10 ms·

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

timr 10y ago
Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular. GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term. You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke? (Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].) [1] https://www.gm.com/investors/sales/us-sales-production.html https://www.gm.com/investors/sales/us-sales-production.html [2] https://www.cars.com/articles/top-10-best-selling-cars-february-2017-1420694288140/ https://www.cars.com/articles/top-10-best-selling-cars-febru...
- Robotbeat 10y ago
  The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market. I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.
  - timr 10y ago
    "The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity." You can't push on a string. Consumers buy bigger cars when gas prices are low, and more efficient cars when gas prices are high. It's why Toyota (which has built a brand identity around fuel efficiency) does worse when fuel prices go down. Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics. "Tesla will be perfectly fine on the demand front." I'm sure there's a market. After all, Lamborghini is "perfectly fine on the demand front", too. But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.
    - kbenson 10y ago
      > Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics. Actually, I would say marketing is one of the few things that actually can change economics, since it affects perception. Marketing can make someone think they need a new car when they don't, or that a car is affordable than an alternative when it really isn't (given financing, fuel economy, services, etc which are not always taken into account). People don't make decisions based on reality, they make decisions based on their perception of reality. If you can change that perception, you may change their decisions.
      - timr 10y ago
        You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa. You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on.
        kbenson 10y ago
        > You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa. If I was attempting to make an argument against that, I would have done so. You seem to have mistaken my comment as some rebuttal to your entire argument. I just thought one specific point was interesting, but not entirely correct from my point of view. > You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on. Since you're asking, no, I don't think car companies want to change anything. That doesn't mean they won't be forced to change, and I think being forced to change rarely works out as well as noticing the trends and changing along with, or better yet, slightly in advance of those trends. It's obvious by the change in types of cars bought based on gas prices that gas prices influence buying decisions for many people. But influence does not necessarily mean control. Many factors go into the decision of which car to purchase, electric or not. Fuel cost is but one of those factors. Tesla has shown that there are people that buy based on other decisions, since the price of a Tesla means that fuel costs are basically moot. Luxury, performance and status are all factors that the automakers and intimately familiar with marketing towards and selling to, usually each to varying degrees with different products. That they've left these areas mostly untapped for electric vehicles after Tesla has shown there is a market, since there were 400k+ Model 3 preorders as of roughly a year ago, leaves many people confused, and I don't think it can be entirely explained away by gas prices. That's enough presales a year ago to be on par with yearly Camry sales. GM is obviously doing something to try to tap into this with the Bolt, but that's still one entry and at the low-end.
- chrishacken 10y ago
  Close to 200,000 Prius's are sold each year. While that's no where near the "best selling" car, their Camry (400,000 cars a year), that's substantial.
  - timr 10y ago
    Ford sold 66,000 F-Series pickups in February 2017, alone. Small car sales are declining, across the board. https://www.cars.com/articles/top-10-best-selling-cars-february-2017-1420694288140/ https://www.cars.com/articles/top-10-best-selling-cars-febru...
    - chrishacken 10y ago
      You can't really compare the "F-Series" with a single car. A more accurate comparison would probably be all sedan's with the F-Series. But yes, trucks are on the rise again.
- greglindahl 10y ago
  I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?
  - timr 10y ago
    "I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?" GM already has a crossover line. In fact, it has a bunch, and they sell really well: http://www.gmfleet.com/vehicle-search/by-body-style/suvs-crossover.html http://www.gmfleet.com/vehicle-search/by-body-style/suvs-cro... Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.
    - chc 10y ago
      > Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait. Whoa — you have to realize what you just did there, right? This is a massive shifting of the goalposts from what you said Tesla's problem was earlier, which is that SUVs and light trucks are what sells. Anyway, I don't think most people with SUVs actually go through a full tank of gas a day, so having completely equal range doesn't seem like that big an issue. So now it sounds like Tesla's major problem is that they're competing with the Range Rover rather than the Equinox.
    - astrange 10y ago
      How large are those cars? No wonder traffic is so bad.
- vvanders 10y ago
  You're getting downvoted because you missed the argument that I presented. It's not about what market segment that sells, it's that dealers have no incentives to sell electric vehicles since there's no margin on services and maintenance.
