Blog A Look at Tesla's EV Competition in 2019

[wdolson]

BMW is an interesting case. To me it looks like they are trying harder than anybody else to compete head-to-head with Tesla. They really, really want this, and they've wanted it for A While. (I mean compared with Porsche and Jaguar, who are coming in much later.) The BMW i3 and i8 Coupe have been on the market for several years, and now we've got the i8 Roadster. These were not timid experiments; they're not half-baked compliance cars. They were meant to steal Tesla's thunder.

And yet, that obviously didn't happen. It's not for lack of trying or lack of commitment on BMW's part. It's more about lack of clue. Despite all their desire and ambition in this area, BMW don't get electric cars. They don't understand the market, don't understand what most of us even want from these vehicles.

The i3 was a very well engineered and well built car. (Munro said it was the best-built car they ever tore down!) And yet, the whole thing was still mired in the old "city car" concept of EVs, based on the assumption that electric cars can't go very fast or very far, batteries aren't good enough, and that their market is basically urban commuters or eco-hipsters who want more of a spunky car than a sexy one. (Also crippling the PHEV version with a teeny gas tank to appease California regulations didn't help.)

The i8 was a course correction. OK, maybe people do want fast-and-sexy after all! "So Tesla think they can do sexy, huh? Hold my weissbier and watch this!" Scissor doors! Weird vents and swoops and air channels where there never were air channels before! Fake engine noises piped through a speaker in the fake tail pipe! A pair of fake front grilles! And long range… We don't have a vast charging network, but we can double down on the PHEV thing (with a three-cylinder engine, haha!).

Neither the i3 or the i8 is a bad car, as such. Some people love them, but not enough. They were aimed at the wrong targets. Maybe the next attempt will have better aim, I dunno.

The i3 and i8 are fine with people who want a weird exotic looking car, but the bulk of the population don't want a weirdmobile. Doug DeMuro who does humorous car reviews on YouTube has reviewed both i8 version, the i3, Bolt, Model 3, Tesla Roadster, and Model X. He's more of an ICE sportcar guy, but he said Tesla proved you could make a high performance EV, yet nobody has really made a true sportscar EV from the ground up yet. He said it was frustrating that nobody has. This was in his review of the i8 Roadster. He said the i8 was pretty much the closest there is at this point, though others will be coming.

DeMuro likes weird cars, so he likes the i8, but it has very limited appeal. When DeMuro reviewed the i3 he pointed out that as far as value went, the Bolt was a significantly better deal at this point. The Bolt has more range and is much cheaper.

I think BMW's problem is there is part of the company that wants to commit to EVs, but another part that doesn't want their EVs to collapse sales of their ICE cars. So they ended up coming out with weird cars only a few people wanted instead of something that really could compete with Tesla head to head.

One of Tesla's big advantages is they don't have any IP invested in ICE tech and nobody within the company defending it. The true disruption of the car industry had to come from the outside because of this. In the next decade Tesla's real competition might not come from legacy automakers but other companies jumping into the car market from other industries. When digital cameras became a thing, the traditional camera makers like Nikon, Canon, etc. jumped in, but so did other players like HP and Sony who made electronics.

I still think LG is planning on jumping into the EV business. They already have expertise in making batteries and they have experience with heavy industry. They are a major maker of large household appliances as well as industrial machinery. Through their partnership with GM, they are learning the ins and outs of making cars.

 

[roblab]

The one thing most of the manufacturers got right, which Tesla got wrong, is that they have the foresight to produce an SUV first. It's what people want.

First? Really? Or do you mean first in the last five years? Tesla has followed its stated goals, first to make a proof of concept sports car, high price, specifically to fund a second phase proof of a passenger vehicle, and then to move on to the SUV and the smaller vehicle. So far, they seem to have gotten it right. As to what people want, the pressure on Tesla is to make millions of Model 3s, not SUVs.

 

[tonybelding]

DeMuro likes weird cars, so he likes the i8, but it has very limited appeal. When DeMuro reviewed the i3 he pointed out that as far as value went, the Bolt was a significantly better deal at this point. The Bolt has more range and is much cheaper.

But GM are rumored to be losing $9,000 on each Bolt they sell. When the first generation Prius came out, GM's analysts concluded that Toyota must be selling them at a loss. They couldn't understand it, they thought Toyota were going to lose a mint. And of course, what happened is that Toyota persevered, continued to improve their technology with successive models, and the Prius became a fabulously valuable brand.

There's an old military adage about preparing to re-fight the last war instead of the next one. Volt and Bolt are GM's attempts to re-fight the Prius war, not fight the Tesla war.

