Long-Term Fundamentals of Tesla Motors (TSLA)

[callmesam]

Did you just say "cannot"? Is that a typo? :tongue:

But on a serious note, I doubt Tesla will launch Model 3 in 2017 without a battery pack that is (at least) 30% cheaper than the current one. And in 2017 the gigafactory will only have that initial factory module, so we can expect the 30% cost reduction to be effective in 2017.

For me, it remains an open question if S and X will get the new Nevada cells in late 2016/early 2017 prior to Model 3 launch, or - as GLDYLX suggests - it will only be the battery packs to be built together at GF from the current Japanese cells. If the former is true, Model S and X will benefit from technological improvements on cell and pack level from late 2016/early 2017 onwards, perhaps with higher energy density, less weight and thus higher range. Maybe I'm getting too excited about it, but this is only two years from now.

Maybe better way to say is that I interpret Tesla's previous pronouncements as indicating that 30% savings will come from scale which will not be achieved in 2016. :tongue:

 

[renim]

Long Term Auto Market Growth Rate		3%
Long Term Market Share Plugin Vehicle		100%
Maximum Annual Growth Rate Plugin Vehicle	60%
Year	Auto Market	plugin Deliveries	Market Share	Growth Rate	Doubling Months
2014	85,000	339	0.40%	59.77%	17.8
2015	87,550	542	0.62%	59.65%	17.8
2016	90,177	865	0.96%	59.45%	17.8
2017	92,882	1,379	1.48%	59.15%	17.9
2018	95,668	2,194	2.29%	58.69%	18.0
2019	98,538	3,482	3.53%	57.99%	18.2
2020	101,494	5,502	5.42%	56.91%	18.5
2021	104,539	8,632	8.26%	55.29%	18.9
2022	107,675	13,406	12.45%	52.90%	19.6
2023	110,906	20,498	18.48%	49.47%	20.7
2024	114,233	30,637	26.82%	44.71%	22.5
2025	117,660	44,336	37.68%	38.52%	25.5
2026	121,190	61,414	50.68%	31.11%	30.7
2027	124,825	80,523	64.51%	23.23%	39.8
2028	128,570	99,229	77.18%	16.01%	56.0
2029	132,427	115,113	86.93%	10.45%	83.7
2030	136,400	127,145	93.22%	6.87%	125.2
2031	140,492	135,877	96.72%	4.87%	174.8
2032	144,707	142,497	98.47%	3.87%	219.0
2033	149,048	148,012	99.31%	3.40%	249.1
2034	153,519	153,039	99.69%	3.18%	265.8
2035	158,125	157,903	99.86%	3.08%	274.2

logisitc growth model of global plugin vehicles based upon 2013 actuals and 2014 forecast
note well that 50% mark is reached at 2026.

 

[jhm]

Hey, this model looks familiar. Glad to see it getting adapted. How sensitive is the timing of half market to the annual rate? Would 40% or 50% rates make much difference?

 

[Words of HABIT]

Tesla future competition to Ford F-150

Dee-Ann Durbin, The Associated Press writes:
Ford bets it all on aluminum-bodied F-150, which heads to dealers next month - Yahoo Finance Canada
"Ford thinks a truck that is lighter and more fuel efficient, but even more capable, will win buyers while its competitors struggle to catch up. Aluminum — which is lighter than steel but just as strong — isn't new to the auto industry, but this is the first time it will cover the entire body of such a high-volume vehicle. Ford made 647,697 F-150 pickups at its two U.S. plants last year; that's one every 49 seconds.
There are big risks. F-Series trucks have been the bestselling vehicles in the U.S. for 37 straight years; last year, Ford sold nearly 100,000 more full-size pickups than General Motors. Any quality problems, production hiccups or customer doubts about aluminum could slow sales and hurt Ford's bottom line. Morgan Stanley estimates F-Series trucks account for 90 per cent of Ford's global automotive profit."

Take-aways from this article:

1) Ford's fortunes are tied to one vehicle alone, the F-150 (so is Tesla, the Model S). Ford is breaking even or losing money in manufacturing most of their other vehicles.

2) Perhaps Tesla should make the truck market a priority goal (in advance of Model 3). Now wouldn't that be something. This would fit Tesla's goal of getting the high gas guzzlers off the road.

3) Ford manufactures one F-150 every 49 seconds. Tesla has a long way to go to catch up. At this point Tesla's growth is limitless.

 

[renim]

Hey, this model looks familiar. Glad to see it getting adapted. How sensitive is the timing of half market to the annual rate? Would 40% or 50% rates make much difference?

thanks for the spreadsheet

50% pushes it back to 2028
40% pushes it back to 2032

this is the global outlook, China will probably ramp faster to pluging vehicles than this!
India will probably ramp much slower than this, yet ramp up in vehicle market.


