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The cost of an RV makes this out of reach of all but the most wealthy. A "paradigm shift" doesn't come from luxury goods, it comes when the cost is within reach

The cost of an RV makes this out of reach of all but the most wealthy. A "paradigm shift" doesn't come from luxury goods, it comes when the cost is within reach of average folks. The photos in the article are of RVs that cost $100k+ (for the little class B) and $175k+ (for the big diesel pusher class A). People who spend $60k+ on a luxury auto may not blink at that, but I doubt it's gonna be a mainstream thing. It's a high margin industry, but even if we assume it becomes much more widespread and competition increases and margins come down, it's still just really expensive to put a whole apartment in a van/bus. Also, RVs are a tremendous amount of labor to own even if you don't do the driving. They need a lot more maintenance (if you're barreling down the highway in your living room at 70MPH, shit's gonna break), maintenance is a lot more expensive, and you have to deal with dumping and refilling tanks, among other things. I just don't think everyone is going to want that as part of their normal daily commute. My sister's family tried renting an RV for trips, rather than flying for a while (because their son liked my motorhome and wanted to try out that kind of travel), but decided not to buy an RV and went back to flying or traveling in their SUV and staying in hotels along the way when they wanted a road trip. As with the boat they bought on a whim, it turned out to be more trouble than it was worth to them. I live in an RV and travel kinda full-time, and have done so for ~6 of the past ~8 years, so I totally understand the appeal. I love having my whole house with me when I travel, sleeping in my own bed every night, cooking in my familiar kitchen, etc., but I can see how it's not for everyone. And, again, the cost is prohibitive for a lot of people. If you live in the RV full-time and don't have rent or a mortgage payment, it's entirely do-able on a modest income...but, in addition to a primary residence, it's a pricey endeavor, really only within reach of pretty wealthy people.

