Last hurdles before mass production in 2020 (minus gigafactory)

[Mitthrawnuruodo]

There is already good discussion about the giga-factory elsewhere. I wanted to stimulate a back-and-forth about the Tesla I envision existing in 2020 and a sort of gap analysis I performed in my head and am only now writing down:

2020 Assumptions:

1. Tesla makes 500,000 to 700,000 cars in 2020 as they have confidently pointed towards numerous times
2. Maintenance and battery degradation remain low. Customer satisfaction remains high
3. Tesla spends most of its cash on GF/production/superchargers, and has around 200 million left to spend (I like pulling numbers from thin air)


Future required milestones:
1. Gigafactory(ies)
2. Chargers EVERYWHERE
3. Many many more service stations than currently (like 20 - 30x more as the EV army grows and ages)
4. Marketing


I have a couple recommendations:

2. Aside from superchargers, partner with Walmart or at least Costco and have a dozen normal chargers in every single location. Maybe need to invent a different charger for the situation. I bet this could be super cheap. What led me to consider this is when Walgreens put EV chargers in 800 of their store parking lots in 2011. http://www.walgreens.com/topic/sr/sr_electric_vehicle_charging_stations.jsp Depressingly enough, it appears they have not increased the number since even though the amount of plugins have probably quadrupled or so in this time.

3. Toughest hurdle, or maybe I am just unimaginative. If I have a slow week I might crunch some cost estimates and how many service centers will likely be required. Feedback on this one would be good. I have had some ideas before on this one, but now that I actually started to write them down they are sounding too bad to even voice.

4. I bet tons of marketing companies would want to be involved in the greenest and most disruptive company since.... ever. Maybe Tesla could buy a small firm on the cheap. The experience in creating and owning the marketing roll-out for a start-up auto company, without dealerships, is a once in history opportunity and several marketers would probably pay Tesla to get them on their CV. I bet there is tons of potential here. Or they could just overtly crowd-source marketing campaigns, if this isn't what they are kind of already doing.


Tesla has really made it too easy to invest. Since 2006 Musk has clearly stated where he wants the company to get to, and that always entails the company expanding rapidly from where it is by a significant factor. All we have to do is trust Musk to get us there haha.

 

[c041v]

I'm about to sit down to dinner, but I will quickly interject a thought that has been in mind as of late. My concerns over Musk's mortality have never been higher. Not that believe Tesla/SpaceX/Solarcity aren't capable of surviving without him, he's just become such a celebrity fixture in the media lately and I wonder how many people tie his words, appearances and, contributions to the success of the companies without realizing the amazing talent pool that has been accrued.

 

[EV2BFREE]

I'm about to sit down to dinner, but I will quickly interject a thought that has been in mind as of late. My concerns over Musk's mortality have never been higher. Not that believe Tesla/SpaceX/Solarcity aren't capable of surviving without him, he's just become such a celebrity fixture in the media lately and I wonder how many people tie his words, appearances and, contributions to the success of the companies without realizing the amazing talent pool that has been accrued.

I always try to think of events that would cause me to sell a stock when I consider going long. The death of Elon Musk or him leaving the company has always been my biggest worry. I do expect him to leave and solely be the CEO of SpaceX after the Gen II is up and running for a few years.

 

[techmaven]

I have a couple recommendations:

2. Aside from superchargers, partner with Walmart or at least Costco and have a dozen normal chargers in every single location. Maybe need to invent a different charger for the situation. I bet this could be super cheap. What led me to consider this is when Walgreens put EV chargers in 800 of their store parking lots in 2011. http://www.walgreens.com/topic/sr/sr_electric_vehicle_charging_stations.jsp Depressingly enough, it appears they have not increased the number since even though the amount of plugins have probably quadrupled or so in this time.

In a world with lots of long range BEVs, there is no reason to install a significant number of EV chargers at locations where one is going to spend < 1 hour. Especially if those stations charge at < 30A (17 miles an hour). It is hardly worth it to even plug in.

Instead, locations where one is likely to spend overnight or a huge portion of the day needs to have a large number of EVSE's.

1) Hotels
2) parking garages
3) Tourist destinations like theme parks, gambling casinos and the like. Think Disney World and Universal Studios.
4) beaches
5) parks

These are the kinds of places where it may be difficult to get a charge and you're potentially driving a significant distance from a Supercharger to get there and you might need a charge to get back. Plus, we need many EVSEs there... think 50-100+ in some cases.

Then we need EVSE's at places like shopping malls and work.

We are likely not to need EVSE's at grocery stores, convenience stores, or drug stores. Who wants to be at Walgreens for 2 hours to get 30 miles of charge?

Dovetailing into this is my thesis that every < 90kW DC quick charger is a complete waste of money at anywhere near the prices for CHAdeMO, CCS, or combo 50kW EVSE's. In a world with many EV's with 40+ kWh battery packs, who wants to charge at 45 or 50 kW? It's too fast for the price at 1-5 above to install 20 or 100 EVSE's. It's too slow for long distance travel, as the existing 120kW Superchargers cadence is slow enough. The mass market does not want a slower cadence.

 

[Reykjavik]

We already have chargers everywhere. We have chargers in nearly every garage in the developed world. What we need to do is keep pushing range upwards. If we can double the range and keep the charging times at superchargers quick, an overnight charge and a single 45 minute lunch will be enough to support a full day of highway driving. For within cities, we are already basically there. Tesla's don't need to be constantly plugged in.

With mass production, more marketing may be needed to keep the demand strong, I'm not sure their current approach will scale particularly well.

 

[Mitthrawnuruodo]

I think everyone has good points about charging, I didn't think it completely through. Interestingly enough, Musk discussed charging in the call today at locations such as London and San Francisco (apartment living). I missed some areas of the call, did he offer a precise solution to this? I feel that this is key in defeating demand constraint when production is over 500,000 cars a year.