Shai Agassi had said that when the monthly cost (including electricity) of a new EV is less than the monthly cost on a 3 year old petrol car (including petrol), then financing new petrol cars will not be a bankable proposition. (ie collapse of financing for new ICE cars from lending institutions) think about it.

- - - Updated - - -

FWIW, the 2014 numbers were manufacturer's volumes to August, multiplied by 2.
EV Sales: September 2014

of note about fast charging
2014 338,996
Nissan 76,574 80% Chademo
China spec. 50,000 GBT China standard
Mitsubishi 46,082 100% Chademo
Tesla 35,288 95% supercharger, future 50% Chademo
Ford 32,508 0% Combo/ Frankenplug
GM 31,630 5% Combo/ Frankenplug
Toyota 30,914 0% Chademo
Misc. 36,000 mix of Combo/Frankenplug or Mennekes AC

There is an immense amount of political support for Combo/Frankenplug, but the commercial reality is that Chademo and Tesla Supercharger are the only 2 DC fast charge systems with willing manufactures to supply cars for. As Combo/Frankenplug seems to Galapogosing the German/Detroit manufacturers to the EU market only or a petrol station. Similarly the pursuit of Hydrogen is simply burning Toyota/Honda/Hyundai to do nothing in regards to vehicle electrification.

 

[chickensevil]

Of course this makes sense... But I don't know when we would ever see that happen? The best selling car is the Toyota corolla and you can easily get a 2012 for around 14000 or less (260$ a month) it gets an average of 29MPG so assuming 1,000 miles a month at 3.50 (gas prices are falling so this is also being generous) gives you a monthly cost of 121$. We will give a generous monthly maintenance cost of 50$ which comes to 421$ a month. That is going to be one tough cookie to crack. Especially talking new car price. 1000 miles a month on 10 cents a kW assuming 300wh/mi comes out to 30$ and assuming no monthly maintenance gives you a car payment of 391$. So a new BEV will have to be priced at roughly 23,000 which is assuming a 5yr loan at 0% interest.... I don't know when we will see a sub 25k BEV that gets 200 miles of range.

On the bright side that should tell you roughly that if you are buying a car at around 15k when you switch you can get a 25k car for about the same price!

But yeah, I think we have a long way to go before we get to that point.

 

[FANGO]

Of course this makes sense... But I don't know when we would ever see that happen? The best selling car is the Toyota corolla and you can easily get a 2012 for around 14000 or less (260$ a month) it gets an average of 29MPG so assuming 1,000 miles a month at 3.50 (gas prices are falling so this is also being generous) gives you a monthly cost of 121$. We will give a generous monthly maintenance cost of 50$ which comes to 421$ a month. That is going to be one tough cookie to crack. Especially talking new car price. 1000 miles a month on 10 cents a kW assuming 300wh/mi comes out to 30$ and assuming no monthly maintenance gives you a car payment of 391$. So a new BEV will have to be priced at roughly 23,000 which is assuming a 5yr loan at 0% interest.... I don't know when we will see a sub 25k BEV that gets 200 miles of range.

On the bright side that should tell you roughly that if you are buying a car at around 15k when you switch you can get a 25k car for about the same price!

But yeah, I think we have a long way to go before we get to that point.

Why 200 miles of range? The leaf can currently be had for 18k post incentives in California. I think we have a short way to go before that point. But people will keep making and buying inferior ICE cars anyway, most likely.

 

[chickensevil]

Why 200 miles of range? The leaf can currently be had for 18k post incentives in California. I think we have a short way to go before that point. But people will keep making and buying inferior ICE cars anyway, most likely.

200 is being nice, I really think most people want more range than that. Note that I live in a major metropolitan area and I drive in to work. I have no hope of ever getting charging at work which means I would need to make a round trip in a car work with some extra range because we operate out of multiple buildings in the area but I am at just one building 95% of my time. All this comes out to me just BARELY being able to make a 100 mile car work, and I would certainly need a second vehicle for other purposes. The Model S is versatile enough that I have never been in a situation that it couldn't handle and WITHOUT being a major inconvenience I might add (there have been some minor inconveniences... but I would consider major to be "show stopping can't go there because my car sucks" kind of break down.

