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Discussion in 'TSLA Investor Discussions' started by uselesslogin, May 25, 2014.
I think Lucid is pretty much DOA, though I wish them well. They apparently *just barely* have a prototype and they have a factory *site*, which is a lot further away from functioning than Tesla was in 2010, with a much more finished prototype and a factory building and equipment.
The Saudi financing isn't enough to get them to the Model S production stage... and they don't want to be at the Model S stage right now, with Porsche and Jaguar trying to make competitors. They will probably be able to do better than Porsche or Jaguar, but they've got the entire hill to climb which Tesla spent the last 8 years climbing, and they're going into a much more price-competitive situation than Tesla was due to having no first-mover advantage. I don't see them making it.
Put it this way: they were founded 4 years after Tesla. They are now roughly 8 years behind Tesla.
Lucid doesn't have the same hill to climb as Tesla circa 2010.
Lucid will enter a market that accepts a well executed BEV can be worth $100k.
Lucid doesn't need to build a Supercharger Network. They can piggy back of Electrify America/CCS 50-350 kWh Network.
Lucid will have Casa Grande/Arizona labor/real estate cost not Fremont/Silicon Valley labor cost.
And they have a billion bucks in the bank. Whereas Tesla brought Model S to market for ~$400M.
Model S has a hatchback but Lucid Air will have a full blow traditional luxury interior with soft leathers,premium woods and Airplane first class type seats.
And Saudi PiF is insisting they get started on a full size SUV yesterday. Not a Model X competitor but an Escalade competitor.
I give Lucid a 1 in 3 chance of making it.
BTW Lucid has new motor design, power electronics design, new BMS design and affiliated patents. How well it works in the real world remains to be seen.
BTW II When Lucid began long long ago they started as a battery pack supplier. They envisioned themselves as selling electric powertrains as a Tier 1 supplier to legacy Automakers. Much later, maybe 7 years ago, they pivoted to making an entire vehicle.
Lucid does have some deep pocket backing which beats a poke in the eye with a sharp stick. There is a big market for exotic cars in some Middle Eastern countries and that might be the primary market they are targeting with Saudi help.
In the US and Europe, the interest in a $100K BEV is declining as the Model 3 moves into the fore. The Model S and X had a pretty bad quarter in Q1 and you can get a new S order to delivery in less than a month on the west coast of the US now. It may be that people are waiting for the rumored update that is Osbourning sales, or it could be the economy getting soft, or it could actually be the demand for those cars really is going away.
Lucid is choosing a bad time to get into the market. Tesla introduced the Model S at the start of a new growth phase and Lucid seems to be planning their launch right at the beginning of a recession.
Tesla also got very lucky with the Model S. There were bugs that needed to be worked out, but they were not that severe. The worst problem that affected the most people was a drive unit noise problem and the door handles. Neither were critical safety bugs.
Fisker went bankrupt because their cars got a reputation for catching fire combined with an uninsured loss of a bunch of cars in Hurricane Sandy.
I look at Lucid and kind of think "meh". But then I'm not an exotic car type of person. Every car I've owned before my Tesla were GM cars, and all were 4 door sedans. Maybe it will find a niche with exotic car fans, but that's a very small market. If they try to go downmarket like Tesla has done, they will find Tesla just as entrenched or more in the mid-range market by the time they get there.
By the time Lucid is ready for their Model 3/Y, Tesla might be outselling some of the well established ICE makers and some might be bankrupt. I think the odds Tesla is a significant player (among the top car builders) in the car business in 5-10 years is higher than Lucid making it. The former is not a sure bet though.
There is room for more than 1 automaker. Even at the premium end.
In Oslo and Silicon Valley you can't swing a dead cat without hitting a Tesla. People that spend $100k on a sedan (not an exotic) want some exclusivity.
There are some people that think it is unthinkable to spend $100k on a car that has vinyl seats. Even if you call the polyurethane "vegan leather." Or on a car that has a "minimalist" interior that doesn't have basic kit like grab handles.
Given choices, people will choose different options. Tesla may be finding out that it can no longer dictate to customers what kind of interior their $100k car will have.
And people that spend $100k on a car want more than Red,Blue, and 3 shades of neutral paint colors.
That noise was from the drive unit bearings eroding due to internally induced currents. All of them with the problem needed to be replaced with revised units (some more than once).
There was also the minor contactor raspberry issue under heavy acceleration.
I do agree with the drawbacks of the Model S/X, but the Model S and X really aren't $100K cars anymore unless you get the Performance version and if the trend continues even the P versions might be under $100K by the end of this year.
Tesla started out with such a high price tag in part because of the inefficiencies of low volume production combined with the cost of batteries. Both have come down for Tesla and Tesla is probably getting the cheapest $/KWH for cells in the world (other than possibly poor quality Chinese cells).
Lucid might come out with a luxurious BEV, but it won't be in the $100K range. To include a reasonable battery pack and load it up with the sort of options European luxury buyers want is probably going to push the price tag up into the Bentley and Maybach market. There may be some European BEVs from traditional manufacturers in that price range by then.
Lucid's difficult ramp-up issue is that -- going into a market where there are already nice electric cars -- they'll have to price-match. Which means they will have to subsidize the first year or so of production ramp-up and "working the bugs out" from a source other than high prices (Tesla used high prices). This could eat half a billion dollars.
