Articles/megaposts by DaveT

[DaveT]

Dave: Thanks again for sharing your thoughts with this latest (#5) installment. While I agree that TM has a good sized first disrupter moat with compelling/long distance EVs, I do believe that the BMWs/MBs have the cash/name recognition to take on this segment of the EV market in the future. My unscientific thesis would have TM well ahead, growing, with TSLA appreciation for the next 5-7 years (say 2020 for argument sake), during that time BMW/MB (pick a name) will pair up with Samsung or LG, or a Chinese company, to build their own series of Gigafactories. They will be able to acquire the 'in house' expertise for the drivetrain and software needed to make their own vehicles. This is actually what Elon/TM wants as well and I could even see more cooperation between TM and other vehicle manufacturers per TMs mission statement. This cooperation, while not good for TM investors is good for humanity so I can definitely see the divide between TM and other EV manufacturers quickly diminish.

Will look forward to your, and other's, thoughts on this and future installments to see if your logic/scientific approach can quickly tear apart my 'gut' approach.

I'm actually optimistic that some/many of the auto makers will partner with companies like Samsung or LG, as they are already to secure batteries. And I think over time they will beef up their EV departments (as they are already doing currently). But let's look at this impact on Tesla from a few angles...

I think the question is can the other auto makers produce a car MORE compelling than Tesla's cars at the same price point of Tesla's cars (ie., Model S, X, Gen3 sedan, Gen 3 crossover, etc). If other auto makers are able to successfully make EVs that are more compelling than Tesla's cars at the same price point, then Tesla's growth is limited since the demand for their vehicles will be severely limited by the more compelling offerings of other auto makers. However, if other auto makers make EVs that are slightly less compelling than Tesla's cars at the same price point, then the demand for Tesla's cars has no end (or is capped by the total size of the market) and Tesla's growth is not limited either.

But let's look at this from yet another angle. When will BMW come out with an electric version of the BMW 3 series that goes 200 miles on a charge and is priced at $35k? (Note: $35k in today's dollars.) Can they release a car like that in 2020? I don't think so. They are so far behind with their EV/battery tech and costs savings, and they don't even have a vision/goal to do that. I'm thinking it's more realistic (or maybe still very optimistic) to imagine 2023-2025 as when BMW will release a compelling BMW 3 series EV (200 mile charge, $35k). But by then, how many Gen3's will Tesla be selling? Probably in the millions. And the Gen3 will likely only get better as Tesla iterates on it with their continuous improvement focus.

Basically, the way I see it is that in the EV market, it's Tesla in in the lead and everybody chasing Tesla. The problem is the companies chasing Tesla aren't chasing with enough effort and urgency since they have their comfortable cash cows (ie., ICE cars) generating enough revenue for them while the EV market is still so small and uninspiring (at least to them). By the time they feel urgency, it might be because Gen3 is taking away substantial amount of sales (ie., BMW 3 series sales drop 10-30% from 2018-2023), and by then Tesla has firmly established their lead and dominance in the growing EV market.

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If my 'gut' is correct, TM very well may be at $800-$1,000/share. I will hopefully have an S, X and Gen III (for my daughter), a decent retirement fund and sell 3/4 of my TSLA.

$800-1000/shares by 2020 is a strangely high number coming from you since IIRC you've shared your doubt that Tesla can surpass BMW/Mercedes/etc is sales. If TSLA is at $800-1,000/share in 2020, then that would be a $120-$150 billion market cap (assuming 150m shares outstanding). Currently, BMW's market cap is $62 billion, Daimler's is $102 billion, Honda is $63 billion.

 

[AlMc]

I'm actually optimistic that some/many of the auto makers will partner with companies like Samsung or LG, as they are already to secure batteries. And I think over time they will beef up their EV departments (as they are already doing currently). But let's look at this impact on Tesla from a few angles...

I think the question is can the other auto makers produce a car MORE compelling than Tesla's cars at the same price point of Tesla's cars (ie., Model S, X, Gen3 sedan, Gen 3 crossover, etc). If other auto makers are able to successfully make EVs that are more compelling than Tesla's cars at the same price point, then Tesla's growth is limited since the demand for their vehicles will be severely limited by the more compelling offerings of other auto makers. However, if other auto makers make EVs that are slightly less compelling than Tesla's cars at the same price point, then the demand for Tesla's cars has no end (or is capped by the total size of the market) and Tesla's growth is not limited either.