I am not alone, at least not in this area. A GIANT majority of people living in the NOVA area commute into the DC Beltway from 25+ miles away. So much so that the population of DC itself (and I don't even work in DC) doubles during the day. This means round tip of no less than 50-60 miles all year round which knocks the Leaf out of the question for most people, especially as performance degrades and you face big losses in the winter time. And the DC metro area is no small place. With close to 6 million people (as classified by the census) we are the 7th largest metro area in the country. I don't know about the other places... maybe they are more tightly packed and can therefore handle it... but here? I haven't seen a Leaf owner on the roads as soon as you get just a little ways away from the beltway... and for good reason. I am sure they exist, but are more rare than Model S which is saying a lot... because Model S are pretty rare this far south.

This doesn't even start to get into the psychological issues of "range anxiety" and how people want cars that have more range even if they never use it... EVER. This is all just on the practicality of trying to make a Leaf work. So this is why I say 200 mile range. Because then you can have round trip commutes of upwards to 150 miles and still feel confident that your car can handle it plus any crazy side trip that might come up throughout the day. Cause you sure aren't going to tell your boss, "oh sorry, I can't go to that meeting that is 5 miles down the road because I don't have enough range".

So yeah, 200 mile range car for 25k... when that happens, then we can talk about fully overtaking the ICE world in most all situations.

 

[bsd]

The best selling car is the Toyota corolla and you can easily get a 2012 for around 14000 or less (260$ a month) it ... So a new BEV will have to be priced at roughly 23,000 which is assuming a 5yr loan at 0% interest.... I don't know when we will see a sub 25k BEV that gets 200 miles of range.

Why are you comparing a used ICE to. New BEV?

 

[chickensevil]

Why are you comparing a used ICE to. New BEV?

Because of this comment:

Shai Agassi had said that when the monthly cost (including electricity) of a new EV is less than the monthly cost on a 3 year old petrol car (including petrol), then financing new petrol cars will not be a bankable proposition. (ie collapse of financing for new ICE cars from lending institutions) think about it.

I believe the assumption here is that at that point it is going to destroy the resale price of 3 year old cars coming off leases which make them a losing proposition for banks to give good lease deals which will bring that whole part of the car market to its knees. At least that is the assumption I am getting from the comment.

 

[bsd]

Because of this comment:

Ah thanks — I had skimmed over that comment.

 

[renim]

...
I believe the assumption here is that at that point it is going to destroy the resale price of 3 year old cars coming off leases which make them a losing proposition for banks to give good lease deals which will bring that whole part of the car market to its knees. At least that is the assumption I am getting from the comment.

exactly
at the depths of the GFC, financial institutions froze car financing, leading to sales collapse in some country's car yards. (not the US, they only had about a 30% drop)

as far as range is concerned, it varies, currently there are 80mile lease EVs and 200mile full range EVs and nothing in between. what will change is that the lease EVs range will improve and that fast charging will improve, how much is required? I don't know, I suspect there is a continuum and it is price sensitive, so that an increasing number of people will accept the EV vs the ICE at increasing ranges.

recently Mitsubishi sold about 3000 Outlander PHEV in EU Mitsubishi Outlander PHEV Sales In Europe Surge To Almost 3,000 In September
that would be significantly more than its diesel 4x4 twin, which costs a similar amount to buy...

thats with a 12kWh battery

 

[jhm]

I agree that when the total cost of ownership of a new EV is lower than the TCO of a used ICEV, this would be a problem for institutions leasing ICEVs. But it seems this is a pretty remote parity level that may not need to come. When TCO of new EVs is obviously lower than that of new ICEVs, why would the customer want to lease ICEV in the first place? It seems the ICE makers would have to cut prices on their cars just to make the sale, and a low new price would be consistent with a lower residual value. So it makes little difference to the lease underwriter; it's just a cheaper car both new and used. I'm having difficulty seeing why finance companies would necessarily be thrown off by this? But of course, if they were caught off guard in this manner, that could trigger a crisis for auto makers.

Anyway, thanks for the sensitivity analysis. I looks like pluggins just need to stay in the 50% to 60% range to turn the market in a timely manner. It will take pure EVs a little longer, another 4 to 6 years because they are starting from a smaller base. But I do think they will come to dominate. Specifically as battery cost comes down, it will become cheper to extend range by adding more battery than by adding an onboard generator. At that point, the uptake on gas range extenders will fall off, and pure EVs will dominate pluggins. Additionally, cheap aluminum batteries might serve as a range extender. So if the market moves to pluggins in the near term, I see this as no impediment to BEVs longer term. Anything that cuts gas consumption right now is a good thing. These vehicle are changing expectations and attitudes.

