Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Tesla, EVs, and the auto industry's response

renim

Active Member
Apr 6, 2013
1,801
2,352
Oz
Renault PDF, very different perspective to Tesla, and was the justification for about 4 Bill euro (US$ 5 bill) investment in EVs by Renault/Nissan

http://www.d-incert.nl/wp-content/uploads/2010/11/orsini.pdf

p 7.png

1/3 of Euro B segment cars never travel more than 150km (ie 94 miles) per day, for each and every day of the cars on road life.
very different to USA experience

no Tesla.png

Ford, Daimler, BMW, Toyota, VW, BYD, Chrysler, GM, Mitsubishi, Hyundai, Renault & Nissan, even FAAM group but no Tesla, the Renault pursuit of EVs was actioned with no regard to California or Tesla.

Tesla's success was great for the companies that invested in EVs pre 2012 (the chasm year for EVs) not all pioneering plug in companies made it to 2013, Tesla's biggest benefit to the industry was to break the spell that EVs are inferior. Companies that benefited from Tesla's glow include Nissan, BYD and Mitsubishi. BYD has been particularly successful at assimilating lessons from both Tesla and Mitsubishi.
 
  • Informative
Reactions: Brando

ChadS

Last tank of gas: March 2009
Jul 16, 2009
3,489
2,960
Redmond, WA
I started this thread to describe how the auto industry treats electric vehicles. The ROI strategies they employ (halo, conquest, compliance) are similar to those used for certain ICE vehicles, but they are not the “volume” strategy that EV advocates would like to see. With the arguable exception of Tesla, no EV available today is following a volume strategy. Halo and compliance vehicles are intentionally low-volume; conquest can vary but is typically low-to-mid volume.

While I believe volume EVs are inevitable, this post looks at the previously-noted obstacles to volume deployment and offers some thoughts on how we can encourage a quicker shift to volume electric vehicles. I was hoping something new, simple and exciting would fall out; but alas the ways to help are already pretty well-known. At least this places them in to context, which can help when prioritizing work or explaining why these actions are important to others. The sections below are:

· Executive Summary
· The Market is Already Changing
· Obstacles to Volume EVs
· Obstacle: Demand Uncertainty
· Obstacle: Regulation/Incentive Uncertainty
· Obstacle: Dealer Lack of Incentives
· Obstacle: First Mover Risks
· Obstacle: Versioning Temptations


EV line.jpg



EXECUTIVE SUMMARY

The market is already moving towards volume EVs, though very slowly. The automakers don’t want to leap in to a volume EV yet because they are uncertain about demand, regulations, and incentives; their dealers are dis-incented to sell them, and it is cheaper to create a cheap version of an ICE car amidst all of this uncertainty. Taking big risks is not common in a low-margin, high-capital, long-turnaround, mature and saturated business.

Some ways that we can help remove obstacles that are keeping automakers from going with a volume strategy include:

· More test drives to help increase and show demand
· More DC charging (without expecting an individual automaker to take the lead)
· Ensure that CARB/CAFÉ regulations will not be relaxed
· Change federal incentive to time-based point-of-sale rebate tied to larger batteries
· Add state/local/company incentives
· Give some of the incentive to dealers for selling EVs
· Convince automakers we want more capable EVs (not conversions) in a variety of versions


THE MARKET IS ALREADY CHANGING

Before discussing what we can do to accelerate the shift to volume EVs, let’s look at a few things that may already have automakers contemplating them:

· CARB and CAFÉ regulations are already slated to require more vehicles in more places, and may get even tighter:
o Concern about CO emissions seems to be picking up steam
o The VW scandal has highlighted some of the serious dangers of other emissions
o The ability of electric vehicles to address these issues has been clearly shown​
· There have already been several halo and conquest EVs, so new ones won’t be as effective, and dealers like hard-to-sell compliance cars even less than hard-to-sell volume cars (although it is true that fewer dealers have to deal with compliance cars)
· Battery prices are coming down significantly, and densities are improving
· It has already been shown that there is at least some demand for EVs; consumer attitudes towards them are clearly improving
· It has already been shown that profits can be made, at least at the high end; and the large automakers specialize in making lower-end profits through volume
· Diesels may be more difficult to market as a solution after the VW fiasco
· Autonomous driving will be an important future feature, and it is easier to implement in an EV
· EVs don’t have emissions regulations to worry about, significantly lowering the barrier to entry to new players (though they still must have a ton of capital)

Taken individually, perhaps none of these trends would overcome current EV obstacles. However, as a group they seem to be pushing from many directions towards EVs. I believe EVs are the best solution and they’ll win out in the end; however, I’d like to make it happen faster if possible. How can we do that? First, let’s review some of the factors that are keeping us from quickly switching to EVs now.



OBSTACLES TO VOLUME EVs

Here are some of the reasons why automakers don’t yet employ the volume strategy for EVs. At the beginning of this thread I discussed them in the context of the auto industry as an explanation for why we are where we are; now I’d like to start with them and look at how we can move forward.

· Uncertainty about demand – initial cost, range, charging, fear of the unknown
· Uncertainty about future regulations and incentives
· Dealers (the only legal sales channel) have no incentive to do extra work for volume or compliance vehicles; it’s more profitable for them to sell current ICE vehicles instead
· First-mover risks
· Versioning is cheaper; but EVs are much better when ground-up. A conversion has limited range.

As we saw in the previous section, some of these are already being addressed. But we will look at these issues one by one and consider how we might help remove obstacles.


OBSTACLE: DEMAND UNCERTAINTY

The auto industry is a high-capital, saturated business with a long turnaround. To make money on a new car line, you have to sell a LOT of them. Are you sure that an entirely new type of car is going to sell in high volumes?

Already happening:
· Tesla, Nissan, GM and BMW (the best sellers – the ones with cars that are not straight conversions) have shown there is at least some demand for a product that’s not slapped together
· Ford shows you can even sell a decent amount of quick conversions if you offer a variety of vehicle types. No surprise that variety is key in EVs just as in ICEs
· Surveys show that the more you know about EVs, the more likely you are to want one. No surprise, but advertising a car with a volume sales strategy (as opposed to, say, a brand-building strategy like polar bears) will help
· Limited test-drive programs show far improved attitudes and high conversion rates after a test drive
· Studies of buyers and those holding back show similar buying triggers. No surprise, but more range, more DC charging and lower prices (which will come with volume) seem to be the main keys

What we can do:
· More test drives!
· Try to get more DC charging while avoiding first-mover concerns. Alliance, utilities, government, etc


OBSTACLE: REGULATION/INCENTIVE UNCERTAINTY

It takes years to put out a new car, and it will only pay back if it sells in high volume. What if you spend a billion dollars going through the cycle – and by the time it is ready to sell, the rules have changed and consumers are less incented to buy your new vehicle?

Already happening:
· We have a large federal incentive, up to $7500. But it requires tax liability in the year of purchase, takes months to get so initial amount must be financed, doesn’t encourage more than 16kWh, is per-automaker so doesn’t incent first movers, and runs out before automakers get to volume levels
· Many states have incentives too; but most don’t, they are quite varied, and few are funded for long
· NHTSA and CARB seem to be holding firm on regulations, and in fact seem more likely to tighten rather than loosen them

What we can do:
· Keep pressure on NHTSA and CARB to ensure regulations won’t be relaxed. This may be easier after what VW did.
· Convince more states to add incentives. For most states, it’s an investment, not a giveaway – EVs purchase clean local fuel rather than dirty imported fuel, so less money is spent, what is spent stays local, and mitigation work can be avoided
· Change federal incentive to a time-based point-of-sale rebate linked to larger battery sizes. I.e, $2500 to $10,000 deducted immediately from price of car (as in Cash for Clunkers), based on kWh from 15kWh to 60kWh until 2020. In 2021 and 2022, half that incentive. None after.
· The incentive doesn’t all have to go to the consumer – see the next section on dealer lack of incentives.


