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There is certainly a relutance from car companies to start making electric cars and the proof of that is Tesla. They have been fighting hard for years to secure

by sweden 9y ago

There is certainly a relutance from car companies to start making electric cars and the proof of that is Tesla. They have been fighting hard for years to secure supply chains for their battery packs, what's stopping the current car companies of doing the same with their infinite cash reserves? Why are they only starting now when Tesla has been planning it for years? Also, you are giving those numbers without any source in them, so I will call this a very deceiving comment. Electric cars are marginally less complex than a regular ICE car, which it makes them simpler and cheaper to manufacture.

lumberjack 9y ago
Way I see it Tesla proves that a mass market EV is still not possible. Either you take it from the fact that they failed to come up with anything revolutionary in terms of the Model 3; price/range still on par with other offerings. Or you take their lowest cost estimates for their battery packs and then you try to build the rest of the car with the remaining $12k (for the total price of a people's car that everyone can afford), and you realise that it is not possible.
- adrianN 9y ago
  The German Post approached VW to have them develop electric cars for deliveries in cities. VW refused, so they just hired a couple of students and started/bought their own company. They get requests from all kinds of businesses now. https://en.wikipedia.org/wiki/StreetScooter https://en.wikipedia.org/wiki/StreetScooter To me that doesn't sound like there is no market, it sounds like big car manufactures want to milk their ICEs as long as possible.
  - mulmen 9y ago
    I'm thinking of starting a blog about RC planes, but I'm going to outsource the development. I submitted a bid to IBM but they haven't replied! On top of that Boeing said they're not interested in assembling my plane! Clearly these incumbents are holding me back. /s Sarcasm aside maybe it just wasn't worth it to VW to take on a relatively small project outside of their core competency?
    - detaro 9y ago
      If making delivery vans for one of the biggest users of delivery vehicles in Germany (that uses tons of VW vans currently) is "a small project outside their core competency", VW really is in trouble.
      - mulmen 9y ago
        Does VW already know how to make electric vehicles? How many would they sell relative to their total sales of existing ICE vans? Is it worth starting up an entire new business for one customer? I think this can be explained by VW just deciding its not worth it rather than saying VW is trying to suppress electric vehicle development.
        adrianN 9y ago
        If you want to get serious about developing EV technology, why not start with a big customer that has a use case that makes the problem a lot easier? Also, small vans for use inside cities is a big market. All delivery services need them, all kinds of workmen need them. With bans for Diesel cars in German cities on the horizon all kinds of businesses are complaining because Diesels are the only offering in that category.
        mulmen 9y ago
        Sure, but can we at least admit that maybe VW did the math and decided it wasn't worth it to them? And that they could have arrived at this conclusion without deciding to sabotage EV development?
        cyxxon 9y ago
        Sure, maybe they did the math, maybe they just couldn't be arsed. But whatever the real reason why they didn't take the job - someone else (DHL itself) actually did the correct math and is now actually a viable competitor for VW in this area. So yeah, again, maybe but they failed at it.
  - lumberjack 9y ago
    Yeah, I know about these. But these are intracity delivery vehicles. The restrictions in their domain of use make the problem simpler. My university has a couple and all they do is transport stuff between the two campuses. I think, although the average commute is probably way lower than a 80km, people would still be reluctant to buy it. For example the Mitsubishi i-MiEV has been around since 2009, is the least expensive amongst EVs (besides Chinese EVs probably) and has a range of 100km to 160km (depending on different metrics) and that didn't sell very well. Only 38.000 units sold.
  - Spooky23 9y ago
    The market is very niche. One of the best values in cars right now is off lease Volts — my neighbor just picked one up for like $16k. Personally, I’m an ideal EV candidate. But it just costs more, especially when you price in electrical work for home chargers, etc. The TCO of a nicely equipped Accord is far less, and will be for a long time.
