When you look at Tesla killer announcements, answer these key questions to determine if they will be competition:
1) Are they priced from $35k base and/or $40k with AP2.5 level tech?
Fair point... however, much like with the Model S I expect that the short battery version Model 3 will be short lived, there's a good chance it's a loss leader for Tesla and they will look to get out of selling it as quickly as possible or they will look for ways to cheapen it over time while keeping the same range so they lose
less money on each one they sell.
2) Do they have a range of at least 210 miles? If they are coming out in 2 years, that number should be closer to 300 miles EPA not NEDC or what that Euro crap is.
As seen with the announced longer range Leaf and the Bolt, nanufacturers are shooting for a 250 mile range on their newer EVs. I would be extremely surprised to see a newly released EV in 2018 or 2019 have a 100 mile range.
3) When said company sells these cars, are they going to be selling them from dealerships? If so, add $1000 to the losses per car because they will have to pay the dealers to sell them. No service means no dealer wants to sell them.
This makes no sense to me. Tesla is the 'dealership' when you buy from them. If you think they are selling their cars for a lower price because they aren't leaving room for dealer profit, I think you are fooling yourself. What are the margins on the S? What are the Margins on a BMW 740? They are probably almost the same. Dealers make very little in profit on sales of new cars, they make most of the profit selling used cars and servicing the cars they sell.
You are looking at dealerships as 100% downside. There is an upside, which is why Apple, for example, sells at both their corporate stores AND still sells at every other retail chain like Target, Best Buy and even small mom and pop type outfits. They simply don't have enough retail stores to handle all of the volume out of their corporate stores... not to mention that there isn't a corporate store for the 50+ percent of America that doesn't live within 50 miles of a large city that has a corporate Apple store.
Someone in a medium sized town in Kansas, Iowa, Indiana, Montana, they are more likely to buy a brand they can get locally and have serviced locally rather than buying a Tesla that they have to travel all day to get serviced... or hope that a ranger can come out and fix their car in X days.
4) How much are they going to cost to service. See #3, it best be close to 0 for the first 5 tears, or it wont be competitive. I am not talking about the plans that Tesla sells, those are not required. I am talking replacing the 12v a couple of times, wiper blades and fluids every couple of years and 1 break job ever 10 years.
So you think Tesla is inexpensive to own long term? We don't have good data yet but early indications are they will be anything BUT inexpensive to own long term. Model S owners who are having things fail during the warranty are seeing what Tesla would be charging for those repairs if the car were not covered under warranty and the costs are obscene. As in, $10,000 drive unit replacements, $18,000 battery replacements, $5,000 center screen replacements... or, if you have something minor fail, like one of the presenting door handles, $2,000.
I think Tesla will be anything BUT affordable to own long term, even their recommended annual service is probably going to be hundreds of dollars per year whether the car needs anything or not.
5) When said company sells these cars are they going to take market share from Tesla, to do so they must have 3 of 4 of the following; greater range, lower cost and better styling and/or better charging network to do so. If they are not taking market share from Tesla, they are will be taking market share from their ICE brands and their ICE competitors. If every ICE company has a couple of models, they are all going to be lined up in a circular firing squad.
You're forgetting brand loyalty. People are very loyal to the brands they trust. If someone is a VW person, or a Ford person or a BMW person they are likely to buy from that company if all other things are CLOSE even if they are not equal.
The one area where Tesla is head and shoulders above everyone else is charging network, so we'll have to see what happens with that over the next few years, or if the market really cares that much about taking long distance road trips with their EV. My experience is that range anxiety is more about day trips or weekend trips than long distance driving. You might not need a super-charger network for that type of driving if the car has a decent range, not to mention that the average family owns 2+ cars and for most people one of them will still be a gas burner and probably an SUV.
6) Where are the owners going to charge? Home is good and will work for most, but you need a decent charge network to have an EV be a real car. The Supercharger network is the bare minimum, not the ideal. The supercharger network of 5 years from now is the ideal and competition is 5-10 years behind.
You don't need a charge network as proven by the Leaf which has sold quite well. Many are buying EVs as commuter cars. Model 3 range extends this into having a car that is good for commuting or driving to and from destinations outside of cities that you can get to in an hour or two. Frankly I think the need for a massive EV network is overblown because you always leave home with a full "tank" of fuel.
Far bigger problem is delivering charging infrastructure to the millions of renters who don't have the ability or means of installing a charging station near the place they park every day. Drive around the streets of any large US city and look at the thousands of cars parked every night on the street in front of the small homes and apartments. None of those cars is a candidate for EV replacement right now because most people aren't going to hang out waiting for their turn at a super-charger for an hour or town when they are going to be late for work if they don't charge their fancy EV.
This is probably one reason that GM is still holding out hope for hydrogen as the real long term solution.
7) Where are they going to get the batteries. 10K units is one thing, but that is not competition, that is a compliance car. Even if 10 companies come out with 2 models each and each is 10k production, that is less then what Tesla will produce next year with Model 3. Bolt will be 30k next year at $7-10k loss per car. In part, because the battery cells are $145/KWh, not the pack, but the cells. The pack adds a fair amount of cost as the packs are not just simple packaging. Tesla was at around $190/KWh for Packs a couple of years ago and dropped that cost by 30-35% with 2170 or $133/KWh. This is all guesstimates, but that would be a significant savings vs the Bolt which could be north of $200/KWh at the pack level. The bolt is currently the only other long range EV and its $2500 more, no charging network, and ugly. So it clearly does not compete because it cannot be the 3/4 criteria from above. Its also smaller, which should also be a criteria.
They will get the batteries from China. Tesla is opening a factory in China and early indications are that they will build a giga factory in China. The Chinese government will do to Tesla batteries what they did to Solar panels. Get the IP for free and then turn that IP over to government friendly businesses run by party connected types who will crank out similar but cheaper products. China has access to the bulk of rare earth minerals.