OBSTACLE: DEALER LACK OF INCENTIVES

EVs are new technology, so dealers have to spend far more time with consumers (most estimates are in the 3x to 4x range) than they would to sell an ICE. Dealers get almost no profit from new car sales to start with; they’d rather sell easier cars that require more maintenance (where most of their profit comes from).

It makes no sense for a dealer to put in extra work to sell a volume or compliance EV that is just cannibalizing an easier and more profitable ICE sale. They may consider halo EVs (they don’t really have to sell any; just plop one in the showroom at a high markup, wait for traffic, they try to sell them an ICE) or conquest EVs (still more work and little profit, but at least they get NEW customers, as long as the EV design is non-cannibalizing like the LEAF and i3).

Automakers have to sell through dealers. To get to volume, dealers have to get an incentive to sell volume EVs.

Already happening:
· Some automakers are doing halo and conquest cars (automakers don’t mind the extra work for those so much; they sell very few halo cars, and conquest cars bring in new customers)
· A few dealers are going gangbusters with conquest cars, and some other dealers are starting to want a piece of the action

What we can do:
· Part of incentives could go to dealers instead of consumers
· Automakers could increase spiffs. (They will only consider if they are trying to go volume; otherwise they are trying to keep costs down. Spiffs could help drive volume, which can then benefit the automaker through accelerated capital payback).


OBSTACLE: FIRST MOVER RISKS

The first automaker to take steps like installing infrastructure, training dealers, and marketing to consumers bears higher costs than later automakers that can leverage that work. This encourages everybody to sit around and wait for somebody else to go first.

Already happening:
· Tesla/Nissan/GM/BMW have already done much of this and removed a fair amount of the risk

What we could do:
· Utilities, government or an automaker alliance could get involved with infrastructure and consumer marketing (including test drives)
· Convince NADA to work on marketing to dealers?
· Change federal incentive from per-automaker units to time-based industry incentive.


OBSTACLE: VERSIONING TEMPTATIONS

It’s cheaper and safer to convert an existing car. But a conversion is never as good as a dedicated platform. For example, because of space and weight capacity, it is difficult to get a conversion to be able to carry enough batteries for more than ~100 miles of range. ~100-mile cars worked at first, but higher available range will definitely help get to higher volumes.

Already happening:
· Tesla Model S and BMW i3 are on new platforms, and they are both great examples of what is possible. Nissan LEAF was a heavy platform modification. Chevy Volt was more than a straight conversion, though it wasn’t a huge modification. Those four are, no surprise, the sales leaders in the US. The others are all either straight ICE conversions or intentionally low-volume halo cars.

What we can do:
· Convince automakers that short-range conversions won’t be competitive and sell in required volumes
· Convince automakers to use versions to increase volumes of a new EV platform: offer both long and short-range versions of a new platforms to span a wide price range
 
Last edited:

renim

Active Member
Apr 6, 2013
1,801
2,352
Oz
A lot depends on how well the manufacturer executes the production of the vehicle. A good platform design allows for both ICE and PHEV and EV development. For example of good execution - BYD Qin and Tang and Mitsubishi PHEV.

Another point is that the companies that people want to buy their plug in vehicle from is different than the companies that actually supply plug in vehicles.
 
Two remarks...
1. What about whole new players entering the arena. The auto industry's oligarchy is largely based on ICE related tech. Tesla is a good example of a newcomer; Elon Musk sees electric cars as big household appliances you don't need a dealership for.
2. Popularization of electric drive is in making this available in other sorts of vehicles. Arcimoto good example.

Tesla should move on. The competition is catching up.
Mercedes Confirms All-Electric Luxury Car To Fight Tesla 'Very Soon'
 
Last edited:
  • Funny
Reactions: Brando
Tesla should move on. The competition is catching up.