dugditches 9y ago
I think the high cost, but strong desire to achieve the lifestyle has contributed to the 'van-dweller' lifestyle. I've gone from a Class C(Small RV/on truck/van frame) down to a Class B(typical Camper Van). As you've said large RV's(Class A's) are lots of work, and less affluent people buying a used one, don't realize they're taking a problem off someone's hands. Namely finding a place to park it.
- justadeveloper2 9y ago
  That, and all the mechanical issues that go along with them! The RV I'm familiar with has three different heating systems, a generator, a huge battery bank, miles of wiring, and no way to get at anything to work on it. It's worse than a sailboat.
grecy 9y ago
Not everyone has a $100k+ class A motorhome. In fact, lots of us don't ever want one. The article applies perfectly well to a ~$30k Sprinter or similar van outfitted with queen bed, sink, stove, tv, etc. There is no reason it will cost significantly more than a Model 3 does now. It makes perfect sense to be able to sleep/eat/cook/wash/read/watch TV whenever the vehicle is moving, once you don't need to drive.
- chewyland 9y ago
  Exactly. I paid 10 grand for my diesel Fiat Ducato. Put 60,000k on it and only had to replace the battery, tires and brakes. She's been to 27 countries and 100s of cities, villages and towns....yes, 100s. From Chernobyl to London, to Southern Greece and Asian side of Turkey... and everything in between.
  - grecy 9y ago
    Nice! I drove my $6k Jeep 65,000 kms through 16 countries, then sold it for what I bought it for. Now I'm driving my ~$35k Jeep through 30 countries in Africa, should be well over 100k kms. Have fun out there!
- SwellJoe 9y ago
  A Model 3 isn't exactly cheap, though it is more obtainable than most new motorhomes. Another major consideration is financing. Obtaining financing for a motorhome is harder than obtaining financing for an automobile, especially if you don't have collateral (like a house). Back when I first bought an RV, I had good credit and had bought a 350Z partly on credit and paid it off a couple years before I went shopping for a motorhome. I couldn't get a loan...no bank, credit union, or anyone else would loan on a used $60,000 motorhome. So, I paid cash for a $30,000 motorhome, instead. Admittedly this was just after the mortgage crisis and the motorhome industry was among the hardest hit by defaults, and I also had only one year of good income to show (the two years before were right after I'd started my company and was living on savings), but nonetheless, I still would have been able to get an auto loan at that time for the same amount of money (and was told so by my bank credit person). So, yeah, the RVs pictured are relatively high end (though not extravagantly so), and you can spend a lot less on a used motorhome. The older you buy, the cheaper it will be, but the more maintenance and upkeep you'll have to deal with. Motorhomes do not age well at all. Again, I understand the appeal of this lifestyle (been doing it for years). And, my RV is an old Avion travel trailer now; much lower priced than the motorhome I was traveling in last time (though I have a big truck to tow it, too, which puts the total price into the same ball park). I know it can be done relatively affordably, but it's not realistic to expect everyone will want to. And, of course, the requirement that it be autonomous for this "paradigm shift" to happen means that you'll have to buy a new motorhome for at least the first few years of the shift. It'll take five years (after they begin to be widely available, which is likely still five years out) for a healthy used market for autonomous motorhomes to exist.
petra 9y ago
From outside, the RV industry look like a small fragmented industry, without a lot of investment into innovation, and it shows. So i'm curious, what would happen if Elon Musk decided to target this industry, thinking it from first principles, how would it look like ?
- SwellJoe 9y ago
  I'd love it if something like that happened (though it's less fragmented than it looks; there's only a couple of major manufacturers which each having dozens of brands and a few billion in revenue, plus a few smaller brands fighting over the scraps). I'm a total nerd for RV history, and there have been pockets of innovation here and there in the history of the industry. One of my favorites was when GMC, a real automaker with the ability to dictate the entire design and supply line, made a motorhome. See here for motorhome porn: http://gmcmotorhome.com/ http://gmcmotorhome.com/ And, it really did require a company that could control the entire thing to make something really innovative. The problem most motorhome makers face is that they all build on the same chassis from existing truck and bus makers. They don't build their own, and can't compete on that metric. So, they get a chassis with an engine and drivetrain from the manufacturer and then build a house on top of it. GMC was able to lower the floor (with a front wheel drive design based on the Toronado car), and thus the roof, making it more like driving a long van rather than like a moving truck. They routed hot water lines through the engine, so you'd arrive at your destination and have hot water in the tank without need for running the propane water heater. It had an adjustable air bag suspension (like found on high end buses). And, it was all around beautiful to look at and had a high quality interior. But, that was 40 years ago, and the only made them for a few years; I still see them on the road now and then, and I've gotten a tour of a few over the years I've been on the road. I love them, but wouldn't want one, because I don't want to work on the damned thing every weekend just to keep it rolling. But, it's hard to argue that any modern motorhome looks as nice. The reality is, or was, that GMC never achieved any kind of economies of scale with that experiment. They were so expensive that they didn't sell a lot of them, and RVs have never been mass-produced in the way cars are. Even the GMC was built by carpenters and plumbers in-place as if it were an apartment being built. Which is how RVs are built in Indiana today (most RVs in the US market are built in northern Indiana, and a lot of the parts manufacturers are there, too). I've frequently considered starting a startup in the industry...but, it's also a really challenging industry. Very subject to economic boom and bust cycles, as many luxury goods are. It's an extremely capital intensive industry. The buyers aren't generally aware of innovation; they're retirees and they buy what the dealer recommends. So, it has all of the hard problems of starting an auto company, with few of the mass market benefits. I doubt Elon Musk would be interested in doing anything in the space, but I'd love it if someone like that did. There's such a dearth of beauty in the industry. I bought a 34-year-old travel trailer (an Avion) specifically because most new travel trailers are ugly fiberglass boxes. Airstream still makes gorgeous trailers, but they cost as much as a house when purchased new. And, even though my trailer doesn't have a drivetrain to worry about, it's still more work to maintain than I wanted. I regret going with such an old RV and will be moving into something else eventually. So, margins are high, and there are some big companies that operate in the space (Thor is the largest manufacturer, and owns about a third of the most popular RV brands, including Airstream; Fleetwood is the other big manufacturer; with Winnebago being maybe the biggest brand that isn't part of a large conglomerate). It's not impossible to make money there. But, it seems to be very difficult to innovate due to the capital costs and the priorities of the market. There were huge shake ups in the industry in ~2009, including a bankruptcy for Fleetwood (maybe others). But, as I understand it, the big ones are doing pretty well today. I could talk for days about RVs. But, realistically, I don't know how to make a business, much less a truly innovative business, there without a tremendous capital outlay.

dugditches 9y ago

I think the high cost, but strong desire to achieve the lifestyle has contributed to the 'van-dweller' lifestyle. I've gone from a Class C(Small RV/on truck/van frame) down to a Class B(typical Camper Van). As you've said large RV's(Class A's) are lots of work, and less affluent people buying a used one, don't realize they're taking a problem off someone's hands. Namely finding a place to park it.

justadeveloper2 9y ago
That, and all the mechanical issues that go along with them! The RV I'm familiar with has three different heating systems, a generator, a huge battery bank, miles of wiring, and no way to get at anything to work on it. It's worse than a sailboat.

grecy 9y ago

Not everyone has a $100k+ class A motorhome. In fact, lots of us don't ever want one. The article applies perfectly well to a ~$30k Sprinter or similar van outfitted with queen bed, sink, stove, tv, etc. There is no reason it will cost significantly more than a Model 3 does now. It makes perfect sense to be able to sleep/eat/cook/wash/read/watch TV whenever the vehicle is moving, once you don't need to drive.

