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This Motor Industry Will Self Destruct In... ?

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

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  1. scaesare

    scaesare Well-Known Member

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    Hmm... I seem to recall that when that a year ago when slide showing that GM's costs for the Bolt were $145/kWh in 2016, and heading to $100 in a few years, that the understanding was that Tesla was already in a position to beet that.

    I can't find it now, but I thought I saw a reasonable estimate of $125 a bit back... $190 seems high.
     
  2. mspohr

    mspohr Well-Known Member

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  3. scaesare

    scaesare Well-Known Member

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    This article might shed some more light on it:

    So that $190 # was indeed correct for pack cost. Which makes the current raw cell cost more in line of what I was thinking.

    The GF will improve that even further...
     
  4. sandpiper

    sandpiper Active Member

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    Ah... okay. That makes sense.
     
  5. habanero69

    habanero69 I Dont Need Cialis. I Drive an EV.

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    I might be in the minority, but I believe ICE will be around a LOT LONGER than most could even conceive (unless of course banned, which I also do not see). Look how many old or vintage cars are still on the road today. Gear heads want to play with gears and valves and dirty, greasy things. Tweaking battery software just won't be enough. I'm probably wrong, but I sure see ICE being here quite a while. There are plenty of people who don't care about EV, carbon, or whatever. They want to put gas in the car and drive until the gauge says zero, fill it up and do it again. Not possible with EV and wont be for a while. Flame suit on...:eek:
     
  6. mspohr

    mspohr Well-Known Member

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    The number of people who play with vintage cars is minuscule compared to the number of people who just need to get to work or the grocery store. Yes, ICE cars will always exist... in museums and in sheds... driven on Sundays.
    (BTW, I love the show "Wheeler Dealers" where they restore vintage autos... just watched one where they rebuilt a 1916 Cadillac V8 from just a pile of parts.)
     
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  7. Ohm it

    Ohm it Member

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    What about their Lambo line? there's nothing like the sound of a V-10 or V-12 screaming ... for that I will always want to burn some fossils.
     
  8. mspohr

    mspohr Well-Known Member

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    I believe the question for discussion here is about traditional automakers "self destructing" because they fail to make the transition to EVs for their mainstream (revenue) cars. There will always be niche cars and they are irrelevant to mass market migration to EVs (and also irrelevant to profits of the traditional automakers).
     
  9. bonaire

    bonaire Active Member

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    It is more probable that dealerships start to fold before car makers. Dealerships rely on service revenues and EVs are more reliable. How will they "upsell their service customers" (as the Automotive News readers are told to do through seminars) when you only go in once every couple years? Automakers can make EVs but if their dealerships are prone not to support them, that is where things break down. If dealerships don't sell the big name vehicles, then automakers have to possibly go the direct-route and sell EVs a different way. And Tesla has shown that this is a viable option to pursue and should be supported. There will probably be a "fight" among dealers to make EVs more service-friendly. Like the Nissan Leaf "replace brake fluid" every 25,000 miles.

    EVs can also become a profit center for power providers where your local power company offers rebates for buying and plugging in (to use more of their kWh product). I would really like to see companies like Duke Power, Exelon, and many others spurring on EV buying through their PoCos (power companies that they own).
     
  10. lklundin

    lklundin Active Member

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    True, but only in the USA with its weird free-market and state laws against manufacturer owned dealerships.

    In the rest of the world, the auto manufacturers make a good deal of their profit on regularly servicing the cars that they produced themselves.

    In fact, I feel convinced that is why for example the German car makers are trying to convince everybody that hybrid cars are the best:
    A combination of a complex ICE _and_ an electric drive train has the maximum number of parts to service, thus extra profits for as long as the buyers can be fooled.

    And the German auto news reek of Tesla-fear, every little piece of news on Tesla and Musk is spun into something negative.
     
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  11. bonaire

    bonaire Active Member

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    What's to fear? Just mimic and do the same. But you're right. They need ongoing car maintenance done and EVs themselves solve a lot of that. I had to pay $3000 USD to get three engine seals repaired in an older VW Passat a couple years ago (not my car but family member). That was because the oil leaks from the seals was dripping ONTO THE EXHAUST PIPE. Can we say car fire possibility? EVs don't have this issue. Dealerships in the USA are becoming "beautiful buildings". Such real estate costs money. They are full of employees. Which cost money. They have to stock hundreds of cars on the lot. Costs money. The Tesla model seems easy to copy but serves to cut out a lot of extra cash that dealerships may want to protect - until they cannot any more. However, to copy Tesla, a lot of money must be spent. Tesla already has something like 2.5 Billion in negative retained earnings. VW and similar need to invest billions more to copy and try to inject full EVs into an ICE landscape is tough. They can make and sell EVs to customers sure - but will they see the customers again very often? Not likely.

