TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Guy Who Killed Fisker Offers Advice To Elon

Discussion in 'Tesla Motors' started by LMB, Oct 21, 2014.

  1. LMB

    LMB Member

    Joined:
    Mar 9, 2013
    Messages:
    192
    Location:
    South Shore Boston
  2. Cattledog

    Cattledog Active Member

    Joined:
    Feb 9, 2012
    Messages:
    1,709
    Location:
    San Antonio, TX
  3. ecarfan

    ecarfan Well-Known Member

    Joined:
    Sep 21, 2013
    Messages:
    10,401
    Location:
    San Mateo, CA
    From the article: "Posawatz said that instead of unveiling another high-priced vehicle at its recent event, he would preferred to have seen the automaker working toward making a lower-cost, high-volume electric vehicle. He thinks that’s one key to their future success".

    Wow, what insight from the guy who produced the ridiculous Fisker.

    Obviously Tesla is already doing that.
     
  4. Todd Burch

    Todd Burch Electron Pilot

    Joined:
    Nov 3, 2009
    Messages:
    4,737
    Location:
    Smithfield, VA
    "CEO of Bankrupt Automaker Gives Advice to CEO of Successful Innovative Automaker".

    It's like the Twilight Zone up in here.
     
  5. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

    Joined:
    Jul 12, 2012
    Messages:
    4,503
    Location:
    Maine
    Note that Posawatz went to Fisker after they'd already got into trouble. I think they were hoping that connections could help them get rescued.

    I thought that was an interesting interview. I think that, rightly, there's a lot of skepticism about Tesla's ability to bring down costs. Tesla track record on meeting targets is poor. Everything's been late and everything's been more expensive than hoped. Given the hard work automotive companies do to lower costs, it's understandable that an industry veteran would see that as a key focus. However, I think that he really missed the importance of the D announcement. Tesla has been working on AWD for several years, longer than they've been expanding their focus on driver assistance. AWD is now apparently good enough to be released, and they showed progress on autopilot (although the restricted nature of the reveal means we really don't know just how much they have ready). AWD was something Tesla identified (I think rightly) as a technology to complete before trying to go to higher volumes. AWD now being ready for release, and likely a popular option that could both help sales and profit margin on sales is a really big deal. I think what really got people nervous is that Tesla has been keeping shtum on the X. Maybe on November 5th there'll be some explosive news on the X, or maybe it'll be a damp squib.
     
  6. Cattledog

    Cattledog Active Member

    Joined:
    Feb 9, 2012
    Messages:
    1,709
    Location:
    San Antonio, TX
    I was taking a sip of water just as I read your post and spit water all over the keyboard - too funny.
     
  7. rcc

    rcc Model S 85KW, VIN #2236

    Joined:
    Aug 1, 2012
    Messages:
    413
    Location:
    San Jose, CA
    Gee, if GM had concentrated on making cars that people liked and could sell at a profit instead of low cost cars that can be made in high volume, maybe it wouldn't have needed a bailout?

    Tesla doesn't need to bring down costs in an unnatural way. Time will bring battery costs down. Tesla just has to bring costs down through scale and efficiency just like any other car company. Then they can ride the battery cost curve. A $50K car will come. Followed by a $35K car. Followed by a $20K car.

    Trying to skip straight to the $30K car gets you a Leaf instead of a Model S and a world of hurt.
     
  8. JohnQ

    JohnQ Active Member

    Joined:
    Jan 1, 2012
    Messages:
    1,585
    Location:
    Redding, CT
    Sometimes I find the glibness here irritating. The bankrupt CEO comment is funny, and it's perfectly accurate. But, as was pointed out, he was brought in to patch an already sinking ship and the odds of success were slim to none. GM has its share of challenges. But it's a whole lot easier to sell a $70,000 car for a profit than it is to sell a $20,000 car for one. There's a lot of people who can't afford a car that costs more than $20k and to make that car profitable requires ruthless cost cutting. Tesla is innovative and commands a loyal following, myself included. But there's still a long way to go.
     
  9. ToddRLockwood

    ToddRLockwood Active Member

    Joined:
    Sep 11, 2012
    Messages:
    1,263
    Location:
    Burlington, Vermont
    "Posawatz said that instead of unveiling another high-priced vehicle at its recent event, he would preferred to have seen the automaker working toward making a lower-cost, high-volume electric vehicle. He thinks that’s one key to their future success."

    Clearly stated by someone who is not following Tesla's development plans. The $35K Model 3 sedan is still slated for a 2017 release. Nothing's changed there. A prototype of the Model 3 (not a concept vehicle) is expected to be shown at the Detroit Auto Show in January. Tesla has more than one project in development at a time. It was silly for people to expect an early introduction of the Model 3 when its very existence is dependent on the upcoming Gigafactory to produce its batteries. The Nevada Gigafactory will take 2 years to complete.

