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> Do you believe this? There are a lot of built-in incentives for manufacturers to switch to electric once the market demand exists. Less moving parts to warr

> Do you believe this? There are a lot of built-in incentives for manufacturers to switch to electric once the market demand exists. Less moving parts to warranty means potentially less long-tail costs for parts as well as less capital allocation for potential warranty service claims paid to dealerships. Less moving parts that can fail. Less parts in general. AWD in electrics is typically done with a front and rear motor configuration versus using moving parts to transfer power from the front to the rear. More opportunities to upsell with lower capital costs. Model stratification by power output in ICE typically means more complex engineering (forced induction) or larger engine; both of which require significantly more R&D, testing, and validation. Once you sink capital investments into an ICE engine and manufacturing line, you need to reuse it over many years across a large range of vehicles to recoup the cost. Model stratification in electrics is via bigger battery packs (stuff more of the same cells in there) and multiple motors. Basically, electric cars are fiscally better for manufacturers in every way -- so long as consumers are willing to pay the premium AND willing to live with the inconveniences (less infrastructure for refueling, longer refueling, range anxiety). What Tesla did was de-risk the market by showing that consumers will buy the product despite its flaws.

JKCalhoun 4y ago
> once the market demand exists I suspect that is where many of us can disagree — the when.
- CharlieDigital 4y ago
  The demand exists. Tesla's order books are full. Ford's Mustang Mach-E is sold out with a waiting list. Ford's F-150 lightning have a waiting list as well as mechanisms to prevent scalping (voiding warranties) because there is so much demand. Problem right now with EVs isn't demand (not saying that demand won't be an issue, but right now it seems like we haven't reached the inflection point for demand vs supply), it's so supply constrained to the extent that dealerships can mark up F-150 Lightnings with exorbitant costs. Granted: we're still not really talking affordable econo-movers yet, but the market of $40-90k electric vehicles is still being restricted on the supply side. There are still people who want to buy a $40-90k EV who can't.
  - frumper 4y ago
    I couldn't find anything on Ford warranties being void if someone resold. The only thing I could find is a statement from Ford saying warranties do transfer to other parties. Any relevant links? Edit: I saw GM announced they'll strip Hummer warranties, pretty crazy. I doubt the people that will buy a scalped Hummer EV will care much though. https://www.teslarati.com/general-motors-warranty-void-flipped-electric-vehicles-price-gouging/ https://www.teslarati.com/general-motors-warranty-void-flipp...
bko 4y ago
> What Tesla did was de-risk the market by showing that consumers will buy the product despite its flaws. Tesla is sexy, sure. But I don't think they proved that people want electric cars. Tesla still sells very few cars (~3%). The giants sell a lot more cars I agree electric cars are better, but nothing stopped the car giants from making them decades ago. Tesla didn't come around at the right time, even Musk admits as much. The car giants could have worked on electric cars in the past, but for whatever reason didn't. It would have even been easier for them considering their expertise in manufacturing and distribution. Not to mention that politicians don't really like Tesla for whatever reason. If you listen to Biden talk about electric cars he often suspiciously leaves out Tesla, which is weird considering their cars are made in US and dominate 75% of the electric market in the US.
- ericmay 4y ago
  > Tesla is sexy, sure. But I don't think they proved that people want electric cars. I'm not sure if this is the right way to frame this. It would probably be better to say something like Tesla proved that EVs are practical and people will buy them. > Tesla still sells very few cars (~3%). The giants sell a lot more cars Sure, at the moment. But now you're conflating manufacturer market share with fuel type market share. A better way to think about this in the context of ICE vs EV is to look at the efforts underway by all manufacturers to ramp up EV production. It takes time to do. New companies (Lucid, Rivian, Tesa, etc.) take time to ramp up production. And then if you want to just compare manufacturers against each other with all fuel types combined, you can do that separately, to which I'd say this is not at all surprising given EV makers are new and take time to get market penetration. > but nothing stopped the car giants from making them decades ago All of the profit incentives in the world stopped them basically. Everyone was fat and happy with oil for cars, why bother changing anything or doing anything different?
- DennisP 4y ago
  Tesla sells every car they can make. Their backlog is about a year long. We won't know how much demand there is until they can actually meet it. Batteries cost a lot more decades ago. Car giants could have built electrics but they would have been expensive and short range. If the trend in battery prices continues, electric cars will have lower sticker prices than ICE cars in a couple years, and then anyone who just wants a good price for a new car will change from an ICE customer to an electric customer.