  - caminante 10y ago
    (Assuming non-material edits by the parent,) IMHO, he didn't miss your argument. The topic's GM and GM dealerships. You said GM has to fight the GM dealerships due to conflicting interests, whereas, he's saying GM and the GM dealerships don't want "non" mass-markets customers to begin with (i.e. no conflict).
- hockley 10y ago
  This kind of proves the thesis. EV is a hobby for the legacy guys that competes with much more powerful (by revenue) business units in the company. It's like expecting Kodak to compete and win with their own digital camera.
  - sremani 10y ago
    Every one does not start with a blank slate, that is a luxury Tesla has as an upstart. GM is "saved" to save jobs by US government. GM has paid back, but its operational reality depends on selling "profit-making" vehicles, which are SUVs and Trucks, pair it with cheap gas prices, there is a strategy for GM to be profitable. Tesla on the other hand, lives and dies by its EV performance, and their approach to the market at higher end kept them alive along with loans from US with few strings attached (for various reasons). Tesla did not "break through" any thing. If any thing, existence of BoltEV and Volt does demonstrate couple of things, a legacy car company when there are profits are going to turn on dime and make shit ton of EVs, if that is what market wants. Tesla has brand recognition behind it, but again as some one pointed out when the market for EVs in high demand and profitable, from BMW to GM, you will have them roll EVs in millions.
- mikeash 10y ago
  EVs are unpopular because cheap ones aren't very good yet. You have to choose between almost unusably short range, or a very high price. Something like the LEAF is affordable, but only useful as a city car. A Model S is a great car, but extremely expensive. The cost is coming down. Chevy is now selling the Bolt, which has pretty good range, for under $40,000. Tesla's Model 3 is coming soon. More will follow. The high cost comes from the batteries, which are getting cheaper all the time. I'm not sure that "unpopular" is quite the right word. A lot of people really like Teslas. Most of them can't afford them. The desire is there, the means is not (yet). It's smart to invest in what sells right now... until things change and that's no longer what sells. GM is investing in what sells today. Tesla is investing in what might sell in a decade or two. Tesla's approach isn't certain but if they're right then GM is going to relive their experience of the 1970s where they take way too long to react to a changing market.
  - paganel 10y ago
    I've had the exact same discussion with somebody else today on /r/futurology, more exactly I told him that "under $40,000" it's still pretty damn expensive for a small hatchback. My 1.4l European small hatchback costs around 13,000 euros new, you just can't expect people to not take into consideration the huge difference between the 2 prices.
    - yawz 10y ago
      I'm not sure if this year all figures are the same, but when I was car-shopping in November, Colorado state granted up to $6,000 in tax credits for new EVs. Federal tax credit was $7,500. And on top of that, Nissan was adding their own discount for their new Leafs. So, nobody pays the full price of an EV at the moment. You can currently buy 1-2 year-old, certified Nissan Leafs for less than $13,000.
      - rootusrootus 10y ago
        With the number of reservations Tesla has for the Model 3, we are going to find out rather quickly what effect losing the big tax credits has on electric adoption. Maybe that is hidden somewhat by the leasing -- buying an EV right now is foolish, leasing is a much better choice. Even the Model S is going through the auctions at half MSRP or sometimes less, and less prestigous cars like the 500E are auctioning at 4K or so. Anybody who purchased on outright a few years ago is going to be extremely upside down for a while longer.
- sremani 10y ago
  I am an Volt owner and I approve your comments. GM with BoltEV and Volt has demonstrated they are up with the EV tech, did they make miscues? Yes, no doubt. But the market needs to educated and for now Tesla is the Apple of Cars and the only brand Customers are willing to be educated from. Nissan Leaf had a decent start, but they cut too many corners, and I do not recommend Leaf. i3 is too limited. Even though I whole-heatedly recommend Volt esp. Gen2. The market is not ready yet, and GM is doing what an established Car company does. Tesla's life depends on pushing EVs, so they are who they are.
- erikpukinskis 10y ago
  > GM is investing in what sells, and right now (i.e. for the last decade or two) Yup. They haven't adopted the Andy Grove/Bill Gates/Larry Ellison philosophy of "Only The Paranoid Survive," yet. They are banking on the expectation that if/when consumer interest spikes they'll be able to use their influence to jump to the front of the line, like they did with past ICE competitors. The question is... will the electric car market be more like the ICE market where paranoia is (apparently) unnecessary, or the semiconductor/software markets where it is (apparently) quite important.

