16 ms·

German Leaders at Odds with Industry Over Electric Cars

116 points by davidiach 10y ago

sickbeard 10y ago
The article makes it sound like electric cars are everywhere and manufacturers are still making gas vehicles.
- bluehawk 10y ago
  I liken it to the time period when Kodak had made the first digital camera, but allowed other companies to surpass them and eat their breakfast, and now Kodak is bankrupt. The german (and american) auto companies will either need to drastically alter their composition or other companies will take their place.
  - mc32 10y ago
    I think it's a somewhat apt comparison in that if the ICE money-making portion does not use those profits to develop good EV alternatives, newcomers can leapfrog them. On the other hand, Kodak was a little different, they feared selling digital would eat into their "film" business. But EV does not eat into the manufacturers' "petro" business because most MFG are not selling fuels. So it's not like they have a perverse incentive is what I'm saying and Kodak suffered from perverse incentives.
    - gyjvdf 10y ago
      It's not about perverse incentives, it's about "the secret sauce". Traditional car manufacturers perfected the ICE and dealership network, while the "secret sauce" of electric cars is batteries and network of charging stations. Practically, GM is right now at a disadvantage relative to Tesla
      - mc32 10y ago
        I don't see much disadvantage. It's not like Tesla is designing and manufacturing the batteries they use all by themselves. Sure, they have input --as Boeing has input w/re GE engines. Given that Tesla will be charging for their networks, it's not an advantage over other charging networks, so overall it'll be a non-issue. Having dealerships does grant the traditional MFGs some advantage but that may erode in the future if dealerships become less necessary in helping the sales of cars (ie. become more on-demand fleets). ICE car MFGs also have _capacity_. Tesla does not have the capacity right now.
        greglindahl 10y ago
        Tesla designs and manufactures battery packs. GM is on record saying that it took them a long time and a lot of money to develop the battery pack for the Bolt.
        kuschku 10y ago
        Actually, most of that IP belongs to Panasonic, with whom Telsa is cooperating. And German manufacturers have bought access to that IP already. I wouldn’t be surprised if Telsa dies very quickly once the actual EV sales start.
        mc32 10y ago
        Tesla uses Panasonic cells to make their batteries[1]. I'm sure Tesla has some circuitry/electronics to control the cells, but it's not like the key battery technology is all Tesla's. The Gig Factory allows Tesla to ensure they have enough batteries for their car fleet so that they don't suffer from shortages as other MFGs put a demand on suppliers. [1]http://www.greencarreports.com/news/1104609_panasonic-to-build-electric-car-battery-cells-at-tesla-gigafactory-this-year-report http://www.greencarreports.com/news/1104609_panasonic-to-bui...
        dangrossman 10y ago
        GM didn't develop the battery pack for the Bolt. The battery cells, battery pack, charging systems, motors, computers and infotainment systems in the Bolt are all designed and manufactured by LG Chem.
  - dx034 10y ago
    All major car manufacturers have plans to introduce EV very soon or have already done so. It's no comparison with cameras or TVs where some companies ignored new technology. The question for car manufacturers is just how fast it will happen. For a company the size of VW it's very risky to go into the new technology too fast if consumers don't want it yet. They still need to produce their current products (and make money doing so). Finding a way to shift towards EV while maintaining economies of scale is the crucial part here. Tesla doesn't have that problem because they don't have the legacy. But they also couldn't produce 10mln vehicles/year within a few years and are not yet profitable. I actually think that companies have realized how dramatic the shift will be. But EVs are still just a niche and will likely not gain traction before 2020 or so. Reducing capacity of ICE vehicles before EVs really take of is too risky. However, having EV models ready means you can likely shift most production within a few years and probably produce at very low costs. In addition to that, brand reputation is very important when it comes to cars. Especially regarding security. Tesla has a great record but many Chinese producers do not. That's why you hardly find any Chinese cars on European roads. This will probably not change with EVs, people would still prefer a Toyota/VW/BMW to a lesser known Chinese brand (even if there's no evidence to back that up).
  - ams6110 10y ago
    Except that digital photography was better in almost every way than film-and-print photography. Electric cars have some advantages but are (at present) woefully inadequate in other ways. I don't think the comparison is the same.
    - iammyIP 10y ago
      Early digital cameras were worse in almost every way, picture resolution, noise, color. The only thing they had going for them was that you could quickly look at the pictures on a computer screen and didn't need to buy film rolls. It took a while until digital was somewhat comparable with analog film for professional use. Quite similar to the electric car situation now actually.
coldcode 10y ago
Subsidies in the US will probably vanish next year as well, but I think the benefits still make them viable.
- greglindahl 10y ago
  Subsidies for fossil fuels will vanish?! Bold prediction. /s
breatheoften 10y ago
Quite interesting -- German government wants to keep the valuable parts of future manufacturing processes in Germany whereas the companies don't care where their future manufacturing value comes from and will remain more interested in optimizing for their current revenue stream for some amount of time in terms of how they deal with the German governments. That revenue will eventually disappear though ... I wonder if they could put a hefty tax on the gas powered cars but offer a rebate for that tax for every electric car sold that is proportionate to the amount of the electric car value that was domestically produced. Investment in domestic electric car production would then become a direct mechanism for preserving their existing revenue stream while forcing them to set themselves up for domestic production of electric cars in the future ...
- tanto 10y ago
  I am pretty sure that would violate a lot of international trade agreements.
  - Brakenshire 10y ago
    Unfortunately China seems to be engaged in exactly the same sort of behaviour. 1 in 7 cars has to be electric (fair enough), but the electric car has to be manufactured by a company owned by Chinese citizens. It's a pity that Donald Trump is going to dismantle the multilateral attempts to make China play by the same rules as everyone else.
    - wavefunction 10y ago
      If that's all the TPP were about, it wouldn't be so dreadful or maligned by so many people. That would be something I could support.
      - Brakenshire 10y ago
