Tesla BEV Competition Developments

[roblab]

There's no reason a long range ev should cost more than $20k.

That's hilarious.

 

[Mader Levap]

In future? Sure, long range ev will cost 20k$ + inflation.

I doubt Tesla will do cheaper cars any time soon, if ever. In my opinion in far future it will indeed be iPhone of cars - overpriced and with fanatically loyal customers that will happily pay premium for brand name.

I mean, it is same as now with difference that they right now are worth their price.

 

[wdolson]

A long range battery pack for a small car is going to cost in the ballpark of $10K. There are rumors Tesla is down near $100/KWh, but most battery packs today are closer to $200/KWh. At $200/KWh a 70 KWH pack would cost $14K.

Tesla isn't able to make the $35K Model 3 yet because they can't do it and make any profit. Nobody else is getting batteries cheaper than Tesla at this point.

Somebody could probably make an 80 mile range Smart Car for around $20K, but that's about the best that can be done until batteries get significantly cheaper.

 

[Buckminster]

I'm in the sub $20k camp. Tesla 40kWh double height pack sold at cost (to accelerate EVs) to Tata would be $5000. Stick it in a streamlined re-engineered Nano (<$1500 without ICE). Total cost $6500 - good for ~300 miles.

 

[RobStark]

IF Tesla gives *sugar* away at cost more people WILL buy.

That is not sustainable for a company.

Ergo, no more free supercharging.

Tesla was not set up as a non-profit charity. Doesn't mean they have to be greedy bastards grabbing every penny as the Earth burns but it does mean it needs to be financially sustainable long term.

That induces other companies to join the EV/Clean Energy revolution.

 

[wdolson]

I'm in the sub $20k camp. Tesla 40kWh double height pack sold at cost (to accelerate EVs) to Tata would be $5000. Stick it in a streamlined re-engineered Nano (<$1500 without ICE). Total cost $6500 - good for ~300 miles.

Tesla had to make the 40 KWH car to comply with the federal loan they got from the US government. Tesla discontinued the 40 KWH in April 2013 and announced they had paid back the loan 10 years early in May 2013. I've never seen any proof the two were tied together, but why didn't they keep the loan which was fairly low interest if they didn't want to get out from under the other terms?

I'm certain Tesla was taking a net loss selling the 40KWH. It was a software limited 60 KWH.

The problem with putting a large enough battery in a small car is a problem of Physics as well as space. The more batteries you put in there, the more the weight goes up and the more energy you consume moving the batteries. You see it with just the relative increase in weight in the Model S from the 75 KWH to 100 KWH. The battery is 1/3 bigger, but the EPA range goes from 259 to 335 miles. If everything was linear, the range of the 100 KWh would be 345 miles.

The Model S is a heavy car to start with, so the increase from 75 to 100 KWH is only a small fraction increase in weight. Start with a much smaller car and put in a bigger battery and the math works against you even harder. With a small car you're going to run out of space inside the car before you get very far. Soon you are to a point where you have room for a small driver and nothing else. I didn't even get into the point that as you add weight for batteries you're also going to have to reinforce the chassis and suspension to handle the extra weight, which adds still more weight to the car and reduces range further.

In engineering, you're always trading off one thing for another. As you push things to the margins, you have to put more and more effort into smaller and smaller returns. I saw this back in the days when people spent fortunes on their stereo systems. Most audiophiles claimed MacIntosh made the best amplifiers in the world. But they cost $4K (back in the 80s). A new one can cost $15K today.

A top of the line Sony amplifier was about $500 and was 90-95% as good. The extra 5% cost 8X.

Cost is one trade off you need to consider, but physical space available, weight, whether the existing system can handle the new loads and what you do about them, and a number of other things are all considerations. Elon said they could make a 500-600 mile range EV family car, but it wouldn't be cost effective. ie it would cost a lot of money to buy, and it probably would have very little space.

Someday when energy densities are higher than they are today (probably the next generation of battery tech beyond Li-ion), it may be possible to make a small car with 300 miles range, and it may be possible to do so inexpensively, but today the former might be possible if you want to sacrifice everything else, the latter is impossible.

 

[ggr]

Tesla had to make the 40 KWH car to comply with the federal loan they got from the US government. Tesla discontinued the 40 KWH in April 2013 and announced they had paid back the loan 10 years early in May 2013. I've never seen any proof the two were tied together, but why didn't they keep the loan which was fairly low interest if they didn't want to get out from under the other terms?

I'm certain Tesla was taking a net loss selling the 40KWH. It was a software limited 60 KWH.

The problem with putting a large enough battery in a small car is a problem of Physics as well as space. The more batteries you put in there, the more the weight goes up and the more energy you consume moving the batteries. You see it with just the relative increase in weight in the Model S from the 75 KWH to 100 KWH. The battery is 1/3 bigger, but the EPA range goes from 259 to 335 miles. If everything was linear, the range of the 100 KWh would be 345 miles.

