Tesla BEV Competition Developments

[scaesare]

Do you think that a network with a net book value of just $150 million (let's be generous and say $250 million because Tesla will continue to add stations) offers any sustainable competitive advantage for Tesla by, say, 2020?

Spending $1 or $2 billion (a multiple of Tesla) to build a network far denser than Tesla's SC network on a global basis until 2020 is chump change for major rival car makers - especially since they decided on two standards (CCS and Chademo).

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Maybe more like 2 years: GM will let employees ride around in self-driving Chevy Volts starting next year | The Verge

OK, I'll grant you the benefit of the doubt that you answer has an implied "Krugerrand is, of course, correct." in it.

That having been said, I think the value is not dependant solely on amount spent, but effectiveness. A lot of money has been spent, by big players in their industries, yet they did not provide a compelling or effective product/service (see: MS Vista, HD-DVD, Apple III/Lisa/Newton, Iridium, etc...)

Just taking your own point: the probable need to support two standards. That could, in itself, produce a far less effective infrastructure than might be assumed by "each standard gets half the money". Confusion, coverage,, charging capability, location selection, cost, ease of use, etc... all are big factors.

Throwing money at a problem is not necessarily a solution if the problem is not well executed against.

 

[dalalsid]

Do you think that a network with a net book value of just $150 million (let's be generous and say $250 million because Tesla will continue to add stations) offers any sustainable competitive advantage for Tesla by, say, 2020?

Yes the fact that they have the network and the ability to create one. How much has Tesla invested in creating the Model S? How much has Audi invested in creating the nearly non-existent R8 eTron (eventually they just cloned the Tesla battery - so a lot of their R&D was fruitless)? How much has BMW invested in creating the i3/i8? How much did GM invest to create the Volt? How much has Toyota invested in creating the nearly non-existent Mirai or Honda on their clarity? Just because Tesla spent 150M doesn't mean others can do it at the same cost. Also since nobody has the will, the better option for everyone at some point will be to join Tesla's existing network.

 

[tftf]

That having been said, I think the value is not dependant solely on amount spent, but effectiveness. A lot of money has been spent, by big players in their industries, yet they did not provide a compelling or effective product/service (see: MS Vista, HD-DVD, Apple III/Lisa/Newton, Iridium, etc...)

Just taking your own point: the probable need to support two standards. That could, in itself, produce a far less effective infrastructure than might be assumed by "each standard gets half the money". Confusion, coverage,, charging capability, location selection, cost, ease of use, etc... all are big factors.

Throwing money at a problem is not necessarily a solution if the problem is not well executed against.

Charging networks often are operated by smaller companies. Take for example the aforementioned FastNed (DC operator in NL, soon in all of Europe): The Fastned Freedom Plan | Fastned

I don't think they waste money on station/network cap-ex compared to Tesla. And I don't think two standards are a problem either, companies such as FastNed use multi-chargers such as these from ABB with two/three plugs; see e.g.: Terra 53 CJG - Multi-standard fast chargers overview (EV Charging Infrastructure) | ABB

They will upgrade to 150kW stations (see blog post linked) as soon as cars with bigger batteries hit the road. ABB by coincidence is a member in the standard organization for 150kW and later 350kW chargers: ABB Joins CharIN: 150 kW Charging Coming Soon, 350 kW Targeted For Future

If car makers give each new EV buyer (Nissan is already testing that in some regions, see my previous post) "free" access to such networks for xyz years it's the same as Tesla's strategy (basically a lump sum included in the car price).

My point here is (summary): Other companies offer or will offer cars with similar longer-range range and charging capabilities. I don't see any sustainable advantage for Tesla's EVs compared to major car makers by around 2020.

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Just because Tesla spent 150M doesn't mean others can do it at the same cost. Also since nobody has the will, the better option for everyone at some point will be to join Tesla's existing network.

Ok, do you really think the CCS/Chademo efforts will falter and many major car companies will join Tesla's proprietary charging network? Tell me your probability prediction that this will happen by 2020 or 2025.

