Have Tesla and Apple disrupted the auto industry past the point of no return?

[wdolson]

I understand Tesla isn't burning cash. Its investing in R&D and tooling for higher production levels. Still I would like to see Tesla at least continuously reduce cash burn / unit sold over the next 2 years.

100k MS+MX per year should happen in 2017 unless something really tragic happens. Just look at the backlog of MX reservations.
How many millions of cars costing at least US$ 75k are sold yearly ? Can't Tesla get 1/3 of that market ?
That would be a real disruption (creating significant hurt to the competition).

Tesla is still not making paid ads... There are always the conservative people that won't buy the car until its selling for many years and they're confident it will be trouble free. Sales in Germany, UK, China, Australia and many other countries is still fairly small compared to the total market potential.

I think MS+MX 70D basic model sales will grow considerably over the next years. Specially if Tesla could pass Giga Factory cost reductions onto customers.

I bet if Tesla could make supercharger usage 100% unlimited and free (even for local charging) it would spur a lot of 70D MS+MX sales for shared rides/uber/cabs (it would require quite significant increase in supercharger network). That market is very significant, and at high usage even a US$ 100k Tesla financed over 60 months can pay for itself in fuel savings. The key is cabs run 24x7. You can't wait 4-5 hours to charge everyday. Supercharging would be mandatory for serious usage of Tesla for cabs.

Don't underestimate Musk's solid track record in the marketing arena. Once Tesla can balance supply and demand without ads, they will figure out means to double demand. They just can't do it yet, it would create a mass of pissed of customers waiting in line for their cars.

Tesla is already dominating the large luxury sedan market, which is quite small, but the Model S is the clear winner. I saw a chart that included the Model S in that segment some months ago, but I can't find it right now, but this site has the data split into two places:

http://www.goodcarbadcar.net/2015/12/usa-large-luxury-car-sales-stats-october-2015-ytd.html
http://www.goodcarbadcar.net/2013/08/tesla-model-s-sales-figures-usa-canada.html

As you can see the US luxury sedan minus Tesla is headed up by the Mercedes S class with 19,771 sold to date and Tesla has sold 22,900 Model S in the US this year. Additionally all the other cars in this segment are seeing a sales slump from -7% to -13.9%. Some of it might be losing sales to other ICE cars, but I wouldn't be surprised if they are losing sales to Tesla too. Tesla is moving into a much denser part of the market with the Model 3, but if they can even be a serious player in that market, they will disrupt it.

There is a cab fleet in the Netherlands that run Tesla cabs. I don't think Tesla is too happy about the cabs dominating the supercharger at the airport.

Tesla should start seeing some turn around on the cash burn in 2016. The Model X is moving from a cash burn to a revenue center.

 

[Ktowntslafan]

The driverless, car-sharing road ahead | The Economist

"Carmakers increasingly fret that their industry is on the brink of huge disruption"

 

[Joules Verne]

Tesla has most certainly disrupted the car industry in so many ways. Not only did they make production electric vehicles cool, performant, desirable, and practical (distance, capacity, less-so on price). They also introduced an international super-charging network. Manufacturer direct purchase model, buy via a website. New service station model. In addition, they reinvented the architecture of a car: a single computer to control it all (which allows for over the air updates, fleet-enabled autopilot, and so much more). Now not only do other manufacturers have to join the electric revolution, but they have to completely change how they think about building cars.

Apple, what have they done again? I love Apple products, but associating them with disrupting the car industry? I think not. Deliver a product, then we can talk about what if anything they disrupted with it.

 

[Joules Verne]

I cheer everyday for Tesla success, but lets be realistic, Tesla is far from disrupting anything.
They need to increase sales almost an order of magnitude to actually bring real hurt to the competition.

You're very wrong about that.

ICE makers have been resting on their laurels for a long time.
Innovation in the car industry was largely dead.
More of the same, incremental progress.

Tesla comes along and shakes-up everything.
Showing the world what's possible.

ICE makers were in denial at first, but they are reacting now.

They are rearchitecting their cars and changing their way of thinking as we speak.
I have first hand knowledge of this.

All because of little bitty Tesla.
I love it!

 

[electracity]

VW reorganized today, forming four divisions. One of which is pure BEV. The report that the one division is purely electric propulsion is very interesting, if reported accurately.

 

[dsm363]

VW reorganized today, forming four divisions. One of which is pure BEV. The report that the one division is purely electric propulsion is very interesting, if reported accurately.

