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TSLA "Almost a Mass Psychosis" -- Lutz

M3BlueGeorgia

Active Member
Dec 10, 2018
1,400
1,283
Atlanta, GA
There are many other articles, but they had to do it in order to compensate for the Federal tax rebate program that ended, and they tried desperately to renew it.

I think that all long range BEVs should get a $3750 tax credit and it should be prorated for range, to encourage manufacturers to put in decent sized batteries into mid and lower priced cars.

Right now, offering $7500 tax credit for new entrants, some of which sell short and mid-range BEVs, distorts the market place.
 
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adiggs

Active Member
Supporting Member
Sep 25, 2012
4,999
15,395
Portland, OR
And in no way am I trying to steer your confidence away from tesla and your investment, I'm sure it will be fine

This is a useful comment, and also consistent with how I approach things.

Anytime I post (or at least most of the time), the question I'm asking myself is whether I'm adding new information to the conversation, and whether I'm leaving people that read my post "smarter" than they were before they read my post.

The primary reason I asked whether you'd test driven the car, is that the rest of your post sounded like posts I've read before from people with a negative view of Tesla as an investment - people who consistently had not even driven the car, much less owned one. An important component of my investment thesis is that the product matters, and people that haven't driven or own the car - without the personal experience, their ability to teach me something new is severely constrainted.

As you own one, I have little more to contribute to your world view. We disagree on interpretation, and I'm entirely fine with that. You've also approached the information in a way that leaves me thinking I've got a chance to learn something from you in the future - and I treasure that.

Thank you.
 

MARKM3

Member
Dec 5, 2018
152
136
Raleigh
This is a useful comment, and also consistent with how I approach things.

Anytime I post (or at least most of the time), the question I'm asking myself is whether I'm adding new information to the conversation, and whether I'm leaving people that read my post "smarter" than they were before they read my post.

The primary reason I asked whether you'd test driven the car, is that the rest of your post sounded like posts I've read before from people with a negative view of Tesla as an investment - people who consistently had not even driven the car, much less owned one. An important component of my investment thesis is that the product matters, and people that haven't driven or own the car - without the personal experience, their ability to teach me something new is severely constrainted.

As you own one, I have little more to contribute to your world view. We disagree on interpretation, and I'm entirely fine with that. You've also approached the information in a way that leaves me thinking I've got a chance to learn something from you in the future - and I treasure that.

Thank you.

No problem, appreciate the discussion
 

MARKM3

Member
Dec 5, 2018
152
136
Raleigh
I think that all long range BEVs should get a $3750 tax credit and it should be prorated for range, to encourage manufacturers to put in decent sized batteries into mid and lower priced cars.

Right now, offering $7500 tax credit for new entrants, some of which sell short and mid-range BEVs, distorts the market place.

Well the same could be said about Tesla getting the advantage for their vehicles, why not let other automakers take advantage of it?
 
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MARKM3

Member
Dec 5, 2018
152
136
Raleigh
They reduced the price accordingly to the reduction in Tax credit, and I remember that vividly becasue I was apart of the 2018 EOY push to get them out before the Tax credit went away (or reduced greatly) 2019.
 

adiggs

Active Member
Supporting Member
Sep 25, 2012
4,999
15,395
Portland, OR
Well the same could be said about Tesla getting the advantage for their vehicles, why not let other automakers take advantage of it?

Something I expect to happen in the US market, this year or next, is for the design of the US Federal tax credit for EV purchases to become a political liability. More specifically, inaction around making adjustments to how the credit works will become a political liability for whoever is in office.

We're already in a state where the US federal tax credit is incentivizing foreign auto makers to sell their vehicles in the US, over US automakers (with the obvious big exception being Ford). I haven't been following Ford closely, but my impression is that they aren't in danger of using their 200,000th credit anytime soon.

But for Tesla and GM, the other 2 big US auto manufacturers, incentivizing German and Japanese car makers OVER domestic auto makers is going to be a bad look. I rather liked the design approach of the updated version of the tax credit that was worked on earlier this year - the existing system stays in place for those still working through their 200k credits, and a new system to extend it would be put in place. I'm also good with what Elon has said repeatedly - Tesla is better off competitively without the credit (he was saying that before Tesla consumed all the US tax credits).


In a market where 50% of cars sold are EV's, and there is no US Federal tax credit, I don't see the Mach E as being all that competitive (using the cars in the market today as the point of comparison). That market is a long ways off in the future (at least 5 years anyway :)), and until then, I see Ford selling all of the Mach E they can make. And I hope that the experience they gain from building and selling them sets them up to transition from a company heading for 10-40k/year unit manufacturing, to much more.

Others in this thread have articulated my own doubts about their success, but I'm hoping.
 

adiggs

Active Member
Supporting Member
Sep 25, 2012
4,999
15,395
Portland, OR
Yeah now it is gone right?

