aerodynamic and thus BORING. It's pretty nuts this car is 35k and the list of advantages to disadvantages can be summed as. There's no reason to buy any other car.

tajen 11y ago
The lifetime of most cars is 14-20 years (half of it on the second-hand market). Tesla's is 8 years, if I understand. It makes their cars twice as expensive in effect.
- sudhirj 11y ago
  8 years for the battery or the car? The batteries are replacable in a minute or so.
  - green7ea 11y ago
    The batteries are the single biggest cost in an electric car. The rest is all much cheaper than a conventional car. Replacing a your batteries would be a significant cost compared to buying a new car. It might even be 1/3 of the new ticket price.
    - akmiller 11y ago
      Last I saw the battery expectation is around 15 years. In 15 years, at the rate of development of EV's and research/development being put into batteries, it would be reasonable to expect that batteries would be significantly cheaper with much better technology.
  - NickM 11y ago
    8 years, unlimited miles for the battery and the drivetrain. 4 years and 50k miles for everything else.
- bronson 11y ago
  The warranty is 8 years. Cars don't just die the moment the warranty runs out, including Teslas. https://www.teslamotors.com/blog/infinite-mile-warranty https://www.teslamotors.com/blog/infinite-mile-warranty
  - jedmeyers 11y ago
    The is no practical way to service a Tesla yourself or in a 3rd party repair shop, like you can a 15 year old Civic. Therefore used Teslas would quickly become financially disadvantageous to service and their price would approach zero on a secondary market.
    - _ph_ 11y ago
      Which current production car is easily serviceable at third party repair shops? They are pretty much all closed down computers. Also, most services required on the engine and support for older cars are just not required on a Tesla. So it is not obvious that it would be more expensive to maintain than any other car, most likely the opposite.
      - gambiting 11y ago
        Things are really not as bad as you think. Even in brand new cars you can replace the brakes, suspension, wishbones, dampers, steering column, oil pans, all filters, oil&fuel pumps, service the air conditioning unit and I am reasonably certain you could do full engine maintenance as well. Most importantly, parts for any new vehicle are publicly available, be it a Fiat 500 or a Mercedes S-Class. On the other hand, Tesla will not sell you the parts. Tesla can at any time deactivate your vehicle if they think it's not fit for driving(as they already do in case of accidents), even remotely, and you have to bring it to their dealership to have it reactivated after it passes their tests. I can't think of any conventional car that you have to do that for, I've seen Range Rovers after horrible crashes that have been fixed and put on the road again, and no one had to ask Land Rover for permission to do that. But even if we forget about that - the biggest cost of owning a second hand Tesla is always going to be the battery. As the value of a Tesla falls down with time, the cost of a new battery for it will remain constant, making a purchase of a second hand Tesla prohibitive. Think about it this way - a cost of 2009 MacBook might have fallen down to around ~$100, but a new battery for it will cost you ~$150. The computer got cheap with time but the parts remained the same price, making a purchase of a 7-year old laptop a bad idea, unless you can do without a battery(and obviously you can't do that in a car). In conventional cars, if you have a 20-year old Mercedes with a dead engine, you go online and find the same engine, with fewer miles on it and in running condition, you buy it for a few hundred dollars, get it installed and you are back on the road. In a Tesla, no one is going to fit you a second-hand electric motor if your old one dies, because Tesla won't allow it.
Hermel 11y ago
>It's just crazy to see them beat the competition so badly. The BMW electric cars (i3 and i8) are quite successful, beating Tesla sales-wise in Germany and selling half as many world-wide. The great weakness of the Tesla S in the German market ist the German autobahn, where it runs out of energy very quickly (after an hour or so for aggressive drivers). The Tesla S is not designed for sustained high speeds.
- jvm 11y ago
  Surely you have never tried to operate an i3 at 80 MPH, I can assure you it has at most 50 miles range at that speed.
- martin_bech 11y ago
  The i3 is a nice small car, but warranty of the battery is horrible, and the range is only so so, specially in cold weater. The i8 is really a plug in hybrid, looks really amazing, but is slower, holds fewer people, and has less space than my Tesla Model S85D. The autobahn is very valid point, driving at 200km/h+ for sustained amounts of time will drain the battery(the amount if sheer wind resistance, makes power used pr km. skyrocket), but driving at 130-150km/h, and stopping and charging when you are low (10% chargeish) is quite effective, as you charge quite fast, when the battery is warm, and low. Thankfully the autobahn always has sections of roadwork, and here the Model S powertrain is very effective at cruising :) .