That seems to be a serious effort then. Maybe there is a new serious player in the EV market. Good news.

 

[electracity]

That seems to be a serious effort then. Maybe there is a new serious player in the EV market. Good news.

I should have been clear and said that they reorganized their vehicle development into four division. They still need to decide whether to build whatever the BEV people come up with.

 

[silverp85+]

I cheer everyday for Tesla success, but lets be realistic, Tesla is far from disrupting anything.
They need to increase sales almost an order of magnitude to actually bring real hurt to the competition.

Tesla is however succeeding in making the competition look bad. That is certainly a solid promise.

I hope Model S+X sales will break 250k cars / yr before 2020. It will heavily depend on Tesla turning a profit so it can fund large scale tooling to sustain 50% unit sales growth on a continuing basis without extra debt.
Disrupting the premium sedan/cross over market is far easier than disrupting the car market in the US$ 25k-40k range.

The key question is proving BEVs can be profitable. That would actually force the competition to act fast and push dealers to actually promote and sell BEVs in lieu of ICEs.

in 2007 apple released the iPhone and Microsoft dominated the smartphone industry. Steve Ballmer said no one will buy the iPhone over windows mobile devices. even though windows mobile devices were hands down the most productive devices on the market, the iPhone still took over the market.

people will buy what's hot now, tesla is hot right now.

- - - Updated - - -

That seems to be a serious effort then. Maybe there is a new serious player in the EV market. Good news.

I could have sworn I read somewhere a few months ago that audi is building a model s competitor

 

[wdolson]

in 2007 apple released the iPhone and Microsoft dominated the smartphone industry. Steve Ballmer said no one will buy the iPhone over windows mobile devices. even though windows mobile devices were hands down the most productive devices on the market, the iPhone still took over the market.

people will buy what's hot now, tesla is hot right now.

I don't believe Microsoft has ever been a major player in the phone market, despite wanting to be. When the iPhone was released Blackberry was the closest thing to a smartphone out there and Motorola was also a major player. Microsoft has made several attempts to get into mobile device markets with tablets and such, but they have always failed. Windows CE was their version of Windows to be embedded in devices and few people have ever heard of it. More recently they bought Nokia trying to be a major player in the phone market, and they did the Microsoft Surface tablet, but neither sold well.

Tesla does have a following that is akin to Apple, but they also make a car that is advanced beyond ICE in many ways.

I could have sworn I read somewhere a few months ago that audi is building a model s competitor

Audi showed some drawings of a car they claim will be out before the end of the decade, but nothing exists off a designer's drawing board.

 

[silverp85+]

I don't believe Microsoft has ever been a major player in the phone market, despite wanting to be. When the iPhone was released Blackberry was the closest thing to a smartphone out there and Motorola was also a major player. Microsoft has made several attempts to get into mobile device markets with tablets and such, but they have always failed. Windows CE was their version of Windows to be embedded in devices and few people have ever heard of it. More recently they bought Nokia trying to be a major player in the phone market, and they did the Microsoft Surface tablet, but neither sold well.

Tesla does have a following that is akin to Apple, but they also make a car that is advanced beyond ICE in many ways.



Audi showed some drawings of a car they claim will be out before the end of the decade, but nothing exists off a designer's drawing board.

Microsoft dominated the market with windows mobile @22% while blackberry slipped to around @20% (not to be confused with windows phone OS) between 2003-2007. those are facts.

I don't get the apple love to be honest. they are the least innovative company out of all the big industry names. what has apple done? what have they innovated? you think pinch and zoom is their innovation? no it was not, Microsoft had the surface table (not tablet) in boats in early 2000's. Microsoft also had voice command/dialing in windows mobile long before siri. The iPhone icons are the same as the palm device of 1995, the iPhone design is same as palm tungsten that was introduced years before iPhone/ipods. when it comes to desktop/laptop OS, apple has 5% of the market. the iPhone looks the same as it did since it's release. the large iphone look identical to the note 2 and only 2 out of 10 phones sold are iphones. they do the least amount of R&d investments compared to Microsoft and google also.

also Microsoft makes billions with apple and android sales because of patents leased to those companies.

apple would make tesla fail.




Audi Plans Tesla Model S Competitor For 2017 | car News @ Top Speed

 

[wdolson]

Microsoft dominated the market with windows mobile @22% while blackberry slipped to around @20% (not to be confused with windows phone OS) between 2003-2007. those are facts.

