Blog Tesla Competition: Culture Eats Strategy!

[Texas]

[QUOTE="What happens when everyone in a neighborhood plugs in their Evs and they start blowing out the neighborhood transformers?"

Since most residential neighborhoods that currently (pun intended) have Teslas, use 40 amp circuits (a few with dual chargers have 80 amp), the same thing will happen when they all turn on their electric dryers or ranges at the same time. Nothing. Electricity providers (mine included) are already planning upgrades adding additional transmission capacity, in addition to adding 'smart' capabilities with energy storage facilities.

My impression after reading your comment? You don't like Tesla? OK. Don't buy one.

I feel there's more than enough negativity in America today.[/QUOTE]

 

[Texas]

The utilities do not need to expand their transmission and distribution capability much if at all. Most EV charging is at night, when the air conditioning is running less, household appliances are off, the television and lights are off, etc. Virtually all electric utilities have excess, unused capacity at night that they are very eager to see used by EV charging.

 

[S'toon]

The writer ignores one fundamental of business -- profits. The reason the big OEMs have been slow with EV's is they aren't willing to knowingly lose money in large quantities like Tesla. Tesla lost $20k on each car in 2017. Anyone who competes with them at a similar price will also lose about the same (GM is losing less than that on the Bolt, but still losing money on each Bolt they sell--so of course they will upsell you whenever they can). So they will all wait as long as they can to ride their current ICE investments and ride battery costs down and the volume curve up -- and in the meantime they expect Tesla to bankrupt in 18 months from their losses. Tesla admits now that the model 3 will be negative margin for the year, and I expect well after that--so it won't save the company. The Semi will also be a huge negative margin (the batteries cost well more than their sales price). They won't be increasing volumes on the S or X--where they could actually make positive margin (with all the software options and Performance option).
Full disclosure--I love my Model X, I am CEO of an Electric Truck business, and I don't own any Tesla stock--short or long.

Incorrect. Tesla reportedly makes $20,000 PROFIT per car.

The problem is they're still building the company. They're expanding their factories, building out the Supercharger network, building new stores, etc. The other auto manufacturers all have their infrastructure in place.

Once Tesla has finished building out their infrastructure, they can start paying off the debt. Until then, they're currently spending money faster than it's coming in. That's not the same thing as losing money.

 

[Phillip L]

Incorrect. Tesla reportedly makes $20,000 PROFIT per car.

The problem is they're still building the company. They're expanding their factories, building out the Supercharger network, building new stores, etc. The other auto manufacturers all have their infrastructure in place.

Once Tesla has finished building out their infrastructure, they can start paying off the debt. Until then, they're currently spending money faster than it's coming in. That's not the same thing as losing money.

True. If the markets decide that the cost of doing that is too high then Tesla may have to slow down their breakneck speed of that buildout. Right now they have a lot on their plate. They are committed to producing high volumes of the Model 3 and getting the Tesla semi into production. If they could get the Model 3 numbers up, and start getting some real cash flow from that and the S and X, then they should think of making announcements on the Y and other models. But also, they do not want to go too slow and lose their advantage over the big automakers in the ev segment. This is where the massive bureaucratic inertia (as detailed by the original poster) of these companies can give more legroom for Tesla than many of the naysayers assume. We have barely seen any of these alleged “Tesla killers”, and it will be some time before we see them in any great quantities.

 

[timreeser]

Incorrect. Tesla reportedly makes $20,000 PROFIT per car.

The problem is they're still building the company. They're expanding their factories, building out the Supercharger network, building new stores, etc. The other auto manufacturers all have their infrastructure in place.

Once Tesla has finished building out their infrastructure, they can start paying off the debt. Until then, they're currently spending money faster than it's coming in. That's not the same thing as losing money.

No--Tesla has never claimed they make $20k per car. You should read the 10K and study some accounting. All the investments you are talking of are already amortized over many years--so they are already effectively subtracted. In their 2018 10k Tesla claims they make a gross profit of 14% on average (before the M3--which will be lower--in fact their Q4 call said they would be negative gross margin all of 2018 on the M3). GAAP accounting requires allocation of all the other expenses (warranty liability, service center costs, interest expenses on ~$4B, manufacturing overhead, Supercharger costs, etc.). Those costs aren't going down over time as they build out--they are going up. They are real costs. With all those allocations, their margins are negative--~$20-per car--and going even more negative. In Q1 they will show a $1B loss on sales of ~30k cars. That is a $33k loss per car. That loss only includes 1/5th of any additional capital investments--so the cash outlay is even higher. Those will be subtracted each year going forward--so the expenses won't go down as they build out.

