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Something is not working with this carbon credit market, the article says demand for electric cars is not there so the auto makers can't generate their own cred

Something is not working with this carbon credit market, the article says demand for electric cars is not there so the auto makers can't generate their own credits. Yet people who are into EV cars view the big three as well as the German marques as not even trying. I bet that selling the credits was never in the Tesla business plan. But it is now!

tyfon 7y ago
It sounds like the cost of the credits is not high enough to make a real dent. Another effective way of doing this is adding the cost of pollution into the price of the car as tax making ICE expensive and electric cheap. That is done here and the demand is very high. ICEs generally have > 100% tax.
- Theodores 7y ago
  Where is 'here'? Let me guess, Norway?
  - tyfon 7y ago
    Correct :)
fit2rule 7y ago
>the article says demand for electric cars is not there I'd see it more as, the demand for electric utility vehicles and industrial transportation systems (truck, etc.) is so great that the demand for personal EV transportation cannot supplant the economies of maintaining an ICE production line. But, as the article explains this may change in the close to near future, and indeed the technology to supplant the former segments of transportation is definitely on the horizon. Take this with a grain of salt, but I happen to know that automobile clubs around the world expect that within 5 years, the automotive industry will be radically different to what it is today - they, too, are hedging their bets, and investing in social-sharing technology for the clubs to be promoting when the tech, and consumer expectations around personal transportation, inevitably changes.
lazyjones 7y ago
> Something is not working with this carbon credit market, the article says demand for electric cars is not there so the auto makers can't generate their own credits. Just low quality articles - most other car makers have long delivery times for EV due to demand, 6 to 18 months in some cases. Their real problem is that they can't or don't want (negative margin?) to produce in quantities.
- sokoloff 7y ago
  Let's see. Long delivery times due to demand that exceeds supply. Margin pressure on the product. I wonder what Microeconomics 101 suggests the path forward for a supplier caught in that trap? It's been a while since I took Econ, but I think the answer is maybe raising prices? Tends to align demand with supply and improve unit economics.
  - lazyjones 7y ago
    This would be the correct choice in a simplified scenario without considering the competition, but car makers know how it'd work out: Tesla would sell even more cars and they'd sell none. Why are they doing what they're doing? Possibly because they want to slow down Tesla's growth and virtue-signal a little without losing too much money. I'm not sure it's working very well for Jaguar and Audi at the moment.
Shivetya 7y ago
warning, I ramble quickly Because the market isn't there. I know we like to believe otherwise but the majority do not care. They will reply to a survey with what the expect the person asking wants but at the end of the day they have no reason to change their buying habits. I really enjoy my Tesla 3 but I am a fan of sedans and coupes. The Y will make it more useful to some but even then it won't solve the immediate issue. That for all their supposed warts petrol powered cars don't require you to change anything you are currently doing. The habits we have established over generations are so ingrained that the time spent fueling and maintenance is not an issue. Now of course they could just plug in at home but people see the costs for charging station installs and say screw it. Infrastructure won't fix this. EV's just don't match petrol cars in common capability in the eyes of shoppers. Finally, there just isn't enough coverage of the type of vehicles people are buying let alone at any reasonable price. Don't get fixated on the average selling price of cars to determine where an EV should be priced. Vehicles not clean sheet designed to be EV show their failings right up front and cause people to price compare to the petrol version; this includes the Chevrolet Bolt, the Hyundai and Kia cars, and even the Audi and Jaguar cars. Those last two are both incredibly disappointing on range. Range also is only considered valid for fair weather or better. Get into the 40F/4C ranges and watch your range go goodbye. I can travel anywhere in the US easily with the 3 without concern but not in winter, I do damn well better than any other maker's EV in that regard. Range needs to be much higher to offset any concern owners have, to let them be lazy in charging. Charging speeds aren't too much of an issue but will be once range comes up. Another option in the range category is, get mid one hundred mile range models out but get them as close to 20k without tax incentives. that might get some of the local only crowd to jump but that is a very price sensitive area.