  - Reason077 11y ago
    The i3 is a nice small car, but warranty of the battery is horrible The battery on the i3 is warrantied for 8 years or 100,000 miles, with a drop below 70% of the original capacity considered to be a battery failure. Tesla also have an 8-year battery warranty, with unlimited miles, but (afaik) they do not explicitly specify what level of capacity loss would be a warranty failure. Considering most people are unlikely to exceed 100,000 miles in 8 years in a "city car" like the i3, is this really a horrible warranty?
    - martin_bech 11y ago
_pmf_ 11y ago
> It's just crazy to see them beat the competition so badly. They have not made a single dollar of profit. Yes, it's an incredibly successful and impressive technology demonstration, but production at the scale that is now required is completely different from the development stage. One example: regular manufacturers are only able to keep their high production numbers because they are able to compensate for hiccups in the supply chain for one model by having evolved to be able to switch a factory to another model in a very short timeframe. A monoculture like Tesla (only model 3 in significant numbers) prevents this.
- illumin8 11y ago
  Correction: every car they sell is profitable, but they've chosen to reinvest those profits to increase future manufacturing capacity.
kelseyfrancis 11y ago
> There's no reason to buy any other car. This seems beyond out-of-touch. There are plenty of good reasons. Cost, size, and the fact that you might need a car now and can't actually buy a Model 3 yet would be chief among them. It seems like a pretty great car if you're in its particular market though.
_fizz_buzz_ 11y ago
> It's just crazy to see them beat the competition so badly. This amazes me so much. I cannot believe that companies like Volkswagen basically ignore the EV market (except some half-assed E-Golf or something). I mean even if it really turns out to be fad - which I don't believe - don't they want to hedge their bets a little bit? Has nobody there ever heard of companies like Nokia, Blackberry, etc.?
- adwn 11y ago
  It's the innovator's dilemma [1] in action. [1] https://en.wikipedia.org/wiki/The_Innovator's_Dilemma https://en.wikipedia.org/wiki/The_Innovator's_Dilemma
- mikeash 11y ago
  Toyota is the one that really baffles me. I can sorta understand car companies ignoring electric and just continuing to plod along with fossil fuels. I don't think it's wise, but it's what they know. But Toyota seems to be ignoring electric and instead focusing on hydrogen, which just makes no sense whatsoever. It's like they read a collection of EV myths (there's nowhere to charge, you can't take road trips, it's worse for the environment than a normal car) and decided to build a car that made them come true.
  - tamal 11y ago
    Meanwhile Toyota partners with Tesla to produce the minimum required number of zero-emissions vehicles in California: https://en.wikipedia.org/wiki/Toyota_RAV4_EV#Second_generation https://en.wikipedia.org/wiki/Toyota_RAV4_EV#Second_generati... All the while denying that it's a good idea. Baffling.
    - mikeash 11y ago
      I'm not sure I see your point. Of course Toyota is going to build EVs if they're required to by law. It's not like they're going to give up the entire California market just because they don't believe in EVs.
ZeroGravitas 11y ago
> It's just crazy to see them beat the competition so badly. There's a video talk on youtube by one of the original Tesla co-founders, Marc Tarpenning: https://www.youtube.com/watch?v=hf15nMnayXk https://www.youtube.com/watch?v=hf15nMnayXk and his take on it (in amongst lots of other cool info), learned from later consulting for those same companies, was that the car companies outsourced everything but the engine. Then tesla came along, bought all the standard parts (windscreen wipers etc.) from these third party companies, and have no need for ICE engines. So now you have people, who built their entire corporate status hierarchy around ICE engine experience, trying to start afresh.
- jzwinck 11y ago
  Outsourcing everything but the engine is an interesting concept and I'm sure it applies to some cars. But I have a striking counterexample. The Ford Taurus SHO from the 90s had a Yamaha engine and a Mazda transmission. This was a flagship car, and from its inception Ford outsourced design and manufacture of the main thing that made it unique.
- coredog64 11y ago
  Third party should be in quotes. Visteon, Delphi, Denso et al aren't really what you'd think of when you think third party. They're more of a way to split up parts of the same business for tax/labor advantages.

