Are we therefore stuck with:
Battery price falls a lot
Price of BEV falls, becomes affordable to Nx as many people, but supply is battery-limited
[lack of] Supply-and-Demand drives price up (Tesla too ...
)
BEV makers have bigger profits
The Lead time for battery factory construction still exists of course, but maybe the economics facilitate something?
Price is a limiting factor with BEVs right now, but at least in the US, public awareness/demand is a bigger limiting factor. In Europe there is a big push on to eliminate ICE from city centers, and Europe is feeling diesel-gate much more than the US.
Diesel cars are sold in the US, but diesel fuel is usually much more expensive than gasoline (petrol). It's a refining problem. The US has done virtually no expansion of refining capacity since the 1970s and demand has increased due to population growth and SUVs have not improved fleet fuel mileage all that much. There has been a lot of resistance to building new refineries.
As a result, the US imports most of its diesel and refines the gasoline domestically. It's safer to transport diesel in tankers than gasoline.
So even though diesel cars get better mileage than equivalent ICE, they cost about the same or more to fuel and not all petrol stations have diesel.
That aside, there has been very little education about electric cars in the US. A poll released in January found 60% of Americans were still pretty much ignorant of electric cars. I've run into a number of people who had heard of Tesla, but didn't know they were electric.
Lack of awareness is surprisingly still the biggest problem for electric vehicle adoption
I suspect the Model 3 is going to change that. Right now most Americans buying electric cars are either super eco buyers, or they have enough money to afford a Model S or X. Soon middle class neighborhoods all over the country will start getting an electric car that doesn't look too weird (especially on the outside), had a range approaching the low end of ICE, and it's superior to everything else out there.
Once the public becomes aware enough of the advantages of electrics, demand will go through the roof and the pressure will be on everyone to start mass producing them. GM will be ahead of the curve with development, but they will be battery limited.
I agree. I think the whole strategy at GM is Win-Win. Compliance, short term, no huge gamble, no huge exposure if they need to retreat, but pole-position (well ... first-row-of-the-grid!!) if it all takes off.
I look at the European car makers promising EV versions of every car in their line up in 5 years time (or whatever) and have two thoughts:
Where are they going to get all the batteries from?
Too-little-too-late.
They are massively over-exposing themselves; they have no BEV experience, so they are making a bet-the-farm that the Tech they stuff into all the models in their range will work right-first-time. Tesla recall cost on early models was a tiny number of vehicles, get that wrong on the all models + large numbers strategy and they will sink without trace.
The one surprise for me is that late-comers are not licencing Tesla tech. Someone like Jaguar is doing the whole thing soup-to-nuts. I understand that a BEV is much easier to do than ICE, but even so: Tesla have solved so many problems, why risk encountering them yourself through inexperience? and why is noone doing deals with Tesla for Supercharger use?
The Europeans are taking Tesla a lot more seriously than American or Japanese auto makers. All the major European brands have a luxury high end that has been hit hard by Tesla's success with the Model S and X. They see the Model 3 as an existential threat to their existence and unlike American brands, they also have a lot of local government pressure to electrify their fleets too.
There have been some noises from European auto makers to build battery factories, but their time scales are fairly long and there has been little spade work on those projects. There was a lot of fanfare of a German auto maker (Daimler I think) expanding a factory to make more battery packs, but the media reported it as a battery plant. They aren't making cells there, they are sourcing them from the same factories in Asia most companies are getting their cells from. VW has said they are building a GigaFactory, but they arne't planning on producing much there until 2025. That's longer than the Model S or Leaf have existed.
I suspect the European brands are expecting the governments to step in and help them build battery plants when the crunch comes. The Japanese and South Korean governments would probably do the same. Though the political atmosphere in the US would allow the Big 3 to sink rather than help them too much if they needed it.
I think the existing car companies don't want to enlist any help from Tesla because they don't want to legitimize them. In the US car dealers for every brand is fighting Tesla in court to oppose selling cars directly to the public. They can't afford to tick off their franchises. They are also all hoping Tesla dies off, but I think that's a pipe dream at this point.