But let's look at this from yet another angle. When will BMW come out with an electric version of the BMW 3 series that goes 200 miles on a charge and is priced at $35k? (Note: $35k in today's dollars.) Can they release a car like that in 2020? I don't think so. They are so far behind with their EV/battery tech and costs savings, and they don't even have a vision/goal to do that. I'm thinking it's more realistic (or maybe still very optimistic) to imagine 2023-2025 as when BMW will release a compelling BMW 3 series EV (200 mile charge, $35k). But by then, how many Gen3's will Tesla be selling? Probably in the millions. And the Gen3 will likely only get better as Tesla iterates on it with their continuous improvement focus.

Basically, the way I see it is that in the EV market, it's Tesla in in the lead and everybody chasing Tesla. The problem is the companies chasing Tesla aren't chasing with enough effort and urgency since they have their comfortable cash cows (ie., ICE cars) generating enough revenue for them while the EV market is still so small and uninspiring (at least to them). By the time they feel urgency, it might be because Gen3 is taking away substantial amount of sales (ie., BMW 3 series sales drop 10-30% from 2018-2023), and by then Tesla has firmly established their lead and dominance in the growing EV market.

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$800-1000/shares by 2020 is a strangely high number coming from you since IIRC you've shared your doubt that Tesla can surpass BMW/Mercedes/etc is sales. If TSLA is at $800-1,000/share in 2020, then that would be a $120-$150 billion market cap (assuming 150m shares outstanding). Currently, BMW's market cap is $62 billion, Daimler's is $102 billion, Honda is $63 billion.

I knew my 'gut' would elicit a response Dave. Thanks. I am optimistic about TM/TSLA going forward. My price targets are also optimistic. However, I want to gather discussion/opinions that are contrary to this optimism. Your articles are great but they need to be challenged/discussed. To a certain extent I am trying to play 'devil's advocate'. I want to hear contrary opinions which sometimes get shot down on TMC.
Keep the posts coming.:biggrin:

Having said this, I do feel that the moat TM has, while deep now, when presented with alternatives by some of the respected brand names ( I do not include US automakers in this), even if not 'as good' as TM products, very well could change my/your/optimistic sales/price targets/valuations.

 

[TSLAopt]

I do feel that the moat TM has, while deep now, when presented with alternatives by some of the respected brand names ( I do not include US automakers in this), even if not 'as good' as TM products, very well could change my/your/optimistic sales/price targets/valuations.

i see this as a possible disruption to TSLA's reckless growth if it was happening now or in the next 1-2 years but the BMW I3, Toyota FCEV, and new Audi "EV" being introduced next year I think are not even close to good enough to be comparable to what we 'know' the GEN III will be.

I too like to play devil's advocate to think of ways that TSLA will not grow into the most dominant automaker in the next 10ish years.
I just have a very hard time dreaming up what I view as a realistic scenario where TSLA doesn't grow into one of the worlds biggest automaker and very likely the biggest (as DaveT eludes to with TSLA 3.0). The only things I see getting in the way are:

-we are all being lied to about GEN III battery cost savings and there is no way it will be able to be produced at anything close to the 35k entry price point even with the GigaFactory and it turns out to be 50k+

-Elon's health or safety

-Apple deciding to dedicate much of its resources/capital to produce its own electric car in the next few years which could move Tesla into its shadows quickly if Apple's product was comparable at the same price point

-Black Swan event such as a World War, natural disaster destroying Fremont or GigaFactory, or a clear/imminent threat Elon decides to dedicate all his resources to fight such as fending off an AI intelligence explosion that shows signs of potential hostility to humanity (AKA non-friendly AI)

 

[woof]

IWhen will BMW come out with an electric version of the BMW 3 series that goes 200 miles on a charge and is priced at $35k? (Note: $35k in today's dollars.) Can they release a car like that in 2020? I don't think so.

I think by 2020 BMW will have something close to that on the market. Will be it as good as Tesla? Probably not, but it may be close enough.

Take the current i3...most Tesla knowledgable folks dismiss it as toy...too small, not enough range, quirky looks. But hidden behind those looks is some ground breaking carbon fiber technology, with the i3 (and i8) used as the vehicles to refine that technology. Also hidden in the i3 (literally) is a range extending ICE generator option. To BEV dogmatics like myself I dismissed it originally. My i3 doesn't have one, don't see why anyone would want an ICE in a BEV. But, lately I've begun to see some of the genius that is the ReX. First of all, BMW doesn't have the battery tech, so they cannot match the range of a Tesla on battery alone. But, as we all know, the actual range needed is no where near the range desired. This is where the ReX slyly comes into play. By adding the ReX, BMW plays to their strength. They know how to build an ICE, and adding one to the i3 instantly doubled the range, at way less cost (dollars and weight and volume) than adding an equivalent amount of BMW's batteries would.