I would consider competition catching up only when they _actually sell_ a long-range (greater than 200-miles) BEV to the public. Caught up to the 2008 Roadster, that is. Before that happens it's vaporware, and at this rate the furthest along are about a decade behind the Roadster. Therefore it'll be TM's game for many many years.
 
  • Like
Reactions: Brando

anticitizen13.7

Not posting at TMC after 9/17/2018
Dec 22, 2012
3,638
5,870
United States
Tesla should move on. The competition is catching up.

In the investor's sub-forum, it has been remarked that Tesla often delivers more "sizzle" than "steak", meaning that the company promises big but doesn't always deliver the substance.

Tesla's competitors in the luxury segment are infinitely worse! So far, most are 100% "sizzle" and "0%" steak! Porche, Audi, and Mercedes Benz have been talking about grand plans for years, but so far there are no released products and no charging network. When these companies actually deliver (1) a product and (2) an infrastructure, I will take them more seriously. I will credit BMW for trying something different with the i3 and i8, but these are flawed products, as the i3 is a weirdmobile without broad appeal, and the i8 is a niche sports car with little practical utility.

I say they should bring something more to the market so that I can actually evaluate it.
 
  • Love
Reactions: Brando

ChadS

Last tank of gas: March 2009
Jul 16, 2009
3,489
2,960
Redmond, WA
A lot depends on how well the manufacturer executes the production of the vehicle. A good platform design allows for both ICE and PHEV and EV development.

That's a good point; I should have said the platform has to be designed to at least include electric, rather than it has to be dedicated. Of course a dedicated platform will still be better; but a shared platform can get most of the way there for far less money.

Another point is that the companies that people want to buy their plug in vehicle from is different than the companies that actually supply plug in vehicles.

Yeah, I've seen some surveys on that and I find it interesting. I'm not sure it has had any impact on what the automakers are doing, but it might be worthy of more thought. Right now I think companies like Nissan and BMW that have gone big with conquest cars are doing well because eco buyers didn't used to consider their brands, so they are gaining a whole new market. I tend to think consumers will adapt to the offerings rather than the other way around, but there may well be effects going both ways.

- - - Updated - - -

What about whole new players entering the arena. The auto industry's oligarchy is largely based on ICE related tech. Tesla is a good example of a newcomer; Elon Musk sees electric cars as big household appliances you don't need a dealership for.

You are correct that this is a good time for new entrants, and I would love to see that. They don't have to worry about the incredibly complicated emissions regulations, and they can (if they want) start up without dealers so they have a sales channel advantage. They do still need a load of capital so I don't think we'll see a ton of them. I briefly mentioned this and it could well be important; but it hasn't affected the market or existing automakers - yet - so I didn't go too far in to speculation.

Popularization of electric drive is in making this available in other sorts of vehicles. Arcimoto good example.

Yeah, if you also don't have to worry about crash testing (because you create a kit car, or a low-speed vehicle, or a motorcycle like Arcimoto) then you can enter the market with far less capital. I like Arcimoto in particular and in fact I put down a deposit with them. However, a new, unknown-to-consumers entry that is perceived as odd (3 wheels? 25mph? I have to put it together myself?) and compromised by consumers often have to compete on price; and that's hard at the very low volumes they almost always start with. As you say, electric drive does make things easier for them, so I hope we'll see more. Zero is one that seems to be doing well, though there are far more counterexamples.

What might happen is we'll see more things like Brammo - they show some great possibilities, but struggle getting to profitability - then are purchased by a larger entity like Polaris that re-releases their product under an existing brand (and works on increasing volume through component sales).

- - - Updated - - -

I will credit BMW for trying something different with the i3 and i8, but these are flawed products, as the i3 is a weirdmobile without broad appeal, and the i8 is a niche sports car with little practical utility.