 

[oliman06]

Without a supercharger network, every other EV is a commuter car. If you can't charge in 20 - 30 minutes and be on your way for the next 200 miles of a trip, you have a commuter car.

Totally Agree! . Tesla developed and created their supercharger network to ensure that every Tesla vehicle can travel the distance that any ICE vehicle can cover in a fairly decent waiting time (1hr at most for "topping off" a 310mi range) - all this without much fanfare and Supercharging stations are still being built currently. At present, I see plenty of Plug-in Hybrids and EV's struggling to even find an open public charging station and when they find one, it'll either only give them 2 hours of charge or worse, being "unplugged" by another EV driver who knows little about charging courtesy (which in itself is another issue facing many current and future EV drivers). We're already almost halfway to 2018 and 2020 will just be around the corner, Tesla didn't build supercharging networks in a year.

I wish for everyone to start accepting EV's in their garage but without a proper network of charging, most non-Tesla EV drivers are "leashed" by the miles their cars can take them and having to wait over 2 hours to get to another charging port (that is not guaranteed to be available or working) is a dealbreaker for me, I can imagine the same for many. I see many Tesla cars going on road trips, not so much for the BOLT and definitely not for the BMW i3, Nissan Versa and the e-trons by Audi / VW / Porsche. Any car manufacturer can release 300+ mile range vehicles but without the proper network of charging, they're headed back home and picking up their ICE vehicles for the long road trip which to me puts Tesla ahead of this game because most Tesla owners are actually enjoying their vehicles more and driving them to places other EV's can't get into (for now).

 

[Blu Angel]

If you read traditional auto press, you’ll frequently see stories along the lines of “big automakers are going to start making EVs in a couple years and when they do, Tesla is doomed.” Traditional automakers have the resources, factories, and engineers to design electric cars and they are very good at manufacturing, so, on the...
[WPURI="https://teslamotorsclub.com/blog/2018/02/20/tesla-competition-culture-eats-strategy/"]READ FULL ARTICLE[/WPURI]

Let's get back on topic for his thread.
Is Tesla doomed?
The OEM car manufacturers would have you believe while they all are really gunning for Elon Musk's company

2018 will be the Year of e EV!!
Tesla 3 and Nissan Leaf will probably produce and sell over 200,000 EV's collectively in the US

Read this article on Cleantechnica to see the S curve ramp up of EV sales
14 Experts Share Their 2018 Electric Vehicle Predictions & Developments | CleanTechnica

 

[oliman06]

Let's get back on topic for his thread.
Is Tesla doomed?
The OEM car manufacturers would have you believe while they all are really gunning for Elon Musk's company

2018 will be the Year of e EV!!
Tesla 3 and Nissan Leaf will probably produce and sell over 200,000 EV's collectively in the US

Read this article on Cleantechnica to see the S curve ramp up of EV sales
14 Experts Share Their 2018 Electric Vehicle Predictions & Developments | CleanTechnica

If we look at earnings and figures alone, then it looks like TESLA IS doomed - however, Elon also did well buying these factories from GM and Toyota when the economy was down and the car market crashed so it will be very hard for another startup EV company to replicate Tesla's success in producing the number of EV cars it has now - WORLDWIDE. So from the perspective of car production, I don't see Tesla cars heading the TUCKER, DELOREAN and recently FISKAR's KARMA death, especially with the extensive supercharging network Tesla has that any other company, startup or big carmakers have yet to start building and also just the sheer number of batteries from GIGA FACTORY can truly catapult TESLA even further ahead of it's closest rival - Chevy BOLT and VOLT. TESLA, I feel will either fuel the fire even more by forcing big car brands to finally embrace the future of automobiles, today. So I am a big fan of TESLA's success and again, from an earnings perspective, if I am in investor with TESLA MOTORS I'm doomed from making insane amounts of money compared investors at big car brands but I have a car i am so proud to have paid a premium for in TESLA. - am I sounding too fanboy-y? =)

 

[Phillip L]

Let's get back on topic for his thread.
Is Tesla doomed?
The OEM car manufacturers would have you believe while they all are really gunning for Elon Musk's company

2018 will be the Year of e EV!!
Tesla 3 and Nissan Leaf will probably produce and sell over 200,000 EV's collectively in the US