Here we go. According to this article, as of July 2018, Ford was just past the halfway point in their use of the US Federal Tax Credit:
https://www.eei.org/issuesandpolicy/electrictransportation/Documents/EV_ Sales Facts and Figures.pdf

From a different article with EV unit sales:
FINAL UPDATE: Quarterly Plug-In EV Sales Scorecard

Ford sold 7500 Fusion Energi's in 2019. For my own view of the market, I consider plug in hybrids to be a great improvement over pure ICEV's, but I also lump them into the ICEV market.

So I see two important problems with Ford's position in the market:
1) They are building hybrids which primarily build on ICEV expertise which Ford has copious amounts of - they don't help all that much with building BEV expertise.
2) They are consuming their 200k credits building hybrids and not developing their BEV expertise.


My prediction is that Ford will sell enough Mach E's (and hopefully other models) to use up their credit allocation in 2021 (for Ford's sake, they BETTER sell 100k BEV units in 2020, and no later than 2021 - they are going to be REALLY far behind if they don't). The moment that Ford finishes their tax credit allocation, THEN the US Federal tax credit will become even MORE of a political liability as you'll have all 3 major US auto makers not receiving the incentive that the US government will be making available to foreign auto makers.

It's good rule of law and level playing field stuff, but it's easy to paint that picture as the US government trying to destroy domestic auto manufacturing and replacing it with foreign auto manufacturing. As I say - a bad look and a political liability. (I think that it either needs to be repealed or updated / extended - either works for me; heck, leaving it as-is also works for me, as Tesla is that competitive - I think that'd be a disaster for GM and Ford based on their competitiveness in the BEV market today).
 

MARKM3

Member
Dec 5, 2018
152
136
Raleigh
Something I expect to happen in the US market, this year or next, is for the design of the US Federal tax credit for EV purchases to become a political liability. More specifically, inaction around making adjustments to how the credit works will become a political liability for whoever is in office.

We're already in a state where the US federal tax credit is incentivizing foreign auto makers to sell their vehicles in the US, over US automakers (with the obvious big exception being Ford). I haven't been following Ford closely, but my impression is that they aren't in danger of using their 200,000th credit anytime soon.

But for Tesla and GM, the other 2 big US auto manufacturers, incentivizing German and Japanese car makers OVER domestic auto makers is going to be a bad look. I rather liked the design approach of the updated version of the tax credit that was worked on earlier this year - the existing system stays in place for those still working through their 200k credits, and a new system to extend it would be put in place. I'm also good with what Elon has said repeatedly - Tesla is better off competitively without the credit (he was saying that before Tesla consumed all the US tax credits).


In a market where 50% of cars sold are EV's, and there is no US Federal tax credit, I don't see the Mach E as being all that competitive (using the cars in the market today as the point of comparison). That market is a long ways off in the future (at least 5 years anyway :)), and until then, I see Ford selling all of the Mach E they can make. And I hope that the experience they gain from building and selling them sets them up to transition from a company heading for 10-40k/year unit manufacturing, to much more.

Others in this thread have articulated my own doubts about their success, but I'm hoping.


Good point, and I agree those incentives actually would help the foreign auto makers. Is that something we want to do? I dunno. Ford is initially planning to build 50k/year, then scale it up from there. Ford sales a ton of vehicles in Europe, I'm sure they will sale every one they can make. The price is equal to the Model Y, and it's the cheapest actual competitor to the Tesla offering.

Ford is a proven brand for over 100 years. They can adapt to the market just as quick as other car makers can, and are going no where anytime soon. Their service and support network is vastly better than Tesla's.
 
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Darmie

Super Member
Supporting Member
Jan 13, 2016
2,062
1,364
Clear Lake TX.
Someone throw that man a life ring.

life ring.JPG


I thought he was attempting to start his own EV company.
 

adiggs

Active Member
Supporting Member
Sep 25, 2012
4,999
15,395
Portland, OR
Good point, and I agree those incentives actually would help the foreign auto makers. Is that something we want to do? I dunno. Ford is initially planning to build 50k/year, then scale it up from there. Ford sales a ton of vehicles in Europe, I'm sure they will sale every one they can make. The price is equal to the Model Y, and it's the cheapest actual competitor to the Tesla offering.

Ford is a proven brand for over 100 years. They can adapt to the market just as quick as other car makers can, and are going no where anytime soon. Their service and support network is vastly better than Tesla's.

One suggestion for monitoring Ford's competitiveness in the BEV market is to track their access to batteries (I track in GWh of capacity). It is consistently the biggest bottleneck for every BEV manufacturer, including Tesla. Of course there is an economic component - that's wrapped up into the available capacity.