        Yes, fair enough, there were a lot of problems with it. The issue is I think Trump is opposed not just to the detail of the proposed deal, but to multilateral deals in general, presumably because he feels it means the US is bound by globalist institutions. But the US or Europe, or Japan, or any of the other countries involved in these deals, cannot accomplish a goal of preventing something like this on their own. They have to join together, and joining together means being bound by jointly created rules. In order to meet these goals, the US has to accept a role not just as a leader but also as one member among many (a role commensurate with a population and economy perhaps 15-30% of the total rather than as a hegemon talking to a minor ally).
gumby 10y ago
The key to electric vehicles is a shift to buy-by-the-ride (since you can get one that will take you wherever you want without worrying about range issues). That shift is also bad for most of the existing car manufacturers
- oblio 10y ago
  This assumes most people don't want car ownership.
  - XorNot 10y ago
    I suspect most people don't? Unlike many things you can own, owning a car is a visible blackhole of money. The problem with changing that dynamic is a continuance of convenience: can a clean vehicle be made available to me with nearly the same amount of notice?
    - mudetroit 10y ago
      > owning a car is a visible blackhole of money All shared vehicles do is distribute that same cost though. The owners of the shared fleets aren't going to no recoup those costs. If anything it simply makes the lost money less visible, but still equally present. (Feel free to argue that the actual costs are less with more sharing)
      - gumby 10y ago
        If you mean "shared vehicles" by the Uber/Lyft model, I agree. If you mean "shared" as in a fleet, well, Daimler Benz probably has a better balance sheet than you do, and can borrow at prime. I feel the same way about housing stock, BTW; the US model of home ownership only works because it is heavily subsidized by the federal government as a longstanding matter of policy (not counting the tax deduction for interest which simply preys upon people's financial ignorance). Almost everyone in the US would be better off it a set of large companies/REITs owned the majority of the housing stock and most people rented.
  - 10y ago
wslh 10y ago
Too big to compete.
rplst8 10y ago
I wonder if anyone has thoroughly considered the impact of tens of thousands of gas stations closing their doors as the demand for petroleum goes down.
- knieveltech 10y ago
  That may not happen. According to various sources fuel sales are not where gas stations make their money. On average they are only bringing in 3 cents of profit on a gallon of fuel. They sell fuel primarily to attract customers and then make their profits on sales of snacks, cigarettes, lottery tickets, and the like. Disrupting the cycle of impulse buys by individuals lured to the store to buy fuel is likely to have a measurable impact on business, but it is unclear if this would drive any/some/most/all convenience stores out of business.
  - bjelkeman-again 10y ago
    Since I got an electric car I only go to an old gas station to wash the car. There may be ways for them to stay in business, but I still think it will be disruptive for many.
    - greglindahl 10y ago
      Occasionally I need to clean my windshield or put some air in my tires... maybe twice a year? I don't think that's going to help the gas stations stay in business.
  - solatic 10y ago
    Right, probably gas stations will either add charging capability in a supercharger fashion, or they'll just turn into convenience stores.
    - cesis 10y ago
      But who would be willing to spend a couple of hours in a gas station?
GoToRO 10y ago
Ever wondered why electric cars from established manufacturers are all ugly? that's why: they develop the technology but they don't want people to buy them yet. They are too good for the customer and they would not be able to make money off of them, after the initial sale.
- plandis 10y ago
  Teslas Model X is ugly? The BMW i8 is ugly? I'd be very curious to see what a none ugly car is in your opinion.
  - andrewflnr 10y ago
    Tesla doesn't count as an established manufacturer in this context. And the i8 is a hybrid, not a pure electric car. In any case, I don't think the original statement was meant to be absolute, just pointing out a trend.
  - GoToRO 10y ago
    BMW i3. Just look at that line under the window of the rear door. It's like the designer forgot how to draw for a split second and he never reviewed the design. Oh, and I never understood why you have to change the design for an electric car? Just use the same design. The electric motor and batteries save space, they don't need more. https://upload.wikimedia.org/wikipedia/commons/thumb/8/83/BMW_i3_(19939421151).jpg/220px-BMW_i3_(19939421151).jpg https://upload.wikimedia.org/wikipedia/commons/thumb/8/83/BM...
    - camiller 10y ago
      sometimes for improved aerodynamics, for example the ugly headlights on the Nissan Leaf break up airflow along the side of the car so that the drag caused by the side mirrors is reduced.
    - robterrell 10y ago
      I agree with the GP and parent, and yes the i3 is awful (i3 driver here), but there are many EVs now that look like normal cars: Fiat 500e, VW Golf, Kia Soul, various Fords.
mathiasben 10y ago
Are there any German start-ups building an electric car?
- kuschku 10y ago
  No startups, but there’s other companies that have never been involved with cars before that are now building electric vehicles. Deutsche Post DHL (Germany’s federal mail service) is now building their delivery vehicles themselves, so they can get electric ones quickly. http://www.spiegel.de/spiegel/deutsche-post-baut-elektro-auto-blamage-fuer-die-deutschen-autobauer-a-1107782.html http://www.spiegel.de/spiegel/deutsche-post-baut-elektro-aut...
- usrusr 10y ago
  Nothing beyond the funny level. Occasionally, people who somehow got their hands on the naming rights to a vintage brand long dead are using "electric!" as a hand-wavey excuse as to how they will reconstitute the name to its former glory, but those rarely get to their second concept rendering. And then there are probably some leftovers from the era of approaching EV from the bottom, with minimalistic vehicles that are more in line with electric assist velomobiles than by electrifying big, heavy cars. But those are more established niche than startup.
digikata 10y ago
It's interesting that the article implies that the German manufactures are so intent on keeping the 'value add' from the internal combustion motors. For the electric vehicles, value add is shifting, and if you look at Elon Musks strategies with Tesla, he's made a bet that it's shifting a significant portion to the power generation, and batteries.
- rsync 10y ago
  "It's interesting that the article implies that the German manufactures are so intent on keeping the 'value add' from the internal combustion motors." Enjoy that. Enjoy that right into the grave. I bought two successive Audi A8s ... and then I saw a car that had derived AWD from two different motors and had a ridiculously low center of gravity due to the "skateboard design" and had faster acceleration than a supercar. Since that moment, German auto manufacturers have missed 2 new car (flagship cars, even) sales from this consumer, and counting ...
  - BoorishBears 10y ago
    Your anecdotal experience doesn't really mean much. I'm sure short term Audi is of the opinion that if you'd settle for a Tesla's definition of luxury and refinement from their flagship, you weren't really their target to begin with. Longer term they probably realize they can't depend on Teslas never getting better and will need to compete or other luxury brands will eat up the segment (and probably wish they had just "done it right" for luxury EVs first) Audi also probably comes from the school of thought if someone wants supercar acceleration, they'll get a supercar (or a proper S-line)
