Tesla, EVs, and the auto industry's response

[Cyberax]

Hybrids are pretty much a dead end - they are just somewhat more efficient ICE cars, and even these efficiency gains don't always pay for themselves. EV market has a very real potential to outgrow hybrids very fast. If this happens, Tesla will be sidelined - they just don't have resources to compete with classic automanufacturers.

In your scenario (new 3-5% niche), Tesla can indeed survive pretty much indefinitely.

Plugin hybrids are another story, though.

 

[wdolson]

Hybrids are pretty much a dead end - they are just somewhat more efficient ICE cars, and even these efficiency gains don't always pay for themselves. EV market has a very real potential to outgrow hybrids very fast. If this happens, Tesla will be sidelined - they just don't have resources to compete with classic automanufacturers.

In your scenario (new 3-5% niche), Tesla can indeed survive pretty much indefinitely.

Plugin hybrids are another story, though.

Hybrids have been a stepping stone to pure BEVs. Back when the Prius was introduced, there were no reasonable options for BEVs. Battery price and energy density have improved since the late 90s which has allowed something like the Model S/X to exist, though still at a premium price. Hybrids were seen by many as a transitional technology between ICE and BEVs.

For some hybrids will be the way to go for some time. I know a number of people who don't have a garage or really the ability to charge their car at home (car needs to park on the street and/or old house with ancient wiring), but they are environmentally conscious. They see owning a hybrid (all I know have a Prius) as a compromise to driving an ICE when owning a BEV is just not an option for them with the current state of the charging infrastructure.

 

[stopcrazypp]

Hybrids are pretty much a dead end - they are just somewhat more efficient ICE cars, and even these efficiency gains don't always pay for themselves. EV market has a very real potential to outgrow hybrids very fast. If this happens, Tesla will be sidelined - they just don't have resources to compete with classic automanufacturers.

Once again, I don't agree with that. Even in a scenario that BEVs outpace the hybrid growth curve, it's not going to be overnight. It's going to take a considerable amount of time and Tesla will be growing during that time. They aren't standing still waiting for the others to catch up and they will be the primary driver of that growth curve, not the wait-and-seers (by definition). If Tesla doesn't maintain a number one position it'll likely be their own choice of not moving down market, not other automakers sidelining them just because they are big today, especially not the wait-and-seers.

The proactive ones like Nissan and BMW today of course are exceptions because they are not taking a wait-and-see approach.

 

[Cyberax]

Hybrids have been a stepping stone to pure BEVs.

Technologically yes, but not really for consumers (for now).

For some hybrids will be the way to go for some time. I know a number of people who don't have a garage or really the ability to charge their car at home (car needs to park on the street and/or old house with ancient wiring), but they are environmentally conscious. They see owning a hybrid (all I know have a Prius) as a compromise to driving an ICE when owning a BEV is just not an option for them with the current state of the charging infrastructure.

Sure. However, I'm assuming that charging infrastructure will become more ubiquitous, and you don't really need that much charging for a daily commute anyway.

 

[ChadS]

Chevy "introduced" the Bolt at CES this week. (For many more details see THIS thread; here I'm just briefly introducing it and talking about the effect on other automakers).

GM had shown the concept - what, nearly a year ago? And they've said dribs and drabs about it, and it's been seen in testing under camo. But at CES they talked more about the car, confirmed it will be available in 2016 (though likely very late), that it has 200 miles of EPA range, and that it will start at $37,500. They also had largely-production-intent vehicles available for the press to drive - they had non-production striping and head/taillights, and some of the dash and door panels were covered, so not everything is final.

Reactions have been pretty good (and I like the car; I will give one heavy consideration). While not a beautiful car, and it's still a hatchback which the US is not fond of, it is more mainstream-looking than the LEAF or i3. And people seem to love the idea of 200 miles of range for $3x,000. They will offer SAE Combo DC charging, though if they plan on any DC buildout they have not announced it yet. While GM has not been clear on numbers, from their suppliers it looks like they only plan to build about 30k per year, although there appears to be some efforts (unclear how urgent) to increase that capacity.

Giving out this many details so far in advance of the car actually being able to be purchased is in-line with what they've been doing with PEVs so far: don't worry about tanking current sales by talking about what's coming; instead, use what's coming to build the brand by showing how advanced GM is in offering practical, affordable, clean technology. The idea behind the marketing -at least so far - is really more to sell other GM vehicles than the Bolt. I hope there are some changes to their marketing once it is really available.

This is no change for GM, but what I'm really interested in now is how the other "serious" automakers will react. Obviously Tesla is going forward with their plans for the Model 3; in fact GM's rush with the Bolt is largely to build the GM brand by getting there before Tesla and others. But what about Nissan and BMW?