And, interestingly most new buyers see this as a great feature. Some only use it as insurance, they may never need it, but they like the idea of it being there. The polls I've seen show the ReX option being picked up more often than the pure BEV version, especially in the US.

So, by this logic, in 2020 to compete with Tesla's Gen III, BMW's pure battery range really only needs to be 120 miles or so, and the rest can be "filled in" with a ReX. They've already shown they can build a 32kWh battery that got 100 miles in the ActiveE. Add "lightness" of the carbon fiber, a small increase in power density, a small decrease in CdA and 120 miles is easy. That's your daily BEV driver. Add the ReX (skip the stupid CARB requirements of less gas range than battery) for an additional 300 miles per fill up and you have a compelling EV for daily use that still does the long distance drives, can be driven on the Autobahn at speed, and performs "like a BMW".

I think a car like that will have mass appeal, and, depending on how good Tesla is by then, the BMW may have more brand awareness than does Tesla.

So, to conclude, BMW doesn't have to go toe-to-toe with Tesla on battery technology in order to produce a compelling "mostly" EV. They need to get close enough, and by my observations, they already have all the pieces.

 

[TSLAopt]

I think by 2020 BMW will have something close to that on the market. Will be it as good as Tesla? Probably not, but it may be close enough.

Take the current i3...most Tesla knowledgable folks dismiss it as toy...too small, not enough range, quirky looks. But hidden behind those looks is some ground breaking carbon fiber technology, with the i3 (and i8) used as the vehicles to refine that technology. Also hidden in the i3 (literally) is a range extending ICE generator option. To BEV dogmatics like myself I dismissed it originally. My i3 doesn't have one, don't see why anyone would want an ICE in a BEV. But, lately I've begun to see some of the genius that is the ReX. First of all, BMW doesn't have the battery tech, so they cannot match the range of a Tesla on battery alone. But, as we all know, the actual range needed is no where near the range desired. This is where the ReX slyly comes into play. By adding the ReX, BMW plays to their strength. They know how to build an ICE, and adding one to the i3 instantly doubled the range, at way less cost (dollars and weight and volume) than adding an equivalent amount of BMW's batteries would.

And, interestingly most new buyers see this as a great feature. Some only use it as insurance, they may never need it, but they like the idea of it being there. The polls I've seen show the ReX option being picked up more often than the pure BEV version, especially in the US.

So, by this logic, in 2020 to compete with Tesla's Gen III, BMW's pure battery range really only needs to be 120 miles or so, and the rest can be "filled in" with a ReX. They've already shown they can build a 32kWh battery that got 100 miles in the ActiveE. Add "lightness" of the carbon fiber, a small increase in power density, a small decrease in CdA and 120 miles is easy. That's your daily BEV driver. Add the ReX (skip the stupid CARB requirements of less gas range than battery) for an additional 300 miles per fill up and you have a compelling EV for daily use that still does the long distance drives, can be driven on the Autobahn at speed, and performs "like a BMW".

I think a car like that will have mass appeal, and, depending on how good Tesla is by then, the BMW may have more brand awareness than does Tesla.

So, to conclude, BMW doesn't have to go toe-to-toe with Tesla on battery technology in order to produce a compelling "mostly" EV. They need to get close enough, and by my observations, they already have all the pieces.

1)Is that right that you own an I3?
if so, for how long?

2)do you also own an S?
if so,how do you compare the two cars from an ownership experience?


i am really interested to hear from anyone who owns both an S and an i3 to see how they compare the two cars as owners of both (do they only drive their S? Or do they split time 70/30 or 50/50? How different is the driving experience after owning both and driving both significantly? Given the price differential would you be more likely to buy another i3 or S? Etc.)

 

[Jack6591]

Contrast the "climate change" political discussion of six years ago with today.

How will that discussion evolve over the next six years? Political expediencies will transform the industry.

 

[30seconds]

1. I think a 100mile electric plus adequately powered REX may be a very viable alternative, especially since you can start running the REX at about 50miles. More complicated, more pollution and ultimately more expensive as battery costs decline, but might be near term competitive

2. The other benefit to others using TSLa's battery tech is that it provides downside protection in case telsa auto demand falls behind gigafactory output. They can sell the batteries to others. My guess however is that there are a lot of other uses for the batteries (airplanes, power storage, etc.) but still some protection.

 

[woof]

1)Is that right that you own an I3?
if so, for how long?

