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iPhones are not a commodity product. At the moment Teslas are. How will Tesla convince consumers that their car, with a high profit margin, is worth it over a m

iPhones are not a commodity product. At the moment Teslas are. How will Tesla convince consumers that their car, with a high profit margin, is worth it over a mature EV vehicle from Ford, BMW, etc.

TeMPOraL 5y ago
As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.
- rsj_hn 5y ago
  I would say there are three main hurdles: * Convincing the public to spend 50-70K on a car * Convincing the public to buy an EV * Convincing the public that Tesla can be trusted for long term repair costs/reliability Right now Tesla is squarely in the luxury vehicle market, competing against Lexus/BMW/Mercedes, rather than against Mazda/Honda/Kia, and it's a new automaker, so we don't have good long term reliability or serviceability data, nor do we have good info on how long the batteries will last, or what costs someone buying a 10 year old model Y will face. These questions will resolve themselves with time, but whether they will all resolve in Tesla's favor is another matter.
  - TeMPOraL 5y ago
    Fair enough. Especially the third one. Especially outside US. I've been joking to my wife for years now that we should get a Tesla eventually. Over that time, I've seen her going from "what's up with these EVs anyway?", through "that's a really expensive car", to "sure, but if anything breaks, IIRC the closest shop that can repair it is in Norway".
    - rsj_hn 5y ago
      Yeah, I think Tesla is just shooting themselves in the foot here. They should be sponsoring a healthy third party aftermarket, they should be adding easy to use ODB ports, they should be publishing service bulletins. And if indeed Munro and other EV enthusiasts are right that maintenance costs will be 90% lower, Tesla should be offering 20 year warranties on their car to give potential buyers, especially used car buyers, ease of mind when purchasing their cars. It's a new tech, there are lots of question marks about long term reliability, so if Tesla is so confident that these are non-issues, they should step in and insure car buyers from these risks. If indeed these cars are incredibly cheap to maintain, it wont cost Tesla much and will open a floodgate of new buyers.
      - xedeon 5y ago
        > They should be adding easy to use ODB ports, they should be publishing service bulletins Both of these have been happening for years now. You can even look up parts/diagrams and order directly from Tesla if you provide your VIN here: http://epc.tesla.com/ http://epc.tesla.com/ Maybe these are not obvious to non-owners. But it's silly to assume things where you have incomplete/false information. You can talk to actual owners here: https://teslamotorsclub.com/tmc/ https://teslamotorsclub.com/tmc/. I lurked around and asked questions to owners for years there. When I was researching if owning a Tesla is even viable. I own 2 now and never looked back. Also on your reply above. There are already 10 year old Model S's out there. My old neighbor just sold his Toyota 4Runner and got a 2012 Model S with 75K miles for $25K that still runs like new. He has it for almost two years now with ZERO maintenance/issues and spends $15-20 a month on electricity.
        deleted 5y ago
        [deleted]
  - xedeon 5y ago
    >Convincing the public to spend 50-70K on a car The Model 3 SR+ starts at $39k. For a while, the Model 3 SR was available by special order for only $35K [1] but it did not include autopilot (Autosteer+TACC) and other things. For $39K it's actually a tremendous value. If you plan on keeping it for more than 5 years. It will actually beat a comparable Accord/Camry Hybrid in terms of TCO. "Calculating insurance, maintenance, repairs, taxes, fees, financing, depreciation and cost of electricity, we get the true cost of ownership for the Tesla Model 3 which is $25,209." 2020 Tesla Model 3 SR Plus: $25,209 2020 Toyota Camry Hybrid : $36,571 As for reliability. There are already plenty of really high mileage Teslas out in the wild. Like this guy who put 800,000+ miles on his 2014 Model S: https://twitter.com/gem8mingen https://twitter.com/gem8mingen Sources: [1] https://www.youtube.com/watch?v=w_-_t29bciw https://www.youtube.com/watch?v=w_-_t29bciw https://www.wheelsjoint.com/toyota-camry-vs-tesla-model-3-cost-of-ownership-after-5-years/ https://www.wheelsjoint.com/toyota-camry-vs-tesla-model-3-co... https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-accord-7-scenarios/ https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-... https://cleantechnica.com/2019/09/27/tesla-model-3-vs-toyota-camry-5-year-cost-to-own/ https://cleantechnica.com/2019/09/27/tesla-model-3-vs-toyota...