When digital cameras became a thing, the traditional camera makers like Nikon, Canon, etc. jumped in, but so did other players like HP and Sony who made electronics.

Out of all those "electronics" companies that tried to get into the camera business, the only one that survived in the long run was Panasonic. IMHO Sony doesn't count, because Sony bought Minolta, but they didn't get the name or trademarks in the deal. So Sony's camera division is basically Minolta flying under the Sony name.

Another "traditional camera maker" that did well in digital cameras early on was... Kodak. Yes, Kodak digital cameras even out-sold Canon for a while. The problem was that Kodak still had an enormous, world-spanning industrial business in film production and processing, and when film sales suddenly collapsed there was simply no way for them to deal with that.

I wonder if there's a lesson in that for car makers?

I still think LG is planning on jumping into the EV business.

An interesting observation about the established car makers is that they out-sourced a lot of their parts and components, but the one thing most of them didn't out-source was the key technology of the automobile: the internal combustion engine.

The key technology of the electric car is the battery. I predict that's going to become a problem for all these car makers that don't produce their own batteries.

 

[wdolson]

But GM are rumored to be losing $9,000 on each Bolt they sell. When the first generation Prius came out, GM's analysts concluded that Toyota must be selling them at a loss. They couldn't understand it, they thought Toyota were going to lose a mint. And of course, what happened is that Toyota persevered, continued to improve their technology with successive models, and the Prius became a fabulously valuable brand.

There's an old military adage about preparing to re-fight the last war instead of the next one. Volt and Bolt are GM's attempts to re-fight the Prius war, not fight the Tesla war.

Good point.

Out of all those "electronics" companies that tried to get into the camera business, the only one that survived in the long run was Panasonic. IMHO Sony doesn't count, because Sony bought Minolta, but they didn't get the name or trademarks in the deal. So Sony's camera division is basically Minolta flying under the Sony name.

Another "traditional camera maker" that did well in digital cameras early on was... Kodak. Yes, Kodak digital cameras even out-sold Canon for a while. The problem was that Kodak still had an enormous, world-spanning industrial business in film production and processing, and when film sales suddenly collapsed there was simply no way for them to deal with that.

I wonder if there's a lesson in that for car makers?

What drove most of the players out of the camera business was cameras in phones. Initially camera phones were pretty poor, but now most people use their phones to take the pictures they used to take with consumer grade cameras. The quality of phone cameras is now good enough some professional camera work has been done with them.

Samsung and Apple are among the biggest camera makers today.

The only market left for separate cameras is a few pro-amateurs who want more flexibility than the typical phone camera, and professionals who need full flexibility.

My father was a professional photographer. He had a Kodak dealership for years and he carried a Kodak digital as a "spotting camera" and used his Nikons for the actual final shot. He said the Kodak was at least 90% as good as his Nikons and in a few instances gave him better shots, though not at the resolution he could get with his Nikons.

An interesting observation about the established car makers is that they out-sourced a lot of their parts and components, but the one thing most of them didn't out-source was the key technology of the automobile: the internal combustion engine.

The key technology of the electric car is the battery. I predict that's going to become a problem for all these car makers that don't produce their own batteries.

Yes. Tesla has recognized this and none of the legacy automakers have completely realized it yet.

I suspect most of the automakers are going to hit a wall when they want to scale up their battery orders to make more of whatever cars they have in production only to find the battery maker will only sell them what they contracted for. Especially if one or more battery makers decide to make their own cars.

 

[whitex]

I'll believe it when I see it -Chet

The number of Electrify America fast chargers in service today is already higher than what Tesla has when they started selling the Model S. You can use the excuse of "I don't see it therefore it isn't true", but that is just hiding your head in the sand. I bet you haven't visited and seen every single Tesla supercharger in the world, and yet you believe they exist.

 

[jgs]

The only market left for separate cameras is a few pro-amateurs who want more flexibility than the typical phone camera, and professionals who need full flexibility.

And ruggedized cameras for sports and other harsh conditions, but I can’t figure out how to relate that back to the topic of cars. :-/

 

[wdolson]

And ruggedized cameras for sports and other harsh conditions, but I can’t figure out how to relate that back to the topic of cars. :-/

My original point was when the camera market had a major technology shift, a bunch of companies with ties to the new tech (electronics) jumped into the camera market. For a while the amateur market was split between the traditional camera makers and the new comers. When cell phone cameras became as good as they did and easy to use, most of the electronics companies left the market and phone makers dominate the amateur market now.