I completely agree about the non-cannibalizing conquest i3 and the halo i8. However, in BMW's defense (as I explained above with way too many words) non-cannibalizing conquest cars and halo cars are the only types of EVs that it currently makes sense for dealers to push, so I think BMW feels restricted by what their dealers will sell. I think it made sense for them to start with those, though of course I'd love to see more and better cars from them.

While BMW promises to release many more PEVs, I fear that much of their future cars will be weak PHEVs. Which is a lot better than nothing, but not what I personally want to buy. Still, BMW seems to understand upcoming market shifts better than most automakers, and is willing to invest and try new things. I hope they have a better BEV planned soon; if they are really serious about making it a volume car (as opposed to using it for brand building, which explains most of the low-detail press releases on far-off products we've seen from automakers so far), it will be done in secret to avoid the Osborne effect on their current vehicles.
 
Last edited:

nwdiver

Well-Known Member
Feb 17, 2013
9,182
13,934
United States
A lot depends on how well the manufacturer executes the production of the vehicle. A good platform design allows for both ICE and PHEV and EV development. For example of good execution - BYD Qin and Tang and Mitsubishi PHEV.

I don't think that's true... one of the things that makes the MS such a great car is that it's designed from the ground up as an EV. It would be a very poor platform for an ICE or PHEV drivetrain.

The LEAF on the other hand IS a multi-drivetrain platform, it's an electrified versa... and IMO is a mediocre EV at best. You pop the hood and there isn't storage... it looks like an ICE with various components stashed up there.

A good EV platform needs to be designed to take advantage of EV benefits... which are a poor fit for adding a liquid fuel tank and ICE.
 
  • Love
Reactions: Brando

S'toon

Knows where his towel is
Apr 23, 2015
3,702
3,751
AB
Sorry to counter the "the competition is catching up, Tesla should move on" narrative. Turns out Mercedes isn't interested in making a "Tesla killer" BEV at all.
<snip>
According to executive Axel Heix in an exclusive interview with Green Car Reports last week, the automaker sees little hurry to launch battery-electric vehicles.


Heix spoke on the sidelines of a drive event in Austria for the new 2017 Mercedes-Benz GLS full-size seven-seat sport utility vehicle; he's the director of product projects for SUVs and sports cars for Mercedes-Benz.


He noted that Mercedes plans to offer plug-in hybrid versions of virtually all of its high-volume models over the next few years.

<snip>

Once a charging infrastructure to permit long-range trips is available, he said, battery-electric cars "will be accepted" by regular buyers. Until then, they remain "city cars" for most customers.

Asked how such an infrastructure will be created, Heix suggested that it will "happen step-by-step" in response to national legislation on fuel consumption and incentives to produce partially or fully zero-emission vehicles.

<snip>

And yet, he said, if the goal is to reduce fuel consumption and emission of carbon dioxide, "It's astonishing how much you can do with internal-combustion engines."

<snip>

Will there be a time when consumers en masse start to buy electric cars simply because they're better, nicer, and more pleasant to drive than electric cars--and they're at roughly equivalent price levels?


There will be, Heix responded, but "not in the near future."


Would it be within his lifetime? Perhaps, he mused, but not within the next one to three generations of vehicles--meaning not within seven to 20 years.


Heix broadly agreed with the notion that automotive lithium-ion cells will fall roughly 7 percent per year in cost, but demurred at the suggestion that carmakers might accept losses on the first generation of a new technology to gain experience and lay the groundwork for higher volumes in future.


From the Daimler point of view, he said, it might be possible for the lines with the best business cases--he gestured toward the large, luxurious, expensive GLS in the background--to provide profits that might help support those with less profitable balance sheets.

"It's a balance with the products we already have," he added, "and we see electrification as an innovation in the future."


But, he said, "We have to keep it at a [financial] level that makes sense," adding that while the performance of electric cars was fast approaching that of combustion vehicles, the business case for carmakers still lagged behind.