I stand corrected, it looks like they were the biggest fish in a very niche of the overall market. It appears they sold only about 10 million smart phones a year in a mobile phone market that sold 500 million. I now vaguely remember seeing a Microsoft OS phone in a phone store once many moons ago. It looked like an overpriced piece of junk.

I don't get the apple love to be honest. they are the least innovative company out of all the big industry names. what has apple done? what have they innovated? you think pinch and zoom is their innovation? no it was not, Microsoft had the surface table (not tablet) in boats in early 2000's. Microsoft also had voice command/dialing in windows mobile long before siri. The iPhone icons are the same as the palm device of 1995, the iPhone design is same as palm tungsten that was introduced years before iPhone/ipods. when it comes to desktop/laptop OS, apple has 5% of the market. the iPhone looks the same as it did since it's release. the large iphone look identical to the note 2 and only 2 out of 10 phones sold are iphones. they do the least amount of R&d investments compared to Microsoft and google also.

also Microsoft makes billions with apple and android sales because of patents leased to those companies.

Apple appeals to a certain mind set and others find their OSs confusing. I've always taken to OSs like a duck to water, UNIX, DOS, Windows, a number of proprietary OSs, but MacOS has always done my head in. It works contrary to the way I think (and the way other OSs work). I use iOS for some things, but I dread whenever I have to interface it or do any kind of changes beyond anything simple. It takes me forever. Setting up my last Android took about an hour including custom ring tones, wallpaper, etc. When I set up my iPhone, doing the exact same things took over 8 hours (I'm not exaggerating). For my SO on the other hand, MacOS makes more sense to her than anything she's ever seen. She bought one of the first Macs back in the 1980s and has three of them now.

There is something different in Apple's approach to OSs. But everybody is borrowing of stealing from everyone else. The graphical user interface was invented at Xerox PARC in the early 1970s and just about everyone has stolen from it in one way or another. Xerox PARC also invented the laser printer, the mouse, ethernet, the computer workstation that became the personal computer, and a number of other innovations that were all brought to market by other people. Some were taken by Xerox employers who went out and started their own company like ethernet others just sat there until someone took the idea and ran with it. The laser printer was not practical in 1970 because RAM was too expensive and the inventors knew it. It wasn't until the early 80s that RAM got cheap enough to go into printers.

apple would make tesla fail.

Audi Plans Tesla Model S Competitor For 2017 | car News @ Top Speed

Though as of last week the Apple car appears to be in doubt. The head of the program left under a bit of a cloud and they slapped a hiring freeze on the program. Rumors are swirling that Apple is going to pull the plug. I've said Apple has the money to make a lot of mistakes and eventually get it right, but I think they would make a lot of mistakes.

 

[silverp85+]

I stand corrected, it looks like they were the biggest fish in a very niche of the overall market. It appears they sold only about 10 million smart phones a year in a mobile phone market that sold 500 million. I now vaguely remember seeing a Microsoft OS phone in a phone store once many moons ago. It looked like an overpriced piece of junk.



Apple appeals to a certain mind set and others find their OSs confusing. I've always taken to OSs like a duck to water, UNIX, DOS, Windows, a number of proprietary OSs, but MacOS has always done my head in. It works contrary to the way I think (and the way other OSs work). I use iOS for some things, but I dread whenever I have to interface it or do any kind of changes beyond anything simple. It takes me forever. Setting up my last Android took about an hour including custom ring tones, wallpaper, etc. When I set up my iPhone, doing the exact same things took over 8 hours (I'm not exaggerating). For my SO on the other hand, MacOS makes more sense to her than anything she's ever seen. She bought one of the first Macs back in the 1980s and has three of them now.

There is something different in Apple's approach to OSs. But everybody is borrowing of stealing from everyone else. The graphical user interface was invented at Xerox PARC in the early 1970s and just about everyone has stolen from it in one way or another. Xerox PARC also invented the laser printer, the mouse, ethernet, the computer workstation that became the personal computer, and a number of other innovations that were all brought to market by other people. Some were taken by Xerox employers who went out and started their own company like ethernet others just sat there until someone took the idea and ran with it. The laser printer was not practical in 1970 because RAM was too expensive and the inventors knew it. It wasn't until the early 80s that RAM got cheap enough to go into printers.