2)do you also own an S?
if so,how do you compare the two cars from an ownership experience?


i am really interested to hear from anyone who owns both an S and an i3 to see how they compare the two cars as owners of both (do they only drive their S? Or do they split time 70/30 or 50/50? How different is the driving experience after owning both and driving both significantly? Given the price differential would you be more likely to buy another i3 or S? Etc.)

So as not to derail Dave's thread, short answers. PM me for more, or create a new thread.
1 Yes. 2 months. 3000 miles worth. i3 "Giga" trim, BEV, "Electronaut Edition"

2. Yes (well, the wife owns the Tesla, 85 kWh).

The i3 is my commuter car (60 miles, round trip, into a city and back to the suburbs). I drive both on a daily basis, and love 'em both differently. Two different tools for two different jobs. When I'm by myself, I prefer the i3 (its smaller, way more efficient, more comfortable, more nimble, and has ACC). With three people or more (dogs are people too!), we always take the Tesla. And obviously, for any distance driving the i3 gets left at home.

 

[DennisLevitt]

Very very true @woof. Most people don't realize that in a two-car household, having a 100 mile range BEV is a great option. I had a Leaf for 19 months, drove it daily, and only needed to borrow my wife's Prius 4 times because my Leaf couldn't get me somewhere and back. For starting an EV revolution, households need two things: a place to charge overnight and a 2nd car which is an ICE. With those things, Leaf or I3 range is plenty, and every household should have one

PS - new to this section of TMC, and REALLY enjoying it. Intelligent discussion about TSLA. Not like the noise at Seeking Alpha and discussions about how Tesla demand is declining......

 

[DaveT]

I knew my 'gut' would elicit a response Dave. Thanks. I am optimistic about TM/TSLA going forward. My price targets are also optimistic. However, I want to gather discussion/opinions that are contrary to this optimism. Your articles are great but they need to be challenged/discussed. To a certain extent I am trying to play 'devil's advocate'. I want to hear contrary opinions which sometimes get shot down on TMC.
Keep the posts coming.:biggrin:

I appreciate your comments.

On another note, I think the purpose of my series isn't necessarily to "prove" or "defend" that TSLA will go to $2000-3000 by 2030 (even though it's in the series name), but rather that there is a case to be made the Tesla could possibly become the largest auto maker in the world in 15 years (resulting in a stock price of $2000-3000 by 2030). Now, even after the case has been made that there's a "possibility" that this could happen, then it's up to each investor to decide what the probabilities of that happening are, as well as what are the downside risks too. Even though I'm one of Tesla's biggest fans, I know that their path to becoming the world's largest auto maker will be one filled with ups and downs and might not happen. And TSLA's stock price will be far from a rising straight line.

I know I haven't presented the TSLA 3.0 case yet, but here's how I look at the odds as an investor trying to use objective eyes:

(first set of odds)
5% - TSLA ending up as a niche auto manufacturer (ie., Porsche)
15% - TSLA ending up in 2030 as a smaller mainstream manufacturer (ie., BMW, Honda)
50% - TSLA ending up in 2030 as a one of the mid-large sized mainstream manufacturers (ie., Mercedes, VW)
30% - TSLA ending up in 2030 as the largest auto manufacturer (ie., larger than Toyota)

But personally I actually think the odds are higher as long as Elon is at the helm (or even overseeing as chairman past 2019). My personal hunch (not through eyes of an investor trying to be objective, but through the eyes of an investor being okay with his subjective opinions driving an assessment) is that the odds look like:

(second set of odds)
3% - TSLA ending up as a niche auto manufacturer (ie., Porsche)
10% - TSLA ending up in 2030 as a smaller mainstream manufacturer (ie., BMW, Honda)
22% - TSLA ending up in 2030 as a one of the mid-large sized mainstream manufacturers (ie., Mercedes, VW)
65% - TSLA ending up in 2030 as the largest auto manufacturer (ie., larger than Toyota)

However, currently probably most investors don't see/believe in the first set of odds. My guess is that current investors probably view the odds like this:

(odds by current investors)
10% - TSLA ending up as a niche auto manufacturer (ie., Porsche)
50% - TSLA ending up in 2030 as a smaller mainstream manufacturer (ie., BMW, Honda)
35% - TSLA ending up in 2030 as a one of the mid-large sized mainstream manufacturers (ie., Mercedes, VW)
5% - TSLA ending up in 2030 as the largest auto manufacturer (ie., larger than Toyota)

Probably over the next 3-4 years, general investor sentiment will move from these odds (odds by current investors) to the first set of odds above. Then, probably starting after Gen3 for several years we'll see general investor sentiment will start shifting from the first set of odds to the second set of odds.

