What is Tesla Motors' biggest flaw/challenge?

[Robert.Boston]

[huddles next to brianman in the nitpicker's corner]

I thought the point of the grain of salt reference was that it should be considered inconsequential.

Interestingly, no. According to the exceedingly well-researched UK Phrase Finder, "to take a statement with 'a grain of salt' or 'a pinch of salt' means to accept it but to maintain a degree of skepticism about its truth." Hence, a "large grain of salt" would correctly imply a large degree of skepticism.

 

[daniel]

Are there any gas stations? Once electric cars become a relevant part of our economy, I don't think it will require a lot of effort (relatively to that scale) to have as many fast chargers as gas stations. Granted, in some areas it will happen sooner than in others, perhaps we are talking about 7 - 20 years for a complete coverage, depending for example on political determination.

I'm 63 years old. Not sure I'll still be driving in 20 years. I do think it will happen. I just don't think these rural areas, with long driving distances, will be early-adopter areas, and so I think fast charging will be slow to come. There might be a public fast charger between here and Seattle, but probably not between here and Revelstoke, B.C. very soon.

Not sure if you would consider the current 300 mile battery "affordable", but I could imagine a 400 mile battery in 3-4 years and a 500 mile battery (it seems those highways aren't high speed) in 5-7 years. So if you buy a 300 mile battery soon, your next upgrade/replacement might be 500 miles (at perhaps a lower cost additionally).

I would pay Model-S battery prices extrapolated out to a 500-mile battery. But I don't expect that to be available at current battery prices because of low demand. The routes I take up to Canada have some 65-mph roads in the US and some 110-kph roads in Canada. So fairly high-speed, yes.

But I am not aware of any OEM car maker offering any upgrade options after the sale on any car, other than safety recalls. IOW I would not count on being able to upgrade a first-gen Model S to a larger battery pack.

Anyway, as long as the S cannot make my trips up to Canada, I don't need another EV. My Roadster is all the EV I need around and near town, out to a 100-mile radius. I'll buy another EV when it can make my summer road trip, or when I cannot get in and out of my Roadster any more. It does take some contortion, and I'm starting to develop some arthritis.

 

[Norbert]

IOW I would not count on being able to upgrade a first-gen Model S to a larger battery pack.

Oh, while I'm not aware of an official commitment, indications are that Tesla will provide upgrades after a number of years. JB Straubel recently said there will be an upgrade battery even for the Roadster (probably a combination of weight reduction and range increase). Who knows, maybe you'll be able to make those trips in the Roadster not too far in the future.

 

[dsm363]

Tesla would likely still want to make a few thousand dollars in profit off of a current customer with a battery upgrade, gain good will, and retain them as a customer than have them go back to BMW or Mercedes. They'd be more likely to stick with Tesla. It seems very few people keep cars longer than 10 years so many people would probably get a new Tesla around that point anyway hopefully.

 

[HawaNY]

Biggest weakness: the fundamental inovation of leveraging existing 'laptop' batteries is a short or medium term innovation. It is taylored--rightly--to the reality that there aren't economies of scale for car-specific batteries. But what happens when that changes? Where will TMs advantage be then?

 

[stopcrazypp]

Biggest weakness: the fundamental inovation of leveraging existing 'laptop' batteries is a short or medium term innovation. It is taylored--rightly--to the reality that there aren't economies of scale for car-specific batteries. But what happens when that changes? Where will TMs advantage be then?

TMs advantage will be diversity in terms of cell sources without having to change the module/pack/car design. Right now car-specific/large format batteries come in all sorts of form factors and have hugely varying cooling requirements.

The other advantage is that 18650 cells still have the highest energy density. Plus at this point it doesn't seem likely that car-specific batteries will undercut 18650 cells in price per kWh even with economies of scale, because cell prices for 18650 have already saturated, while capacity per cell is increasing (which means there is an improvement in $/kWh proportional to the ~8% improvement in energy density every year).

And if there are car-specific cells that are much cheaper per kWh and/or provides much higher energy density, Tesla can always switch to that (Tesla has a team that continually tests new cells so they won't be kept in the dark).

 

[Larry Chanin]

And if there are car-specific cells that are much cheaper per kWh and/or provides much higher energy density, Tesla can always switch to that (Tesla has a team that continually tests new cells so they won't be kept in the dark).

Tesla to Use High-Energy Batteries from Panasonic

Straubel says that, for now, the manufacturing experience with cylindrical cells outweighs the potential advantages of flat cells, but as Tesla and Panasonic collaborate, they may eventually turn to flat cells.

Larry

 

[Larry Chanin]

Biggest weakness: the fundamental inovation of leveraging existing 'laptop' batteries is a short or medium term innovation. It is taylored--rightly--to the reality that there aren't economies of scale for car-specific batteries. But what happens when that changes? Where will TMs advantage be then?

The Tesla Roadster Battery System
By Gene Berdichevsky, Kurt Kelty, JB Straubel and Erik Toomre

Due to its small size, the cell contains a limited amount of energy. If a failure event occurs with this cell, the effect will be much less than that expected from a cell many times larger.

Larry

 

[daniel]

Oh, while I'm not aware of an official commitment, indications are that Tesla will provide upgrades after a number of years. JB Straubel recently said there will be an upgrade battery even for the Roadster (probably a combination of weight reduction and range increase). Who knows, maybe you'll be able to make those trips in the Roadster not too far in the future.

I'm really not sure I'd want to sit in the cramped Roadster for more than a couple of hours at a time. But if they build a Model S with 500-mile range I'll buy it and sell the Prius. By the time my Roadster's range has declined to two hours of driving, I'll be too old for it and I'll have a Model S, or whatever has superseded it by then.

