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EU Market Situation and Outlook

vgrinshpun

Well-Known Member
Supporting Member
Apr 5, 2013
5,899
22,944
PA
Switzerland December sales - 193, total for 2015 - 1556 Model S.

Let's see how Model S did in 2015 vs. more opulent members of Oberklasse on the neutral territory:

Tesla Model S
1556
MB S/CLS
1276
BMW 6 Series
286
Audi A7
242
BMW 7 Series
192
Porsche Panamera
168
Bentley Continental
119
Maserati Quatroporte
107
Audi A8
100
Cadillac CTS
37
Jaguar XJ
20
Rolls-Royce Wraith
20
Rolls-Royce Ghost
6
Rolls-Royce Wraith
5
VW Phaeton
5
Rolls Royce Phantom
5
 
Last edited:

Spidy

Active Member
Feb 7, 2015
1,365
1,106
EU
I was always confused by this, but apparently Switzerland has something called "general importeure", which kinda makes the prices of non direct sales cars pretty expensive. I think compared to Germany a S-Class is like 35000 Euro more expensive than a Model S, at least on the official website. Will be interesting to see if there is any reaction of the German manufacturers after this.
 

Alfred

Member
Supporting Member
May 28, 2009
300
259
Zurich
There are some important differences in relation to Germany or he US:
1) A much smaller proportion of cars are company cars. Company cars can often be chosen by the individual and there is no home brand bias.
2) Motorway speeds are limited to 120 Km/h and distances covered in daily use are on average very short, particularly in relation to the US.
3) Tesla (Switzerland) was well managed by dedicated professionals right from the beginning. Also service has always been and still is impressive. One service center e.g. started immediately to work in 2 shifts as the workload rose. I for one was never "postponed". Tesla was also able to recruit and train relatively quickly good mechanics out of their "mechatronic" apprenticeships (the cream of the traditional "auto mechanic"). Switzerland's good professional training system was a clear advantage to this aspect of a startup operation.
4) People use the cars to get from A to B and do not live in them. The number of coffee cupholders is not decisive.

In general cars sold tend to be more generously fitted. In particular 4WD is, for obvious reasons, very popular. Any comparison of prices has to make sure like is compared with like.
 
2) Motorway speeds are limited to 120 Km/h and distances covered in daily use are on average very short, particularly in relation to the US.

Motorway speeds in the US are limited to 106 Km/h to 136 Km/h the fastest being Texas.

Distances covered are not materially different in Europe vs the US. This is a common misconception.

The vast majority of American car owners drives less than 40 miles per day.

The supercommuters that drive over 100 miles per day are about 8% of the total and distort averages.

The difference is Americans use public transportation less and drive more days per year.

And yes, we live in our cars. Apparently, we eat more drink more put on make-up more shave more in our cars than Europeans.
 

vgrinshpun

Well-Known Member
Supporting Member
Apr 5, 2013
5,899
22,944
PA
There are some important differences in relation to Germany or he US:
1) A much smaller proportion of cars are company cars. Company cars can often be chosen by the individual and there is no home brand bias.
2) Motorway speeds are limited to 120 Km/h and distances covered in daily use are on average very short, particularly in relation to the US.
3) Tesla (Switzerland) was well managed by dedicated professionals right from the beginning. Also service has always been and still is impressive. One service center e.g. started immediately to work in 2 shifts as the workload rose. I for one was never "postponed". Tesla was also able to recruit and train relatively quickly good mechanics out of their "mechatronic" apprenticeships (the cream of the traditional "auto mechanic"). Switzerland's good professional training system was a clear advantage to this aspect of a startup operation.
4) People use the cars to get from A to B and do not live in them. The number of coffee cupholders is not decisive.

In general cars sold tend to be more generously fitted. In particular 4WD is, for obvious reasons, very popular. Any comparison of prices has to make sure like is compared with like.

Yes, indeed, there is no home brand bias, and this is exactly what I meant by calling Switzerland a neutral territory.

There is no escape, IMO, from the overall conclusion that Model S performance against other members of Oberklasse is an ominous sign for an ICE automobile. Notwithstanding the very familiar and often repeated disadvantage of Model S against Oberklasse rivals as far as opulence quotient is concerned, Model S sales are exceptional. Do not forget that Tesla expanded their market share from zero to the level of the leaders in just three years. The fact that this was achieved not necessarily by stealing sales from Oberklasse rivals, but in large measure by bringing new owners to this high price category, must be very painful to those occupying certain boardrooms in European country well known for their exceptional auto industry.