If Ford has 10 GWh of capacity available annually, and they're putting 100 kWh packs into their cars, then they have the ability to build 100,000 units / year worth of cars. If they're putting 67 kWh worth of packs into their cars, then they've got more like 150k units / year. So they really need more like 50 GWh (500-750k units / year) worth of capacity to try and stay even with Tesla production in 2020 (counted in units).

Finally assembly capacity isn't really the limiting constraint. To change over 5.5M units/year from ICEV to BEV, Ford is going to need something like 500 GWh, and it's probably closer to 1000 GWh as there will be a lot of trucks in that 5.5M and I expect those to be well over 100 kWh per vehicle worth of battery pack. Given that today's worldwide auto battery pack capacity is something closer to 50-100 GWh, you'll see Ford developing that capacity. It'll be in their quarterly financials - it'll be in their press releases - it'll be telegraphed big time.

At least from my perspective, until you see that coming, then you're looking at a company that is further mastering the old technology and going out of business - not a company that can swoop in and be immediately competitive (technology and delivered units) with Tesla anytime they want (if nothing else, they won't have the parts / batteries to make enough units).
 

ammulder

3P, X ordered
Supporting Member
Apr 11, 2019
1,281
4,729
Philly area
Good point, and I agree those incentives actually would help the foreign auto makers. Is that something we want to do? I dunno. Ford is initially planning to build 50k/year, then scale it up from there. Ford sales a ton of vehicles in Europe, I'm sure they will sale every one they can make. The price is equal to the Model Y, and it's the cheapest actual competitor to the Tesla offering.

Ford is a proven brand for over 100 years. They can adapt to the market just as quick as other car makers can, and are going no where anytime soon. Their service and support network is vastly better than Tesla's.

The batteries are the thing.

Ford undoubtedly has the capacity to roll 50K or 100K Mach-E frames off the assembly line in any given year. They could ramp that rapidly by converting existing factories, if they had the motivation to do so.

But what OEM has had unrestricted access to batteries? VW and GM are making big investments in battery factories. Where's Ford's battery investment? Mercedes bought 3rd party batteries instead, and how's the EQC production going?

It's fine to say Ford can scrape together 100K cars worth of batteries in [time frame X] but how much is Tesla going to extend their battery lead in that same time frame? If Ford gets to 100K when Tesla gets to 1M, how's Ford being competitive?

Though, wave the magic battery wand and assume Ford is totally OK on batteries. What about software? I heard only negative comments on the infotainment at the reveal. Assuming that's fixed by release, how will the first few years of OTA updates go?

Is the grab-bag of charging networks going to be an effective answer to Tesla's Superchargers? Will the nav system automatically route to a charger that's high-speed, available, and working? Will it be a place you want to spend 15-30 minutes? If not, will there be something to do in the car while you wait?

Will dealers want to invest the necessary cost in ramping EV sales and service when the benefits are so much more limited than for ICEs? Will having 4 dealers nearby give a better experience if their EV capabilities vary dramatically by location?

For all these reasons, even if the Mach-E drives very well, it's not at all obvious to me that it will be a big hit. I actually hope it will -- competition has rarely made situations like this worse -- but with so many obstacles, it's hard to be confident.
 

MARKM3

Member
Dec 5, 2018
152
136
Raleigh
Defending the dealership model? That's a new one.

EVs barely need any maintenance, why on Earth would we want to keep dealerships? Add 10% to the price and opacity to the offerings?

No thanks. I'll take on-call service, preferably in my driveway and not designed to have 70% margins.

TESLA WAY

Tesla's is the manufacturer and the SELLER of the vehicle. Not only are they now responsible for manufacturing a good car, but they have to also be responsible for covering the cost of selling that vehicle.

No matter where you go in the country, the price is the same for buying a Tesla. Why? It cost them twice as much in labor cost to sale you a vehicle in Los Angeles than it does in Raleigh? Well, their price COVERS that in ALL areas of the country.

Even if it cost tesla $1,000 less to sell you a car in Raleigh, they charge you the LAX price.

Tesla doesn't care to lower the price, they know you can't go to the next closest service center and get a lower price.

The DEALERSHIP model works as such:

An individual is responsible for the financial success of the dealership. This is in all aspects of the business, service, and sales. When a dealership is in Raleigh, their cars will be priced CHEAPER than in Los Angeles. Why? Because that same sales manager has to make twice the commission for living expenses. They are also managed by two completely different people and owned by two completely different companies

Also, the manufacturer of the Vehicle focuses primarily on the manufacturing of the vehicle while offering incentives to move the vehicles at the dealer level if need be.

The manufacturer focuses on building a car, while the Dealer focuses on running that side of the business and being profitable and selling the vehicle. If you understand anything about cars, you'd realize that on new car sales most dealers are only getting a $500 mark up over invoice on low price vehicles.

Not only that, but majority of the time they are competing with other dealers located right down the road. This further drives prices down in the local market.
 

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