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Comparing Tesla with Ford is like comparing Ford with (GM + Shell + Hertz). Tesla is an energy company not an automobile company. It plans to sell you new ways

by mvpu 10y ago

Comparing Tesla with Ford is like comparing Ford with (GM + Shell + Hertz). Tesla is an energy company not an automobile company. It plans to sell you new ways to capture (solar panels), store (power wall), and consume (cars) energy. It also plans to make cars fully autonomous and ownership free. Ford will obviously compete with Tesla in some segments is not a primary competition for Tesla.

thinkling 10y ago
What you said is correct but immediately raises the question "what's the value of that integration?" Obviously GM and Shell have been successful and profitable without being integrated, and it's not clear that merging would yield them advantages. Why do these advantages exist in the electric energy arena?
- mvpu 10y ago
  Can't predict numbers but some obvious integration points are... a) on the hardware side a solar panel customer could also buy the power wall (natural extension) and car, which can yield very high LTV per consumer; b) on the services side a fully autonomous ride sharing means low operating cost; c) if Solar City continues to lease out the panels then Tesla could become the biggest solar powered grid network on the planet.
  - gph 10y ago
    I just don't see a) as happening much. If there are cheaper solar panel or electric cars available I don't see the point in a consumer not going with the competition. Unless Tesla intentionally makes it hard to integrate competitors solar panels into their power walls/cars, which would likely land them in some anti-competitive/monopoly troubles in a number of jurisdictions.
    - mvpu 10y ago
      Possible.. interesting thing to note is that home owners are more inclined to lease panels than buy them (so retail cost doesn't matter much it appears). SolarCity really took off after it started offering the 0 down lease. If that trend continues, Tesla could potentially offer a blanket $x/month for energy production and $y/month for consumption (cars) and lock people in. We know panel cost and batter cost will go down over time, so the game is likely in selling experiences not entities..
- gph 10y ago
  This is just my opinion, but I think long term Tesla will lose out on solar panels to cheaper more focused competition. But they seem to be leading the way in battery production and self-driving automobiles. If they can hold on to market lead in those two areas then they should still be able to way outpace Ford or other car manufacturers. Big IF though in terms of self-driving technology with all the other big money players racing for that grail. Energy storage and battery production they seem to be in a class of their own without much competition.
Robotbeat 10y ago
Correct. The energy side (powerpacks) are absolutely huge, even with cheap oil. When combined with solar, this provides a cheaper source of dispatchable power than diesel, which is its primary competitor, anywhere along the equator. I actually think the residential solar roof market will remain niche, and the fancy integrated solar roof will be effectively a luxury product with a relatively small market value. However, look at that huge Kauai solar/storage installation: http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii-kauai-kiuc-powerpack-battery-generator http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii... Tesla (with acquisition of Solar City) is able to turn these commodity solar cells from other companies (now at just 19 cents per Watt: http://pv.energytrend.com/pricequotes.html http://pv.energytrend.com/pricequotes.html) into profitable utility-scale installations very quickly and at scale. They can install them all over the developing world where electricity demand is soaring and the existing sources are expensive (i.e. diesel). A key to this is the ability to install FAST. They can install these utility-scale battery storage units in just 3 months vs 3 years for a natural gas fired power plant (vs 4-5 years for coal, 6-20+ years for a nuclear power plant). And they can work with any kind of existing or future electricity source, smoothing out peaks in demand, including advanced combined cycle natural gas plants. So that's a huge market especially if you can tack on a solar farm on top of it. And their exposure to risk on the very low-margin solar cell manufacturing side is limited, as Solar City primarily uses whatever cells the market produces, not their in-house stuff. It has even less competition than the "non-sucky production electric cars" market, and with the 3rd world needing terawatts of electricity, the market will only grow.
LordHumungous 10y ago
>Tesla is an energy company not an automobile company ORLY? Odd that an energy company puts such a high emphasis on quarterly delivery numbers of... automobiles.
- josefresco 10y ago
  Agreed. Tesla is a young auto company, who eventually wants to be an energy company. It might happen faster than we all think or expect, but it's not there yet.

by mvpu 10y ago

thinkling 10y ago

What you said is correct but immediately raises the question "what's the value of that integration?" Obviously GM and Shell have been successful and profitable without being integrated, and it's not clear that merging would yield them advantages. Why do these advantages exist in the electric energy arena?

mvpu 10y ago
Can't predict numbers but some obvious integration points are... a) on the hardware side a solar panel customer could also buy the power wall (natural extension) and car, which can yield very high LTV per consumer; b) on the services side a fully autonomous ride sharing means low operating cost; c) if Solar City continues to lease out the panels then Tesla could become the biggest solar powered grid network on the planet.
- gph 10y ago
  I just don't see a) as happening much. If there are cheaper solar panel or electric cars available I don't see the point in a consumer not going with the competition. Unless Tesla intentionally makes it hard to integrate competitors solar panels into their power walls/cars, which would likely land them in some anti-competitive/monopoly troubles in a number of jurisdictions.
  - mvpu 10y ago
    Possible.. interesting thing to note is that home owners are more inclined to lease panels than buy them (so retail cost doesn't matter much it appears). SolarCity really took off after it started offering the 0 down lease. If that trend continues, Tesla could potentially offer a blanket $x/month for energy production and $y/month for consumption (cars) and lock people in. We know panel cost and batter cost will go down over time, so the game is likely in selling experiences not entities..
gph 10y ago
This is just my opinion, but I think long term Tesla will lose out on solar panels to cheaper more focused competition. But they seem to be leading the way in battery production and self-driving automobiles. If they can hold on to market lead in those two areas then they should still be able to way outpace Ford or other car manufacturers. Big IF though in terms of self-driving technology with all the other big money players racing for that grail. Energy storage and battery production they seem to be in a class of their own without much competition.

Robotbeat 10y ago

Correct. The energy side (powerpacks) are absolutely huge, even with cheap oil. When combined with solar, this provides a cheaper source of dispatchable power than diesel, which is its primary competitor, anywhere along the equator. I actually think the residential solar roof market will remain niche, and the fancy integrated solar roof will be effectively a luxury product with a relatively small market value. However, look at that huge Kauai solar/storage installation: http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii-kauai-kiuc-powerpack-battery-generator http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii... Tesla (with acquisition of Solar City) is able to turn these commodity solar cells from other companies (now at just 19 cents per Watt: http://pv.energytrend.com/pricequotes.html http://pv.energytrend.com/pricequotes.html) into profitable utility-scale installations very quickly and at scale. They can install them all over the developing world where electricity demand is soaring and the existing sources are expensive (i.e. diesel). A key to this is the ability to install FAST. They can install these utility-scale battery storage units in just 3 months vs 3 years for a natural gas fired power plant (vs 4-5 years for coal, 6-20+ years for a nuclear power plant). And they can work with any kind of existing or future electricity source, smoothing out peaks in demand, including advanced combined cycle natural gas plants. So that's a huge market especially if you can tack on a solar farm on top of it. And their exposure to risk on the very low-margin solar cell manufacturing side is limited, as Solar City primarily uses whatever cells the market produces, not their in-house stuff. It has even less competition than the "non-sucky production electric cars" market, and with the 3rd world needing terawatts of electricity, the market will only grow.

LordHumungous 10y ago

>Tesla is an energy company not an automobile company ORLY? Odd that an energy company puts such a high emphasis on quarterly delivery numbers of... automobiles.

josefresco 10y ago
Agreed. Tesla is a young auto company, who eventually wants to be an energy company. It might happen faster than we all think or expect, but it's not there yet.