LeanderK 10y ago
German here. My Problem with the German Car Industry is that they still see the car as a product, not as a platform. A car is a major investment and one that sticks to me for a while. I must rely on the car manufactures to continuously push updates and improve the lane-keeping assistant etc. (Maybe even the style of the UI?). I don't see this happening, at all. The lane keeping assistants get shipped and then forgotten, everybody is working on a new integration that is maybe coming out in years (crazy to think about if your only used to software-cycles). I don't want to be in the situation that i can't pair my smartphone with my car next year because mercedes doesn't bother updating it's software. Tesla does OTA updates and sees it's car as a platform, at least in my perspective. Software is all i know and they don't understand software yet. Softwares lives, unsupported software is dead. I don't think that they are completely missing the electric car trend. They are being cautious, but everybody is at least getting it's feet wet. I hope they can then "just" scale their production. I don't think this is enough, but i hope they can turn around quickly enough when this gets serious. But overall the future doesn't look too good. Besides, i don't have the money right now to buy a car (also i don't want to).
- Matthias247 10y ago
  As someone who worked at one of the OEMs in the german automotive industry I can second this. However the big problem is that the complete engineering process that many of those companies have does not allow for any updates and a car platform. The process is mostly: You write dozens of specifications for specific components of a car and then get contracts with external suppliers that develop and produce those. After the development cycle for a specific model is over (~3-4years) all these components have been integrated into a complete car that gets sold. When the next development cycle starts basically everything is done from the beginning, since the components may be developed and produced by completely different suppliers. So no chance to update anything, since the component might have not only different hardware, but also completely different software - even though it might look the same from user perspective. One way to solve this would be to develop more software and components in-house in order to continuously improve them. But as this is against the established engineering process it will only be very slowly introduced - if at all. In addition to that these companies mostly don't understand software (and software development), so the results won't be great in the beginning.
maxxxxx 10y ago
I have been around for long enough to see how the German car industry reacted to safety belts, crash safety requirements, catalytic filters and tighter emission rules. Every time they claimed that it would hurt business and cost jobs. But they did perfectly fine or even used the new features as selling point eventually. It's pretty safe to ignore objections from industry. Most of the time they just don't want to adapt and keep doing business as usual.
- ams6110 10y ago
  Um, the Germans invented and pioneered all those safety things. Mercedes had crumple zones and collapsible steering columns in the 1960s. They were among the first with seat belts as standard, ditto airbags. They probably did object to the emissions stuff because that reduced performance.
garyclarke27 10y ago
Problem I think is still range. Tesla model S is no doubt a great, albeit very expensive, car, but it's real world range on European motorways, is still pathetic. At 100 mph, range is is measly 100 miles, my BMW 535d does 500 miles at this speed, even in the UK averaging 110 mph is quite common, when not too busy. In Germany one regularly sees cars travelling at 140+ mph for long stretches, which would be impossible for a Tesla.
- deleted 10y ago
  [deleted]
- greglindahl 10y ago
  What fraction of the luxury car market is in places with 100mph speed limits?
  - kuschku 10y ago
    100% of Germany?
    - petre 10y ago
      Germany doesn't have speed limits on most motorways. They have the 20+ minute stau instead. Otherwise the speed limit on most of Europe's motorways is 130 km/h.
- macns 10y ago
  At 100 mph, range is is measly 100 miles Where did you get those numbers? Tesla's range calculator claims different[1]. Can you also point to a similar calculator from BMW? All I found is for electric; why is there not one for gas fueled cars? EDIT: forgot the link[1] https://www.tesla.com/en_EU/models?redirect=no#range-calculator https://www.tesla.com/en_EU/models?redirect=no#range-calcula...
  - kuschku 10y ago
    The calculator doesn’t even allow setting the value to 100mph, so it can’t claim different?
julianpye 10y ago
I worked together with many Japanese CE companies during the transition to MP3. At first I was surprised why they were so slow to adapt and were happy to work with the music industry who tried to ban unprotected MP3s and planned to sell MP3s for $5. It went against everything that consumers wanted at the time. But... once you saw that these companies employed so many terrific engineers who could build tiny miniaturized drives for tape decks, laser pickups that could withstand vibrations, etc... it was understandable. All these engineers, of which many were in their 50s were about to lose their value and their expertise. The company tried to retrain quite a few of them to S/W engineering. It was heartbreaking how ashamed many of them were about their struggles. The German ethos is quite similar to Japan. A prime responsibility is employment and valuing their workforce. That is why they are so fearful of a change in the entire eco-system of the internal combustion engine.
- Gibbon1 10y ago
  Reminds me of a two pictures a guy took to document his toys for his renters insurance. In 2000 he had twelve electronic devices, in 2010 he had six. Half the devices had been rolled into his smart phone.
- woodpanel 10y ago
  German here and no offense taken, but: What are your grounds for assuming that it is a nation's work ethos that is keeping companies from innovating? How is a multinational's German work ethos keeping it's Indian or US-American employees from innovating? Why aren't German Ford-Workers failing in Germany because of their american work ethos? It is a rather cajoling prejudice. But in my experience of working in big multinational companies (DAX or DJI enterprises) change isn't prohibited by management's guilt or a society's taboo of layoffs. Instead it's the sheer number of employees, responsibilities and added layers of business-structure. What's adding to the complexity of business structure is that with every country it operates in, new regulations and country specifics are to be dealt with. No new merger or acquisition will result in equilibrium of efficiency. You may have to - out of the most ridiculous reasons - work with a team that's located in another company, city or time-zone - or complete different culture, which means more overhead. I think this work ethos cliche stems from a misconception. Yes, in Japan as in Germany old employees are guarded like infants. But that's often due to the old contracts that they got [1]. Those were granted seldomly since. Instead most of these companies (or rather their work pipelines) are filled with temp staff, external contractors and suppliers. There is no "ethos" protecting those people from being fired immediately. [1] Contracts of war-torn countries. Contracts of countries that just years before believed that they would rule the world and now had to beg for glimpses of sovereignty. Rebuilding the economy was more than about jobs. It was about the gaining back sovereignty. That's why firing those 50 year olds is more expensive than keeping them. And thats why the companies at the same time try to dodge the necessity of having to employ someone just because some external market demand.