I will offer my prediction: CCS networks (as well as some wireless, slower charging for convenient overnight/home charging) will dominate public charging by 2020 - many of the current stations will be upgraded or extended to 150 kW by 2020. Most of these stations will also (continue to) offer Chademo plugs - but almost all Western car makers will offer CCS plugs in their EVs and longer-range PHEVs.

 

[Gerardf]

Charging networks often are operated by smaller companies. Take for example the aforementioned FastNed (DC operator in NL, soon in all of Europe): The Fastned Freedom Plan | Fastned
I don't think they waste money on station/network cap-ex compared to Tesla. And I don't think two standards are a problem either, companies such as FastNed use multi-chargers such as these from ABB with two/three plugs ( see e.g.: Terra 53 CJG - Multi-standard fast chargers overview (EV Charging Infrastructure) | ABB )
They will upgrade to 150kW stations (see blog post linked) as soon as cars with bigger batteries hit the road.
If car makers give each new EV buyer (Nissan is already testing that in some regions, see my previous post) "free" access to such networks for xyz years it's the same as Tesla's strategy (basically a lump sum included in the car price).

I am Dutch, live in The Netherlands. I virtually never see anybody charging at the Fastned stations. And there are many good reasons for that. I also made quite some efforts to work out how they can ever earn their CAPEX investment back, and know some others tried a swell.
This is not the place to share all the ins-and-outs of that, but I simply can not see how they can make money (and they are not making money). My guess is they hope to sell to some (desperate) carmaker(s) in the future who does not need the stations to earn money.

BTW, rolling out a Fast-Charge network is not simply a case of trowing enough money to it. It takes time. And even ignoring the time consuming process, it is not enough to order and install chargers at car dealers or (as Fastned is doing) at gas stations.
Tesla's SuperChager network is a key locations near restaurants. Actually these restaurants and shops will make (much) more money from EV-drivers than Fastned can ever make selling them kWh's.


P.S. I hope Fastned is successful and I applaud their initiative.

 

[Discoducky]

From the perspective of GM with the Bolt, it seems reasonable that the investments to a fast-charge Level 3 or >150kW long distance infrastructure are necessary. They must have a plan, but will most likely hedge their bets depending on other business factors. I'm guessing they still feel like they are 'first' of the ICE to make the big investment as pointed out above it is still not built to support the kind of travel needed if the Bolt starts to sell like hotcakes. Of all the things that could go wrong or cause GM to loose shareholder value, I'd bet GM would love to have this as their top issue.

A hit with the Bolt could be as important to their long-term viability (20 year) as anything else they are working on.

 

[dalalsid]

Ok, do you really think the CCS/Chademo efforts will falter and many major car companies will join Tesla's proprietary charging network? Tell me your probability prediction that this will happen by 2020 or 2025.

I will offer my prediction: CCS networks (as well as some wireless, slower charging for convenient overnight/home charging) will dominate public charging by 2020 - many of the current stations will be upgraded or extended to 150 kW by 2020. Most of these stations will also (continue to) offer Chademo plugs - but almost all Western car makers will offer CCS plugs in their EVs and longer-range PHEVs.

If compelling long range EVs are offered, some major manufacturers wlil join Tesla's network. There is close to 0 probability that this will happen by 2020 because I see nearly zero probability of a volume production (volumes > Model S) long range EV by 2020. Can't say about 2025. So yes some/many CCS/Chademo efforts for long distance travel will falter. CCS/Chademo charging offered for a price will be replaced by businesses offering free EV charging or parking lots including it in the fee (I see that happening around me already). Car dealers will be forced to put up chargers but in all these cases there will be no hope of relying on anything to actually make a road trip by 2020 (barring a few exception markets).

 

[jjkroll]

I will offer my prediction: CCS networks (as well as some wireless, slower charging for convenient overnight/home charging) will dominate public charging by 2020 - many of the current stations will be upgraded or extended to 150 kW by 2020. Most of these stations will also (continue to) offer Chademo plugs - but almost all Western car makers will offer CCS plugs in their EVs and longer-range PHEVs.

This is fun to read. My prediction follows. All the car manufacturers will fund 150KW chargers as soon as they build large battery cars. They will all build these large battery cars as soon as the 150KW charger network is built.

Standards like CCS are a nightmare. They are the reason Tesla went out on their own after they continuously tried to sway the standards committees.