    - rsj_hn 5y ago
      When big companies change the subject from the cost of their products to TCO, that's when you check your wallet. Particularly when you are calculating TCO by assuming the car is under warranty and trying to sell that to a used car buyer who has no warranty and is forced to service their car at predatory dealerships and may be facing a 20K battery replacement cost. TCO needs to be calculated over the entire life of the vehicle, otherwise your plan is to sell the car to a sucker at the end of your ownership period, which may work for a short period of time, but not over the long term. Rear drive standard range model 3 starts at 40K. There is simply no universe in which this is either affordable or a bargain. This is entry-level luxury car pricing. If you are buying an out of warranty used Tesla for 20K, say 5 years old, then your TCO is going to be far higher than if you buy a 5 year old out of warranty Camry or Toyota. It is also foolish to include temporary government subsidies when determining the long term viability of a company. Those will all go away shortly at which point your TCO will also go up, and used car buyers do not benefit from these subsidies. And the Camry is the more expensive sedan, with the cheaper Corolla outselling it regularly. That's kindof the point. If you want Toyota style volumes, be prepared to have Toyota-style reliability, repair costs, parts eco-system, independent mechanics, and selling prices. The weighted average retail price for new Toyota cars sold is 34K, and 2/3 of cars purchased each year are used cars. The weighted average selling prices of Teslas is ~60K, nearly double the price of Toyotas. And remember that Toyota is a premium brand due to their legendary reliability. Let me know the lifetime service costs of a Tesla and then we can compare that to the Toyota. Include battery replacement costs in that figure and get back me to me with a real TCO. For Tesla, there are real question marks about out of warranty cost of ownership and battery replacement costs for purchasing used Teslas. For example, I've never paid more than 13K for a car, always have it serviced at independent mechanics I have a relationship with, and I have always kept my car for at least 7 years, with relatively cheap maintenace cost -- the biggest repair ticket item I ever needed to pay was a clutch replacement. So I am not willing to eat 5-7K in depreciation+maintenance per annum that Tesla buyers will pay. I've only ever suffered at most 1.5K per annum in depreciation+maintenance over the life of cars I've purchased. So don't talk to me about the great deal of paying 40K for a tesla that will lose 20K in depreciation over 5 years. I don't care how much cheaper electricity is than fuel, there is no universe in which this is a cost effective form of car ownership for the majority of the public (2/3 of car sales are used car sales). I buy reliable used cars that are 5-7 years old that are easy to service. So do other cost-conscious purchasers. For this demographic, there are too many question marks for me to dip into the EV market now, but wait 10-20 years for more reliability data to come out and to see if a cost-competitive third party aftermarket springs up for Teslas that has replacement parts and service costs comparable to what you can get with a good local mechanic working on Toyotas or Hondas, as well as battery replacement costs that are less than the price of the car when the battery dies -- unless the plan is to sell disposable cars, at which point the value proposition is even worse for cost-sensitive purchasers, and Tesla will have a hard time competing if their intention is to sell disposable cars for a higher price than cars that can be maintained for 30 years.
  - enos_feedler 5y ago
    Tesla is not in the luxury vehicle market. They have carved out their own segment with some overlap. They have pulled in some of the Kia and BMW market for those who put a price on technology, EV, etc
- rwcarlsen 5y ago
  When they provide an interior that isn't inferior to ICE cars (e.g. physical buttons and readings/dials in front of the driver) - and don't lose half their battery life for me in the winter heating the vehicle - then I'll probably buy an EV.
- underwater 5y ago
  That's irrelevant. Being a high quality or popular product doesn't stop it being a commodity. Apple worked hard to make an iPhone a different product segment to a smart phone the App Store, iMessage and an ecosystem of Apple-compatible services and products. As a result of you want to buy an iPhone you need to pay the premium Apple is asking. Tesla have the supercharger network and brand name recognition. Neither of them would allow them to completely own the EV market.