There were two revolutions in cameras back to back, first film->digital, then camera->phone. Some established brands of cameras surfed the changes and survived, others didn't. Minolta survived as a division of an electronics company. The companies that focused on the bottom end of the film camera market are now making something else and many are divisions of other companies. Hasselblad, once the Rolls Royce of film cameras is still around, but owned by someone else.

My prediction is that non-car companies that have experience in related technologies like batteries and/or major manufacturing will get into the car business and those companies might prove to be Tesla's prime competition over the next decade. LG is in the prime position to do so. Samsung is another company with the background to compete. BYD is not widely available outside China, but they are a battery maker that went into the car business.

Many of the Japanese companies are now following Nissan's example and starting or partnering with companies to make their own batteries. The Europeans are making serious noises about doing that, but haven't yet. The Big 3 American companies are happy to get their batteries from 3rd parties and might find they can't get more when they want them.

When it comes to electric car manufacturing, the companies that control the production of batteries control the market.

The comparison with digital cameras does break down because there isn't really a bottleneck technology in making digital cameras. Making CCDs is fairly easy and being small semi-conductor devices, there are plants all over the world that can make them in quantity. Good optics are a little tougher to come by, but withe CCD's receiving surface being much smaller than film, you can get away with a pretty small lens and get close to the same quality. Though a bigger lens of high quality is going to get the best pictures, and it's the reason the pros still use SLRs.

When Tesla started out, they knew very little about making cars or manufacturing in general and they managed to surf the trecherous start up shoals to emerge as a serious car company. Most of the battery companies don't have experience making cars, but most of the larger battery companies today make something else because they started making batteries back when they were just a minor component of portable computer devices.

When Tesla approached Panasonic, they asked Panasonic how many li-ion cells they would like every consumer to have and they said about 8 was their goal. When Tesla said they could make that 7000 Panasonic they were interested. In business it's rare to see an opportunity to increase your volume by nearly 1000X.

Those battery companies having their hand in other technologies puts them in a position to make EVs too and they have a head start on where Tesla started in many key areas. LG is one of the biggest large appliance makers in the world and Samsung makes them too. both companies know how to mass produce large electric things and they can make their own batteries. Both are big enough to hide a car R&D project. LG could be doing it in plain sight where they are making components for the Bolt.

Some legacy car makers will make it through the transition just like Nikon and Canon did. Others may make it through as a division of something else, and still others will be gone like the brands on this list:
List of defunct automobile manufacturers of the United States - Wikipedia

It's very long.

 

[jgs]

The number of Electrify America fast chargers in service today is already higher than what Tesla has when they started selling the Model S. You can use the excuse of "I don't see it therefore it isn't true", but that is just hiding your head in the sand. I bet you haven't visited and seen every single Tesla supercharger in the world, and yet you believe they exist.

Since you seem to know a lot about Electrify America, maybe you know if they have a zoomable map somewhere? The one on their web site sucks, you can’t figure out from it where they’ve sited the chargers, and as we all know siting is everything. I tried using PlugShare to glean the info but that didn’t work out either.

 

[tonybelding]

The i3 and i8 are fine with people who want a weird exotic looking car, but the bulk of the population don't want a weirdmobile. Doug DeMuro who does humorous car reviews on YouTube has reviewed both i8 version, the i3, Bolt, Model 3, Tesla Roadster, and Model X. He's more of an ICE sportcar guy, but he said Tesla proved you could make a high performance EV, yet nobody has really made a true sportscar EV from the ground up yet. He said it was frustrating that nobody has. This was in his review of the i8 Roadster. He said the i8 was pretty much the closest there is at this point, though others will be coming.

Got to admit I'm with Doug DeMuro, in that I have a soft spot for weird exotic looking cars. (It doesn't help that the current fashions in "normal" cars are butt-ugly to me.)

I was also kind of briefly tempted by the i8 Roadster. Even though I made fun of its over-cooked styling, it's not an ugly car by any means (especially in the Duracell copper paint job!), and I'm sure I'd get a kick out of the attention it draws. It's not a hard core sports car, but its performance is probably okay for me, since I'm really looking for more of a grand touring car. The idea of being able to travel freely anywhere, without concern about battery charging, and then put the top down and switch to EV mode and cruise around and see the sights in style… That has a definite appeal to me.

Then I looked at the fake front grilles, the fake tailpipe with the speaker to produce fake engine sounds, fake engine noise in the cabin, a measly 20 miles electric range, slower acceleration than the original Tesla Roadster, possibly even less trunk space too, and a price tag not that much short of the 2nd gen Tesla Roadster, and I just couldn't swallow all that.