Read this article on Cleantechnica to see the S curve ramp up of EV sales
14 Experts Share Their 2018 Electric Vehicle Predictions & Developments | CleanTechnica

I think that the real test of EVs becoming more mainstream will be seen on television. When we see ads for various EVs on the television then we will know that the EV has arrived. And once the ads start, then the real awakening of the general public will occur, and we could see a real surge in buyers. Essentially now, EVs are still a word of mouth phenomenon. People are really only first learning about them from owners or enthusiasts now. (And that includes YouTube, etc where I suspect most viewers are already the converted). Can’t wait for when there is a big splash over the first EV Super Bowl ad.

 

[Ed Hart]

Hmmm....well I don't know how this stuff works. All I know is that I just got a notification email, clicked on it, and it took me here. What gives?

 

[Ed Hart]

Totally Agree! . Tesla developed and created their supercharger network to ensure that every Tesla vehicle can travel the distance that any ICE vehicle can cover in a fairly decent waiting time (1hr at most for "topping off" a 310mi range) - all this without much fanfare and Supercharging stations are still being built currently. At present, I see plenty of Plug-in Hybrids and EV's struggling to even find an open public charging station and when they find one, it'll either only give them 2 hours of charge or worse, being "unplugged" by another EV driver who knows little about charging courtesy (which in itself is another issue facing many current and future EV drivers). We're already almost halfway to 2018 and 2020 will just be around the corner, Tesla didn't build supercharging networks in a year.

I wish for everyone to start accepting EV's in their garage but without a proper network of charging, most non-Tesla EV drivers are "leashed" by the miles their cars can take them and having to wait over 2 hours to get to another charging port (that is not guaranteed to be available or working) is a dealbreaker for me, I can imagine the same for many. I see many Tesla cars going on road trips, not so much for the BOLT and definitely not for the BMW i3, Nissan Versa and the e-trons by Audi / VW / Porsche. Any car manufacturer can release 300+ mile range vehicles but without the proper network of charging, they're headed back home and picking up their ICE vehicles for the long road trip which to me puts Tesla ahead of this game because most Tesla owners are actually enjoying their vehicles more and driving them to places other EV's can't get into (for now).

Please let me add that in my simple world, I actually spend less time fueling my Tesla than I did my ICE. And three years ago - while the SC network was still building out - we cross the US with little difficulty.

 

[PismoPat]

You see all of these stats about an EV charger being within 2 miles of 85% of the homes, but what people new to the EV world don't understand is that a vast majority of these (excluding Tesla Superchargers) are L2 chargers and that it will take 4 to 8 hours to get a Bolt or Leaf back on the road to continue their voyage. Non-Tesla high-speed DC chargers are difficult to find.

 

[PismoPat]

Please let me add that in my simple world, I actually spend less time fueling my Tesla than I did my ICE. And three years ago - while the SC network was still building out - we cross the US with little difficulty.
View attachment 359999View attachment 360001

Add 10 minutes for each fill-up if you Costco!

 

[Axtrader]

Add 10 minutes for each fill-up if you Costco!

Costco in San Diego can easily add 15-20 min to a fillup. ICE-ers are content to drive an extra few miles and wait an extra 15 minutes to save a few pennies/gal

 

[Ed Hart]

Costco in San Diego can easily add 15-20 min to a fillup. ICE-ers are content to drive an extra few miles and wait an extra 15 minutes to save a few pennies/gal

Ha....that chart above was sought up while I was waiting in line for 20 minutes at Costco to fill up my son's ICE!!

 

[mrbulk]

Tornado® 2019 | Camioneta pequeña para tu negocio | Chevrolet Mex

 

[Swampgator]

So as we enter 2019 I think some things are obvious.
#1. Tesla is far, far ahead of all other automakers in EV technology, including battery production.
#2. OEMs are reacting to Tesla by introducing EVs in 2019 that are not as good as Teslas being made today. They are less powerful, less efficient, and lack charging infrastructure. (It's coming soon they say)
#3. Porsches Taycan is the only EV from a major OEM that is compelling in it's own right, and not just an EV
#4. All other EVs released this coming year are compliance vehicles. Period. They will not compete with Tesla for market share because to do so would mean they are competing against their own ICE offerings.
#5 Tesla is the only automaker that has enough batteries to build cars to market demand.
#6 These guys (legacy OEMs) are not scaring Tesla...at all.