New Sandy Munro interview on Model 3 (2/28/19)

[SMAlset]

There's a new Sandy Munro (Munro & Associates) interview with Alex Guberman as of today. Just sitting down to listen to it now.

One of the first questions asked was about the fact that seemingly all of the legacy automakers are having delays in their release dates for one reason or another. Tesla took a lot of flack from other automakers for and the press over Tesla’s delays. Glad to see that others who thought they were so superior in car manufacturing are now realizing they are struggling to produce their EVs.

 

[SMAlset]

Guess the interview was done before the Tesla announcement on the Standard Range Model 3 today. Question is when Sandy thinks the $35K will be released. Sandy still thinks the margins in China on the cars manufactured there could be 25% gross.

Next question is about legacy manufacturers and their profit margin and faith in a brand.

 

[thegruf]

...
Next question is about legacy manufacturers and their profit margin ...

This.

Tesla are putting immense pressure on existing manufacturers EV profitability.
All these manufacturers have to recover their own R+D costs, but of course they will also only sell in relatively small volumes so per unit recovery will be huge compared to a high volume ICE model. Also none of them have an integrated battery supply model yet. Just look at the way LG is refusing to be pushed around by the might of VAG/VW, suggestions by VAG that they would set up their own battery plant are being met by LG threatening to use clauses in the contract to pull out altogether. There's also stories of VW having to compeltely re-assess their costing by $3K once they realised how well cost engineered the Model3 is.

They will be forced to hide these losses in their overall performance, but Tesla really have done the impossible by making the Model3 good enough and most importantly cheap enough to build that traditional ICE cannot turn the tables on them and sell subsidized models to squeeze Tesla out of existence.

Tesla really are setting traditional ICE manufacturers some very serious challenges indeed.

 

[SMAlset]

Some interesting comments from VW's Herbert Diess in today's news:

VW's Herbert Diess Says Tesla Is Doing A Good Job & Has An Edge

VW admits Tesla has advantage with EV because they don’t have to protect gas car business


I will say that in listening to Sandy in this interview he has done a turnaround in his thinking about Tesla and what they have accomplished and how they will be positioned in this new EV market. It was interesting to hear his comments on China (and briefly on India). Look forward to an interview when he returns. He said China invest in top-line German equipment for their plants and he expects them to be a force in the U.S. auto market in the coming years as he feels that buyers here will be more concerned with price and getting a good product. I think even the German automakers are worried about their future given Tesla and China's advancements in the EV market.

 

[e-FTW]

The biggest thing I got out of this interview was his clear, down to earth explanation of why China is winning at manufacturing and trade: we did it to ourselves by buying the cheap crap at Walmart, the American consumer only cares about price, and the Chinese are well equipped, smart and want to keep winning.

This is how trade deficits become a thing. We buy from China for the cheap prices, and we don’t sell them anything they want anymore. Because they make everything. And they now do it well.
In the process of wanting the absolute best price for every single thing we buy, we took away the jobs of family members that worked in and around the manufacturing sector.
/OT