 

[wdolson]

Got to admit I'm with Doug DeMuro, in that I have a soft spot for weird exotic looking cars. (It doesn't help that the current fashions in "normal" cars are butt-ugly to me.)

I was also kind of briefly tempted by the i8 Roadster. Even though I made fun of its over-cooked styling, it's not an ugly car by any means (especially in the Duracell copper paint job!), and I'm sure I'd get a kick out of the attention it draws. It's not a hard core sports car, but its performance is probably okay for me, since I'm really looking for more of a grand touring car. The idea of being able to travel freely anywhere, without concern about battery charging, and then put the top down and switch to EV mode and cruise around and see the sights in style… That has a definite appeal to me.

Then I looked at the fake front grilles, the fake tailpipe with the speaker to produce fake engine sounds, fake engine noise in the cabin, a measly 20 miles electric range, slower acceleration than the original Tesla Roadster, possibly even less trunk space too, and a price tag not that much short of the 2nd gen Tesla Roadster, and I just couldn't swallow all that.

Odd cars are interesting to look at, but I wouldn't want to drive one. For car ownership I like something that is non-descript for the most part. My Model S is the most stand out car I've ever had, but it looks so similar to many other cars people don't know it's anything unusual unless they know what they're looking at.

 

[Sunlight]

Determined to go EV and having no option for now we got our BMW i3 which is serving us well for 90% of our trips.

I also was quite taken by its 'quirky' looks when it came out - although I can't say I loved it, I never felt hostile to the design. Actually I preferred the original concept a bit.

Anyway "Beauty is in the eye of the beholder" and I have to say that the design has grown on me and, to my surprise, most people who see it (and have never even seen a photo of one) seem really taken by its 'cute and funky' (and practical) shape.

My feeling now is that it is really a new generation EV fundamental design - short nose; spacious inside; squared off practical butt; skateboard chassis; SUV format; short overhangs; blunt and clean streamlined front...…

Amazingly it will take a 3000mm length (wood or plastic section) from the windscreen base to the tailgate - same as our Jeep Grand Cherokee! So the Jeep will not be getting those extra chores.

 

[WarpedOne]

And even you felt the need to post the concept and not the production turd. ...

 

[Sunlight]

The concept was for illustrative uses as I suspect not many remember this early design - it is actually remarkably close to the production 'turd' (main difference is the dropped rear window line)

But as you call yourself, I think you are warped by rigid preconceptions! Then again I am often amused by the disdain for certain designs that I (and presumably others) like and vica versa...….Art? Very subjective.

 

[whitex]

Since you seem to know a lot about Electrify America, maybe you know if they have a zoomable map somewhere? The one on their web site sucks, you can’t figure out from it where they’ve sited the chargers, and as we all know siting is everything. I tried using PlugShare to glean the info but that didn’t work out either.

They web UI is fairly primitive, but if you just go to their locations link, on the right you will have a list of all chargers. If you click the charger on the list (right side of the screen) it zooms onto the charger. See attached screenshot.

 

[SteveD]

I was reading an article today that was just posted in my Fidelity account. As you know Fidelity own a fairly good share in Tesla stock. This is a link to a Reuters article talking about 2019 as the beginning of serious competition to Tesla. Here is a link to the article.

https://www.fidelity.com/news/article/top-news/201809030802RTRSNEWSCOMBINED_L8N1VL260_1

They are working on plans for a Supercharger network, built in partnership with other car makers. Could be significant to have a multi brand supercharger network built by a consortium of car manufacturers. It would make sense to keep costs down. I would not underestimate German ingenuity. Don't think they will sit back and let Tesla rule the market. Clearly Tesla has built demand for EV.

BTW, just the other day I saw 2 car transport trucks with a load of new Model 3 hearing north on I-5, either Seattle or Canada. It's the third transport I've seen in the last 3 weeks.

 

[EVMeister]

Further analysis on that media piece - Reuters: "Electric Mercedes opens German assault on Tesla". I think many people here understand how short-sighted the analysis is. And how flawed the notion of "the others" eating away at Tesla's market share is. It just doesn't work like that in an expanding market (EVs), it is all about displacing the nasty ICE.

 

[RFernatt]

Not one of these Tesla Killers is designed to be better than each manufactures’ gasoline cars. However, they will hurt their own brand more than they hurt Tesla.

Reminds me of the Star Trek Next Gen episode "Booby Trap." The Enterprise finds itself in a situation where the ship is held immobile by a force field and being bombarded by lethal radiation. As the crew poured more energy into the warp drive for escape, the alien booby trap converted that energy into more radiation. The trap used your own resources to weaken and then kill you.