B1FF_PSUVM 10y ago
> "counting on the idea that the government has no interest in creating a crisis" Yeah, that's what they've been doing with the software cheats in VW cars (aka Dieselgate). It's a total shame for the undeniably brilliant German engineering, and they're handling it - collectively - by pretending it did not happen. The silence is deafening. I doubt it will profit them in the long range.
- petre 10y ago
  Well at least they got busted for it overseas. I won't be buying a VW anytime soon.
Animats 10y ago
VW made a bad bet on bad Diesel technology, and Toyota is making a bad bet on hydrogen technology. (The Toyota Mirai hydrogen-powered car, at California Toyota dealers now.[1] As of September 29, 2016, 641 cars have been sold. $57,500, including three years of liquid hydrogen.) The German car companies have a problem. They have all that investment in the technology of making precision power machinery. But electric motors just aren't that complicated mechanically. Their edge over China disappears. GM seems to get it. Chevrolet is shipping Chevy Bolts to dealers right now. [1] https://ssl.toyota.com/mirai/fcv.html https://ssl.toyota.com/mirai/fcv.html
- kuschku 10y ago
  > GM seems to get it. Chevrolet is shipping Chevy Bolts to dealers right now. All the German car makers are also shipping electric versions of their cars, just no one wants an electric Golf or up!. > They have all that investment in the technology of making precision power machinery. But electric motors just aren't that complicated mechanically. Their edge over China disappears. This is something that can be combined with a lot of other tech – there’s so much technology that can be precision-produced.
  - spaceflunky 10y ago
    > just no one wants an electric Golf Speak for yourself. I have 28k miles on my e-Golf and I think it's a great car! The problem is most people are shocked SHOCKED, when I tell that it's fully electric. They've never heard of such a thing until I told them because VW doesn't actually want people to buy the e-Golf, not the other way around. I still have yet to see an extensive tv or billboard campaign for the e-Golf. It's a compliance car and VW is only selling it because they have to. Meanwhile, I'm enjoying my perfectly capable and affordable electric car.
    - kuschku 10y ago
      It’s what, 20%? 30%? 40%? more expensive than the normal version. I’m not sure that the market for that exists.
wallace_f 10y ago
I know HN has a large fanbase of Tesla and Elon Musk, but yet I'm still surprised to see no one address the problem of the supply side of renewables before moving towards a larger consumer base of electric cars. I would be a very happy man to be able to own a Tesla Model S, but gasoline just has some advantages, especially so if we still are powering the majority of our grid with fossil fuels: 1) it has extremely high energy density relative to lithium ion batteries, 2) IC technology is very well-developed, 3) it is low cost in the near-term, and 4) no energy loss through transmission over the grid. Depending on where you live, most of the juice you put in your Tesla (or other EV) is generated by fossil fuels, anyways. It seems to me that we're putting the cart before the horse. We need to solve the problem of powering our grid with renewables first before we should pressure the car makers out of economic equilibrium.
- greglindahl 10y ago
  How about people with both an electric car and solar panels? How about people who pay for carbon offsets and own an electric car? Or people who voted for renewables minimums and own an electric car? I'm also unsure what you mean by "pressure the car makers out of economic equilibrium"? Are you referring to the economic equilibrium with negative externalities paid for? California started down the path of encouraging electric cars because of smog, which has a large negative effect on LA and the SF Bay area.
  - wallace_f 10y ago
    Like I said, I would be very proud to own a Tesla, and to have resources to send funds towards renewable energy resources. However, while that is great to be able to make those purchases, let's not conflate 2 separate economic choices. I can obviously buy renewable energy certificates without buying an electric car, and I can buy an electric car without buying RECs. The question I posed was: should we get more renewable energy on the grid before forcing EVs onto the market? That is in the context of the article which discusses government influencing public policy -- if made those aforementioned individual choices that's great, I think well of you for doing that. > I'm also unsure what you mean by "pressure the car makers out of economic equilibrium"? No worries. Here is the Wikipedia definition: > In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the values of economic variables will not change So take that and put it in the context of the article. From the article: > The government in Berlin fears that German automobile companies are lagging behind as electric cars pick up speed around the world > The Chancellery and the Economics Ministry have spent years trying to persuade German manufacturers to establish their own joint battery-cell manufacturing facility. Does that make sense? Since the German car manufacturers are for-profit corporations who exist to make profit, their profit-maximizing strategy is to produce at market equilibrium the products which consumers demand. What the article discusses is that they are "lagging behind." You should place your null hypothesis on their products as responding to market forces, not that successful corporations do not produce what their markets demand. You bring up negative externalities, which are a prudent factor to account for, and is a reason why free markets don't always lead to optimal outcomes. So that's a perfect example of a reason to have a government which can effectively regulate, if you care about human welfare and economic prosperity. In this case, is it the right call for the government to force electric cars into the market? There are pros and cons, and it depends on a number of given factors. If our effort is to reduce greenhouse gas emissions, do we produce less or more by switching to electric cars? It's a complex question, but if renewable energy production remains constant, the increased load on the grid will come from fossil fuels, so the answer could actually be more. Counter intiuitive, but generating and transmitting electricity over the grid and storing it in relatively very heavy batteries that most be moved with the vehicle all create inefficiencies. It's not such a simple yes or no question, either. Like you pointed out, residents of LA and SF may wish to effectively relocate their pollution from their respective urban centers to remote areas where energy generation occurs, and that appears to make sense: less people live in remote areas.