The problem is that the automotive leaders must *electrify* their offerings to compete, but it is not easy to do when so much of the resources are tied in ICE, and require additional resources to maintain ROI. There is natural drive to avoid stranded resources, which leads to dangerous procrastination for going "all in" on EV development.

"It is not a fair fight"
 
Last edited:
Yes, indeed, there is no home brand bias, and this is exactly what I meant by calling Switzerland a neutral territory.

There is no escape, IMO, from the overall conclusion that Model S performance against other members of Oberklasse is an ominous sign for an ICE automobile. Notwithstanding the very familiar and often repeated disadvantage of Model S against Oberklasse rivals as far as opulence quotient is concerned, Model S sales are exceptional. Do not forget that Tesla expanded their market share from zero to the level of the leaders in just three years. The fact that this was achieved not necessarily by stealing sales from Oberklasse rivals, but in large measure by bringing new owners to this high price category, must be very painful to those occupying certain boardrooms in European country well known for their exceptional auto industry.

The problem is that the automotive leaders must *electrify* their offerings to compete, but it is not easy to do when so much of the resources are tied in ICE, and require additional resources to maintain ROI. There is natural drive to avoid stranded resources, which leads to dangerous procrastination for going "all in" on EV development.

"It is not a fair fight"

I'm actually surprised how little meaningful reaction we have seen from BMW, Mercedes, and VW (i.e., Audi and Porsche).
By now they must be painfully aware of the impact Tesla is having outside of the German market. And even there it is starting to get noticed.
Yet everything I see from them sounds more like CYA, compliance cars and certainly not am attempt to truly compete. Heck, GM appears to be fielding a more credible EV than they are...
 

Alfred

Member
Supporting Member
May 28, 2009
300
259
Zurich
Zetsche from Mercedes was very open and stated something like: "The lesson Tesla with the Model S taught us". Tesla is not their only concern in this context. I read somewhere that Apple is perceived to be just as important as a potential competitor. (Sorry, I did not keep those links.)
As traditionally the auto-industry keeps their new developments under wraps, there is a lot we do not hear. Large corporations are also often intentionally slow in adopting new technology. They consider that their capital and other assets permit a later, rapid and more cost effective entry. They are also not likely to speak about their boardroom exchanges.

- - - Updated - - -

To Rob:
"Distances covered are not materially different in Europe vs the US. This is a common misconception."

The figures I found are about 14000 Km/y for Germany, marginally less for Switzerland and about 18000 Km (11262 m) for the US. I agree with the problem of distribution of those miles. There are about 5-15% that drive a disproportionate number of Km per year, but this phenomenon does not only hold for the US. I found so far no local source of usable numbers for Switzerland. Geographic characteristics would perhaps support that the overall difference is nevertheless indicative also for the lesser mileage citizens.
 
I'm actually surprised how little meaningful reaction we have seen from BMW, Mercedes, and VW (i.e., Audi and Porsche).
By now they must be painfully aware of the impact Tesla is having outside of the German market. And even there it is starting to get noticed.
Yet everything I see from them sounds more like CYA, compliance cars and certainly not am attempt to truly compete. Heck, GM appears to be fielding a more credible EV than they are...

I couldn't agree more. And it is frustrating as hell to see them explain their cognitive dissonances away "the US is buying American made cars only", "the Norwegians is no wonder with their subsidies", "the Swiss just don't like Germany any longer" etc. etc. They like to point to China and Germany and pretend all is perfect. The irony of all this is, that currently the German policy framework on the introduction of EVs can't move forward as any move to support EVs without a credible German EV would be seen as "unpatriotic" while German car makers don't offer credible EVs and point to the lack of incentives. It is an outrageously silly situation...

PS: on a different note - the numbers of DK for December stand as they were reported. So I guess that's that. And for January 2016 until today only 6 new cars reported which is in line with the expectations (I'm actually a bit amazed there are these 6 at all).
 

hobbes

Active Member
Feb 11, 2013
3,240
24,230
Germany

hobbes

Active Member
Feb 11, 2013
3,240
24,230
Germany
They'll compromise. 5000€ for cars made by EU manufacturers that are partial zero emission.
I'll bet you a dollar.
With the utter lack of commitment from the German car industry to EVs there's no way the German government will give the foreign competition a boost.