    - BoorishBears 9y ago
      On lease EVs are extremely cheap but only because the market is niche. Dealers desperate to get them off their lots stack up incentives on top of existing rebates until people get to lease 40k cars for 100$ a month
- sweden 9y ago
  I have to disagree, most of the current electric car offerings on the market are more expensive than the base price of the Model 3 (looking at the BMW i3 in Europe, the base price is 45000 dollars). Tesla is a company that was built from the ground up, without any prior design and manufacturing experience, and they have been mass producing cars for only 5 or 6 years. You can't simply expect them to have the same business agility as BWM, which is a company with over 1 century old. The lack of "better" product offerings from Tesla is not due to the technology, is due to the infancy of the company.
  - dangrossman 9y ago
    The base price on the Model 3 today is $49,000 and Tesla's own IR documents state that they don't expect to have a positive gross margin, even at that price point, until some time in the distant future after production is fully ramped up at both Fremont and the Gigafactory. It's not a very good example of the point I think you're trying to make.
    - jsight 9y ago
      They definitely haven't said that margins would be negative until the "distant future".
      - richardknop 9y ago
        They are selling for a loss currently. Any margins from model S and X are being used to subsidise model 3 and overall they are still losing tons of money, profitability not even on the horizon. I wonder how long their current runway is without raising new cash again.
        jsight 9y ago
        That is mostly right, but I was responding to someone who said that positive gross margins for the vehicle were only planned for the distant future. Their financial statement for last quarter implied that the 3 would have positive gross margins in late 2018. Their cash position decreased by about 162 million last quarter and they have ~3.3 billion on hand at the end of Q4. There are a lot of risks still out there due to the production bottlenecks that currently exist (and maybe more on the horizon with S and X), but the cashflow situation isn't as horrible as some want to believe.
- Robotbeat 9y ago
  If someone fails to do something, that proves nothing. Can't prove a negative like that.
- dizzystar 9y ago
  EVs have been around for decades, and that's the issue here. They weren't ever cool and it was never particularly cheap to buy one. California used to (still does?) give rebates and an okay to use the carpool lane, and that didn't even cause a significant bump. All Tesla did is prove you can sell an EV at a high price point to tech people who love all sorts of trendy things that don't sell outside that sphere. This in no way says EV is a mass-market vehicle yet. Tesla did bring many infrastructure issues to the forefront, and that's no small feat.
kickopotomus 9y ago
Tesla is not proof of that. Tesla is an EV company from the ground up. They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc. Moreover, car companies do not have "infinite cash reserves". Retooling factories for EV production is an expensive undertaking. Combined with the expense of lithium cells and supply issues, it's not a simple or cheap task.
- adrianN 9y ago
  VW's profit in 2017 has been more than ten billion Euros. That kind of money could fund a lot R&D and retooling factories.
  - Barrin92 9y ago
    It does fund a lot of research. Volkswagens investment into electrical cars exceeds Tesla by a factor of five. The article suggests that manufacturing at large scale is not yet profitable, not that they're not actively working on R&D.
- vvanders 9y ago
  > They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc. I don't buy that for a second, esp given that they are now out-selling the S Class[1]. [1] https://electrek.co/2017/05/26/tesls-model-s-leading-us-large-luxury-segment/ https://electrek.co/2017/05/26/tesls-model-s-leading-us-larg...
  - sxates 9y ago
    To be fair - the S Class is a relatively low volume car. I don't have exact figures, but I'd expect it to be in the range of 2-3% of the cars Mercedes manufactures. BMW made nearly 2,000,000 cars in 2015[1], and this year, best case, Tesla will make 150,000. That's an order of magnitude difference in scale. [1]https://en.wikipedia.org/wiki/BMW#Production https://en.wikipedia.org/wiki/BMW#Production
    - 9y ago