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Here's a chart:

 

[DaveT]

I think by 2020 BMW will have something close to that on the market. Will be it as good as Tesla? Probably not, but it may be close enough.

Take the current i3...most Tesla knowledgable folks dismiss it as toy...too small, not enough range, quirky looks. But hidden behind those looks is some ground breaking carbon fiber technology, with the i3 (and i8) used as the vehicles to refine that technology. Also hidden in the i3 (literally) is a range extending ICE generator option. To BEV dogmatics like myself I dismissed it originally. My i3 doesn't have one, don't see why anyone would want an ICE in a BEV. But, lately I've begun to see some of the genius that is the ReX. First of all, BMW doesn't have the battery tech, so they cannot match the range of a Tesla on battery alone. But, as we all know, the actual range needed is no where near the range desired. This is where the ReX slyly comes into play. By adding the ReX, BMW plays to their strength. They know how to build an ICE, and adding one to the i3 instantly doubled the range, at way less cost (dollars and weight and volume) than adding an equivalent amount of BMW's batteries would.

And, interestingly most new buyers see this as a great feature. Some only use it as insurance, they may never need it, but they like the idea of it being there. The polls I've seen show the ReX option being picked up more often than the pure BEV version, especially in the US.

So, by this logic, in 2020 to compete with Tesla's Gen III, BMW's pure battery range really only needs to be 120 miles or so, and the rest can be "filled in" with a ReX. They've already shown they can build a 32kWh battery that got 100 miles in the ActiveE. Add "lightness" of the carbon fiber, a small increase in power density, a small decrease in CdA and 120 miles is easy. That's your daily BEV driver. Add the ReX (skip the stupid CARB requirements of less gas range than battery) for an additional 300 miles per fill up and you have a compelling EV for daily use that still does the long distance drives, can be driven on the Autobahn at speed, and performs "like a BMW".

I think a car like that will have mass appeal, and, depending on how good Tesla is by then, the BMW may have more brand awareness than does Tesla.

So, to conclude, BMW doesn't have to go toe-to-toe with Tesla on battery technology in order to produce a compelling "mostly" EV. They need to get close enough, and by my observations, they already have all the pieces.

First, it's nice to have a Model S & i3 owner chime in.

I was following the BMW i3 development process since the MiniEV and the ActiveE. I was really hoping for a better performing vehicle but was disappointed when I drove it, BMW i3 - Page 81 .

I think there will be people who buy and like the car, just as there are people who buy and like the LEAF, the Volt, etc. But the question is how big is that market? As the LEAF and Volt have shown, the market is limited... although the LEAF seems to be picking up as they're pricing has dropped.

I have my doubts about whether BMW can create something close to Tesla's Gen3 by 2020. I think by 2020, BMW could increase the i3 range to 120 miles real-world range and drop the price to $35,000 (additional for REX). I wouldn't necessarily say that a $35k BMW i3 would be a competitor to the Tesla Gen3. Will people buy a $35k BMW i3? Sure, some will. And some will really like it as well. But for direct competition, BMW needs to release an EV that can perform/handle like a BMW 3 series and have 200 mile range. The BMW i3 isn't that car.

Regarding range extenders, I think I think the market is limited in the long-term. If given a choice, I think most people would choose an electric car with 200+ real mile range (w/supercharging) over an electric car with 120 mile range and a range extender. I can see range extenders as a practical option for city dwellers who don't use their cars for long-distance travel much at all and want the occasional option to travel longer distances. That way they can choose a car with a smaller range (ie., 120 miles) and choose a range extender. But I think over time, people tend to enjoy driving electric and they prefer it over using a range extender. As the Supercharger network becomes increasingly dense, it gives even less incentive for people to need a range extender.

Overall though, I don't think competition "coming close" to what Tesla has to offer is a threat to Tesla's growth plans. The EV market by 2020 will be growing tremendously and the market is large enough for many models of EVs. As long as Tesla keeps their focus and standards high and releases a stellar Gen3 car, then they will have set the bar for everyone to chase after. Then, it becomes the market leader setting the pace and everyone trying to keep up.

 

[ckessel]

2020 is a long way off. Gen3 probably won't ship until 2018 (Tesla has never been remotely on time with their original estimates) and I'll be surprised if BMW or Audi doesn't have something comparable by 2020. That'll give Tesla a few years jump on the BMWs of the world, but I don't know if that's enough head start to make it beyond the smaller vendor status.