- larzang 7y ago
  Infrastructure is absolutely the deciding factor for those of us who are not suburban home owners. I live in a building which has 1 EV space for 200-something units. I work in an office building which has 2 EV spaces installed, but they're reserved for the Tesla-driving building owners. There are no public charging stations remotely convenient to either location. My next car will absolutely be a Prius/Insight/Ioniq, but a full EV is not a reasonable consideration, and not because of range or habits but 100% because of infrastructure. Despite a majority-freeway commute I still pass 5 or 6 gas stations going to and from work every day. I ought to be passing at least one charging station.
davedx 7y ago
"Demand is not there" "25,913% Growth In Tesla Sales In 6 Years" I don't know how people reconcile these kinds of statements. Unless they're arguing that Q1 2019 is an inflection point and sales will taper off for the foreseeable future? https://cleantechnica.com/2018/10/04/25913-growth-in-tesla-sales-in-6-years/ https://cleantechnica.com/2018/10/04/25913-growth-in-tesla-s...
- imtringued 7y ago
  Isn't that basically what happened? [0] [0] https://insideevs.com/news/343787/tesla-sales-down-for-q1-2019-but-the-situation-is-far-from-dire/ https://insideevs.com/news/343787/tesla-sales-down-for-q1-20...
  - rfeather 7y ago
    No. You cite an article that falsely compares sales and delivery numbers. It's deliveries on already sold cars that slowed.
  - jsight 7y ago
    If it was, it isn't at all clear from the data. Model S and Model X slowed dramatically, and that part might be indicative of a real problem with those two models. Model 3, OTOH, appears to be growing steadily right now.
- adolph 7y ago
  The two assertions may not be in conflict. There may not be demand for EVs that are rehashes of ICE designs (and not just in “looks” but also in engineering compromises made to retrofit EV to a body originally intended for an ICE). Also, there may truly not be sufficient demand for EV in the bread and butter market segments traditional “mature” automakers address (and corporate/union socio-political factors might stifle an internally created Tesla, similar to what happened to Saturn in GM).
- gamblor956 7y ago
  To put things into perspective: Despite 26000% growth... Tesla still has less than 1% of the global auto market.
benj111 7y ago
The carbon credits market is designed to impose a cap on the level of CO2 of the car fleet. I would hope that it's agnostic about specific technologies, as it's meant to incentivise manufacturers to find the best way of meeting the cap, eg another option would be to produce smaller cars like they use in the rest of the world, rather than massive trucks. The fact that companies are going out, buying credits, subsidising lower emitters says to me that the systems working perfectly.
zaroth 7y ago
Regulatory assistance was always a huge part of Tesla’s business plan. Whether it is on the consumer side (rebates) or corporate side (credits). As for demand, you are missing the big picture of the technology adoption curve. There is a massive learning curve which needs to be climbed in terms of producing EVs and particularly batteries at the scale required. Never mind the charging infrastructure or changing consumer habits. The market is growing as fast as possible and is totally supply constrained and will be likely for the next decade plus. It’s not that the big 3 aren’t even trying. It’s that they can’t try. If you are buying 3rd-party assembled batteries and motors to put into your EVs you are likely able to produce a meaningless number of units at a near zero or negative margin. They were never going to invest the $20 billion in R&D to canabalize themselves. It always had to be an outsider who would have to make the push.
- gamblor956 7y ago
  Toyota has spent billions on alternative fuels and green tech cars. The Prius is single handedly the reason that a market for Teslas and other EVs exist.
  - zaroth 7y ago
    > The Prius is single handedly the reason that a market for Teslas and other EVs exist. Can you elaborate on this please? I would never own or drive a Prius, or really a hybrid of any kind. I do own a Model 3. I see it as polar opposite to a hybrid.
    - gamblor956 7y ago
      The Prius showed that there was a large market for green cars. The largest group of Tesla Model 3 buyers is former Prius owners. Without the Prius to pave the way, Tesla would never exist, because nobody would have invested in an EV company without the Prius proof.
DeonPenny 7y ago
Sounds like it works perfectly. A huge new all america car company is reaping large benefits while research and developing world class EVs up and into the point it kills off some of the legacy automakers.

tyfon 7y ago

It sounds like the cost of the credits is not high enough to make a real dent. Another effective way of doing this is adding the cost of pollution into the price of the car as tax making ICE expensive and electric cheap. That is done here and the demand is very high. ICEs generally have > 100% tax.

