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This Motor Industry Will Self Destruct In... ?

Discussion in 'Tesla' started by Driver Dave, Jan 6, 2017.

  1. Driver Dave

    Driver Dave Member

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  2. ecarfan

    ecarfan Well-Known Member

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  3. zambono

    zambono Member

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    I think of the major automakers Audi will probably be the first to go full electric.
     
  4. wdolson

    wdolson Supporting Member

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    I think the catalyst for the end will be the Model 3. If it's anything close to as big a thing as it looks like it's going to be, it will completely transform the automotive landscape. The German automakers have been taking Tesla seriously because they have already lost some business to Tesla. Mercedes, Audi, and BMW all have cars cost competitive with the Models S and X and they have seen how their market share has shrunk. They know it can only get worse when the Model 3 hits the market.

    The rest of the automotive industry is trying to ignore Tesla and expecting them to implode before they get strong enough to hurt them.

    What I see happening is the Model 3 will be a big hit, selling far more than the 400,000 initial reservations. It may be a little late, but nowhere near as late as the S and X were. When the 3 becomes a big deal, the public will want good quality EVs and nobody will have anything that can compete. The industry will start a mad scramble to produce EVs to compete. The initial products will compare poorly with the Model 3 and will not be available in anywhere near the quantities needed because nobody but Tesla will be able to get enough batteries and the production of batteries won't meet demand.

    Some car companies will fold, some will merge with other companies, and some will survive, but weakened. Among the survivors I give VW and Nissan-Renault the best odds. VW ironically because of dieselgate. To make nice they have had to embrace EVs more than any other European auto maker. Nissan-Renault have built the most EVs and have more experience than most of the competition.

    I would not be survived if Tesla ends up buying a weakened competitor with factories on every continent to get access to their factory space.

    I give Fiat-Chrysler the longest odds. They seem to just be milking what they have to get the most out of old tech. I don't think they even have a good road map to meet the 2025 CAFE restrictions.
     
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  5. ElectricTundra

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    We had a favorite saying that we'd rather obsolete ourselves than be obsoleted by someone else. If someone is going to introduce a way to do something better or cheaper then we'd prefer that be us. If we can't walk away with two bucks in our pocket then better to walk away with one than none.
     
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  6. ecarfan

    ecarfan Well-Known Member

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    A quote from Steve Jobs

    Walter Isaacson: “One of Job's business rules was to never be afraid of cannibalizing yourself. "If you don't cannibalize yourself, someone else will," he said. So even though an Iphone might cannibalize sales of an IPod, or an IPad might cannibalize sales of a laptop, that did not deter him.”
     
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  7. Discoducky

    Discoducky Active Member

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    Fun to read and I felt the same way about Ford's"electrified" announcement.

    Here's a zinger...

    "How is it possible that while one company has consistently demonstrated that it is possible to make attractive non-polluting vehicles, the rest of the industry remains committed to the hybrid and is basically engaged in an exercise in self-deception, preferring to compete to make more powerful and dirty engines? The answer is simple: focus, or lack of it. The traditional automobile industry, faced with an avalanche of change, is completely lacking in focus"

    Also, it is less understood how many components are made by Tesla vs any other car company. I wish someone would do a deep dive article on the level of 1st party integration in Model X.
     
  8. ecarfan

    ecarfan Well-Known Member

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    That part of the article I am not fully in agreement with. It's not so much a lack of focus as simply typical short term corporate thinking. The top executives make their money by meeting quarterly and annual goals. They don't think long term like Elon does. The other auto company CEOs figure they can keep making ICE cars for a few more years, get paid millions, and then retire. They don't care about what will happen to their company a decade from now and neither do most of their shareholders. So there is no economic forcing function acting on them to change their short term behavior.
     
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  9. mspohr

    mspohr Active Member

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  10. Xenoilphobe

    Xenoilphobe Active Member

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    I love this line:

    Has it never occurred to anybody in the automotive industry just how pathetic it is that an absolute beginner in the category such as Elon Musk has been able to manufacture the best car ever in an industry with decades and decades of experience? And what is more, that after having manufactured it, he has released his patents for use by any other company, and yet no rival has emerged to give him a run for his money?

    The legacy automotive industry wants to monetize their ICE investment as long as possible. Its all about money and profits.
     