Funding source make a a lot of difference of how I judge a company. Chinese and Saudi money does not mean that much in my evaluation. It does nothing other than let you to stay alive longer. If you don't have it you still don't have it. On the other side of spectra VC money carries a lot more weight. Those top VC's are very keen business people. They have examined hundreds of business plans and could tell real potential from pipe dreams. I thought it's a red flag that Faraday Future and now Lucid did not have any VC participation.
Yes it sounds serious but it actually was not. Rebuild the motor is easy and not like if you have a blown engine. I've never heard of someone got stranded on the road because of it and Tesla usually just replace the drive unit in a day. That problem was fixed with the new ceramic bearing.
This is a good point. After Tesla's success, VCs would fall over one another to fund a start up that looked as viable as Tesla.
A number of automotive outlets, including Consumer Reports made a big deal about the drive unit replacements equating them to the same magnitude a problem as having to replace the engine in an ICE during warranty. The electric motor is analogous to the engine in an ICE, but replacing it is a smaller magnitude problem than replacing the alternator in an ICE.
A dealer is going to do everything it can to keep the original engine in an ICE because replacing the engine is a massive project. But if cars under warranty were having problems with the alternator, they would replace them.
There were a lot of complaints about the milling sound, they were legion here when I joined in 2015. I think a few people actually had drive unit failure, but virtually all drive units were replaced long before failure.
Early Model Ss got a reputation for having some problems, but none were company killers. And Tesla didn't have any big mishaps like Fisker did. If Tesla had lost a lot full of Model Ss in Hurricane Sandy and the insurance company refusing to pay, they would have gone under too.
In 2008 Elon Musk called every VC in the Valley asking for a capital raise.
They didn't just say no, according to Musk they said "hell no" and cut off the phone.
The geniuses at Daimler Benz came up with the $50M.
Silicon Valley VCs aren't some special kind of geniuses that are so much smarter than Saudi PiF or Jeff Bezos/Amazon.
Huh? From Wiki:
"Musk's Series A round included Compass Technology Partners and SDL Ventures, as well as many private investors. Musk later led Tesla Motors' Series B, US$13 million, investment round that added Valor Equity Partners to the funding team. Musk co-led the third, US$40 million round in May 2006 along with Technology Partners. Tesla's third round included investment from prominent entrepreneurs including Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker and added the VC firms Draper Fisher Jurvetson, Capricorn Management and The Bay Area Equity Fund managed by JPMorgan Chase. The fourth round in May 2007 added another US$45 million and brought the total investments to over US$105 million through private financing."
Nobody had money or guts to invest in anything in 2008. Elon still got the funding just days before Tesla would go out of business. The only reason he could convince investors was he himself put every penny he left at that point into it. That enabled Tesla to last a little longer to demo an electric Smart and got Merc to invest months later. Toyota came in not too long after that. The rest you can say is history. Neither Merc nor Toyota was genius as they severed their relationship with Tesla and sold their I believe 10% each interest in Tesla a couple year later after the projects ended. Imagine what it could be if they still have Tesla ownership now?
Here we go...the times are changing......I like the spiciness of this ad. Right on Audi!
Was just gonna post this, saw the same commercial on espn. Is there any greater indicator that these legacy auto boards aren't gonna switch in time?
Edit: Didn't read your actual post comment. No, when marketing is highlighting all the negative(even dispelling disinformation), their true mission is reinforcing those false notions. It's 100% an anti-EV ad. What factual irrefutable rebuttals did they provide? None.
What!?! It's bring to light the social norms and dissing them. This commercial is for the layman, the one that doesn't do the research, the one that sits on the couch and scoffs at EVs. We need stuff like this to get into people's minds. Neighbors are constantly having mini battles to see who can have the best and latest thing. This commercial is perfect.
I love the line at the end: "Electric has gone Audi"
Because, sure enough they can't say Audi has gone electric with only 1 EV vs many ICE models
Put it this way....they got the blueprint for this ad from GM's "pro-EV" ad work. High quality disinformation is rarely overt, it's slipped into the subconscious. By highlighting all the negatives and showing a human emotionally responding to those conditions, Audi is reinforcing the idea that these are valid concerns. Which of the dozens of easy quantifiable specific advantages of EVs were even mentioned in the messaging?
Distilled to it's essence, this ad says "EVs are crap, but Audi is awesome."
hmmmm......I get what you are saying, but I just see it from a different angle....hopefully it works...
Did you just imply hitching your EV model rollout plans to Saudi opinions is a positive?
It's battery development and logistics/manufacturing execution....period. Lucid from my understanding has none of that and not one brick of one gigafactory set in mortar.
This is just as empty as Porsche saying they have a 400kW charger and "just need to develop the battery". Uh, yeah......I could build a 400kW charger tomorrow.
In tennis there is base play and there is net play; both can be effective. Then there is the space between where you are no longer on the baseline and you have not made it to the net. I have heard tennis players call this in between area "no mans land" in tips like "don't get caught in no mans land." Right now it feels like almost all the auto industry except for Tesla is in "no mans land". Tesla is at the high stakes aggressive position of net play forcing all others to adjust their game play accordingly.