Theodores 7y ago
Where is 'here'? Let me guess, Norway?
- tyfon 7y ago
  Correct :)

fit2rule 7y ago

>the article says demand for electric cars is not there I'd see it more as, the demand for electric utility vehicles and industrial transportation systems (truck, etc.) is so great that the demand for personal EV transportation cannot supplant the economies of maintaining an ICE production line. But, as the article explains this may change in the close to near future, and indeed the technology to supplant the former segments of transportation is definitely on the horizon. Take this with a grain of salt, but I happen to know that automobile clubs around the world expect that within 5 years, the automotive industry will be radically different to what it is today - they, too, are hedging their bets, and investing in social-sharing technology for the clubs to be promoting when the tech, and consumer expectations around personal transportation, inevitably changes.

lazyjones 7y ago

> Something is not working with this carbon credit market, the article says demand for electric cars is not there so the auto makers can't generate their own credits. Just low quality articles - most other car makers have long delivery times for EV due to demand, 6 to 18 months in some cases. Their real problem is that they can't or don't want (negative margin?) to produce in quantities.

sokoloff 7y ago
Let's see. Long delivery times due to demand that exceeds supply. Margin pressure on the product. I wonder what Microeconomics 101 suggests the path forward for a supplier caught in that trap? It's been a while since I took Econ, but I think the answer is maybe raising prices? Tends to align demand with supply and improve unit economics.
- lazyjones 7y ago
  This would be the correct choice in a simplified scenario without considering the competition, but car makers know how it'd work out: Tesla would sell even more cars and they'd sell none. Why are they doing what they're doing? Possibly because they want to slow down Tesla's growth and virtue-signal a little without losing too much money. I'm not sure it's working very well for Jaguar and Audi at the moment.

Shivetya 7y ago

warning, I ramble quickly Because the market isn't there. I know we like to believe otherwise but the majority do not care. They will reply to a survey with what the expect the person asking wants but at the end of the day they have no reason to change their buying habits. I really enjoy my Tesla 3 but I am a fan of sedans and coupes. The Y will make it more useful to some but even then it won't solve the immediate issue. That for all their supposed warts petrol powered cars don't require you to change anything you are currently doing. The habits we have established over generations are so ingrained that the time spent fueling and maintenance is not an issue. Now of course they could just plug in at home but people see the costs for charging station installs and say screw it. Infrastructure won't fix this. EV's just don't match petrol cars in common capability in the eyes of shoppers. Finally, there just isn't enough coverage of the type of vehicles people are buying let alone at any reasonable price. Don't get fixated on the average selling price of cars to determine where an EV should be priced. Vehicles not clean sheet designed to be EV show their failings right up front and cause people to price compare to the petrol version; this includes the Chevrolet Bolt, the Hyundai and Kia cars, and even the Audi and Jaguar cars. Those last two are both incredibly disappointing on range. Range also is only considered valid for fair weather or better. Get into the 40F/4C ranges and watch your range go goodbye. I can travel anywhere in the US easily with the 3 without concern but not in winter, I do damn well better than any other maker's EV in that regard. Range needs to be much higher to offset any concern owners have, to let them be lazy in charging. Charging speeds aren't too much of an issue but will be once range comes up. Another option in the range category is, get mid one hundred mile range models out but get them as close to 20k without tax incentives. that might get some of the local only crowd to jump but that is a very price sensitive area.