by sweden 9y ago

lumberjack 9y ago

Way I see it Tesla proves that a mass market EV is still not possible. Either you take it from the fact that they failed to come up with anything revolutionary in terms of the Model 3; price/range still on par with other offerings. Or you take their lowest cost estimates for their battery packs and then you try to build the rest of the car with the remaining $12k (for the total price of a people's car that everyone can afford), and you realise that it is not possible.

adrianN 9y ago
The German Post approached VW to have them develop electric cars for deliveries in cities. VW refused, so they just hired a couple of students and started/bought their own company. They get requests from all kinds of businesses now. https://en.wikipedia.org/wiki/StreetScooter https://en.wikipedia.org/wiki/StreetScooter To me that doesn't sound like there is no market, it sounds like big car manufactures want to milk their ICEs as long as possible.
- mulmen 9y ago
  I'm thinking of starting a blog about RC planes, but I'm going to outsource the development. I submitted a bid to IBM but they haven't replied! On top of that Boeing said they're not interested in assembling my plane! Clearly these incumbents are holding me back. /s Sarcasm aside maybe it just wasn't worth it to VW to take on a relatively small project outside of their core competency?
  - detaro 9y ago
    If making delivery vans for one of the biggest users of delivery vehicles in Germany (that uses tons of VW vans currently) is "a small project outside their core competency", VW really is in trouble.
    - mulmen 9y ago
      Does VW already know how to make electric vehicles? How many would they sell relative to their total sales of existing ICE vans? Is it worth starting up an entire new business for one customer? I think this can be explained by VW just deciding its not worth it rather than saying VW is trying to suppress electric vehicle development.
      - adrianN 9y ago
        If you want to get serious about developing EV technology, why not start with a big customer that has a use case that makes the problem a lot easier? Also, small vans for use inside cities is a big market. All delivery services need them, all kinds of workmen need them. With bans for Diesel cars in German cities on the horizon all kinds of businesses are complaining because Diesels are the only offering in that category.
        mulmen 9y ago
        Sure, but can we at least admit that maybe VW did the math and decided it wasn't worth it to them? And that they could have arrived at this conclusion without deciding to sabotage EV development?
        cyxxon 9y ago
        Sure, maybe they did the math, maybe they just couldn't be arsed. But whatever the real reason why they didn't take the job - someone else (DHL itself) actually did the correct math and is now actually a viable competitor for VW in this area. So yeah, again, maybe but they failed at it.
- lumberjack 9y ago
  Yeah, I know about these. But these are intracity delivery vehicles. The restrictions in their domain of use make the problem simpler. My university has a couple and all they do is transport stuff between the two campuses. I think, although the average commute is probably way lower than a 80km, people would still be reluctant to buy it. For example the Mitsubishi i-MiEV has been around since 2009, is the least expensive amongst EVs (besides Chinese EVs probably) and has a range of 100km to 160km (depending on different metrics) and that didn't sell very well. Only 38.000 units sold.
- Spooky23 9y ago
  The market is very niche. One of the best values in cars right now is off lease Volts — my neighbor just picked one up for like $16k. Personally, I’m an ideal EV candidate. But it just costs more, especially when you price in electrical work for home chargers, etc. The TCO of a nicely equipped Accord is far less, and will be for a long time.
  - BoorishBears 9y ago
    On lease EVs are extremely cheap but only because the market is niche. Dealers desperate to get them off their lots stack up incentives on top of existing rebates until people get to lease 40k cars for 100$ a month
sweden 9y ago
I have to disagree, most of the current electric car offerings on the market are more expensive than the base price of the Model 3 (looking at the BMW i3 in Europe, the base price is 45000 dollars). Tesla is a company that was built from the ground up, without any prior design and manufacturing experience, and they have been mass producing cars for only 5 or 6 years. You can't simply expect them to have the same business agility as BWM, which is a company with over 1 century old. The lack of "better" product offerings from Tesla is not due to the technology, is due to the infancy of the company.
- dangrossman 9y ago
  The base price on the Model 3 today is $49,000 and Tesla's own IR documents state that they don't expect to have a positive gross margin, even at that price point, until some time in the distant future after production is fully ramped up at both Fremont and the Gigafactory. It's not a very good example of the point I think you're trying to make.
  - jsight 9y ago
    They definitely haven't said that margins would be negative until the "distant future".
    - richardknop 9y ago
      They are selling for a loss currently. Any margins from model S and X are being used to subsidise model 3 and overall they are still losing tons of money, profitability not even on the horizon. I wonder how long their current runway is without raising new cash again.
      - jsight 9y ago
        That is mostly right, but I was responding to someone who said that positive gross margins for the vehicle were only planned for the distant future. Their financial statement for last quarter implied that the 3 would have positive gross margins in late 2018. Their cash position decreased by about 162 million last quarter and they have ~3.3 billion on hand at the end of Q4. There are a lot of risks still out there due to the production bottlenecks that currently exist (and maybe more on the horizon with S and X), but the cashflow situation isn't as horrible as some want to believe.
Robotbeat 9y ago
If someone fails to do something, that proves nothing. Can't prove a negative like that.
dizzystar 9y ago
EVs have been around for decades, and that's the issue here. They weren't ever cool and it was never particularly cheap to buy one. California used to (still does?) give rebates and an okay to use the carpool lane, and that didn't even cause a significant bump. All Tesla did is prove you can sell an EV at a high price point to tech people who love all sorts of trendy things that don't sell outside that sphere. This in no way says EV is a mass-market vehicle yet. Tesla did bring many infrastructure issues to the forefront, and that's no small feat.

kickopotomus 9y ago

Tesla is not proof of that. Tesla is an EV company from the ground up. They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc. Moreover, car companies do not have "infinite cash reserves". Retooling factories for EV production is an expensive undertaking. Combined with the expense of lithium cells and supply issues, it's not a simple or cheap task.

adrianN 9y ago
VW's profit in 2017 has been more than ten billion Euros. That kind of money could fund a lot R&D and retooling factories.
- Barrin92 9y ago
  It does fund a lot of research. Volkswagens investment into electrical cars exceeds Tesla by a factor of five. The article suggests that manufacturing at large scale is not yet profitable, not that they're not actively working on R&D.
vvanders 9y ago
> They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc. I don't buy that for a second, esp given that they are now out-selling the S Class[1]. [1] https://electrek.co/2017/05/26/tesls-model-s-leading-us-large-luxury-segment/ https://electrek.co/2017/05/26/tesls-model-s-leading-us-larg...
- sxates 9y ago
  To be fair - the S Class is a relatively low volume car. I don't have exact figures, but I'd expect it to be in the range of 2-3% of the cars Mercedes manufactures. BMW made nearly 2,000,000 cars in 2015[1], and this year, best case, Tesla will make 150,000. That's an order of magnitude difference in scale. [1]https://en.wikipedia.org/wiki/BMW#Production https://en.wikipedia.org/wiki/BMW#Production
  - 9y ago