    Of course, you may have seen these as well:
    Audi: 20-25% of our cars will have a plug by 2025
    Audi to Launch an Electric Vehicle Model Every Year Starting in 2018
    BMW says electrification will appear across the BMW range, including M cars
    Daimler announces $11 billion investment in electric vehicles

    So the Germans are not sitting still.
     
  12. wdolson

    wdolson Supporting Member

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    I remember when CDs came on the scene in the late 80s and early 90s. Initially CDs were the more expensive exotic, but it seemed almost overnight that vinyl was gone. My old turntable was dying and I wanted something to play my old vinyl so I tried to buy a turntable before they were gone and it was like the selection went from hundreds of options to 3 overnight. Now there are specialty albums produced on vinyl and it still has a following among audiophiles and DJs who do the scratching type of dance stuff in clubs require vinyl, but even CDs are dying out.

    There is usually a market that remains for obsolete tech for one reason or another. Horses became more of a hobby than a necessity when cars became the norm, but for some ranching tasks, horses are still necessary and they are used for some work where motorized vehicles are not suitable. There is also a massive horse hobby industry with lots of competitions for horses as well as a lot of recreational riding.

    Steam locomotives were almost all retired in the 1950s because economically diesels were much more feasible. However some steam locomotives are kept in running condition for recreation train rides and when larger steam locomotives go out on the rails, rail fans crowd the tracks to see them go by.

    My father has been a rail fan his whole life and when I was in college we went to see the old SP locomotive 4449 go through the Tehachapi Loop. I didn't appreciate the attraction of steam engines until that day. As the engine went by pulling the grade the ground shook in a very unique way and there was something primal about it.

    I never got the thrill some people get from sports car engines, but if I hear an old inline or radial aircraft engine my eyes will be glued to the sky. My father (who also was into aircraft) taught me how to recognize the some engines by sound. He's always been much better at recognizing the engines by sound. Again there is a thrill to hearing a Merlin V-12 with the throttle open that you're never going to get with a general aviation plane, or even a modern airliner.

    ICE cars will remain as a type of hobby vehicle and there are some things that ICE will probably be better at for many years to come. If you need a vehicle to do 1000 miles without any facilities, an ICE is going to be the only way to go for some years to come. Few ICE have fuel tanks that will get them more than 400 miles, but its usually easy to carry extra fuel on board to extend your range.

    An EV could cross the Australian Outback or remote regions of North America with some solar panels carried on board, but the vehicle is going to be stopped for days at a time recharging. You're likely to run out of food before making it.

    Seeing people get the "ah hah" about electrics as I talk them up and show them my car as well as my own experience learning about them, I suspect the switch in attitude between ICE and EV will be very quick once Model 3s get out there in large numbers. A recent poll of Americans indicated that something like 65% of Americans know very little about EVs and less than 20% have ever been in one.

    The time between when the public switches its attitudes about EVs and car companies produce enough to meet demand is going to be a decade or more. Switching from vinyl to CDs was a fairly easy thing to do. It probably took a week or two to change vinyl pressing plants over to CD production. EVs face the problem that we need 100 more Gigafactories to replace all the ICE built and building that capacity is going to take around $1 trillion. Nobody has the money to do that quickly, even if the will is there.

    Changing over small tech is fairly easy, but the larger the tech, the more difficult it is to switch. Switching from horses to cars was a much simpler problem than switching all car production to EVs, the tech involved in early cars was much simpler and there were a lot fewer horses to replace (the population of the entire world and especially the developed world was much smaller) and that still took from the 1890s to the 1930s. Right now we're right about at that elbow in demand that happened around 1915 when the Model T was introduced. It still took nearly 2 more decades to replace all the horses (my father remembers horse drawn delivery and service vehicles when he was a kid).

    The Chinese may try to move into overseas markets, but few, if any, of their cars can pass the safety standards in developed countries and they have a massive internal demand for cars. It's going to be a while before Chinese car makers are going to have the excess capacity to seriously need external markets. Some like BYD are thinking long term and probing foreign markets, but the bulk of their production is sold domestically and likely will for another decade.

    Chinese home grown batteries are very poor quality compared to those made in the rest of the world. They can improve the tech, but their batteries will then cost the same as everyone else's. As I've pointed out before, making high quality li-ion batteries is very capital intensive, not labor intensive, so the Chinese advantage in manufacturing costs is nullified.