larzang 7y ago
Infrastructure is absolutely the deciding factor for those of us who are not suburban home owners. I live in a building which has 1 EV space for 200-something units. I work in an office building which has 2 EV spaces installed, but they're reserved for the Tesla-driving building owners. There are no public charging stations remotely convenient to either location. My next car will absolutely be a Prius/Insight/Ioniq, but a full EV is not a reasonable consideration, and not because of range or habits but 100% because of infrastructure. Despite a majority-freeway commute I still pass 5 or 6 gas stations going to and from work every day. I ought to be passing at least one charging station.

davedx 7y ago

"Demand is not there" "25,913% Growth In Tesla Sales In 6 Years" I don't know how people reconcile these kinds of statements. Unless they're arguing that Q1 2019 is an inflection point and sales will taper off for the foreseeable future? https://cleantechnica.com/2018/10/04/25913-growth-in-tesla-sales-in-6-years/ https://cleantechnica.com/2018/10/04/25913-growth-in-tesla-s...

imtringued 7y ago
Isn't that basically what happened? [0] [0] https://insideevs.com/news/343787/tesla-sales-down-for-q1-2019-but-the-situation-is-far-from-dire/ https://insideevs.com/news/343787/tesla-sales-down-for-q1-20...
- rfeather 7y ago
  No. You cite an article that falsely compares sales and delivery numbers. It's deliveries on already sold cars that slowed.
- jsight 7y ago
  If it was, it isn't at all clear from the data. Model S and Model X slowed dramatically, and that part might be indicative of a real problem with those two models. Model 3, OTOH, appears to be growing steadily right now.
adolph 7y ago
The two assertions may not be in conflict. There may not be demand for EVs that are rehashes of ICE designs (and not just in “looks” but also in engineering compromises made to retrofit EV to a body originally intended for an ICE). Also, there may truly not be sufficient demand for EV in the bread and butter market segments traditional “mature” automakers address (and corporate/union socio-political factors might stifle an internally created Tesla, similar to what happened to Saturn in GM).
gamblor956 7y ago
To put things into perspective: Despite 26000% growth... Tesla still has less than 1% of the global auto market.

benj111 7y ago

The carbon credits market is designed to impose a cap on the level of CO2 of the car fleet. I would hope that it's agnostic about specific technologies, as it's meant to incentivise manufacturers to find the best way of meeting the cap, eg another option would be to produce smaller cars like they use in the rest of the world, rather than massive trucks. The fact that companies are going out, buying credits, subsidising lower emitters says to me that the systems working perfectly.

zaroth 7y ago

Regulatory assistance was always a huge part of Tesla’s business plan. Whether it is on the consumer side (rebates) or corporate side (credits). As for demand, you are missing the big picture of the technology adoption curve. There is a massive learning curve which needs to be climbed in terms of producing EVs and particularly batteries at the scale required. Never mind the charging infrastructure or changing consumer habits. The market is growing as fast as possible and is totally supply constrained and will be likely for the next decade plus. It’s not that the big 3 aren’t even trying. It’s that they can’t try. If you are buying 3rd-party assembled batteries and motors to put into your EVs you are likely able to produce a meaningless number of units at a near zero or negative margin. They were never going to invest the $20 billion in R&D to canabalize themselves. It always had to be an outsider who would have to make the push.

gamblor956 7y ago
Toyota has spent billions on alternative fuels and green tech cars. The Prius is single handedly the reason that a market for Teslas and other EVs exist.
- zaroth 7y ago
  > The Prius is single handedly the reason that a market for Teslas and other EVs exist. Can you elaborate on this please? I would never own or drive a Prius, or really a hybrid of any kind. I do own a Model 3. I see it as polar opposite to a hybrid.
  - gamblor956 7y ago
    The Prius showed that there was a large market for green cars. The largest group of Tesla Model 3 buyers is former Prius owners. Without the Prius to pave the way, Tesla would never exist, because nobody would have invested in an EV company without the Prius proof.

DeonPenny 7y ago

Sounds like it works perfectly. A huge new all america car company is reaping large benefits while research and developing world class EVs up and into the point it kills off some of the legacy automakers.