madads 11y ago

As he says in short the masterplan is to: "Build sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. While doing above, also provide zero emission electric power generation options. Don't tell anyone."

jakobegger 11y ago
They clearly underestimated the cost of the Model S (it's a luxury car, not a "sporty affordable family car"). But overall their strategy seems to be working out beautifully.
- MrFoof 11y ago
  No, I think they changed the strategy somewhat. Who has the best margins in the automotive industry? Porsche. In fact, it's almost always been Porsche since their recovery from the mid-90s. Porsche's margins are so good, investors are complaining that the high-volume Macan is dragging down margins to a "terrible" 16% from their typical 19-20% -- which (the 19-20%) is double what Audi's (#2 for industry margins) margins are. To put this in perspective, Porsche brings in as much profit (in Euros) as the Volkswagen brand, despite selling 2% as many cars. Porsche commands their premium by finding a niche and trying to be the most desirable in it. They have competitors, but they offer a package people are simply willing to pay a lot more for. There were never a lot of competitors to Porsche's sports cars in their price range -- Corvette aside, Porsche still commands a huge chunk of the traditional $50-150K sports car market, and has a very devoted fanbase. They also carved out a significant chunk of the high-end SUV market. What competes with the Model S and Model X? Nothing from a powertrain perspective. Add in clever packaging and other features that are largely exclusive and they've created a niche for themselves. The Model 3 is Tesla's Cayenne/Macan. The volume play to ensure their top-end electric vehicles can continue to command their prices, and to provide cash for general operations. Being the mass market player is admirable, but if someone (or several companies) outplay or match you, you could be in for a rough ride. To me, Tesla made the smart play by focusing on higher-margin vehicles.
  - 11y ago

rgawdzik 11y ago

First they ignore you, then they laugh at you, then they fight you, then you win. Mahatma Gandhi

Fluid_Mechanics 11y ago
"Misattributed quotes taken out of context can be used to defend anything" -Mahatma Gandhi http://www.snopes.com/first-they-ignore-you/ http://www.snopes.com/first-they-ignore-you/
- rgawdzik 11y ago
  Why are you obsessing over the origin of the quote? There is nothing to defend here.
kybernetikos 11y ago
This quote is not very useful as an indicator of the future. Not everything that starts ignored will be laughed at. Not everything that is laughed at will be fought. Not everything that is fought will win. It's not even the majority of things that follow that path.
- rgawdzik 11y ago
  You are taking the quote too literally. > First they ignore you Tesla Roadster > then they laugh at you http://www.spike.com/video-clips/c3neux/top-gear-reviews-the-tesla-roadster http://www.spike.com/video-clips/c3neux/top-gear-reviews-the... > then they fight you Tesla Model S + EV clones > then you win. Tesla Model 3
  - vinay427 11y ago
    What are these EV clones that are fighting the Model S? Also, the Model 3 hasn't won anything yet, except a lot of refundable preorders alongside a soon to be expiring tax credit.

doctorcroc 11y ago

I am a fan of Tesla and am excited for the Model 3, but some of the hype around the car is a bit much. I think this is a good counter-perspective: http://www.thedailybeast.com/articles/2016/03/31/tesla-s-model-3-could-destroy-elon-musk-s-company.html http://www.thedailybeast.com/articles/2016/03/31/tesla-s-mod... Creating an affordable EV at mass consumer scale is a much harder problem than creating a luxury EV at modest volume. However, if there was anyone I would bet on making this work and building an amazing car, it would be Elon Musk and team.