The biggest question to me is how well someone like BMW proliferates EVs across their model line. If BMW just has one really good EV and waits a long while to see how it's doing, then they're not a threat since Tesla will have 3 models out and hopefully close on the Gen3 small SUV. If BMW can proliferate quality EV design across multiple offerings, then that's a problem for Tesla.

Tesla will have a solid market position when it shakes out, but I think the 3rd set of probabilities are the most likely and perhaps generous.

 

[maoing]

I agree with that. Assuming each household has two cars, then one Model X/S like long range EV + one Model E/Leaf/I3/Volt like commuter EV is the best combination. Certainly we don't see imminent competition in long range EV side, but fierce competition could be for the other side. Is it a worry for Tesla? The answer might be not. More affordable commuter EV can boost EV market and a lot of households need long range EV anyway, which would be dominated by Tesla. Also the commuter EV market would be much larger than high-end long distance EV market, so Tesla can still gain a large percent of shares.

btw, the reason I classify Model E as commuter EV is the 200 miles EPA range will be converted to 160 miles real life range. So daily or every other day charging becomes necessary. Also the 160 miles range makes Model E less attractive for the long distance travel. Per 30 minutes half range charging theory from super charger, Model E owner would need to stop for charging every 100 miles, this sounds a bit more inconvenient.

Very very true @woof. Most people don't realize that in a two-car household, having a 100 mile range BEV is a great option. I had a Leaf for 19 months, drove it daily, and only needed to borrow my wife's Prius 4 times because my Leaf couldn't get me somewhere and back. For starting an EV revolution, households need two things: a place to charge overnight and a 2nd car which is an ICE. With those things, Leaf or I3 range is plenty, and every household should have one

PS - new to this section of TMC, and REALLY enjoying it. Intelligent discussion about TSLA. Not like the noise at Seeking Alpha and discussions about how Tesla demand is declining......

 

[mrdoubleb]

First, it's nice to have a Model S & i3 owner chime in.

I was following the BMW i3 development process since the MiniEV and the ActiveE. I was really hoping for a better performing vehicle but was disappointed when I drove it, BMW i3 - Page 81 .

I think there will be people who buy and like the car, just as there are people who buy and like the LEAF, the Volt, etc. But the question is how big is that market? As the LEAF and Volt have shown, the market is limited... although the LEAF seems to be picking up as they're pricing has dropped.

I have my doubts about whether BMW can create something close to Tesla's Gen3 by 2020. I think by 2020, BMW could increase the i3 range to 120 miles real-world range and drop the price to $35,000 (additional for REX). I wouldn't necessarily say that a $35k BMW i3 would be a competitor to the Tesla Gen3. Will people buy a $35k BMW i3? Sure, some will. And some will really like it as well. But for direct competition, BMW needs to release an EV that can perform/handle like a BMW 3 series and have 200 mile range. The BMW i3 isn't that car.

Regarding range extenders, I think I think the market is limited in the long-term. If given a choice, I think most people would choose an electric car with 200+ real mile range (w/supercharging) over an electric car with 120 mile range and a range extender. I can see range extenders as a practical option for city dwellers who don't use their cars for long-distance travel much at all and want the occasional option to travel longer distances. That way they can choose a car with a smaller range (ie., 120 miles) and choose a range extender. But I think over time, people tend to enjoy driving electric and they prefer it over using a range extender. As the Supercharger network becomes increasingly dense, it gives even less incentive for people to need a range extender.

Overall though, I don't think competition "coming close" to what Tesla has to offer is a threat to Tesla's growth plans. The EV market by 2020 will be growing tremendously and the market is large enough for many models of EVs. As long as Tesla keeps their focus and standards high and releases a stellar Gen3 car, then they will have set the bar for everyone to chase after. Then, it becomes the market leader setting the pace and everyone trying to keep up.

Regarding ReX...

I wouldn't go so far as to proclaim having found some universal truth, but being a geek and having followed science and technology developments my whole life (and having watched way too many NGC documentaries) I do see a trend.

Every time there is major technological/industrial advancement coming up, the old technology - often complacent and with minimal advancements for a longer period - suddenly tries a comeback and scrambles to stop the inevitable. You see new features being introduced, things trying to address the shortcomings of the new technology, strangle it in its infancy. But by that time it's too little too late, and deep down all parties know that. Once you reach a certain threshold, the new technology explodes into the scene-

Some random examples come to mind.