chewyland 9y ago
Exactly. I paid 10 grand for my diesel Fiat Ducato. Put 60,000k on it and only had to replace the battery, tires and brakes. She's been to 27 countries and 100s of cities, villages and towns....yes, 100s. From Chernobyl to London, to Southern Greece and Asian side of Turkey... and everything in between.
- grecy 9y ago
  Nice! I drove my $6k Jeep 65,000 kms through 16 countries, then sold it for what I bought it for. Now I'm driving my ~$35k Jeep through 30 countries in Africa, should be well over 100k kms. Have fun out there!
SwellJoe 9y ago
A Model 3 isn't exactly cheap, though it is more obtainable than most new motorhomes. Another major consideration is financing. Obtaining financing for a motorhome is harder than obtaining financing for an automobile, especially if you don't have collateral (like a house). Back when I first bought an RV, I had good credit and had bought a 350Z partly on credit and paid it off a couple years before I went shopping for a motorhome. I couldn't get a loan...no bank, credit union, or anyone else would loan on a used $60,000 motorhome. So, I paid cash for a $30,000 motorhome, instead. Admittedly this was just after the mortgage crisis and the motorhome industry was among the hardest hit by defaults, and I also had only one year of good income to show (the two years before were right after I'd started my company and was living on savings), but nonetheless, I still would have been able to get an auto loan at that time for the same amount of money (and was told so by my bank credit person). So, yeah, the RVs pictured are relatively high end (though not extravagantly so), and you can spend a lot less on a used motorhome. The older you buy, the cheaper it will be, but the more maintenance and upkeep you'll have to deal with. Motorhomes do not age well at all. Again, I understand the appeal of this lifestyle (been doing it for years). And, my RV is an old Avion travel trailer now; much lower priced than the motorhome I was traveling in last time (though I have a big truck to tow it, too, which puts the total price into the same ball park). I know it can be done relatively affordably, but it's not realistic to expect everyone will want to. And, of course, the requirement that it be autonomous for this "paradigm shift" to happen means that you'll have to buy a new motorhome for at least the first few years of the shift. It'll take five years (after they begin to be widely available, which is likely still five years out) for a healthy used market for autonomous motorhomes to exist.

petra 9y ago

From outside, the RV industry look like a small fragmented industry, without a lot of investment into innovation, and it shows. So i'm curious, what would happen if Elon Musk decided to target this industry, thinking it from first principles, how would it look like ?

SwellJoe 9y ago
I'd love it if something like that happened (though it's less fragmented than it looks; there's only a couple of major manufacturers which each having dozens of brands and a few billion in revenue, plus a few smaller brands fighting over the scraps). I'm a total nerd for RV history, and there have been pockets of innovation here and there in the history of the industry. One of my favorites was when GMC, a real automaker with the ability to dictate the entire design and supply line, made a motorhome. See here for motorhome porn: http://gmcmotorhome.com/ http://gmcmotorhome.com/ And, it really did require a company that could control the entire thing to make something really innovative. The problem most motorhome makers face is that they all build on the same chassis from existing truck and bus makers. They don't build their own, and can't compete on that metric. So, they get a chassis with an engine and drivetrain from the manufacturer and then build a house on top of it. GMC was able to lower the floor (with a front wheel drive design based on the Toronado car), and thus the roof, making it more like driving a long van rather than like a moving truck. They routed hot water lines through the engine, so you'd arrive at your destination and have hot water in the tank without need for running the propane water heater. It had an adjustable air bag suspension (like found on high end buses). And, it was all around beautiful to look at and had a high quality interior. But, that was 40 years ago, and the only made them for a few years; I still see them on the road now and then, and I've gotten a tour of a few over the years I've been on the road. I love them, but wouldn't want one, because I don't want to work on the damned thing every weekend just to keep it rolling. But, it's hard to argue that any modern motorhome looks as nice. The reality is, or was, that GMC never achieved any kind of economies of scale with that experiment. They were so expensive that they didn't sell a lot of them, and RVs have never been mass-produced in the way cars are. Even the GMC was built by carpenters and plumbers in-place as if it were an apartment being built. Which is how RVs are built in Indiana today (most RVs in the US market are built in northern Indiana, and a lot of the parts manufacturers are there, too). I've frequently considered starting a startup in the industry...but, it's also a really challenging industry. Very subject to economic boom and bust cycles, as many luxury goods are. It's an extremely capital intensive industry. The buyers aren't generally aware of innovation; they're retirees and they buy what the dealer recommends. So, it has all of the hard problems of starting an auto company, with few of the mass market benefits. I doubt Elon Musk would be interested in doing anything in the space, but I'd love it if someone like that did. There's such a dearth of beauty in the industry. I bought a 34-year-old travel trailer (an Avion) specifically because most new travel trailers are ugly fiberglass boxes. Airstream still makes gorgeous trailers, but they cost as much as a house when purchased new. And, even though my trailer doesn't have a drivetrain to worry about, it's still more work to maintain than I wanted. I regret going with such an old RV and will be moving into something else eventually. So, margins are high, and there are some big companies that operate in the space (Thor is the largest manufacturer, and owns about a third of the most popular RV brands, including Airstream; Fleetwood is the other big manufacturer; with Winnebago being maybe the biggest brand that isn't part of a large conglomerate). It's not impossible to make money there. But, it seems to be very difficult to innovate due to the capital costs and the priorities of the market. There were huge shake ups in the industry in ~2009, including a bankruptcy for Fleetwood (maybe others). But, as I understand it, the big ones are doing pretty well today. I could talk for days about RVs. But, realistically, I don't know how to make a business, much less a truly innovative business, there without a tremendous capital outlay.