    The AWD "D" variant of the Model S is a very smart move on Tesla's part. The electric AWD technology developed for the upcoming Model X was adapted to the current Model S without a complete redesign of the vehicle. This has greatly improved the Model S's competitive position in the luxury market.
     
  10. wycolo

    wycolo Active Member

    Joined:
    May 16, 2012
    Messages:
    2,428
    Location:
    WY
    > I think what really got people nervous is that Tesla has been keeping shtum on the X. Maybe on November 5th there'll be some explosive news on the X, or maybe it'll be a damp squib. [INATM]

    Are you so far Down East that you sound like Letterman's London corespondent? LOL!! Help please.

    And +1 on what else you said.
    --
     
  11. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

    Joined:
    Jul 12, 2012
    Messages:
    4,503
    Location:
    Maine
    #11 ItsNotAboutTheMoney, Oct 22, 2014
    Last edited: Oct 22, 2014
    Lol. Well spotted. I'm originally from the UK and I've been here a little over 7 years. I speak American with a British accent which I shall never lose even though I'm not specifically trying to retain it. I occasionally slip into British idiom, sorry.

    Urban Dictionary: shtum

    Shtum = quiet, silent. Probably adopted from German. It's a war thing.

    November 5th = Tesla will release the Q3 results. It's also Bonfire Night in the UK, when the British celebrate the brutal execution of a Catholic who was involved in the failed Gunpowder Plot - Wikipedia, the free encyclopedia, probably, maybe. Make an effigy, burn it on a bonfire and also light fireworks. Hence the bad puns of "explosive news" and "damp squib". (Squib being a small explosive device, with a damp squib being one that fails because it got wet).

    PS Down East is very often written Downeast around here. Downeast cider, for example was originally made in Waterville, ME, a small city in Central Maine, not in Downeast Maine, but branding's more important that actual facts.
     
  12. wycolo

    wycolo Active Member

    Joined:
    May 16, 2012
    Messages:
    2,428
    Location:
    WY
    Using 'Way Down East' films from 1920 and 1935 as my example and hoping for more doggerel balderdash from any direction! :biggrin:
    --
     
  13. rcc

    rcc Model S 85KW, VIN #2236

    Joined:
    Aug 1, 2012
    Messages:
    413
    Location:
    San Jose, CA
    That's true. But the battery tech isn't there to support a viable $20K car that can be sold at a profit. Tesla has the time to grow and scale as the battery tech improves. It's a long process. Trying to get there overnight is a sure-fire recipe for bankruptcy.

    Also, as long as they can stay profitable, Tesla can pause or stop at any point along the way. Ferrari, BMW and Toyota represent three very different points on the volume curve and they're all profitable.

    BMW is proof that you can make a $20-35K car at a profit without being a Toyota/GM/Ford-like volume manufacturer (Mini Cooper).

    I think his background at GM has him overly focused on cost-cutting. Recall that for most of his career, GM's design philosophy - if you can call it that - was to design cars that could be built with a minimum amount of factory retooling so they could minimize the amount of factory downtime. Because of the union contracts, GM had to pay the workers even if the factory was shut down to redo the assembly lines. So they tried very hard to keep the factories running all the time so they wouldn't have to pay their workers to stay home. They figured the resulting cars were good enough and they could market their way out of any problems.

    In retrospect, GM cared more about putting out a low cost car than they cared about building a car consumers actually liked.

    And this is the guy offering advice to Tesla and Elon - who are riding a wave of success because they built a car that consumers love.
     
  14. LMB

    LMB Member

    Joined:
    Mar 9, 2013
    Messages:
    192
    Location:
    South Shore Boston
    (LMB spouse)

    Yeah, I was aware of that. Most of what I know about Posawatz comes from reading the Fisker forum, Fisker Buzz Forums. They're really not fond of him over there.
     
  15. RobStark

    RobStark Active Member

    Joined:
    Jul 2, 2013
    Messages:
    2,930
    Location:
    Los Angeles
    Ferrari is part of Fiat Chrysler Automobiles. The only way some its investments in technology can be justified is that they filter down to Maserati,Alfa Romeo, and eventually Fiat. Other times they acquire technology from FCA.

    BMW will hit 2M units this year. That means over 50% growth in 10 years.

    BMW sees the writing on the wall with Volvo and Jaguar-Land Rover being purchased by Asian OEMs.
     
  16. rcc

    rcc Model S 85KW, VIN #2236

    Joined:
    Aug 1, 2012
    Messages:
    413
    Location:
    San Jose, CA
    True on Ferrari. But Tesla is already pushing ~3x the volumes of Ferrari + Maserati and that multiplier will continue to grow.