116 points by davidiach 10y ago

sickbeard 10y ago

The article makes it sound like electric cars are everywhere and manufacturers are still making gas vehicles.

bluehawk 10y ago
I liken it to the time period when Kodak had made the first digital camera, but allowed other companies to surpass them and eat their breakfast, and now Kodak is bankrupt. The german (and american) auto companies will either need to drastically alter their composition or other companies will take their place.
- mc32 10y ago
  I think it's a somewhat apt comparison in that if the ICE money-making portion does not use those profits to develop good EV alternatives, newcomers can leapfrog them. On the other hand, Kodak was a little different, they feared selling digital would eat into their "film" business. But EV does not eat into the manufacturers' "petro" business because most MFG are not selling fuels. So it's not like they have a perverse incentive is what I'm saying and Kodak suffered from perverse incentives.
  - gyjvdf 10y ago
    It's not about perverse incentives, it's about "the secret sauce". Traditional car manufacturers perfected the ICE and dealership network, while the "secret sauce" of electric cars is batteries and network of charging stations. Practically, GM is right now at a disadvantage relative to Tesla
    - mc32 10y ago
      I don't see much disadvantage. It's not like Tesla is designing and manufacturing the batteries they use all by themselves. Sure, they have input --as Boeing has input w/re GE engines. Given that Tesla will be charging for their networks, it's not an advantage over other charging networks, so overall it'll be a non-issue. Having dealerships does grant the traditional MFGs some advantage but that may erode in the future if dealerships become less necessary in helping the sales of cars (ie. become more on-demand fleets). ICE car MFGs also have _capacity_. Tesla does not have the capacity right now.
      - greglindahl 10y ago
        Tesla designs and manufactures battery packs. GM is on record saying that it took them a long time and a lot of money to develop the battery pack for the Bolt.
        kuschku 10y ago
        Actually, most of that IP belongs to Panasonic, with whom Telsa is cooperating. And German manufacturers have bought access to that IP already. I wouldn’t be surprised if Telsa dies very quickly once the actual EV sales start.
        mc32 10y ago
        Tesla uses Panasonic cells to make their batteries[1]. I'm sure Tesla has some circuitry/electronics to control the cells, but it's not like the key battery technology is all Tesla's. The Gig Factory allows Tesla to ensure they have enough batteries for their car fleet so that they don't suffer from shortages as other MFGs put a demand on suppliers. [1]http://www.greencarreports.com/news/1104609_panasonic-to-build-electric-car-battery-cells-at-tesla-gigafactory-this-year-report http://www.greencarreports.com/news/1104609_panasonic-to-bui...
        dangrossman 10y ago
        GM didn't develop the battery pack for the Bolt. The battery cells, battery pack, charging systems, motors, computers and infotainment systems in the Bolt are all designed and manufactured by LG Chem.
- dx034 10y ago
  All major car manufacturers have plans to introduce EV very soon or have already done so. It's no comparison with cameras or TVs where some companies ignored new technology. The question for car manufacturers is just how fast it will happen. For a company the size of VW it's very risky to go into the new technology too fast if consumers don't want it yet. They still need to produce their current products (and make money doing so). Finding a way to shift towards EV while maintaining economies of scale is the crucial part here. Tesla doesn't have that problem because they don't have the legacy. But they also couldn't produce 10mln vehicles/year within a few years and are not yet profitable. I actually think that companies have realized how dramatic the shift will be. But EVs are still just a niche and will likely not gain traction before 2020 or so. Reducing capacity of ICE vehicles before EVs really take of is too risky. However, having EV models ready means you can likely shift most production within a few years and probably produce at very low costs. In addition to that, brand reputation is very important when it comes to cars. Especially regarding security. Tesla has a great record but many Chinese producers do not. That's why you hardly find any Chinese cars on European roads. This will probably not change with EVs, people would still prefer a Toyota/VW/BMW to a lesser known Chinese brand (even if there's no evidence to back that up).
- ams6110 10y ago
  Except that digital photography was better in almost every way than film-and-print photography. Electric cars have some advantages but are (at present) woefully inadequate in other ways. I don't think the comparison is the same.
  - iammyIP 10y ago
    Early digital cameras were worse in almost every way, picture resolution, noise, color. The only thing they had going for them was that you could quickly look at the pictures on a computer screen and didn't need to buy film rolls. It took a while until digital was somewhat comparable with analog film for professional use. Quite similar to the electric car situation now actually.

coldcode 10y ago

Subsidies in the US will probably vanish next year as well, but I think the benefits still make them viable.

greglindahl 10y ago
Subsidies for fossil fuels will vanish?! Bold prediction. /s

breatheoften 10y ago

Quite interesting -- German government wants to keep the valuable parts of future manufacturing processes in Germany whereas the companies don't care where their future manufacturing value comes from and will remain more interested in optimizing for their current revenue stream for some amount of time in terms of how they deal with the German governments. That revenue will eventually disappear though ... I wonder if they could put a hefty tax on the gas powered cars but offer a rebate for that tax for every electric car sold that is proportionate to the amount of the electric car value that was domestically produced. Investment in domestic electric car production would then become a direct mechanism for preserving their existing revenue stream while forcing them to set themselves up for domestic production of electric cars in the future ...

tanto 10y ago
I am pretty sure that would violate a lot of international trade agreements.
- Brakenshire 10y ago
  Unfortunately China seems to be engaged in exactly the same sort of behaviour. 1 in 7 cars has to be electric (fair enough), but the electric car has to be manufactured by a company owned by Chinese citizens. It's a pity that Donald Trump is going to dismantle the multilateral attempts to make China play by the same rules as everyone else.
  - wavefunction 10y ago
    If that's all the TPP were about, it wouldn't be so dreadful or maligned by so many people. That would be something I could support.
    - Brakenshire 10y ago
      Yes, fair enough, there were a lot of problems with it. The issue is I think Trump is opposed not just to the detail of the proposed deal, but to multilateral deals in general, presumably because he feels it means the US is bound by globalist institutions. But the US or Europe, or Japan, or any of the other countries involved in these deals, cannot accomplish a goal of preventing something like this on their own. They have to join together, and joining together means being bound by jointly created rules. In order to meet these goals, the US has to accept a role not just as a leader but also as one member among many (a role commensurate with a population and economy perhaps 15-30% of the total rather than as a hegemon talking to a minor ally).