The Model S is a heavy car to start with, so the increase from 75 to 100 KWH is only a small fraction increase in weight. Start with a much smaller car and put in a bigger battery and the math works against you even harder. With a small car you're going to run out of space inside the car before you get very far. Soon you are to a point where you have room for a small driver and nothing else. I didn't even get into the point that as you add weight for batteries you're also going to have to reinforce the chassis and suspension to handle the extra weight, which adds still more weight to the car and reduces range further.

In engineering, you're always trading off one thing for another. As you push things to the margins, you have to put more and more effort into smaller and smaller returns. I saw this back in the days when people spent fortunes on their stereo systems. Most audiophiles claimed MacIntosh made the best amplifiers in the world. But they cost $4K (back in the 80s). A new one can cost $15K today.

A top of the line Sony amplifier was about $500 and was 90-95% as good. The extra 5% cost 8X.

Cost is one trade off you need to consider, but physical space available, weight, whether the existing system can handle the new loads and what you do about them, and a number of other things are all considerations. Elon said they could make a 500-600 mile range EV family car, but it wouldn't be cost effective. ie it would cost a lot of money to buy, and it probably would have very little space.

Someday when energy densities are higher than they are today (probably the next generation of battery tech beyond Li-ion), it may be possible to make a small car with 300 miles range, and it may be possible to do so inexpensively, but today the former might be possible if you want to sacrifice everything else, the latter is impossible.

Like virtually all government money, the loan came with all sorts of onerous reporting requirements and conditions. That's part of why Tesla wanted to get out at the earliest possible time.

 

[RobStark]

If I remember correctly if Tesla did not pay "early" then the Feds would get a large chunk of TSLA shares.

It was cheaper to pay the "early payment fees."

 

[wdolson]

Like virtually all government money, the loan came with all sorts of onerous reporting requirements and conditions. That's part of why Tesla wanted to get out at the earliest possible time.

If I remember correctly if Tesla did not pay "early" then the Feds would get a large chunk of TSLA shares.

It was cheaper to pay the "early payment fees."

These probably are the core reasons. The 40 was dropped around the same time. It could be coincidence, but it may not be.

 

[Tim]

That's hilarious.

Sorry, just saw this reply.

I don't get what is so hilarious about my statement. Your comment reminds me of the scorn some mit aeronautical professor showed for Elon when he casually said that electric planes were certainly possible. It definitely comes from the same place.

What is unreasonable about a $10k powertrain and a $10k body/other bits? If a 50kwh battery pack costs $110/kwh then that leaves about $4k for the motor and power electronics. That seems reasonable.

What do you think the terminal price for say a Chevy Cruze ev equivalent would be given a competitive environment with typical automotive margins and fully scaled technology?

Maybe you don't think technology is fully scaled, and I suppose that's true. But some technology bits are close to being scaled for Tesla. The other bits are at scale for most other global automakers. Why is it unreasonable to say that a company who is at scale across the entire spectrum couldn't produce such a car at a $20k price point if they made an effort to do so?

The nice thing about competition is that it only takes one. If it's possible, and I think it is, then some company will do so.

 

[Yuri_G]

Sorry, just saw this reply.

I don't get what is so hilarious about my statement. Your comment reminds me of the scorn some mit aeronautical professor showed for Elon when he casually said that electric planes were certainly possible. It definitely comes from the same place.

What is unreasonable about a $10k powertrain and a $10k body/other bits? If a 50kwh battery pack costs $110/kwh then that leaves about $4k for the motor and power electronics. That seems reasonable.

What do you think the terminal price for say a Chevy Cruze ev equivalent would be given a competitive environment with typical automotive margins and fully scaled technology?

Maybe you don't think technology is fully scaled, and I suppose that's true. But some technology bits are close to being scaled for Tesla. The other bits are at scale for most other global automakers. Why is it unreasonable to say that a company who is at scale across the entire spectrum couldn't produce such a car at a $20k price point if they made an effort to do so?

The nice thing about competition is that it only takes one. If it's possible, and I think it is, then some company will do so.

We're at a $44k profitable EV right now. Extrapolating from that it's going to take millions of EVs to get to a $20k profitable car. There's a reason it has taken Tesla a year or so longer than they initially believed to release a viable $35k model. We're just not quite there yet.

 

[Buckminster]

Tesla is a premium car. The point is, if a low cost manufacturer was focussed on low cost, high range, it could theoretically get done. Quality, features, safety, performance, size would all be lower.

 

[scaesare]

I'm certain Tesla was taking a net loss selling the 40KWH. It was a software limited 60 KWH.

Not originally planned that way. They only went to S/W locked 60Kwh packs when the take up rate (< 4% IIRC) was so low that the cost to build/stock an separate part made no sense.