My second prediction. The car manufacturers will not wake up until it is way too late. Nissan may be the only one capable of anything, but the one CEO, who fights tirelessly, will eventually burn out.

 

[Yggdrasill]

Just to highlight some of the challenges with the CCS charging network here in Europe: Google Translate

Hi all,

I must get out a little frustration.

Tuesday I got my new e-Golf So happy because now it will finally be cheap to get to work in Oslo, I live in Hamar.

I figured that now would be the right time to do the maiden voyage with the new wonder. Packed clothes and dog and sat in the car in Hamar and headed towards Løken in Aurskog Høland. Following tips from the sales person, I had the car in Eco mode and stayed at 90-100 km/h until Minnesund. Minnesund should in theory be my charging point on the way to work every day .

I get there, plug in and go and pay for 15min charging since it is what I have been told that is needed by the seller. Now the fun begins: After multiple attempts restarting the charging station 5 times the staff and I have to give up. The e-Golf will not charge and they say that this is a problem they have quite often with the e-Golf. I continued with good spirits, although somewhat cold I drove down to Minnesund Kiwi (grocery store) where I know there is another charger.

I plug the car in and send text to start chargin, nothing happens little frustrated now. I call the phone number on the charging post and the lady tells me that someone has pressed the emergency button, just twist it to the right so it pops out. Fair enough I think but no luck .... With the lady still on the line I try again and again without luck to twist the damn red button to the right so that it will pop out as the lady says. It does not move!!!! We give up and I get back into the car to drive to the next charging station, which I think is within range. The McDonalds at Berger (I'd completely forgotten the McDonalds at Jessheim).

I still drive at 90-100 and I get past Dal, when it starts to get a bit colder in the car because it starts to conserve energy. Still in good spirits, because I'm sure I'll get to Berger, no problem, just slow down I think. I slow down and the car is now pretty cold inside .

My problem now is that I couldn't for the life of me remember how far it is to Berger. I get to Kløfta with 5km left on the battery before I call Falken (ie use up one of two free roadside assistance on my first trip). After nearly two hours Falken arrives . We get the car on the flatbed and drive to the new charging stations at Kiwi Kløfta. Unload the car and start charging will be easy, we think. NOPE!!!! The charging station will not charge, nor the next ...... Now I'm just a little frustrated, but still upbeat. We load up the car and drive back to Jessheim. Unload the car and plug it in. Yay this charger works.

The comments from the Falken guy, daughter and son are: cars should go wroom and emit fumes .

After 40 min, the car finishes charging. I get in the car and go .... well, the driving goes slow as I quickly see that the range is rappidly dropping. I turn off all comfort and have a really cold trip home to my daughter at Løken. The trip that should have taken two hours has now taken five.

Unfortunately, I couldn't charge the car at night, due to a bad power socket at my daughter's. No problem, I think, I've got 110 km left on the car. The drive to Lillestrøm on my way to work the following day will go fine....

New morning, big smile . Hmmmm ...... I notice the car can't really go more than 50-60 km before the range really starts dropping, again. This goes slow and I'm freezing. . The sales person calls while I'm slowly making my way to work to hear how it's going. I'm still upbeat and say, no, this isn't going great. What do I do if I get to Lillestrøm and the charger at McDonalds doesn't work? The Falken guy actually said something about it yesterday that it rarely works. The sales person sends me information about where there are other charging stations. I get there (same type of charging station as Jessheim). The car charges, but it takes 40min to get it fully charged :-(.

I finally get to work.

Then there was the trip home: Now I know that even though I have 120 km on the car I MUST charge it before I drive back to my daughter at Løken to babysit. I therefore drive to Strømmen Mall, where there are 6 charging stations neatly in a row. Three are occupied, so I back into an unoccupied charge spot. I take out the charge cable of the car, send the text to start charging and plug in. Nothing happens ........... hmmmm ...... a little frustrated I take out the charge cable and try plugging it back in again .... again NADA. Now I'm getting pissed ....... I get out the other the cable from the car, because I have bought an e-Golf which has three different ways of charging!!!! Again NADA!!! Now I've had it!!! I call the salesman, trying to be upbeat, barely maintaining my composure....... Together we try again.... NADA!!!! He does not understand this.... now I cry out of frustration and say I can't drive around until I find a charger that my car will recharge at. This doesn't work...... He says, can you reach the store at Skjetten so they can help you? Yes, I say, but can you call them to let them know I'm coming? He makes the call and I drive there.