JKCalhoun 4y ago

> once the market demand exists I suspect that is where many of us can disagree — the when.

CharlieDigital 4y ago
The demand exists. Tesla's order books are full. Ford's Mustang Mach-E is sold out with a waiting list. Ford's F-150 lightning have a waiting list as well as mechanisms to prevent scalping (voiding warranties) because there is so much demand. Problem right now with EVs isn't demand (not saying that demand won't be an issue, but right now it seems like we haven't reached the inflection point for demand vs supply), it's so supply constrained to the extent that dealerships can mark up F-150 Lightnings with exorbitant costs. Granted: we're still not really talking affordable econo-movers yet, but the market of $40-90k electric vehicles is still being restricted on the supply side. There are still people who want to buy a $40-90k EV who can't.
- frumper 4y ago
  I couldn't find anything on Ford warranties being void if someone resold. The only thing I could find is a statement from Ford saying warranties do transfer to other parties. Any relevant links? Edit: I saw GM announced they'll strip Hummer warranties, pretty crazy. I doubt the people that will buy a scalped Hummer EV will care much though. https://www.teslarati.com/general-motors-warranty-void-flipped-electric-vehicles-price-gouging/ https://www.teslarati.com/general-motors-warranty-void-flipp...

bko 4y ago

> What Tesla did was de-risk the market by showing that consumers will buy the product despite its flaws. Tesla is sexy, sure. But I don't think they proved that people want electric cars. Tesla still sells very few cars (~3%). The giants sell a lot more cars I agree electric cars are better, but nothing stopped the car giants from making them decades ago. Tesla didn't come around at the right time, even Musk admits as much. The car giants could have worked on electric cars in the past, but for whatever reason didn't. It would have even been easier for them considering their expertise in manufacturing and distribution. Not to mention that politicians don't really like Tesla for whatever reason. If you listen to Biden talk about electric cars he often suspiciously leaves out Tesla, which is weird considering their cars are made in US and dominate 75% of the electric market in the US.

ericmay 4y ago
> Tesla is sexy, sure. But I don't think they proved that people want electric cars. I'm not sure if this is the right way to frame this. It would probably be better to say something like Tesla proved that EVs are practical and people will buy them. > Tesla still sells very few cars (~3%). The giants sell a lot more cars Sure, at the moment. But now you're conflating manufacturer market share with fuel type market share. A better way to think about this in the context of ICE vs EV is to look at the efforts underway by all manufacturers to ramp up EV production. It takes time to do. New companies (Lucid, Rivian, Tesa, etc.) take time to ramp up production. And then if you want to just compare manufacturers against each other with all fuel types combined, you can do that separately, to which I'd say this is not at all surprising given EV makers are new and take time to get market penetration. > but nothing stopped the car giants from making them decades ago All of the profit incentives in the world stopped them basically. Everyone was fat and happy with oil for cars, why bother changing anything or doing anything different?
DennisP 4y ago
Tesla sells every car they can make. Their backlog is about a year long. We won't know how much demand there is until they can actually meet it. Batteries cost a lot more decades ago. Car giants could have built electrics but they would have been expensive and short range. If the trend in battery prices continues, electric cars will have lower sticker prices than ICE cars in a couple years, and then anyone who just wants a good price for a new car will change from an ICE customer to an electric customer.