gumby 10y ago

The key to electric vehicles is a shift to buy-by-the-ride (since you can get one that will take you wherever you want without worrying about range issues). That shift is also bad for most of the existing car manufacturers

oblio 10y ago
This assumes most people don't want car ownership.
- XorNot 10y ago
  I suspect most people don't? Unlike many things you can own, owning a car is a visible blackhole of money. The problem with changing that dynamic is a continuance of convenience: can a clean vehicle be made available to me with nearly the same amount of notice?
  - mudetroit 10y ago
    > owning a car is a visible blackhole of money All shared vehicles do is distribute that same cost though. The owners of the shared fleets aren't going to no recoup those costs. If anything it simply makes the lost money less visible, but still equally present. (Feel free to argue that the actual costs are less with more sharing)
    - gumby 10y ago
      If you mean "shared vehicles" by the Uber/Lyft model, I agree. If you mean "shared" as in a fleet, well, Daimler Benz probably has a better balance sheet than you do, and can borrow at prime. I feel the same way about housing stock, BTW; the US model of home ownership only works because it is heavily subsidized by the federal government as a longstanding matter of policy (not counting the tax deduction for interest which simply preys upon people's financial ignorance). Almost everyone in the US would be better off it a set of large companies/REITs owned the majority of the housing stock and most people rented.
- 10y ago

wslh 10y ago

Too big to compete.

rplst8 10y ago

I wonder if anyone has thoroughly considered the impact of tens of thousands of gas stations closing their doors as the demand for petroleum goes down.

knieveltech 10y ago
That may not happen. According to various sources fuel sales are not where gas stations make their money. On average they are only bringing in 3 cents of profit on a gallon of fuel. They sell fuel primarily to attract customers and then make their profits on sales of snacks, cigarettes, lottery tickets, and the like. Disrupting the cycle of impulse buys by individuals lured to the store to buy fuel is likely to have a measurable impact on business, but it is unclear if this would drive any/some/most/all convenience stores out of business.
- bjelkeman-again 10y ago
  Since I got an electric car I only go to an old gas station to wash the car. There may be ways for them to stay in business, but I still think it will be disruptive for many.
  - greglindahl 10y ago
    Occasionally I need to clean my windshield or put some air in my tires... maybe twice a year? I don't think that's going to help the gas stations stay in business.
- solatic 10y ago
  Right, probably gas stations will either add charging capability in a supercharger fashion, or they'll just turn into convenience stores.
  - cesis 10y ago
    But who would be willing to spend a couple of hours in a gas station?

GoToRO 10y ago

Ever wondered why electric cars from established manufacturers are all ugly? that's why: they develop the technology but they don't want people to buy them yet. They are too good for the customer and they would not be able to make money off of them, after the initial sale.

plandis 10y ago
Teslas Model X is ugly? The BMW i8 is ugly? I'd be very curious to see what a none ugly car is in your opinion.
- andrewflnr 10y ago
  Tesla doesn't count as an established manufacturer in this context. And the i8 is a hybrid, not a pure electric car. In any case, I don't think the original statement was meant to be absolute, just pointing out a trend.
- GoToRO 10y ago
  BMW i3. Just look at that line under the window of the rear door. It's like the designer forgot how to draw for a split second and he never reviewed the design. Oh, and I never understood why you have to change the design for an electric car? Just use the same design. The electric motor and batteries save space, they don't need more. https://upload.wikimedia.org/wikipedia/commons/thumb/8/83/BMW_i3_(19939421151).jpg/220px-BMW_i3_(19939421151).jpg https://upload.wikimedia.org/wikipedia/commons/thumb/8/83/BM...
  - camiller 10y ago
    sometimes for improved aerodynamics, for example the ugly headlights on the Nissan Leaf break up airflow along the side of the car so that the drag caused by the side mirrors is reduced.
  - robterrell 10y ago
    I agree with the GP and parent, and yes the i3 is awful (i3 driver here), but there are many EVs now that look like normal cars: Fiat 500e, VW Golf, Kia Soul, various Fords.

mathiasben 10y ago

Are there any German start-ups building an electric car?

kuschku 10y ago
No startups, but there’s other companies that have never been involved with cars before that are now building electric vehicles. Deutsche Post DHL (Germany’s federal mail service) is now building their delivery vehicles themselves, so they can get electric ones quickly. http://www.spiegel.de/spiegel/deutsche-post-baut-elektro-auto-blamage-fuer-die-deutschen-autobauer-a-1107782.html http://www.spiegel.de/spiegel/deutsche-post-baut-elektro-aut...
usrusr 10y ago
Nothing beyond the funny level. Occasionally, people who somehow got their hands on the naming rights to a vintage brand long dead are using "electric!" as a hand-wavey excuse as to how they will reconstitute the name to its former glory, but those rarely get to their second concept rendering. And then there are probably some leftovers from the era of approaching EV from the bottom, with minimalistic vehicles that are more in line with electric assist velomobiles than by electrifying big, heavy cars. But those are more established niche than startup.

digikata 10y ago

It's interesting that the article implies that the German manufactures are so intent on keeping the 'value add' from the internal combustion motors. For the electric vehicles, value add is shifting, and if you look at Elon Musks strategies with Tesla, he's made a bet that it's shifting a significant portion to the power generation, and batteries.