timr 10y ago

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular. GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term. You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke? (Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].) [1] https://www.gm.com/investors/sales/us-sales-production.html https://www.gm.com/investors/sales/us-sales-production.html [2] https://www.cars.com/articles/top-10-best-selling-cars-february-2017-1420694288140/ https://www.cars.com/articles/top-10-best-selling-cars-febru...

Robotbeat 10y ago
The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market. I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.
- timr 10y ago
  "The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity." You can't push on a string. Consumers buy bigger cars when gas prices are low, and more efficient cars when gas prices are high. It's why Toyota (which has built a brand identity around fuel efficiency) does worse when fuel prices go down. Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics. "Tesla will be perfectly fine on the demand front." I'm sure there's a market. After all, Lamborghini is "perfectly fine on the demand front", too. But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.
  - kbenson 10y ago
    > Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics. Actually, I would say marketing is one of the few things that actually can change economics, since it affects perception. Marketing can make someone think they need a new car when they don't, or that a car is affordable than an alternative when it really isn't (given financing, fuel economy, services, etc which are not always taken into account). People don't make decisions based on reality, they make decisions based on their perception of reality. If you can change that perception, you may change their decisions.
    - timr 10y ago
      You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa. You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on.
      - kbenson 10y ago
        > You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa. If I was attempting to make an argument against that, I would have done so. You seem to have mistaken my comment as some rebuttal to your entire argument. I just thought one specific point was interesting, but not entirely correct from my point of view. > You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on. Since you're asking, no, I don't think car companies want to change anything. That doesn't mean they won't be forced to change, and I think being forced to change rarely works out as well as noticing the trends and changing along with, or better yet, slightly in advance of those trends. It's obvious by the change in types of cars bought based on gas prices that gas prices influence buying decisions for many people. But influence does not necessarily mean control. Many factors go into the decision of which car to purchase, electric or not. Fuel cost is but one of those factors. Tesla has shown that there are people that buy based on other decisions, since the price of a Tesla means that fuel costs are basically moot. Luxury, performance and status are all factors that the automakers and intimately familiar with marketing towards and selling to, usually each to varying degrees with different products. That they've left these areas mostly untapped for electric vehicles after Tesla has shown there is a market, since there were 400k+ Model 3 preorders as of roughly a year ago, leaves many people confused, and I don't think it can be entirely explained away by gas prices. That's enough presales a year ago to be on par with yearly Camry sales. GM is obviously doing something to try to tap into this with the Bolt, but that's still one entry and at the low-end.
chrishacken 10y ago
Close to 200,000 Prius's are sold each year. While that's no where near the "best selling" car, their Camry (400,000 cars a year), that's substantial.
- timr 10y ago
  Ford sold 66,000 F-Series pickups in February 2017, alone. Small car sales are declining, across the board. https://www.cars.com/articles/top-10-best-selling-cars-february-2017-1420694288140/ https://www.cars.com/articles/top-10-best-selling-cars-febru...
  - chrishacken 10y ago
    You can't really compare the "F-Series" with a single car. A more accurate comparison would probably be all sedan's with the F-Series. But yes, trucks are on the rise again.
greglindahl 10y ago
I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?
- timr 10y ago
  "I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?" GM already has a crossover line. In fact, it has a bunch, and they sell really well: http://www.gmfleet.com/vehicle-search/by-body-style/suvs-crossover.html http://www.gmfleet.com/vehicle-search/by-body-style/suvs-cro... Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.
  - chc 10y ago
    > Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait. Whoa — you have to realize what you just did there, right? This is a massive shifting of the goalposts from what you said Tesla's problem was earlier, which is that SUVs and light trucks are what sells. Anyway, I don't think most people with SUVs actually go through a full tank of gas a day, so having completely equal range doesn't seem like that big an issue. So now it sounds like Tesla's major problem is that they're competing with the Range Rover rather than the Equinox.
  - astrange 10y ago
    How large are those cars? No wonder traffic is so bad.
vvanders 10y ago
You're getting downvoted because you missed the argument that I presented. It's not about what market segment that sells, it's that dealers have no incentives to sell electric vehicles since there's no margin on services and maintenance.