Remember when MP3s took over the world, and file sharing came in. CD sales were still king, big record companies were in control and the likes of Sony and Philips were pumping out equipment cashing in on the royalties of cassettes, CDs, DVDs. They ignored the threat first, than ridiculed it for sound quality. Then came the scrambling: CDs with extra content (pictures, software), trying to adopt the new and get ahead in the game with mp3s on CDs, then developing Super Audio CD with a conventional and a high quality layer and even DVD audio. All for nothing, the fall was inevitable and people said the sound quality was good enough given the portability and the ease of getting content.

Print media went through several phases too, first ridiculing online journalism, than improving print quality, going online behind paywalls... all which didn't stop the fall.

Nokia ignored the iPhone too - just like Ericsson, Blackberry and Motorola. The battery life was 1 day instead of a week and they said typing on a screen will never catch on. We all know how it ended.

ReX, Hybrids, start/stop systems and all the rest are just the same. Futile attempts to delay the inevitable.

 

[AlMc]

Regarding ReX...

I wouldn't go so far as to proclaim having found some universal truth, but being a geek and having followed science and technology developments my whole life (and having watched way too many NGC documentaries) I do see a trend.

Every time there is major technological/industrial advancement coming up, the old technology - often complacent and with minimal advancements for a longer period - suddenly tries a comeback and scrambles to stop the inevitable. You see new features being introduced, things trying to address the shortcomings of the new technology, strangle it in its infancy. But by that time it's too little too late, and deep down all parties know that. Once you reach a certain threshold, the new technology explodes into the scene-

Some random examples come to mind.

Remember when MP3s took over the world, and file sharing came in. CD sales were still king, big record companies were in control and the likes of Sony and Philips were pumping out equipment cashing in on the royalties of cassettes, CDs, DVDs. They ignored the threat first, than ridiculed it for sound quality. Then came the scrambling: CDs with extra content (pictures, software), trying to adopt the new and get ahead in the game with mp3s on CDs, then developing Super Audio CD with a conventional and a high quality layer and even DVD audio. All for nothing, the fall was inevitable and people said the sound quality was good enough given the portability and the ease of getting content.

Print media went through several phases too, first ridiculing online journalism, than improving print quality, going online behind paywalls... all which didn't stop the fall.

Nokia ignored the iPhone too - just like Ericsson, Blackberry and Motorola. The battery life was 1 day instead of a week and they said typing on a screen will never catch on. We all know how it ended.

ReX, Hybrids, start/stop systems and all the rest are just the same. Futile attempts to delay the inevitable.

Excellent insight. Do you see any difference with the ICE/Hybrid vs BEVs comparison when you factor in price? It is easy (relatively cheap) to buy a different phone or an MP3 versus a vehicle that costs 100-1000x as much as those electronics.

 

[Johan]

Excellent insight. Do you see any difference with the ICE/Hybrid vs BEVs comparison when you factor in price? It is easy (relatively cheap) to buy a different phone or an MP3 versus a vehicle that costs 100-1000x as much as those electronics.

In my view, the only real difference is the time frame. People buy music devices maybe every two years, a new phone every 2-3 years but a new car only every 5-8 years? So the switch is slower, at first, but when it does take off it's expontential - think Law of Accelerating returns which applies to all of the examples you have mentioned and I'm sure will also apply to the electrification of personal transport (with the small but important definition of electric drivetrains, but how the energy is to be stored may still be up for debate - pure battery? battery with ICE extender? even hydrogen fuel cell?)

 

[clmason]

On March 31, 2011 Morgan Stanley published a researh note on TSLA comparing the ICE to Electric Car transition to that of the Horse and Buggy to ICE transition and shared these two photos. This transition really resonated with me and helped strengthen my conviction in TSLA. Whenever someone brings up the old Nokia to Iphone or Kodak to Digital Camera, etc. I always think of the MS report and these two photos.

Easter 1903 - can you find the singel Car amongst the Horse and Buggies

Easter 1913 - can you find the Horse and Buggie?
[url="http://photosofwar.net/fifth-avenue-on-easter-day-new-york-city-march-23-1913/"]

 

[mrdoubleb]

In my view, the only real difference is the time frame. People buy music devices maybe every two years, a new phone every 2-3 years but a new car only every 5-8 years? So the switch is slower, at first, but when it does take off it's expontential - think Law of Accelerating returns which applies to all of the examples you have mentioned and I'm sure will also apply to the electrification of personal transport (with the small but important definition of electric drivetrains, but how the energy is to be stored may still be up for debate - pure battery? battery with ICE extender? even hydrogen fuel cell?)