iPhones are not a commodity product. At the moment Teslas are. How will Tesla convince consumers that their car, with a high profit margin, is worth it over a mature EV vehicle from Ford, BMW, etc.

TeMPOraL 5y ago

As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.

rsj_hn 5y ago
I would say there are three main hurdles: * Convincing the public to spend 50-70K on a car * Convincing the public to buy an EV * Convincing the public that Tesla can be trusted for long term repair costs/reliability Right now Tesla is squarely in the luxury vehicle market, competing against Lexus/BMW/Mercedes, rather than against Mazda/Honda/Kia, and it's a new automaker, so we don't have good long term reliability or serviceability data, nor do we have good info on how long the batteries will last, or what costs someone buying a 10 year old model Y will face. These questions will resolve themselves with time, but whether they will all resolve in Tesla's favor is another matter.
- TeMPOraL 5y ago
  Fair enough. Especially the third one. Especially outside US. I've been joking to my wife for years now that we should get a Tesla eventually. Over that time, I've seen her going from "what's up with these EVs anyway?", through "that's a really expensive car", to "sure, but if anything breaks, IIRC the closest shop that can repair it is in Norway".
  - rsj_hn 5y ago
    Yeah, I think Tesla is just shooting themselves in the foot here. They should be sponsoring a healthy third party aftermarket, they should be adding easy to use ODB ports, they should be publishing service bulletins. And if indeed Munro and other EV enthusiasts are right that maintenance costs will be 90% lower, Tesla should be offering 20 year warranties on their car to give potential buyers, especially used car buyers, ease of mind when purchasing their cars. It's a new tech, there are lots of question marks about long term reliability, so if Tesla is so confident that these are non-issues, they should step in and insure car buyers from these risks. If indeed these cars are incredibly cheap to maintain, it wont cost Tesla much and will open a floodgate of new buyers.
    - xedeon 5y ago
      > They should be adding easy to use ODB ports, they should be publishing service bulletins Both of these have been happening for years now. You can even look up parts/diagrams and order directly from Tesla if you provide your VIN here: http://epc.tesla.com/ http://epc.tesla.com/ Maybe these are not obvious to non-owners. But it's silly to assume things where you have incomplete/false information. You can talk to actual owners here: https://teslamotorsclub.com/tmc/ https://teslamotorsclub.com/tmc/. I lurked around and asked questions to owners for years there. When I was researching if owning a Tesla is even viable. I own 2 now and never looked back. Also on your reply above. There are already 10 year old Model S's out there. My old neighbor just sold his Toyota 4Runner and got a 2012 Model S with 75K miles for $25K that still runs like new. He has it for almost two years now with ZERO maintenance/issues and spends $15-20 a month on electricity.
      - deleted 5y ago
        [deleted]
- xedeon 5y ago
  >Convincing the public to spend 50-70K on a car The Model 3 SR+ starts at $39k. For a while, the Model 3 SR was available by special order for only $35K [1] but it did not include autopilot (Autosteer+TACC) and other things. For $39K it's actually a tremendous value. If you plan on keeping it for more than 5 years. It will actually beat a comparable Accord/Camry Hybrid in terms of TCO. "Calculating insurance, maintenance, repairs, taxes, fees, financing, depreciation and cost of electricity, we get the true cost of ownership for the Tesla Model 3 which is $25,209." 2020 Tesla Model 3 SR Plus: $25,209 2020 Toyota Camry Hybrid : $36,571 As for reliability. There are already plenty of really high mileage Teslas out in the wild. Like this guy who put 800,000+ miles on his 2014 Model S: https://twitter.com/gem8mingen https://twitter.com/gem8mingen Sources: [1] https://www.youtube.com/watch?v=w_-_t29bciw https://www.youtube.com/watch?v=w_-_t29bciw https://www.wheelsjoint.com/toyota-camry-vs-tesla-model-3-cost-of-ownership-after-5-years/ https://www.wheelsjoint.com/toyota-camry-vs-tesla-model-3-co... https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-accord-7-scenarios/ https://cleantechnica.com/2019/04/25/tesla-model-3-vs-honda-... https://cleantechnica.com/2019/09/27/tesla-model-3-vs-toyota-camry-5-year-cost-to-own/ https://cleantechnica.com/2019/09/27/tesla-model-3-vs-toyota...