gchokov 11y ago
The hype is too much indeed. It's actually concerning - I believe that a lot of people will get their $1000 back, once the first negative review hits, and this is going to backlash. And we are definitely going to see such reviews, because the negative and "something-gate" news sell well. Disclaimer: I am a fan of Elon. p.s. Why am I being downvoted without a response?
- Artistry121 11y ago
  History will tell. Calculated bets move us forward.
  - gchokov 11y ago
    Yes, I agree. The bet is high and I hope it will produce nice outcome for everybody in the long term!
- base698 11y ago
  Probably because Tesla has had tons of bad news already: the Model S has had many recalls and reliability issues and the X still hasn't hit its stride in terms of units shipped despite the large backlog. Yet the stock still goes up in periods of obvious trouble.
dionidium 11y ago
One minor counter to this is that you shouldn't get too caught up in the hype about this being a mass-produced car. HN and tech journalism is a bit of a bubble. Normal people do not spend $35-40k on a car. We're still talking about a high-end vehicle. Nobody driving a Model 3 is going to be devastated when it needs to go in the shop.

huuu 11y ago

Related is Tesla's recycling program of batteries: https://www.teslamotors.com/nl_NL/blog/teslas-closed-loop-battery-recycling-program https://www.teslamotors.com/nl_NL/blog/teslas-closed-loop-ba... Some people are skeptical about electric cars because the estimate life span of a battery is around eight years. But reading the article above (and others) you can see the batteries are not an issue anymore. I was also a little skeptical about electric cars but I think the absolute pros are: * Electricity can come from any source (coal, nuclear, sun, water, waste, aliens). * No emission (in cities). * No noise pollution. But I still got one issue with a lot of those environment friendly solutions. Because why would you use a lot of energy for sensors, insane mode, automatic doors, displays, computers, and so on? I know you need some of them but in the end environment friendly means: using less energy (in any form).

Yaggo 11y ago
> Because why would you use a lot of energy for sensors, insane mode, automatic doors, displays, computers, and so on? Signals electronics (displays, sensors, etc) use so little energy compared to power electronics (the drivetrain system) that it doesn't really matter.
- huuu 11y ago
  It does matter. 1 W * 1,000,000 cars is still 1 MW. It's like saying a javascript file of 1MB is ok because there are images of 10MB on the same page.
  - ricardobeat 11y ago
    No, it's like saying everyone should cut down their JavaScript files by 1kb to reduce emissions.
    - huuu 11y ago
      I don't think you got my point, but yes, cutting down your JavaScript files will reduce emission.

ripitrust 11y ago

Link to the missing white paper : http://www.evworld.com/library/Tesla_21centuryEV.pdf http://www.evworld.com/library/Tesla_21centuryEV.pdf

harwoodleon 11y ago

Elon Musk is the brand investors invest in, not tesla, not spacex. As he says, he is the pot of money - he is the core driver. I personally applaud his bravery, changing the established order is hard and carries great risk. He is the real consortium of products and can shift money between these industries at will. The risk here for all of his companies is that he is building a house of cards, one company collapse could bring it all down. Or if they all succeed, he may become one of he most powerful entrepreneurs in history. Which is his real 'secret plan'

jsli 11y ago
I like the "house of cards" metaphor. After learning how these three companies could help each other in his biography, I think the possibility of collapse is actually pretty low.
mabbo 11y ago
He actually gambled the house of cards early on. SpaceX needed money, he bet Tesla, and they got lucky. It's not simply that he's a great entrepreneur, it's that his goals seem to be slightly different from others. Every business owner wants to make a lot of money, but Musk has decided to do that via pushing humanity into a Sci-fi future as soon as possible.
- infogulch 11y ago
  Musk is definitely going for the Science victory.
- soared 11y ago
  "Make humans a multi-planet species" "Disrupt the oil industry's hold on america" His goals are crazy. Crazy awesome.
phaedryx 11y ago
SpaceX - rocket/aerospace research Tesla - energy storage and AI assisted vehicle research And then there is the miscellaneous stuff like this: https://en.wikipedia.org/wiki/Musk_electric_jet https://en.wikipedia.org/wiki/Musk_electric_jet It's obvious that his real 'secret plan' is an ironman suit.

Cruisedealer 11y ago

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jamisteven 11y ago

Ill buy one when the windows have solar cells integrated.

westoque 11y ago

Build sports car Use that money to build an affordable car Use that money to build an even more affordable car --- He's definitely a visionary. It's amazing how he followed up his plans to the dot.