My new fine blue e-Golf is handed over and I can borrow a small Skoda which cost me $10 per day in tolls + gasoline. I was supposed to save money by buying an e-Golf .......

I'm defeated and a little sad, but still positive that VW manages to fix the problem for me.

Almost forgot one thing: On the way to work at 70 km/h, I was overtaken by an e-Golf!!!!! I can't do that in mine lol

The CCS network isn't close to working optimally here in Europe, and won't be for probably many years. On the other hand, the Supercharger network has been working flawlessly for years.

 

[Johan]

Good story Yggdrassil!

But just throw a few billion dollars (chump change) at the problem and it will solve itself whenever needed (if and when those who use CCS need it).

 

[Spidy]

Do you really think Tesla will have a problem selling hundreds of thousands/year of the Model 3 with the announced specs, a worldwide Supercharing Network, a 5* star plus sub-category safety rating, OTA updates, sleek design with a drag coefficient of 2.0...

The Model 3 will be sold WORLD-wide and wasn't fast-tracked. Instead Tesla took their time producing first a proof of concept sports car, then designing from the ground up the first premium aluminum BEV sedan that's won every major award, has an outstanding safety rating and record, outstanding performance, outstanding cargo space, OTA updating which improves the car month after month for owners, with the most advanced and unique powertrain and battery system, then offered a FREE for life long distance Supercharging Network around the world - making note that that network produces the FASTEST, most powerful charging standard in the world -, then took even more time to design an SUV with features never before seen in a vehicle including an expected off the chart safety standard - give it time my friend, the Model X will embarass the premium SUV market and win every major award....all of this meaning that a whole heck of a lot of R&D will in turn be invested into the Model 3.

Yeah, GM should sell their fast-tracked 30k Bolt units. That'll be 30k more BEVs on the road, they'll also be great advertising for the much superior and equally priced Model 3. Go GM!

To me this is just as much vapourware as other concept cars until I see it in production.

Safety is easier on larger cars. Making it smaller means less crumple zones. Also using Alumnium can have had some benefits here which the Model 3 won't have.

Low drag will also won't be easier on a smaller car and also stands in contrast with a great looking car and safety.

Then you have the lower price which also limits you in materials and manufacturing methodes.


There will be compromises.

 

[Discoducky]

To me this is just as much vapourware as other concept cars until I see it in production.

Safety is easier on larger cars. Making it smaller means less crumple zones. Also using Alumnium can have had some benefits here which the Model 3 won't have.

Low drag will also won't be easier on a smaller car and also stands in contrast with a great looking car and safety.

Then you have the lower price which also limits you in materials and manufacturing methodes.


There will be compromises.

You state this as fact, but did you mean it to be your opinion, rumor or speculation?

 

[green1]

You state this as fact, but did you mean it to be your opinion, rumor or speculation?

People at Tesla in the past have stated that the Model 3 won't be aluminum due to cost. That said, this was a few years ago, and as Tesla has extensive experience and tooling for aluminum, I would not at all be surprised if they changed their mind on this one.

 

[dha]

People at Tesla in the past have stated that the Model 3 won't be aluminum due to cost. That said, this was a few years ago, and as Tesla has extensive experience and tooling for aluminum, I would not at all be surprised if they changed their mind on this one.

Not to mention this cost of aluminum has been plummeting: Kitco - Spot Aluminum Historical Charts and Graphs - Aluminum charts - Industrial metals

 

[AudubonB]

Not to mention this cost of aluminum has been plummeting: Kitco - Spot Aluminum Historical Charts and Graphs - Aluminum charts - Industrial metals

Aaahh...not quite point you were hoping to make.

Spot aluminum, according to that link, has dropped in CY2015 from 80¢ to 67¢ per pound - a fall of 16%.
In that same period, spot LME cash prices for steel billet have dropped from $480/t to $170/t - a fall of 65%. Link: Steel Billet Prices (LME) - Data and Charts from Quandl

*Neither of these products are truly fungible commodities, but the associated products used for automobiles will follow these price trends reasonably closely.