  - rsj_hn 5y ago
    When big companies change the subject from the cost of their products to TCO, that's when you check your wallet. Particularly when you are calculating TCO by assuming the car is under warranty and trying to sell that to a used car buyer who has no warranty and is forced to service their car at predatory dealerships and may be facing a 20K battery replacement cost. TCO needs to be calculated over the entire life of the vehicle, otherwise your plan is to sell the car to a sucker at the end of your ownership period, which may work for a short period of time, but not over the long term. Rear drive standard range model 3 starts at 40K. There is simply no universe in which this is either affordable or a bargain. This is entry-level luxury car pricing. If you are buying an out of warranty used Tesla for 20K, say 5 years old, then your TCO is going to be far higher than if you buy a 5 year old out of warranty Camry or Toyota. It is also foolish to include temporary government subsidies when determining the long term viability of a company. Those will all go away shortly at which point your TCO will also go up, and used car buyers do not benefit from these subsidies. And the Camry is the more expensive sedan, with the cheaper Corolla outselling it regularly. That's kindof the point. If you want Toyota style volumes, be prepared to have Toyota-style reliability, repair costs, parts eco-system, independent mechanics, and selling prices. The weighted average retail price for new Toyota cars sold is 34K, and 2/3 of cars purchased each year are used cars. The weighted average selling prices of Teslas is ~60K, nearly double the price of Toyotas. And remember that Toyota is a premium brand due to their legendary reliability. Let me know the lifetime service costs of a Tesla and then we can compare that to the Toyota. Include battery replacement costs in that figure and get back me to me with a real TCO. For Tesla, there are real question marks about out of warranty cost of ownership and battery replacement costs for purchasing used Teslas. For example, I've never paid more than 13K for a car, always have it serviced at independent mechanics I have a relationship with, and I have always kept my car for at least 7 years, with relatively cheap maintenace cost -- the biggest repair ticket item I ever needed to pay was a clutch replacement. So I am not willing to eat 5-7K in depreciation+maintenance per annum that Tesla buyers will pay. I've only ever suffered at most 1.5K per annum in depreciation+maintenance over the life of cars I've purchased. So don't talk to me about the great deal of paying 40K for a tesla that will lose 20K in depreciation over 5 years. I don't care how much cheaper electricity is than fuel, there is no universe in which this is a cost effective form of car ownership for the majority of the public (2/3 of car sales are used car sales). I buy reliable used cars that are 5-7 years old that are easy to service. So do other cost-conscious purchasers. For this demographic, there are too many question marks for me to dip into the EV market now, but wait 10-20 years for more reliability data to come out and to see if a cost-competitive third party aftermarket springs up for Teslas that has replacement parts and service costs comparable to what you can get with a good local mechanic working on Toyotas or Hondas, as well as battery replacement costs that are less than the price of the car when the battery dies -- unless the plan is to sell disposable cars, at which point the value proposition is even worse for cost-sensitive purchasers, and Tesla will have a hard time competing if their intention is to sell disposable cars for a higher price than cars that can be maintained for 30 years.
- enos_feedler 5y ago
  Tesla is not in the luxury vehicle market. They have carved out their own segment with some overlap. They have pulled in some of the Kia and BMW market for those who put a price on technology, EV, etc
rwcarlsen 5y ago
When they provide an interior that isn't inferior to ICE cars (e.g. physical buttons and readings/dials in front of the driver) - and don't lose half their battery life for me in the winter heating the vehicle - then I'll probably buy an EV.
underwater 5y ago
That's irrelevant. Being a high quality or popular product doesn't stop it being a commodity. Apple worked hard to make an iPhone a different product segment to a smart phone the App Store, iMessage and an ecosystem of Apple-compatible services and products. As a result of you want to buy an iPhone you need to pay the premium Apple is asking. Tesla have the supercharger network and brand name recognition. Neither of them would allow them to completely own the EV market.