Though as of last week the Apple car appears to be in doubt. The head of the program left under a bit of a cloud and they slapped a hiring freeze on the program. Rumors are swirling that Apple is going to pull the plug. I've said Apple has the money to make a lot of mistakes and eventually get it right, but I think they would make a lot of mistakes.

Microsoft did not start selling phones till late 2015 (starting with 950xl) and manufacturers like htc (biggest at the time) sold more than 10 mil a year of windows mobile devices. the OS was so popular palm abandoned PALM OS in favor of windows mobile.

Windows Phones (not windows mobile) today have the best cameras and most productive OS on the market (I guess it's junk if you don't know what you're looking at). Their windows 10 os runs smoothly on the cheapest phone (635) on the market. Try that with ios and android.

The apple OS is very simple and very easy OS to learn, it's mainly based on windows 95. the only hard part of Apple OS is removing viruses/malware, but I've got that down to a science now.

 

[wdolson]

Microsoft did not start selling phones till late 2015 (starting with 950xl) and manufacturers like htc (biggest at the time) sold more than 10 mil a year of windows mobile devices. the OS was so popular palm abandoned PALM OS in favor of windows mobile.

Windows Phones (not windows mobile) today have the best cameras and most productive OS on the market (I guess it's junk if you don't know what you're looking at). Their windows 10 os runs smoothly on the cheapest phone (635) on the market. Try that with ios and android.

The apple OS is very simple and very easy OS to learn, it's mainly based on windows 95. the only hard part of Apple OS is removing viruses/malware, but I've got that down to a science now.

I was talking about seeing a phone running a Windows OS in a store about 8 years ago. I don't recall who's hardware it was, just that the OS was Windows, and it didn't look very impressive. I don't think I had seen an iPhone yet and I think Android was fairly new. I ended up getting an Android phone with a slide out keyboard. I liked the phone, but it was not reliable.

 

[Joules Verne]

The apple OS is very simple and very easy OS to learn, it's mainly based on windows 95.

Windows 95 !!?

Apple's Mac OS X is mainly based on Mach, BSD, and Apple's desktop GUI.
It has nothing to do with Windows, which is why it's such an elegant operating system.

 

[wdolson]

The apple OS is very simple and very easy OS to learn, it's mainly based on windows 95. the only hard part of Apple OS is removing viruses/malware, but I've got that down to a science now.

I missed this bit the first time through. No Apple OS has anything to do with any Microsoft OS. MacOS dates from the early 1980s and predates Windows 95 by over a decade. All GUI OSs steal quite blatantly from Xerox PARC's GUI OS developed in the early 1970s. Xerox never did anything with it and GUI developers ever since have been making derivative products.

Apple did change the core technology in MacOS when they switched from Motorola to Intel processors. The 68000 family had reached end of life and the 8086 family was still growing. Some other processor technologies have tried to supplant the 8086 descendants, but it has become the defacto standard for desktop and laptop computers. Modern Macs can run Windows natively and there are a few utilities to enable you to do that requiring a reboot in some cases (such as Bootcamp) or you can run Windows as a virtual machine within MacOS (such as with Parallels). But MacOS does not share any lineage or any code with Windows beyond possibly some vendor supplied drivers which may have some similarity.

 

[Ed Hart]

The Motley Fool today had another piece on whether or not Tesla has disrupted the automotive market, concluding that it doesn't matter:

It Doesn't Matter If Tesla Motors Is Actually Disruptive or Not -- The Motley Fool

It seems that Clayton Christensen is sticking by his insistence that we can only use the word "disruption" it answers one of these critical questions:
1. Does the product either target overserved customers or create a new market?
2. Does the product create "asymmetric motivation" where incumbents have less motivation to innovate than new entrants?
3. Can the product improve performance fast enough to satisfy consumer expectations at reasonable costs?
4. Does the product create new value networks?
5. Does the product disrupt incumbent companies, or can incumbents capture the opportunity?

All good and well, and I personally believe this is a very good rule set that works in thinking about traditional market players. However, even though Christensen insists that Tesla has not disrupted the automotive market, it seems to me that question 5 is answered in the affirmative based on the fact that Tesla outsold all other large luxury vehicles in the US in 2015, per the include chart. The REAL test for disruption is to ask the marketing executives of Mercedes, BMW, VW/Audi/Porsche and Jaguar if they feel "disrupted!" The charge suggests they are feeling the burn.

 

[Ktowntslafan]

How are people feeling now?

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