 

[wdolson]

I am very much looking forward to GM's presentation & roadmap of a Fast-Charger (100 kW capable) road-trip enabling network that can be used by their future Bolt customers. I very much hope they will indeed invest in that, however I remain skeptic until I see it.

All the major manufacturers push as much as possible off onto other people. They depend on huge networks of suppliers to supply parts, they rely on independent dealers to take the risk off them of producing large numbers of cars on spec, and they rely on the aftermarket for support. The support aftermarket includes gas stations selling gasoline refined by major oil companies as well as independent repair shops, auto parts stores, etc.

To a large degree, they are thinking somebody is going to pick up the ball regarding charging just like someone did with gasoline and as long as they supply the charging plug and the spec, somebody will supply the chargers. I think it was BMW or Audi who was lobbying the governments of Europe to build a high speed charging network for them. And I think they wanted the same in the US too. That possibility is even more remote in the US than it is in Europe.

The car companies will start building long range EVs soon and it will take them a year or so to realize that the free market and/or governments aren't going to provide what they need. Then they will be faced with the need to build out their own network on their own expense, or throw in the towel and join forces with Tesla. Tesla realized early on that the free market was not going to provide the kind of network they wanted, so they did it themselves.

In this regard, Tesla is taking a page from Microsoft hardware. Microsoft is primarily a software company, but they also make and sell some hardware products. I contracted in the MS hardware division once and the MS strategy with hardware was explained to me. When MS sees some hardware they think should be out there and nobody is doing it, they do it themselves. In some cases they drop the hardware line after a few years, but if it remains profitable, they keep it like the keyboard and mouse business.

Tesla saw a need for fast chargers that was going unmet, so they did it themselves. The other car companies are slower to react and BEVs are not their primary business, so if the Bolt sales lag because of a lack of fast chargers, it won't hurt GM like such a scenario would hurt Tesla. It will take the big car companies longer to realize they need to do it themselves, but eventually they will realize it and do it. There will be some free market attempts and long term free market long distance charging might be a successful business to be in, but in the short term there are too few EVs out there to make it profitable so someone needs to build them and take a loss on it.

 

[Bangor Bob]

One of the issues with the cost of automotive aluminum alloy sheet is that there just wasn't much demand for it, so it wasn't necessarily on a well-optimized production process, batch runs were small, etc. Not the best environment for low prices.

With the F150 now being aluminum, and GM working on the next-gen Silverado being aluminum too, production volume is way up and growing, and "experience curves" should help drive out some of the cost.

 

[RobStark]

People at Tesla in the past have stated that the Model 3 won't be aluminum due to cost.

Not exactly.

What they have said is Model 3 will not be as aluminum intensive as Model S.

Could mean Model 3 is 85% aluminum or 3% aluminum.

Maybe we will get a clue in March.

 

[wdolson]

One of the issues with the cost of automotive aluminum alloy sheet is that there just wasn't much demand for it, so it wasn't necessarily on a well-optimized production process, batch runs were small, etc. Not the best environment for low prices.

With the F150 now being aluminum, and GM working on the next-gen Silverado being aluminum too, production volume is way up and growing, and "experience curves" should help drive out some of the cost.

The price of aluminum is coming down, but it will probably never be as low as steel. Refining aluminum ore is a more complex and expensive process than refining iron ore and that is unlikely to change.

 

[RobStark]

The price of aluminum is coming down, but it will probably never be as low as steel. Refining aluminum ore is a more complex and expensive process than refining iron ore and that is unlikely to change.

True but aluminum is lighter.

Requires less horsepower to move the car.

Requires less robust suspension components to uphold the car.

Less prone to metal fatigue and much less prone to rust making the vehicle more durable.

These are benefits that make aluminum inherently more valuable.

 

[Bangor Bob]

The price of aluminum is coming down, but it will probably never be as low as steel. Refining aluminum ore is a more complex and expensive process than refining iron ore and that is unlikely to change.

This is certainly true. An aluminum ingot is as close to "a block of solid electricity" as we're likely to get.