 

[green1]

I always try to think of events that would cause me to sell a stock when I consider going long. The death of Elon Musk or him leaving the company has always been my biggest worry. I do expect him to leave and solely be the CEO of SpaceX after the Gen II is up and running for a few years.

This is a big worry, when asked at one point, Musk stated that he thought a person should only be CEO of one company at a time, It's also relatively evident that he would choose SpaceX over Tesla if he had to make that choice (and really, it's hard to blame him, I love electric cars, but even they have trouble competing with spaceships). I too worry that he'll leave Tesla at some point. I believe strongly in the Tesla product, but the product alone isn't enough if the visionary isn't there. It would be very difficult to replicate his style, and I'm worried that any replacement CEO wouldn't have the risk tolerance needed to do what needs to be done to keep Tesla great.

 

[dhrivnak]

We already have chargers everywhere. We have chargers in nearly every garage in the developed world. What we need to do is keep pushing range upwards. If we can double the range and keep the charging times at superchargers quick, an overnight charge and a single 45 minute lunch will be enough to support a full day of highway driving. For within cities, we are already basically there. Tesla's don't need to be constantly plugged in.

With mass production, more marketing may be needed to keep the demand strong, I'm not sure their current approach will scale particularly well.

Here in middle America chargers have a LONG way to go before they are prevalent. Heck I am trying to plan a trip to Pittsburgh and have yet to find ANY hotel along the route that has charging. There is one hotel with a campground in walking distance that has NEMA 14-50, one hotel in 400 miles!!!

On my trips to Missouri there are 2 hotels along the 500 mile route that have charging. And NO-ONE has charging above 6KW (208V & 30 amps) that is far from an ideal trip.

 

[dsm363]

If Tesla could somehow get a deal with a major hotel chain that would go a long way. Even without Superchargers at least you'd have an option for overnight.

 

[LakeForest]

If Tesla could somehow get a deal with a major hotel chain that would go a long way. Even without Superchargers at least you'd have an option for overnight.

I'm surprised Tesla has not put more emphasis on their destination charging program. I feel like of they just put a map of all the locations w/ HPWC's on their website it could be a huge boost to hotels/attractions willingness to install. Further, they could appoint one of the sales people from each location to spend like ten hours a week as a "charging ambassador" and work to educate businesses and get chargers installed where owners want them. Every owner should then be able to submit a location to this contact. Owners taking the additional trips with their cars would likely pay off in the long run as well, see math below.Further, if they really want to sell Gen III to all, it needs to work for every trip, and in many locations that is difficult/inconvenient right now without destination charging.


With avg. asp of 100k, a 25% margin, and maybe we can estimate an owner will trade up after 100k miles, so each additional mile traveled nets tesla $.25 theoretical profit. Thus, if one destination charger will encourage one additional 400 mile round trip, that is a $100 profit. So, if ten owners take this trip, that $1,000 profit should cover the cost of the HPWC(say $700 for Tesla, and the cost of the charging ambassador's time, $300)

 

[ecarfan]

I think everyone has good points about charging, I didn't think it completely through. Interestingly enough, Musk discussed charging in the call today at locations such as London and San Francisco (apartment living). I missed some areas of the call, did he offer a precise solution to this? I feel that this is key in defeating demand constraint when production is over 500,000 cars a year.

I was pleased and surprised to hear what Musk said about the decision to install Superchargers in some dense urban areas such as Chinese cities, London, and S.F. But he gave no details about when that might happen. At least Tesla has recognized that there are city dwellers who want to buy Tesla EVs but don't have a way to charge them, a local Superecharger that would allow them to get a quick charge a few times a week on the way to or from work, or even on the weekend, is a good solution for those who can't get power to their apartment or condo parking space or who park on the street.

 

[RobStark]

I was pleased and surprised to hear what Musk said about the decision to install Superchargers in some dense urban areas such as Chinese cities, London, and S.F. But he gave no details about when that might happen. At least Tesla has recognized that there are city dwellers who want to buy Tesla EVs but don't have a way to charge them, a local Superecharger that would allow them to get a quick charge a few times a week on the way to or from work, or even on the weekend, is a good solution for those who can't get power to their apartment or condo parking space or who park on the street.

This changes the economics of the Supercharger being used a few times a year for long trips.

I wonder if the policy will change for owners in the future. A limited number of free charges per year or pay to charge in cities but still unlimited charging between cities?

 

[Lerxt]

My guess is that the majority of new Superchargers are going to places like Asia and Europe.

 

[RobStark]

I always try to think of events that would cause me to sell a stock when I consider going long. The death of Elon Musk or him leaving the company has always been my biggest worry. I do expect him to leave and solely be the CEO of SpaceX after the Gen II is up and running for a few years.

Elon has always said he would be the last out, last to sell his TSLA stock. Even if Elon leaves as an employee of Tesla he will still have A LOT of influence owning ~27% of the stock.

Even if he leaves he will probably still be Chairman of the Board.

More likely, if Elon feels Tesla no longer needs his daily attention, he hires somebody to handle the day to day issues while Elon remains the big vision guy/product architect.

He remains CEO other person becomes Chief Operating Officer.

 

[green1]

He remains CEO other person becomes Chief Operating Officer.

Except he is on record stating that no person should be CEO of more than one company at a time, implying he really doesn't want to do that.

 

[RobStark]

Except he is on record stating that no person should be CEO of more than one company at a time, implying he really doesn't want to do that.

And Yet he has been CEO of Tesla and SpaceX for six years.

What I propose is that he remain CEO of SpaceX and the nominal CEO of Tesla.

Wildly successful people can change their minds too.