Which doesn't disagree with your point, I suspect you are correct that they lost money on them... just pointing out they did initially plan a real 40KWh pack.

 

[Yuri_G]

Tesla is a premium car. The point is, if a low cost manufacturer was focussed on low cost, high range, it could theoretically get done. Quality, features, safety, performance, size would all be lower.

Theoretically, but you still have to drive battery pack cost down, which takes selling gigawatt-hours of batteries. The only way to do that is sell a more expensive product and achieve economies of scale or sell at a loss. We've seen that the old guard has only been willing to sell a limited number of cars at a loss, which doesn't do much for driving prices down.

 

[jbih]

I coudn't find the source but there was the news recently that a $8k elelectric car with relatively decent range was offered in China. I firmly believe Tesla will announce a $25k electric car not too far in the future, and will go cheaper still. The company's mission is not profit, it's the sustainability of transport, which requires cheap electric cars.

 

[Tim]

Theoretically, but you still have to drive battery pack cost down, which takes selling gigawatt-hours of batteries. The only way to do that is sell a more expensive product and achieve economies of scale or sell at a loss. We've seen that the old guard has only been willing to sell a limited number of cars at a loss, which doesn't do much for driving prices down.

Or they could just choose option C and copy the successful stuff Tesla does and skip the rest. Listen, the point is that in a fully competitive market the terminal price for a product will approach it's costs. Whether that happens 10 years from now or in 6 months is irrelevant. Knowing what these terminal costs are is critical in determining the size of the market and the relative value of any economic moats that Tesla possesses.

If Tesla does not continue to pursue scale and lower it's prices to that of the terminal value then it will likely be disrupted by competitors who do. My view is that $35k is nowhere near a floor price for a fully scaled competitor. Any attempt by Tesla to harvest excess profits above the floor price will reduce their competitive advantage and lead.

Personally, I dont see any reason why long-range EVs ought to cost more than ice vehicles. Like I said a $10k powertrain seems totally reasonable. The infotainment stuff is pretty geewiz right now, but 90% of that functionality can be had with a $100 tablet off eBay and some Bluetooth speakers. Everything else is pretty much the same as the stuff in ice cars. I swag that as $10k. And perhaps the efficiency sucks for this car, but remember at $110/kwh, it's only $1100 to increase pack size by 20%.

 

[RobStark]

The company's mission is not profit, it's the sustainability of transport, which requires cheap electric cars.

Long term profits and Tesla's Mission align almost perfectly.

Transitioning the world to clean sustainable energy is going to be expensive.

You need big profits to do it.

Tesla is not a feel good company engaged in token do-goodisms.

Tesla is not Ecotricity.

Tesla is out to make real change happen. Force/compel others to join in the mission. That is only possible with profits at least as good as the alternatives.

 

[Yuri_G]

Or they could just choose option C and copy the successful stuff Tesla does and skip the rest. Listen, the point is that in a fully competitive market the terminal price for a product will approach it's costs. Whether that happens 10 years from now or in 6 months is irrelevant. Knowing what these terminal costs are is critical in determining the size of the market and the relative value of any economic moats that Tesla possesses.

If Tesla does not continue to pursue scale and lower it's prices to that of the terminal value then it will likely be disrupted by competitors who do. My view is that $35k is nowhere near a floor price for a fully scaled competitor. Any attempt by Tesla to harvest excess profits above the floor price will reduce their competitive advantage and lead.

Personally, I dont see any reason why long-range EVs ought to cost more than ice vehicles. Like I said a $10k powertrain seems totally reasonable. The infotainment stuff is pretty geewiz right now, but 90% of that functionality can be had with a $100 tablet off eBay and some Bluetooth speakers. Everything else is pretty much the same as the stuff in ice cars. I swag that as $10k. And perhaps the efficiency sucks for this car, but remember at $110/kwh, it's only $1100 to increase pack size by 20%.

It sounds like you're pulling numbers out of thin air. We have battery pack cost estimates for Tesla and that's about it. There's a reason no one has undercut Tesla and it's exactly for the reasons I stated. It's all about batteries and no one is investing in their improvement and production as much as Tesla has, as far as I can see.

 

[omgwtfbyobbq]

We're at a $44k profitable EV right now. Extrapolating from that it's going to take millions of EVs to get to a $20k profitable car. There's a reason it has taken Tesla a year or so longer than they initially believed to release a viable $35k model. We're just not quite there yet.

To be fair to Tesla, part of the delay is from the problems they had automating production to the degree they expected to. While I haven't heard much about where they're at, my guess is they're still working hard at it. From personal experience, automation is harder than you think it'll be, takes longer than you think it will, and is better than you expected it would be after it's dialed in. Along the same lines, a $35k Model 3 in late 2017 is roughly comparable to a $37k Model 3 in late 2019 because of inflation.

 

[elasalle]

From Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable (Loup Ventures article )