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  11. ⚡️ELECTROMAN⚡️

    ⚡️ELECTROMAN⚡️ Fritterer and waster of hours in an off hand wayer

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    Tesla has already shown them how to build the vehicle and the charging infrastructure. The batteries just aren't quite there yet. As soon as Tesla shows them how to get the battery cost down and the energy density up, it's all over for the ice.
     
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  12. Ulmo

    Ulmo Active Member

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    The concept that one should not succeed because one will be taking away from one's legacy and history is silly. I've never understood the don't-cannibalize argument. It kind of sounds like "stop breathing, because you don't want to go outside and breath new fresh air."
     
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  13. wdolson

    wdolson Supporting Member

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    Getting the energy density up is a tough challenge but there are a lot of people working on it. Tesla has gone a long ways towards lowering the cost though. The GigaFactory will be making the least expensive Li-ion batteries in the world.

    The Model 3 will still cost more than the competition, but the iPhone has always cost more than Android phones that do the same things, but lots of people buy them. Personally I give Apple an F for inter-connectivity between iOS and Windows, but they do make a very solid and reliable phone. I bought a used iPhone 5 on Ebay a couple of years ago and it's been more reliable than the two Android phones I had before it (an LG and a Samsung).

    As long as the premium isn't too steep, people will pay it. The premium right now for a Model S or X is around $30-50K. I ended up paying twice what I originally was looking to pay. I was able to stretch my budget to pay for it, but it was tough. People with more expenses and/or lower incomes can't do that.

    Today the average price for a new car in the US is around $35K. Elon has said the average configuration for a Model 3 will end up being around $42K. That's only a $7K premium over the average car today. A lot more people can stretch their budget to pay an extra $7K for a car than $30K or more. That's the winning combination with the Model 3. It will cost more, but like the iPhone, it will still be reachable to a large enough segment of the public to be affordable.
     
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  14. fsch

    fsch Member

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    Here is my own answer to the OP question, for the record, in case I'm right :cool:

    According to recent stats for Canada (where sales data are available), the market share of pluggable cars doubles every two years. The market share for 2016 (0.57%) is about 2 times that of 2014 (0.29%), and that of 2015 (0.36%) is two time that of 2013 (0.18%). Actually, a fit through the data (excluding 2011) indicates that it doubles every 1.8 years. This reminds us Moore's law: the number of transistors on chips double every 1.5-2 years since the sixties.

    If we attempt an extrapolation (which is very risky, as it namely includes the extra assumptions that the trend applies at least to the US and will continue over the next few years), this gives a 5% market share by 2022, five years from now. By that time, battery prices which are currently ~200 $/kWh may have reached 100 $/kWh, making a 100-kWh battery just 10 k$.

    So based on that, I attempt the fairly risky prediction that car companies that did not develop "significant" pluggable cars (i.e. with electric range at least that of a current Volt) will be, by 2022, in the position Nokia was 6-7 years ago. And gas-only cars becoming as obsolete as dumbphones were becoming 5-6 years ago.

    Lets come back in 5 years to see if I was right! :)

    plugableMarketShare.png
     
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  15. mspohr

    mspohr Active Member

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  16. scaesare

    scaesare Active Member

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    I'd venture Tesla's costs are near that today, and the GF will have them below that by next year.
     
  17. Driver Dave

    Driver Dave Member

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    Ford's Super Bowl ad, though nice to see, was kind of pathetic. Enough talk, let's see the cars on the road.
     
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  18. sandpiper

    sandpiper Active Member

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    This is what I see. Whereas we salivated over the Vettes and Ferraris, the kids nowadays salivate over Teslas. They are a technology centric generation and the Tesla, to them, is a giant iPhone on wheels. They live with plugging in their devices daily, to being always connected. The old mechanical nature of the ICE is as anachronistic to them as the rotary dial phone and rotary changer TV, were to my generation growing up in the early 80s. It's a device from a prior era, that's still hanging around but clearly on it's deathbed. The Tesla fits their new paradigm to a T.

    There is a very real risk that the ICE market collapses far quicker than anybody imagines. And the further risk is that a bunch of Chinese manufacturers step in to fill the gap left by the legacy makers. We should all be very concerned.
     
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  19. sandpiper

    sandpiper Active Member

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    Tesla claimed, a few weeks ago, to be below $190/kwh. $100 is still a ways off, but the GF should get them a long ways toward it.
     
  20. Driver Dave

    Driver Dave Member

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    This is totally true.

    This is the car everyone wants, they just don't realize it yet. And when they do. Massive shift very quick.
     

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