- caminante 10y ago
  (Assuming non-material edits by the parent,) IMHO, he didn't miss your argument. The topic's GM and GM dealerships. You said GM has to fight the GM dealerships due to conflicting interests, whereas, he's saying GM and the GM dealerships don't want "non" mass-markets customers to begin with (i.e. no conflict).
hockley 10y ago
This kind of proves the thesis. EV is a hobby for the legacy guys that competes with much more powerful (by revenue) business units in the company. It's like expecting Kodak to compete and win with their own digital camera.
- sremani 10y ago
  Every one does not start with a blank slate, that is a luxury Tesla has as an upstart. GM is "saved" to save jobs by US government. GM has paid back, but its operational reality depends on selling "profit-making" vehicles, which are SUVs and Trucks, pair it with cheap gas prices, there is a strategy for GM to be profitable. Tesla on the other hand, lives and dies by its EV performance, and their approach to the market at higher end kept them alive along with loans from US with few strings attached (for various reasons). Tesla did not "break through" any thing. If any thing, existence of BoltEV and Volt does demonstrate couple of things, a legacy car company when there are profits are going to turn on dime and make shit ton of EVs, if that is what market wants. Tesla has brand recognition behind it, but again as some one pointed out when the market for EVs in high demand and profitable, from BMW to GM, you will have them roll EVs in millions.
mikeash 10y ago
EVs are unpopular because cheap ones aren't very good yet. You have to choose between almost unusably short range, or a very high price. Something like the LEAF is affordable, but only useful as a city car. A Model S is a great car, but extremely expensive. The cost is coming down. Chevy is now selling the Bolt, which has pretty good range, for under $40,000. Tesla's Model 3 is coming soon. More will follow. The high cost comes from the batteries, which are getting cheaper all the time. I'm not sure that "unpopular" is quite the right word. A lot of people really like Teslas. Most of them can't afford them. The desire is there, the means is not (yet). It's smart to invest in what sells right now... until things change and that's no longer what sells. GM is investing in what sells today. Tesla is investing in what might sell in a decade or two. Tesla's approach isn't certain but if they're right then GM is going to relive their experience of the 1970s where they take way too long to react to a changing market.
- paganel 10y ago
  I've had the exact same discussion with somebody else today on /r/futurology, more exactly I told him that "under $40,000" it's still pretty damn expensive for a small hatchback. My 1.4l European small hatchback costs around 13,000 euros new, you just can't expect people to not take into consideration the huge difference between the 2 prices.
  - yawz 10y ago
    I'm not sure if this year all figures are the same, but when I was car-shopping in November, Colorado state granted up to $6,000 in tax credits for new EVs. Federal tax credit was $7,500. And on top of that, Nissan was adding their own discount for their new Leafs. So, nobody pays the full price of an EV at the moment. You can currently buy 1-2 year-old, certified Nissan Leafs for less than $13,000.
    - rootusrootus 10y ago
      With the number of reservations Tesla has for the Model 3, we are going to find out rather quickly what effect losing the big tax credits has on electric adoption. Maybe that is hidden somewhat by the leasing -- buying an EV right now is foolish, leasing is a much better choice. Even the Model S is going through the auctions at half MSRP or sometimes less, and less prestigous cars like the 500E are auctioning at 4K or so. Anybody who purchased on outright a few years ago is going to be extremely upside down for a while longer.
sremani 10y ago
I am an Volt owner and I approve your comments. GM with BoltEV and Volt has demonstrated they are up with the EV tech, did they make miscues? Yes, no doubt. But the market needs to educated and for now Tesla is the Apple of Cars and the only brand Customers are willing to be educated from. Nissan Leaf had a decent start, but they cut too many corners, and I do not recommend Leaf. i3 is too limited. Even though I whole-heatedly recommend Volt esp. Gen2. The market is not ready yet, and GM is doing what an established Car company does. Tesla's life depends on pushing EVs, so they are who they are.
erikpukinskis 10y ago
> GM is investing in what sells, and right now (i.e. for the last decade or two) Yup. They haven't adopted the Andy Grove/Bill Gates/Larry Ellison philosophy of "Only The Paranoid Survive," yet. They are banking on the expectation that if/when consumer interest spikes they'll be able to use their influence to jump to the front of the line, like they did with past ICE competitors. The question is... will the electric car market be more like the ICE market where paranoia is (apparently) unnecessary, or the semiconductor/software markets where it is (apparently) quite important.