<snip>
Full article at:
http://www.greencarreports.com/news...tric-cars-possible--when-business-makes-sense
 
  • Like
Reactions: Brando

adiggs

Well-Known Member
Sep 25, 2012
6,002
21,952
Portland, OR
Sorry to counter the "the competition is catching up, Tesla should move on" narrative. Turns out Mercedes isn't interested in making a "Tesla killer" BEV at all.

Full article at:
http://www.greencarreports.com/news...tric-cars-possible--when-business-makes-sense

Competition like that really is worrisome, isn't it? :)

It's very measured, and it's the sort of talk that works well in established markets trying to figure out when an incremental innovation should be brought in.

I see a brand new market being created that is disrupting an established market. The new technology is so much better, and it's cost curve is improving so much more rapidly, that it is going to replace the incumbent..

I believe that every car maker that doesn't believe today that their hair is on fire, and putting out the fire means developing and delivering fully functional EV's ASAP, are going to burn. This isn't because I believe climate change drives a need for this kind of behavior - I believe this is because the electric driving experience, when matched up with the infrastructure to make it a fully functional driving experience, is so attractive that it will replace today's personal transportation market (ICE engine cars with EVs), and because the cost of providing the new and improved driving experience is falling so rapidly, we're on the order of 10 years away from ICE engine vehicles being expensive alternatives to the better driving experience vehicles.


One personal point of perspective. The sticker price on the Roadster I own was $142k or so (2.5 Sport). The important option packages were chosen, but there were additional options not chosen. I believe fully loaded, a 2.5 Sport could get into the 160's (I got the car for $80k used). Today, if I check absolutely every single box for a Model X, I can spend about the same amount of money.

Let's compare - the vehicles come from two very different segments of the market, so to some degree, they will always serve different customers. However, the Roadster provides a 2 seat sports car with a small trunk, 0-60 in 3.7s, and about 200 miles of driving range. The similarly priced Model X will provide a 5-7 seat luxury SUV with AWD, towing, huge interior cargo capacity, 0-60 in 3.2s, and more like 250 miles of driving range. In less than 10 years, holding price constant, we've ~tripled human carrying capacity, more than 10x cargo capacity (between interior and towing), increased the driving range, while making the whole thing a LOT faster 0-60. This has happened over roughly 8 years (2008 to 2016). If this progress continues like this, then maybe we see Model X scale capability priced for 1/2 of today's price. In 2024, the fully loaded SUV / truck of that day does everything Model X does today, for $70k? Actually, Elon's been saying that arrives in a couple of years with Model 3.

This is admittedly slower than integrated circuits taking over for vacuum tubes, but it's the same idea as Moore's Law from that industry. Each new manufacturing node means faster, cheaper, and lower power circuits. How those get put together into an individual product varies - you can keep the processor size the same and power envelope the same, yielding more performance. Or you can shrink the processor size and power consumption, lowering cost and holding performance steady. Or you can mix and match.

The point is that all of the value dials are getting better, and they're getting better fast, in the EV world. They're really just getting started. How those get mixed and matched in an individual product will vary. But all the value dials are in the EV maker's hands (or at least in Tesla's hands), not in the ICE engine maker's hands.

Mercedes-Benz, or at least this executive in his public comments, is asleep at the wheel.
 
  • Informative
Reactions: Brando
I believe that every car maker that doesn't believe today that their hair is on fire, and putting out the fire means developing and delivering fully functional EV's ASAP, are going to burn.

Unfortunately, I doubt that being a first mover is going to be that big of a advantage compared to Brand identify in the luxury market. Mercedes has so much badge cachet that they could likely wait 5 to ten years until electric car sales are really picking up, produce cars competitive in that market and have tons of people eager to buy them.