    Chinese cars introduced into developed country car markets are trying to compete in a completely different arena than they have at home. Chinese is mechanizing now, the competition for new cars is bicycles and scooters. In that market with a huge social bonus for having a car, any car, you can produce any crappy car and people will buy it.

    In developed countries the market is very different. Cars have improved in quality dramatically over the last 30 years to a point where there are a lot of perfectly serviceable 20 year old cars on the road. The market is saturated and new cars compete with older cars. A new BYD fill-in-the-blank is not competing with the other new cars on the market, it's also competing with the last 20 years of used cars. Buyers are asking the question, should I buy this EV with a bad reliability record compared to other cars with poor features compared to other cars? Or should I buy a 10 year old Honda and save my money for what I really want?

    A lot of people are going to put up with the old ICE a bit longer to get what they want.

    Car companies will have a tough time selling new ICE, but the used ICE market will keep going as people wait for decent EVs rather than just get any EV. Other people will lease a new car rather than buy so they can get rid of it in a few years when they get the EV they want.
     
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  13. wdolson

    wdolson Supporting Member

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    There will be a market for ICE supercars, but even there people who want the fun of driving a high performance EV will kill off some sales of high performance ICE. Those who want the noise from the ICE will buy the ICE supercars, those who really want to drive high performance cars will buy EVs.

    There will remain some market for ICE for some time to come and restoring old ICE will probably become a bigger hobby than it is today (it's already pretty big), but for actual transportation EVs will win out just like diesel locomotives killed steam. EVs built to take advantage of the EV technology are so much better than ICE for most tasks as well as being cheaper. Ultimately ICE can't compete except in niches.

    And some countries are banning ICE entirely or in part. A lot of European cities will ban ICE by the middle of the next decade. That not only puts pressure on car makers to produce some kind of electric for city use at minimum, but also requires the development of EV delivery vehicles.
     
  14. diesel

    diesel Member

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    There will continue to be a market for diesel powered vehicles a long way into the future, petrol however is likely to continue as a hobby as you suggest.

    Why? Using Australia as an example, we have a huge expanse of open land that is traversable only by 4WD, in some cases requiring a Toyota Landcruiser, Nissan Patrol, etc to carry 220 litres of diesel to be able to make it between fuel stops. For these sorts of trips to be made using electric 4WD's we would need the following to occur:
    • A substantial cost reduction in stationary energy storage to allow remote area fuel stops to store energy captured from solar, wind, etc.
    • A huge increase in the energy density of EV battery storage
    In addition to the above, military forces will need the ability to take and hold terrain in areas where there is no supporting infrastructure, currently that need is met by diesel fueled vehicles and supply chains. That said there will be opportunities for EV's in a military context, it's just not going to replace a large portion of the fleet in the medium term.
     
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  15. 3Victoria

    3Victoria Active Member

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    "If Tesla’s latest battery technology has a similar impact on its “less than $190 per kwh” cost for vehicle battery packs as it had from Powerwall 1 to Powerwall 2, it will bring the cost down to roughly $120 per kWh for the battery pack or less than what GM is paying just for the battery cells in the Bolt EV ($145/kWh)."

    Tesla’s battery cost lead perfectly illustrated in one simple chart
     
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  16. larmor

    larmor Active Member

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    The motor industry will self destruct in an exponential fashion following the exponential decrease in battery cost.
     
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  17. Dwdnjck

    Dwdnjck Member

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    So I guess the true value of a Lamborghini is their ability to creat noise.
     
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  18. Bangor Bob

    Bangor Bob Member

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    If only we could pipe the sound directly into the cockpit and spare the rest of us...

    See also, Harley Davidson.
     
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  19. wdolson

    wdolson Supporting Member

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    Demand has very little to do with the price of batteries. Tesla is scaling up to make batteries as cheaply and efficiently as possible and they are still going to be relatively expensive. The key factors in the cost of li-ion batteries is the complexity of construction and to some extent the cost of raw materials. With massive expansion of mining the raw materials, the costs might come down a bit, and the cost of production will decrease a little here and there thanks to incremental improvements in techniques, but demand is likely going to raise the price of batteries in the short to mid-term until production can meet demand. Tesla will have fixed cost for batteries because they control their own production but almost everyone else will be in a bidding war for batteries with all the other car companies. That gives Tesla a massive market edge until the massive increases in battery production can come online.
     
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  20. wdolson

    wdolson Supporting Member

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    The BMW i-8 does this.

    The sound of a Harley is a major selling point. My SO, who used to ride with her ex (they built some custom bikes too) she pointed out the sound of a Harley was also a good safety factor. It let cars know you are there.
     

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