Actually, German car industry officials have asked for EV incentives (which actually has the sound of "give us money, then we´ll make EVs"), so they couldn´t really complain. I think you do have a point, but I don´t believe it will come this far. More likely nothing will happen at all.
 
Actually, German car industry officials have asked for EV incentives (which actually has the sound of "give us money, then we´ll make EVs"), so they couldn´t really complain. I think you do have a point, but I don´t believe it will come this far. More likely nothing will happen at all.
I will admit that I haven't followed this too closely. I read this on Heise.de which points out that while the social democrat Gabriel is in favor of an EV-only incentive, the right wing finance minister is against it. And in the past the CDU/CSU and the car industry have very much been "hand in glove" when it comes to getting the regulations the car makers wanted... And looking at the track record so far with 12363 EVs sold in Germany in 2015 (out of 3.2M new cars - so fewer than 0.4%) and absolutely anemic offerings by the local car makers... I don't think there's an appetite there.
 
They'll compromise. 5000€ for cars made by EU manufacturers that are partial zero emission.
I'll bet you a dollar.
With the utter lack of commitment from the German car industry to EVs there's no way the German government will give the foreign competition a boost.

I'll take that bet ;)

I don't think they will restrict it to EU manufacturers :p

On a more serious note, I've been involved with our local city authority in their ULEV bids, there's lots of EU money coming in and no real differentiation between BEV and PHEV(/EREV). So cynically I think you are right the powerful (primarily German) EU auto industry isn't going to lay down arms just yet with the lobbying.

It has been a very interesting insight however talking to the planners about some of the issues. Some are misguided, with none of the teams driving BEV's other than fleet council Leafs, but some are genuine concerns (including but not limited to: tax revenue worries, grid capacity, scalability, social equality, housing constraints, anti competition issues ). So being generous our lawmakers could be looking at it in a different way than we might. Get 1000 ULEV cars on the road or 100 BEVs, and ultimately just have less vehicles altogether pushing people into mass transit.


I get the distinct impression the focus in EU will be ULEV not ZEV for the next 5 years. I also think a lot of the credits will be EU wide, with the member states varying around a theme how they implement distribution of those credits.

Are the auto makers leading the agenda or just putting maximum resource into the most likely next round of government policy to sell the most vehicles.
 

Lessmog

Active Member
Aug 24, 2013
2,966
8,473
Smögen
I'll take that bet ;)

I don't think they will restrict it to EU manufacturers :p

On a more serious note, I've been involved with our local city authority in their ULEV bids, there's lots of EU money coming in and no real differentiation between BEV and PHEV(/EREV). So cynically I think you are right the powerful (primarily German) EU auto industry isn't going to lay down arms just yet with the lobbying.

It has been a very interesting insight however talking to the planners about some of the issues. Some are misguided, with none of the teams driving BEV's other than fleet council Leafs, but some are genuine concerns (including but not limited to: tax revenue worries, grid capacity, scalability, social equality, housing constraints, anti competition issues ). So being generous our lawmakers could be looking at it in a different way than we might. Get 1000 ULEV cars on the road or 100 BEVs, and ultimately just have less vehicles altogether pushing people into mass transit.


I get the distinct impression the focus in EU will be ULEV not ZEV for the next 5 years. I also think a lot of the credits will be EU wide, with the member states varying around a theme how they implement distribution of those credits.

Are the auto makers leading the agenda or just putting maximum resource into the most likely next round of government policy to sell the most vehicles.

What's a ULEV?
 
The biggest issues I have with the German plan are: 1) it is an idea only - nothing is confirmed and the minister for finance doesn't want it, so it won't come. 2) Even if it comes it will be far into the future - so anybody remotely considering buying an EV right now risks of "losing" 5000 Euro if they buy now. -> now that's a perfect way to strangle an already lousy EV market and give Diesel a good push.

If they were serious they would apply it retroactively to 1-Jan-2016 (or something like that) - but my suspicion is that they want to have it only in the future at a time when maybe some German car makers are in a position to offer EVs. If Tesla and the French don't sell any EVs in Germany in the meantime, they won't care...
 

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