LEAF and i3 sales are going to have to be affected by the news of a similarly-priced car with twice the range. The LEAF more than the i3, as i3 owners most concerned about range have the REX option, though not all of them want it. Nissan and BMW are clearly going to have to respond. Unlike GM, they care about their current sales, so they are not blasting out their future plans. However, it's clear they are both working on adding range to their cars. When will they actually offer cars with more range - will they wait until the Bolt is out to see how the market responds, or will they respond before it arrives to boost flagging sales and take away GM's thunder? I suspect the key things Nissan and BMW are both watching are sales and battery prices. Nissan also likely doesn't want to add more range until the redesigned 2017 LEAF is available; they are no doubt hurrying to get that out in 2016 as well.

Will BMW and Nissan offer new, longer-range but higher-priced vehicles alongside their current offerings?

I hope so. I can't wait for more choices.

 

[FlatSix911]

The Bolt is definitely better looking than the BMW i3

The i3 experiences a 1 year depreciation hit of 50%!
http://insideevs.com/bmw-i3-depreciation-check/

 

[ChadS]

Just for fun, here is the Nissan LEAF:

And the car I think the Bolt looks most like, the Honda Fit (though the Bolt is notably larger in every dimension):

 

[renim]

 

[ChadS]

What is that?

And why is it facing the wrong way?

 

[ChadS]

More details have surfaced on the Bolt. The most telling, to me, was when asked about DC infrastructure, they didn't say they were still evaluating it - they said they weren't going to do it. Combine that with their marketing (especially the pre-marketing) and the outsourcing of all the electric bits on the Bolt, and I can't reach any conclusion other than the Bolt is not of strategic importance to GM.

That's not to say it won't be a good car. The Volt is a fantastic car with incredible customer satisfaction numbers, and I expect the same out of the Bolt. It offers enough range to comfort most consumers at a great new price point. It looks decent and has useful packaging, and will easily fit in to any 2-car household and even work for some 1-car households. With all the electric advantages, I am sure owners will love it and it will be great for conquest purposes. GM also gets to build their brand with it (already doing so!) and get sufficient credits to keep selling their gas cars in ZEV states. I'm not complaining about the car, just pointing out that while GM does get something out of the Bolt, they are clearly not considering this the first step in a major transition. Their main vehicle development plans seem unchanged.

This is the easy way out mentioned upthread that I think a lot of automakers are going to do as long as they can. They'll offer a BEV for image and credits; but they will offer and sell more PHEVs to meet CAFE numbers and to provide range without having to worry about dedicated platforms to carry enough batteries, dealer objections to explaining new tech and less maintenance, and having to worry about DC infrastructure. They won't be able to do it forever, but for now it's an awful lot easier. It's not a bad thing - we DO need PHEVs for the transition (and they do contribute nearly as many electric miles as BEVs do), and right now GM's building the best one - it's just not the accelerated pace of change that I would prefer. Also note that while they are not leading the EV charge, they aren't dragging it down here either - their early announcement is pressuring other automakers to respond, and they have repeatedly said they will sell the Bolt everywhere and make as many as there is demand for, so they are not trying to hold EVs back. We do still have to wait to see their Bolt marketing when the car comes out to see just how serious they are about moving the car, though.

Tesla, Nissan and BMW, at least, seem to be putting more effort in if that's important to you. (Other automakers may jump in and surprise us with new efforts soon; they may be keeping quiet unlike GM to avoid killing sales of their current products. Of course, from the outside this looks exactly the same as doing nothing, so it's hard to tell if this will happen or not). In general I do prefer to buy products from companies that consider them strategically important; it doesn't always make a difference, but there's a better chance that it will be built better, be upgradable, supported longer, and I like to support companies that I think are moving in the right direction. I suspect Tesla and Nissan will at least match GM's vehicle specs, though when is still in question - if it takes too long, I might still buy a Bolt (well, likely lease). BMW I suspect will at least meet GM halfway, but may not feel the need to do a 200-mile car because they offer the REX option (remember that BMW gets BEV credits even when they sell a REX).

 

[ChadS]

...and BMW just announced that late in 2016, the 2017 i3 will get a boost to 120 miles of EV range. As expected, they feel the REX is good enough for anybody that wants more range than that. I am surprised they announced it this early; i3 sales are going to drop now and there will no doubt be some hefty discounts.

It is a step in the right direction, and I do think many people will find that a useful car. I like the i3's size, efficiency and build method. But personally, I need a car with at least 150 miles of EV range (due to a change in driving habits; I had an 80-mile car years ago and it was fine for me then) - and given I have had an EV with over 200 miles of range since 2009, I am not going back to a car with a gas engine in it now. BMW's approach makes sense in many ways, but they are not really pushing the EnVelope. For all the things GM isn't doing, at least they are pushing the price/range ratio. (Though I think the early announcement is merely for brand-building; so Nissan and Tesla will likely have meaningful responses in due time).