A good comparison would be a Apple in the last decade. Their sales haven't decreased even though the majority of their products are highly derivative and they haven't been close to first movers in innovation.
 

stopcrazypp

Well-Known Member
Dec 8, 2007
13,550
10,120
Unfortunately, I doubt that being a first mover is going to be that big of a advantage compared to Brand identify in the luxury market. Mercedes has so much badge cachet that they could likely wait 5 to ten years until electric car sales are really picking up, produce cars competitive in that market and have tons of people eager to buy them.

A good comparison would be a Apple in the last decade. Their sales haven't decreased even though the majority of their products are highly derivative and they haven't been close to first movers in innovation.
First mover would not necessarily give you advantage, like for example with the Honda Insight, but if you can establish your brand in a particular segment (like Toyota did) that is a huge advantage. This is especially true if competitors come extremely late (rather than 1-2 years where it makes less difference). Others still have to fight an uphill battle against Toyota in terms of hybrids.

I think Tesla's strength is not only in being first, but also being extremely successful establishing their brand as a premium EV maker.
 
I think Tesla's strength is not only in being first, but also being extremely successful establishing their brand as a premium EV maker.

I totally agree, Tesla has been great at creating a brand. I'm just saying that Merc (from a financial point) likely doesn't need to prove itself as a electric car company as it's brand is strong enough as it is. Ten years from now, if Merc produces its first long range EV, most buyers will believe that the brand is up to the task. In 2025, the average consumer will likely give at least as much credit to Mercs first LREV as Tesla's competitor. If Tesla is seen as a competitor then it is a huge win for them, But it matters little for Merc.
 

FlatSix911

Porsche 918 Hybrid
Jun 15, 2015
7,629
8,033
Silicon Valley
Unfortunately, I doubt that being a first mover is going to be that big of a advantage compared to Brand identify in the luxury market. Mercedes has so much badge cachet that they could likely wait 5 to ten years until electric car sales are really picking up, produce cars competitive in that market and have tons of people eager to buy them.

A good comparison would be a Apple in the last decade. Their sales haven't decreased even though the majority of their products are highly derivative and they haven't been close to first movers in innovation.

First mover would not necessarily give you advantage, like for example with the Honda Insight, but if you can establish your brand in a particular segment (like Toyota did) that is a huge advantage. This is especially true if competitors come extremely late (rather than 1-2 years where it makes less difference). Others still have to fight an uphill battle against Toyota in terms of hybrids.

I think Tesla's strength is not only in being first, but also being extremely successful establishing their brand as a premium EV maker.

I totally agree, Tesla has been great at creating a brand. I'm just saying that Merc (from a financial point) likely doesn't need to prove itself as a electric car company as it's brand is strong enough as it is. Ten years from now, if Merc produces its first long range EV, most buyers will believe that the brand is up to the task. In 2025, the average consumer will likely give at least as much credit to Mercs first LREV as Tesla's competitor. If Tesla is seen as a competitor then it is a huge win for them, But it matters little for Merc.

MB is getting more serious on the PHEV level ... http://insideevs.com/mercedes-benz-e350e-plug-hybrid-launch-2017/

http://insideevs.com/mercedes-benz-c350-fall-us-launch-delayed-2016/


14C1134_06.jpg
 

Olle

Active Member
Jul 17, 2013
1,051
1,237
Orlando, FL
Toyota and BMW "mysteries"

Fantastic and enlightening write up, ChadS, thanks!

Two more things to dwell on:

  • Since Toyota stands to lose its huge hybrid market if BEVs become too good, why did they invest in Tesla Motors in the first place? Is Toyota's hydrogen venture more a diversion tactic from BEV to defend current leadership through hybrids, or do they truly believe in it?
  • As you say Chad, BMW seems to be taking electrification seriously and in one investor meeting they said that they will have ICE phased out in 10 years (now 9 years) The i brand is a sub brand for conquest reasons. Gradually the Battery component will grow and the ICE will diminish in the main BMW brand, as evidenced by their rapid ICE downsizing and introduction of bigger batteries. But what happens with the i brand when the main brand reaches 100% electrification?
 