I'd agree with that and another law comes to mind, a basics of economics, the Rogers' bell curve. The only difference, as you said is the time frame given the barrier of entry: price. Tesla is building the biggest brand of the 21st century. People are wanting the S, it's what posters on little boys walls are made of. At this point only a select few can afford it, but when Tesla releases Gen3 another wall wil crumble. Not the ultimate one, mind you, that will be more like when the cheap Chinese Android phones came out and that OS took over the world in a heartbeat. As much as the West likes to think a 35k car is "affordable", it's not, at least for the other 80% of the world population.

Yet, as Elon was correctly pointing out, there are 2 billion ICEs on the world. Even with the global car production reaching 100 million per year, it would take 20 years to completely replace the fleet if the "EV fairy" converted all factories to EV production overnight. She won't, so expect a longer period - but certainly in the First World, the transition may be like wildfire. Especially given that high price of a new car: it's a long term investment. When 200+ mile 35k Gen3s become available, with free SCs and lots of streetside and mall chargers, would you spend your hard earned money on an ICE? Suddenly ICEs will ahve to worry about resale values.

As for competeing technologies, they will live about as long as those MP3 CDs.

 

[AlMc]

I'd agree with that and another law comes to mind, a basics of economics, the Rogers' bell curve. The only difference, as you said is the time frame given the barrier of entry: price. Tesla is building the biggest brand of the 21st century. People are wanting the S, it's what posters on little boys walls are made of. At this point only a select few can afford it, but when Tesla releases Gen3 another wall wil crumble. Not the ultimate one, mind you, that will be more like when the cheap Chinese Android phones came out and that OS took over the world in a heartbeat. As much as the West likes to think a 35k car is "affordable", it's not, at least for the other 80% of the world population.

Yet, as Elon was correctly pointing out, there are 2 billion ICEs on the world. Even with the global car production reaching 100 million per year, it would take 20 years to completely replace the fleet if the "EV fairy" converted all factories to EV production overnight. She won't, so expect a longer period - but certainly in the First World, the transition may be like wildfire. Especially given that high price of a new car: it's a long term investment. When 200+ mile 35k Gen3s become available, with free SCs and lots of streetside and mall chargers, would you spend your hard earned money on an ICE? Suddenly ICEs will ahve to worry about resale values.

As for competeing technologies, they will live about as long as those MP3 CDs.

In what time frame do you see TM capturing 1% ( 1 million vehicles produced per year) of the future worldwide market?

 

[adiggs]

Brilliant pair of photos - thank you for posting these. Ten years apart, and the world is just about unrecognizable from one to the next.

The magnitude of the manufacturing effort for a comparable transition over the next 10 years is overwhelming for me to even think about, but for isolated and controlled circumstances - such as within the bowels of a large city, I could imagine something equally dramatic happening. Any big cities decide to make gas engines rare / prohibitive to operate inside the city as a way of improving air quality?

Sidebar - notice how much of modern car driving / ownership experience is already present in the second photo? That looks like an asphalt road surface, but maybe it's really well maintained clay. The cars all have license plates. I'm not sure, but it looks like there might be a brake light in the lower left corner of many of the cars. But no stoplights that I can see - I bet those would have helped people get around!

- - - Updated - - -

...Tesla is building the biggest brand of the 21st century. People are wanting the S, it's what posters on little boys walls are made of. At this point only a select few can afford it, but when Tesla releases Gen3 another wall wil crumble....

To build on mrdoubleb's comment - I participated in the Hillsboro, OR July 4th parade in my Tesla Roadster with the Oregon EV Association (ok - they had the entry, and I answered the call for volunteers to bring out their EV's). Anyway, something that just has to be experienced to be appreciated - I got all the "cool car" "neat car" "slick ride" type of comments you'd expect (it's a black Roadster - duh ). What I didn't expect was the number of "Go Tesla" type comments. Like people were rooting for a sports team or something. And the kids (here defined as somewhere around 8-18ish - not so much the really young kids that were just in it for the candy) - might have been the first time they saw a Roadster in person, but an amazing number of them knew what it was. Maybe it's just the west coast (WA / OR / CA), but recognition of the company and the cars is much better than is sometimes appreciated.

There's an entire generation of car buyers that is already grown up and ready to buy the Gen III, or a further out version of the Gen III, or a used version of the Gen III; they're ready to be buying that car today. There's another generation of future car buyers that might have to get by with something else for awhile, but their aspiration is a Tesla as well. Just because the transition is stretched out over time, doesn't mean it isn't happening dramatically fast.