rsync 10y ago
"It's interesting that the article implies that the German manufactures are so intent on keeping the 'value add' from the internal combustion motors." Enjoy that. Enjoy that right into the grave. I bought two successive Audi A8s ... and then I saw a car that had derived AWD from two different motors and had a ridiculously low center of gravity due to the "skateboard design" and had faster acceleration than a supercar. Since that moment, German auto manufacturers have missed 2 new car (flagship cars, even) sales from this consumer, and counting ...
- BoorishBears 10y ago
  Your anecdotal experience doesn't really mean much. I'm sure short term Audi is of the opinion that if you'd settle for a Tesla's definition of luxury and refinement from their flagship, you weren't really their target to begin with. Longer term they probably realize they can't depend on Teslas never getting better and will need to compete or other luxury brands will eat up the segment (and probably wish they had just "done it right" for luxury EVs first) Audi also probably comes from the school of thought if someone wants supercar acceleration, they'll get a supercar (or a proper S-line)

LeanderK 10y ago

German here. My Problem with the German Car Industry is that they still see the car as a product, not as a platform. A car is a major investment and one that sticks to me for a while. I must rely on the car manufactures to continuously push updates and improve the lane-keeping assistant etc. (Maybe even the style of the UI?). I don't see this happening, at all. The lane keeping assistants get shipped and then forgotten, everybody is working on a new integration that is maybe coming out in years (crazy to think about if your only used to software-cycles). I don't want to be in the situation that i can't pair my smartphone with my car next year because mercedes doesn't bother updating it's software. Tesla does OTA updates and sees it's car as a platform, at least in my perspective. Software is all i know and they don't understand software yet. Softwares lives, unsupported software is dead. I don't think that they are completely missing the electric car trend. They are being cautious, but everybody is at least getting it's feet wet. I hope they can then "just" scale their production. I don't think this is enough, but i hope they can turn around quickly enough when this gets serious. But overall the future doesn't look too good. Besides, i don't have the money right now to buy a car (also i don't want to).

Matthias247 10y ago
As someone who worked at one of the OEMs in the german automotive industry I can second this. However the big problem is that the complete engineering process that many of those companies have does not allow for any updates and a car platform. The process is mostly: You write dozens of specifications for specific components of a car and then get contracts with external suppliers that develop and produce those. After the development cycle for a specific model is over (~3-4years) all these components have been integrated into a complete car that gets sold. When the next development cycle starts basically everything is done from the beginning, since the components may be developed and produced by completely different suppliers. So no chance to update anything, since the component might have not only different hardware, but also completely different software - even though it might look the same from user perspective. One way to solve this would be to develop more software and components in-house in order to continuously improve them. But as this is against the established engineering process it will only be very slowly introduced - if at all. In addition to that these companies mostly don't understand software (and software development), so the results won't be great in the beginning.

maxxxxx 10y ago

I have been around for long enough to see how the German car industry reacted to safety belts, crash safety requirements, catalytic filters and tighter emission rules. Every time they claimed that it would hurt business and cost jobs. But they did perfectly fine or even used the new features as selling point eventually. It's pretty safe to ignore objections from industry. Most of the time they just don't want to adapt and keep doing business as usual.

ams6110 10y ago
Um, the Germans invented and pioneered all those safety things. Mercedes had crumple zones and collapsible steering columns in the 1960s. They were among the first with seat belts as standard, ditto airbags. They probably did object to the emissions stuff because that reduced performance.

garyclarke27 10y ago

Problem I think is still range. Tesla model S is no doubt a great, albeit very expensive, car, but it's real world range on European motorways, is still pathetic. At 100 mph, range is is measly 100 miles, my BMW 535d does 500 miles at this speed, even in the UK averaging 110 mph is quite common, when not too busy. In Germany one regularly sees cars travelling at 140+ mph for long stretches, which would be impossible for a Tesla.

deleted 10y ago
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greglindahl 10y ago
What fraction of the luxury car market is in places with 100mph speed limits?
- kuschku 10y ago
  100% of Germany?
  - petre 10y ago
    Germany doesn't have speed limits on most motorways. They have the 20+ minute stau instead. Otherwise the speed limit on most of Europe's motorways is 130 km/h.
macns 10y ago
At 100 mph, range is is measly 100 miles Where did you get those numbers? Tesla's range calculator claims different[1]. Can you also point to a similar calculator from BMW? All I found is for electric; why is there not one for gas fueled cars? EDIT: forgot the link[1] https://www.tesla.com/en_EU/models?redirect=no#range-calculator https://www.tesla.com/en_EU/models?redirect=no#range-calcula...
- kuschku 10y ago
  The calculator doesn’t even allow setting the value to 100mph, so it can’t claim different?

julianpye 10y ago

I worked together with many Japanese CE companies during the transition to MP3. At first I was surprised why they were so slow to adapt and were happy to work with the music industry who tried to ban unprotected MP3s and planned to sell MP3s for $5. It went against everything that consumers wanted at the time. But... once you saw that these companies employed so many terrific engineers who could build tiny miniaturized drives for tape decks, laser pickups that could withstand vibrations, etc... it was understandable. All these engineers, of which many were in their 50s were about to lose their value and their expertise. The company tried to retrain quite a few of them to S/W engineering. It was heartbreaking how ashamed many of them were about their struggles. The German ethos is quite similar to Japan. A prime responsibility is employment and valuing their workforce. That is why they are so fearful of a change in the entire eco-system of the internal combustion engine.

Gibbon1 10y ago
Reminds me of a two pictures a guy took to document his toys for his renters insurance. In 2000 he had twelve electronic devices, in 2010 he had six. Half the devices had been rolled into his smart phone.
woodpanel 10y ago
German here and no offense taken, but: What are your grounds for assuming that it is a nation's work ethos that is keeping companies from innovating? How is a multinational's German work ethos keeping it's Indian or US-American employees from innovating? Why aren't German Ford-Workers failing in Germany because of their american work ethos? It is a rather cajoling prejudice. But in my experience of working in big multinational companies (DAX or DJI enterprises) change isn't prohibited by management's guilt or a society's taboo of layoffs. Instead it's the sheer number of employees, responsibilities and added layers of business-structure. What's adding to the complexity of business structure is that with every country it operates in, new regulations and country specifics are to be dealt with. No new merger or acquisition will result in equilibrium of efficiency. You may have to - out of the most ridiculous reasons - work with a team that's located in another company, city or time-zone - or complete different culture, which means more overhead. I think this work ethos cliche stems from a misconception. Yes, in Japan as in Germany old employees are guarded like infants. But that's often due to the old contracts that they got [1]. Those were granted seldomly since. Instead most of these companies (or rather their work pipelines) are filled with temp staff, external contractors and suppliers. There is no "ethos" protecting those people from being fired immediately. [1] Contracts of war-torn countries. Contracts of countries that just years before believed that they would rule the world and now had to beg for glimpses of sovereignty. Rebuilding the economy was more than about jobs. It was about the gaining back sovereignty. That's why firing those 50 year olds is more expensive than keeping them. And thats why the companies at the same time try to dodge the necessity of having to employ someone just because some external market demand.