Legacy OEMs seem to face a similar situation.

 

[wdolson]

I was reading an article today that was just posted in my Fidelity account. As you know Fidelity own a fairly good share in Tesla stock. This is a link to a Reuters article talking about 2019 as the beginning of serious competition to Tesla. Here is a link to the article.

https://www.fidelity.com/news/article/top-news/201809030802RTRSNEWSCOMBINED_L8N1VL260_1

They are working on plans for a Supercharger network, built in partnership with other car makers. Could be significant to have a multi brand supercharger network built by a consortium of car manufacturers. It would make sense to keep costs down. I would not underestimate German ingenuity. Don't think they will sit back and let Tesla rule the market. Clearly Tesla has built demand for EV.

BTW, just the other day I saw 2 car transport trucks with a load of new Model 3 hearing north on I-5, either Seattle or Canada. It's the third transport I've seen in the last 3 weeks.

How many batteries has Mercedes secured for their SUV? To seriously compete with Tesla will take about 50 GWH/year (500K cars/year with 100 KWH each). For an SUV to have any decent range at all it's going to require something in the range of 100 KWH.

I see articles that Mercedes is buying cells from CATL, but I can't find anything on how many cells they have contracted for.

Somebody needs to scour the net and gather together data on who has access to how many batteries. That is the key to mass producing EVs. The only companies that are truly serious about competing with Tesla will have locked down contracts for GigaFactory quantities of cells. Anyone who hasn't done that is just posing.

These articles also seem to assume a couple of things that are almost certainly false. The first being that Tesla is going to be standing still while all this happens. The other is that the EV market is limited. Ultimately it is, but the limits are so vast compared to where the market is now, there is room for staggering growth by many players before anybody gets hurt by competition from rivals if both have compelling products.

Saying Mercedes will hurt Tesla with their own EVs is like saying android was going to put Apple out of business in 2008 or 2009 because they were going to be on more smart phones. Android is more common worldwide today, but Apple is hardly in trouble because of it. The market replacing pre-smart phones as well as new phone sales was so vast that there was plenty of room for both. The market is near saturation now and new smartphones are competing with older smartphones, but neither iOS nor Android are getting marginalized. Other phone OSs are, but that's a different story.

There is a lot of news this year about VW contracting for $48 to $50 billion for cells. If you read the fine print, they're aiming to be spending that on cells by 2025. It's predicted that cells will cost $100/KWH by 2025. It may be sooner, but assume that's VW's working target. That's 500 GWh/year (based on $50 billion a year for cells). If they are making 100 KWh cars, that's 5 million cars a year.

Which is a serious number of cars, but 2025 is 7 years from now. 7 years ago Tesla was wrapping up Roadster production and the Model S wasn't in production yet. Tesla is currently producing 20 GWh/year, soon to be 35 GWh/year with an eventual goal at GF1 to be 150 GWh/year. And that's just their first factory. They are already planning the next two. The Chinese are building large battery factories, but nobody other than Tesla outside of China has broken ground on one yet.

By the time Mercedes, VW, and BMW get to competitive volumes, Tesla might be one of the biggest automakers in the world.

The established automakers have some advantages. They have established production facilities and much more experience making cars. They also have an established distribution network. They also have a bunch of things working against them: internal battles with the ICE die hards, way behind Tesla in making EVs, way behind Tesla in long range charging networks, and way behind Tesla in battery production volumes. Add on top of that that Tesla has proven itself to be very quick to change and there are 0 ICE advocates slowing anything down in the company.

Just getting established as a serious player in the market is going to be tough enough. Getting enough batteries for volume production is another hurdle. And as they roll out compelling EVs they have to deal with the hit their ICE lines are going to suffer before they have enough batteries to completely convert all their production to EVs. So most of these companies will likely take income hits as their overall sales drop due to lack of demand for ICE when most of their production is ICE at a time when they will have to be investing lots of money into retooling factories and rolling out new cars.

All new car models have bugs that need to be worked out, so these companies will also be spending a lot of extra money on warranty service.

There will be legacy auto makers who make it through, but some will not make it.

Actually cutting into Tesla's sales to any degree is the least of their problems. The potential market is big enough a number of compelling EVs could be out from different companies and not really compete with one another much because all will be killing ICE sales much more than hurting one another.

 

[Electroman]

The market for upscale electric cars is Tesla's to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019.

 

[Electroman]

Electric Mercedes opens German assault on Tesla

The market for upscale electric cars is Tesla's to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019.

Bwwhhhhaaa. They can’t get a simple fact right. Tesla would sell 50K M3s just in Q3 alone.