 

[renim]

...When TCO of new EVs is obviously lower than that of new ICEVs, why would the customer want to lease ICEV in the first place?....

skepticism

TCO of a LEAF is cheaper than a Sentra, why aren't the sales figures reversed? (2,589 vs 13,129)

 

[chickensevil]

skepticism

TCO of a LEAF is cheaper than a Sentra, why aren't the sales figures reversed? (2,589 vs 13,129)

This is what I was getting at above. The leaf isn't winning the hearts and minds of car buyers because it is too "limited" for many people (whether that is a real limitation or just something in their heads doesn't matter)

Even better you should compare the Versa against the leaf since it is the exact same platform one is electric and the other is not. If it can't even best out itself how does it ever hope to topple anything else? (I actually don't know the sales for the Versa... So if it is already outdoing the Versa, Great! If not... How sad!)

 

[JRP3]

skepticism

TCO of a LEAF is cheaper than a Sentra, why aren't the sales figures reversed? (2,589 vs 13,129)

Because it's still less capable with it's range limitations and not equivalent.

 

[FANGO]

Because it's still less capable with it's range limitations and not equivalent.

Or more capable because you don't have to take it to gas stations. And all sorts of other reasons.

Or alternately, and the probable explanation, is that dealers don't want to sell it. Which is the strength of teslas model.

This is why I'm not convinced that Agassi's idea will hold perfectly, consumers will continue to buy the inferior product even after the aforementioned price points have been met for various reasons. Though the change will happen fairly rapidly, I (and those of us with lungs) would certainly like it to be more rapid.

That said, they've sold well over 100k Leafs (that was in January, I wouldn't be surprised if it was close to 200k by now...at least closer to 200k than 100...), so it seems to be winning the hearts and minds of car buyers quite well. That may seem like a blip compared to overall car sales, but sales of the Leaf are growing very quickly, along with other EVs, and the Leaf is leading the way in terms of EV sales. It's crushing every other EV out there, except for Tesla, which it's still beating in terms of raw units (though Tesla can be considered the sales winner there since the cars are selling much better as compared to the market they're in).

As for versa comparisons, the base leaf is similarly optioned to a high end versa, so the price comparisons should start there. According to a quick truecar estimate you can get a Versa SV for ~200/mo leased. Leafs are 200/mo base (truecar estimates lease payments to be much higher though, because it doesn't account for incentive passthrough). So it looks as if the Versa is not significantly cheaper, plus add gas.

Of course, a 3 year old versa would probably still be cheaper than a new Leaf. But the Leaf and Versa are significantly different cars anyway.

 

[SmartElectric]

Anyone who has actually driven an electric car knows that the silent thrust and convenience of fuelling is the "killer app" for this new vehicle class.

Therefore, I challenge the assertion that an electric car built on the same platform (Versa vs Leaf, Volt vs Malibu, Focus Electric vs gas, Smart ED vs gas Fortwo) is somehow "comparable". Bull.

They aren't comparable, one takes off with urgency from a stop light in silent glory. Whereas the "comparable" gas car sputters, roars and lurches and otherwise feels completely outclassed.

One can be refuelled in your comfortable weather proof garage while you sleep, the other leaves you at the mercy of the elements and smells as you wait minutes at the pump on a freezing winter morning.

Bottom line, they are not comparable no matter how hard you want to try.

My Smart dealer strenuously objected to letting me test drive a gas Smart Fortwo when he was still waiting to get a Smart ED demonstrator ready, telling me that there is no comparison between the two cars, except for the body shell. He was worried I would never come back after the gas car test drive!


And yes, range is just one of the "easy to quote" inhibitors, and the other is warranty/longevity of the battery.
Tesla has already substantially solved these "problems", without only the dimension of price remaining for mass adoption.

For me, my Smart ED is "already there", as it is perfect for it's intended function, namely, my short daily commute.

 

[JRP3]

The majority of the car buying public still expects a vehicle to have the range and fast fueling similar to an ICE. If not EV's would be selling in far greater volumes. For all the LEAF's success it's far below initial projections from Nissan.

 

[FANGO]

The majority of the car buying public still expects a vehicle to have the range and fast fueling similar to an ICE. If not EV's would be selling in far greater volumes. For all the LEAF's success it's far below initial projections from Nissan.

This is precisely why Agassi's timeline is unfortunately not going to result in an immediate paradigm shift - because people will continue to buy inferior vehicles for the reasons you've stated, and probably others as well. Nevermind that I've spent less time fueling my EV than I've ever spent on any of my previous cars, and mine isn't even capable of quick charging. And of course, when EV people constantly talk about how EVs aren't very good, as I see far too often from Tesla people, that doesn't help anything either.

But I do also think that the dealer angle has more to do it than most people realize. See this survey in case anyone here missed it: Dealership Survey | Electric Cars - Consumer Reports News

It really speaks to the strength of Tesla's model. George Blankenship (and the way he set up the Tesla retail strategy) may well end up having been the most important person in the EV revolution.