B1FF_PSUVM 10y ago

> "counting on the idea that the government has no interest in creating a crisis" Yeah, that's what they've been doing with the software cheats in VW cars (aka Dieselgate). It's a total shame for the undeniably brilliant German engineering, and they're handling it - collectively - by pretending it did not happen. The silence is deafening. I doubt it will profit them in the long range.

petre 10y ago
Well at least they got busted for it overseas. I won't be buying a VW anytime soon.

Animats 10y ago

VW made a bad bet on bad Diesel technology, and Toyota is making a bad bet on hydrogen technology. (The Toyota Mirai hydrogen-powered car, at California Toyota dealers now.[1] As of September 29, 2016, 641 cars have been sold. $57,500, including three years of liquid hydrogen.) The German car companies have a problem. They have all that investment in the technology of making precision power machinery. But electric motors just aren't that complicated mechanically. Their edge over China disappears. GM seems to get it. Chevrolet is shipping Chevy Bolts to dealers right now. [1] https://ssl.toyota.com/mirai/fcv.html https://ssl.toyota.com/mirai/fcv.html

kuschku 10y ago
> GM seems to get it. Chevrolet is shipping Chevy Bolts to dealers right now. All the German car makers are also shipping electric versions of their cars, just no one wants an electric Golf or up!. > They have all that investment in the technology of making precision power machinery. But electric motors just aren't that complicated mechanically. Their edge over China disappears. This is something that can be combined with a lot of other tech – there’s so much technology that can be precision-produced.
- spaceflunky 10y ago
  > just no one wants an electric Golf Speak for yourself. I have 28k miles on my e-Golf and I think it's a great car! The problem is most people are shocked SHOCKED, when I tell that it's fully electric. They've never heard of such a thing until I told them because VW doesn't actually want people to buy the e-Golf, not the other way around. I still have yet to see an extensive tv or billboard campaign for the e-Golf. It's a compliance car and VW is only selling it because they have to. Meanwhile, I'm enjoying my perfectly capable and affordable electric car.
  - kuschku 10y ago
    It’s what, 20%? 30%? 40%? more expensive than the normal version. I’m not sure that the market for that exists.

wallace_f 10y ago

I know HN has a large fanbase of Tesla and Elon Musk, but yet I'm still surprised to see no one address the problem of the supply side of renewables before moving towards a larger consumer base of electric cars. I would be a very happy man to be able to own a Tesla Model S, but gasoline just has some advantages, especially so if we still are powering the majority of our grid with fossil fuels: 1) it has extremely high energy density relative to lithium ion batteries, 2) IC technology is very well-developed, 3) it is low cost in the near-term, and 4) no energy loss through transmission over the grid. Depending on where you live, most of the juice you put in your Tesla (or other EV) is generated by fossil fuels, anyways. It seems to me that we're putting the cart before the horse. We need to solve the problem of powering our grid with renewables first before we should pressure the car makers out of economic equilibrium.

greglindahl 10y ago
How about people with both an electric car and solar panels? How about people who pay for carbon offsets and own an electric car? Or people who voted for renewables minimums and own an electric car? I'm also unsure what you mean by "pressure the car makers out of economic equilibrium"? Are you referring to the economic equilibrium with negative externalities paid for? California started down the path of encouraging electric cars because of smog, which has a large negative effect on LA and the SF Bay area.
- wallace_f 10y ago
  Like I said, I would be very proud to own a Tesla, and to have resources to send funds towards renewable energy resources. However, while that is great to be able to make those purchases, let's not conflate 2 separate economic choices. I can obviously buy renewable energy certificates without buying an electric car, and I can buy an electric car without buying RECs. The question I posed was: should we get more renewable energy on the grid before forcing EVs onto the market? That is in the context of the article which discusses government influencing public policy -- if made those aforementioned individual choices that's great, I think well of you for doing that. > I'm also unsure what you mean by "pressure the car makers out of economic equilibrium"? No worries. Here is the Wikipedia definition: > In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the values of economic variables will not change So take that and put it in the context of the article. From the article: > The government in Berlin fears that German automobile companies are lagging behind as electric cars pick up speed around the world > The Chancellery and the Economics Ministry have spent years trying to persuade German manufacturers to establish their own joint battery-cell manufacturing facility. Does that make sense? Since the German car manufacturers are for-profit corporations who exist to make profit, their profit-maximizing strategy is to produce at market equilibrium the products which consumers demand. What the article discusses is that they are "lagging behind." You should place your null hypothesis on their products as responding to market forces, not that successful corporations do not produce what their markets demand. You bring up negative externalities, which are a prudent factor to account for, and is a reason why free markets don't always lead to optimal outcomes. So that's a perfect example of a reason to have a government which can effectively regulate, if you care about human welfare and economic prosperity. In this case, is it the right call for the government to force electric cars into the market? There are pros and cons, and it depends on a number of given factors. If our effort is to reduce greenhouse gas emissions, do we produce less or more by switching to electric cars? It's a complex question, but if renewable energy production remains constant, the increased load on the grid will come from fossil fuels, so the answer could actually be more. Counter intiuitive, but generating and transmitting electricity over the grid and storing it in relatively very heavy batteries that most be moved with the vehicle all create inefficiencies. It's not such a simple yes or no question, either. Like you pointed out, residents of LA and SF may wish to effectively relocate their pollution from their respective urban centers to remote areas where energy generation occurs, and that appears to make sense: less people live in remote areas.