BTW, the last car pictured above (the one facing the "wrong" way) is a Nissan Murano.

 

[renim]

Mitsubishi confirme en Europe
'Outlander is the best- selling brand in Europe with 52,294 units, including 30,873 PHEV , or 59 % of sales of the model.'

so that means that 41% of EU Outlanders were petrol or diesel.

does this mean its a Natural PHEV but also comes in petrol or diesel variants?

nb in most countries what Americans call Outlander Sport is actually called ASX, and treated as a different vehicle.

 

[renim]

its subtle, the difference between a response, and assimilation of ideas.
VW Audi are developing a response to Tesla
Renault Nissan is presumably attempting to assimilate learnings from Tesla

Nissan timeline is for an Infiniti badge EV before Mar 2017, and an Nissan badge EV shortly after Mar 2017 (but both to be consider products of the time period that ends Mar 2017)

the concept is 60kWh battery and a Renault Megane sized car.

Renault Zoe goes 240km NEDC on 22kWh battery
Nissan LEAF goes 250km NEDC on 30kWh battery (107 miles EPA)

rough extrapolation for 60 kWh battery
3x240 -10% = 650km ( Zoe extrapolation)
or 500km (LEAF extrapolation)

so approx somewhere between 214miles EPA and 278miles EPA is reasonable expectation for Nissan 60kWh gen 2 EV, with the final result is probably closer to 278 miles EPA range than 214 miles EPA range.

Marketwise the Megane competes with VW Golf, so Nissan LEAF 2 is definitely not a Tesla 3, BMW 3, Audi A4 competitor, even if it has more range for less money.

 

[Gerasimental]

VERY rough. By the same calculation the Model S85 should have 240*85/70= 291 miles of EPA range, instead of 265. Range doesn't scale linearly with kWh at all.

 

[renim]

VERY rough. By the same calculation the Model S85 should have 240*85/70= 291 miles of EPA range, instead of 265. Range doesn't scale linearly with kWh at all.

with Nissan it seems to scale fairly linearly with kWh
2% difference Hwy, 0% difference City cycle
Compare Side-by-Side

they are however, the same power and performance, unlike Tesla which increases performance with increasing cost&capacity.

 

[renim]

just a rough calc using figures from the ev sales blog

YOY growth global 62% - strong, due to China
CCS Combo slips from 3rd to 5th in terms of vehicle sales as part of global parcel.
(Ie China standard is now the dominant standard from a world total perspective, and AC 22 has swapped places to lead CCS Combo compared to 2014)

It looks like CAN based fast charging (Tesla SC, China GBT & Chademo) have really powered ahead in 2015.

 

[renim]

thread bump

model 3 reservations must demand a response from German lux 3 + Lexus

 

[renim]

Peer wide fallout from VW's Dieselgate has been a big factor for the Germans lux 3 in USA, but I'll be looking for April 2016 YOY declines for Lexus compared to YOY increase for Toyota, to see if Model 3 is having any immediate effect.

 

[EVie'sDad]

If the Model 3 does to the Bolt what the Model S has done to the Volt and other electric/hybrid vehicles, I see little chance of GM or other auto manufacturers throwing the full weight of their manufacturing capability into more electric type vehicles. Sadly, it is that very lack of effort that will be their eventual downfall. It is now their's to lose. Someone else better get serious about building better vehicles and a new infrastructure of recharging stations to fuel their new eco-friendly fleet.

 

[ChadS]

Here's slightly different way of explaining how automakers are approaching the EV market by comparing the various ROI strategies. This one hopefully will have more pictures and less dense texts and charts (though wherever I go, dense text seems to follow).

Imagine being at an automaker and launching a new car. There are many tradeoffs to consider in the car itself - quality materials versus low-price materials; comfort features versus light weight, performance versus fuel economy, streamlining versus utility, etc. Similarly, there are several business-model considerations that are less directly related to the hardware, but just as important in attracting customers, growing the brand and demand, and making a return on your investment. For example, some (this is not an exhaustive list!) things you might consider would include:

• building the brand image
• drawing potential buyers in to showrooms
• reducing costs
• meeting regulatory requirements
• drawing in customers from other brands

So let's say you're following the most basic strategy - volume. You hope to sell a LOT of these cars. Here's how some of the tradeoffs might have to make:

The "volume" strategy is somewhere in the middle of all these business considerations. It has some tentacles reaching out to satisfy each one as well as it can, but to be a volume car and please many people it has to be kind of a centered balance. Most of the tradeoffs are not very extreme.

However, you could follow a more focused strategy of some sort. Here are some strategies marked where they might fall on the above chart:

The oval strategies above are more focused than the volume strategy, and won't sell as many cars, but are niche ways to reduce costs, increase margins, increase volumes, or some other method to accelerate overall ROI for the brand (if not necessarily on this particular car).