    Tesla has a different business model than your typical car company and is plowing everything into growth like a startup. Because of that, it's difficult to tell what levels of volume are needed to sustain profitability but I guarantee it's not GM-level production. Their direct sales model and low-cost showroom model means they capture more profit per car sold than the GM's of the world. Their vertically integrated production model makes them more efficient than normal at lower volumes. Tesla gets better cross-platform sharing out of their drivetrain investment and their drivetrains are simpler so they don't need to invest as much in them for either R&D or production. They've taken a totally different approach to designing the control systems for the car too. Which given the size of their software team is absolutely more efficient and effective. Etc.

    In other words, this GM exec's intuition is being driven by numbers and assumption that aren't valid for Tesla.

    Yes, Tesla needs to scale. But given the way Tesla does business and the way that Tesla designs and builds its cars, it's highly likely that Tesla can get away with a lot less scale than normal.

    And given the battery costs, it's suicide to scale too large too soon. Until those costs come down, you can't build a $20K EV that lots of people actually want to buy.
     
  17. Vger

    Vger Active Member

    Joined:
    Apr 10, 2009
    Messages:
    1,688
    Location:
    Salt Spring Island, BC, Canada
    Well put. I regard everything Elon and team do as for the long game. They are not (just) a company, they are a catalyst for a movement. They price compelling and essentially unique cars at huge margins now, precisely because that is all revenue that can be ploughed into achieving scale and preparing for coming down market. There is really no precedent in the auto industry, and perhaps none in any industry, for what they have planned and achieved. I often liken it to Babe Ruth's famous pointing at the right field wall and then hitting reliable home runs. Those who have not walked the entrepreneurial road cannot comprehend any of this, regardless of their well-fatted resumés. This is not glib, it is empathy and recognition of genius.
     
  18. Kutu

    Kutu Member

    Joined:
    Apr 15, 2014
    Messages:
    122
    Location:
    NE Florida
    The major cause of the troubles at the "big 3" US auto manufacturers was the desire to gain and protect market share- profit was secondary. That is why the UAW will only strike one manufacturer at a time. Market share should not be the ultimate goal, if it is you will forever be producing inferior products and on the verge of failure.
     
  19. RobStark

    RobStark Active Member

    Joined:
    Jul 2, 2013
    Messages:
    2,930
    Location:
    Los Angeles
    True.

    With possible exception of factory owned stores in the USA, it is unlikely Tesla will keep those advantages forever.

    Tesla needs to grow, grow ASAP, and scale up before others catch up. Not just legacy automakers but the Chinese as well.

    Tesla needs to be first with a compelling $20k EV.

    Elon has said he would be disappointed if battery cost did not fall below $100/kWh within a decade.

    That is the price at which BEV powertrains fall below the price of ICE powertrains.

    That is when you can make a better $15k BEV than Toyota can make an ICE Yaris.
     
  20. rcc

    rcc Model S 85KW, VIN #2236

    Joined:
    Aug 1, 2012
    Messages:
    413
    Location:
    San Jose, CA
    I don't believe Tesla will lose its advantages.

    Every other big auto company has gone to outsourced parts as much as possible. It would take years to undo that.

    Every other big auto company would like to go to a skateboard + body approach like Tesla has. A world platform that you can slap different bodies on is the Holy Grail of automotive engineering. They've been trying for decades to do that but ICE's are so intrusive, they can't. Tesla has that with the skateboard.

    ICE engine and powertrain design is a money sink. I bet the new variants of the electric motors for the D's and the X's cost an order of magnitude less money to develop than their ICE equivalents. I'm sure the tooling and setup costs are a lot lower too. Then there's clutches, transmissions, etc. Tesla uses software-controlled direct drive and isn't likely to change that.

    I could go on but I'll stop here. Basically, Tesla's cost and simplicity advantages come from a combination of: EV, new design methodology, new manufacturing and supply-chain methodology.

    The old companies don't believe in EVs and their old methodologies are baked into their corporate culture. With big companies, that kind of corporate culture is almost impossible to change. Worse yet, for now and for quite a few years to come, long-range EVs are viable *only* if you change your basic methodologies around how tightly you integrate the powertrain and battery pack. And have a supercharging network.

    So I think Tesla will have the time it needs to grow.

    The only question is whether Tesla can successfully sync its growth to the battery tech curve. And if they're going to err, they need to err on the side of growing too slowly. You'd rather be 6-12 months late with the Model 3 than have your company, sales force and service centers tooled up and ready to support Model 3 volumes but have the battery packs be too expensive to make the profit you need.

    - - - Updated - - -

    It was worse than that. They wanted to make a profit. But they allowed CAFE to distort their profit/loss calculations. They were willing to break even or even lose some money on small cars if it meant they could sell a high-margin truck or SUV. If you're willing to drop the price enough, you can sell huge number of very mediocre cars. Especially if you own a rental car company that needs to buy new cars every year.

    So they spent years getting better at producing mediocre but low-cost cars. And they never realized how outclassed they were because it never showed up on their earnings. Until one day it did. But by then, they'd spent years digging themselves into the hole.
     

Share This Page