ChadS

Last tank of gas: March 2009
Jul 16, 2009
3,489
2,960
Redmond, WA
I don't know the answers to your questions, Olle, but I'll guess at some of them.

I think Toyota saw a chance to kill a couple of birds with one stone. They had pulled out of their Fremont factory, but felt bad about it not being sold or used, with no prospects for their former employees - they really wanted to see somebody take over the factory (largely to comfort their workers in other factories that their jobs won't completely disappear when Toyota pulls out of another factory). Perhaps they were caught flat-footed without a way to get sufficient short-term ZEV credits - maybe because they assumed the ZEV rules would be relaxed, thought their H2 vehicles would be ready sooner, or had an internal EV project that failed. Maybe they weren't completely flat-footed; maybe they had expected to contract out EV powertrain development to somebody anyway because it's not a technology they needed in-house. Perhaps they didn't believe in EVs for the mass market, but thought Tesla's high-end approach could work short-term. Investing in Tesla helped give Tesla enough money to buy the factory and be able to build powertrains for the RAV4-EV while also having the potential to make money (and hence reduce the EV program cost) for Toyota - which I believe was successful, I think Toyota did quite well on Tesla stock.

There must be some people inside Toyota that have examined the issues and fully understand H2 limitations; and that is no doubt why their plans are to build so few H2 cars - they are clearly just compliance cars (which in turn implies that they expect their HEVs to stick around). However, any regular Toyota employees I have met seem to REALLY BELIEVE that H2 is the future and all cars will be H2 someday soon - like most consumers, most employees don't have any reason to look in to it in great detail, and "it works just like a gas car, but emits only water" is pretty attractive. I would love to see their internal communication on the topic.

As for what BMW will do with their i brand, I'm not positive. In addition to conquest, they're also using it for the halo i8. It does sound like their weak PHEVs will not be i-branded. So is "i" just for the low-volume eco cars? It seems to us Tesla fans that EVs can be good for performance and such, but BMW had said that their "i" and "M" brands will not overlap, rather they will be "opposing bookends". If that's really their long-term plan, I think it's a mistake. But maybe they plan on evolving the "i" brand as EVs become more mainstream; right now it may be more about calming dealer fears and helping BMW note which dealers can sell EVs and which can't.
 
According to this report Ford is the latest to start taking Tesla seriously:

Ford Is Gearing up to Take on Tesla

One of the largest most well-known automakers in the world is making moves to take on a low-volume upstart. Seems like a real lopsided battle, but Ford Motor Co has been wise enough to read the tealeaves, and knows where the market is going. That is why it has announced plans that it will invest $4.5 billion in electric cars between now and 2020.

The move is clearly to ready itself for the continued, sustained growth of electric automaker Tesla...

Whether this reported investment by Ford in EV technology will actually happen remains to be seen. I would hope that all the major auto companies can see that EVs are the future, whether they like it or not, but most show no signs of it.
 

stopcrazypp

Well-Known Member
Dec 8, 2007
13,550
10,120
According to this report Ford is the latest to start taking Tesla seriously:

Ford Is Gearing up to Take on Tesla



Whether this reported investment by Ford in EV technology will actually happen remains to be seen. I would hope that all the major auto companies can see that EVs are the future, whether they like it or not, but most show no signs of it.
Unfortunately this is another case of journalists writing another "Tesla killer" article, as compiled below:
http://teslamondo.com/2014/05/25/yipes-watch-out-tesla-move-over-tesla/

As had been discussed before, Ford's $4.5 billion investment for "electrified" vehicles includes non-plug-in hybrids, PHEVs, and BEVs. Like with the $5.9 billion DOE loan, it will not be significant enough to change things drastically in the direction of BEVs, but rather spread out in Ford's product line as it is today (with hybrids, Energi line, and Focus EV). It is stretching things very far to claim somehow this Ford investment is targeting Tesla.
 

About Us

Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.

Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


SUPPORT TMC
Top