Tesla would likely still want to make a few thousand dollars in profit off of a current customer with a battery upgrade, gain good will, and retain them as a customer than have them go back to BMW or Mercedes.

No Mercedes or BMW for me! But if Honda or Toyota ever comes out with a BEV with good performance and range, I'd consider them for my next car when I'm too old for the Roadster or when they can offer enough range for my summer hiking trips to Canada.

I really think the biggest challenge for Tesla will be competition from established car makers when and if they offer BEVs that offer the performance and range. I'm a Tesla fanboy because they build electric cars with range and performance. But I'll go with whoever builds the best car. Right now that's Tesla. In 1989 my Honda Civic was the most efficient and reliable car I could find. In 2004 it was my Prius. I doubt it will ever be an ICE car again, except for long trips, and only until an EV has an all-day range.

 

[jerry33]

I really think the biggest challenge for Tesla will be competition from established car makers when and if they offer BEVs that offer the performance and range.

I don't think Tesla has a lot to worry about for quite a while. The big car makers are not going to do anything to upset their dealers until they have no other choice. If they make "Tesla knock-off cars" that really compete with ICE cars, they are basically putting most of their dealers out of business because the dealers survive on parts and maintenance. Because most large dealers own a number of dealerships that sell a wide variety of brands, the first car maker that sells a competitive EV (an EV that can only be counted upon to go 60 miles is not competitive) will find themselves with few dealers. Hybrids, such as the Volt, don't count because there is still an expensive ICE engine to maintain.

The time Tesla will need to worry is when they get above 10% of market share. Then the big car makers will then be forced to produce a true EV. This will be similar to what happened to the tire industry when Michelin started selling radial tires. At first the other tire manufacturers tried to prevent them from becoming popular--remember bias-belted tires? They also spread a bunch of FUD "Radial tires won't work for highway driving", "Radial tires won't work for city driving" (depending upon who you asked). Radial tires require special rotation (never was true, although you still hear this kind of FUD decades later), "Radial tires are too expensive and U.S. consumers will never purchase them", "Radial tires aren't cost effective". The list goes on. Actually, you could take the tire reviews from the late 1960s and early 1970s do a search for radial tires and replace with BEV, change the pictures and you'd have the BEV reviews being put out today.

By the time the big tire manufacturers realized that the bias-ply tire was no longer viable it was too late. Now there is only one major tire manufacturer left in the U.S. (Goodyear). The others exist only as sub-brands owned by Michelin, Bridgestone, Yokohama, etc.

 

[daniel]

I don't think Tesla has a lot to worry about for quite a while. The big car makers are not going to do anything to upset their dealers until they have no other choice. If they make "Tesla knock-off cars" that really compete with ICE cars, they are basically putting most of their dealers out of business because the dealers survive on parts and maintenance.[...]

I disagree with this assessment because EV acceptance by the public will be slow. If one or two percent, even five percent (and that's awfully optimistic in the short term) of cars sold are EVs, the effect on dealer profitability will be small. Some dealers will reject EVs out of the usual prejudices, and others will embrace them. A smart auto maker will allow dealers to decide whether or not they want to sell EVs, and enough will accept them that anybody who wants one will be able to find a dealer. The Nissan dealer nearest to me is wildly enthusiastic about the Leaf. He's apparently not worried about lost maintenance work. And it will be many years before EVs are a large part of his sales.

 

[jerry33]

EV acceptance by the public will be slow.

That's certainly going to be the case with all EVs sold by the dealer having such a short range. If all EVs had a 250 to 500 mile range I suspect the adaptation would be much quicker.

If one or two percent, even five percent (and that's awfully optimistic in the short term) of cars sold are EVs, the effect on dealer profitability will be small.

I'm agreeing with you. I meant if Tesla by itself achieved those numbers (which it won't until Bluestar arrives--assuming Bluestar doesn't drop the range to ridiculously low like the other EVs on the market).

Some dealers will reject EVs out of the usual prejudices, and others will embrace them. A smart auto maker will allow dealers to decide whether or not they want to sell EVs, and enough will accept them that anybody who wants one will be able to find a dealer.

Yes. My point was that because of the reduced service that EVs require many, perhaps most, dealers will go out of business when EVs reach some critical mass.

The Nissan dealer nearest to me is wildly enthusiastic about the Leaf.

That is great. I didn't have the same experience with any of the dealers around where I live (and there are quite a few). I was all set to get a Leaf but the dealers and their lack of enthusiasm killed the sale (along with the only 60 mile range).

He's apparently not worried about lost maintenance work.

I'm guessing that he, and a few others like him, are going to be the ones left.

 

[EVNow]

That's certainly going to be the case with all EVs sold by the dealer having such a short range. If all EVs had a 250 to 500 mile range I suspect the adaptation would be much quicker.

It isn't just the range. It is also the price. A $70k car will not make adaption quicker, irrespective of the range.

 

[Norbert]

A $70k car will not make adaption quicker, irrespective of the range.

But of course it will, to the degree it is successful at its price level. Market share in any segment will have a potentially cascading effect, to the degree it is a convincing product.

Much of the difficulty is, and will be, changing perceptions about whether or not electric cars can be "the future" any time soon. I expect the Model S to do a better job at that than any currently available EV.

 

[smoothoperator]

Tesla is great as a technology company, as a car company not so much.

$175/hr labor rate is ridiculous for a 200k car let alone a 60k car. Resale value will start to suffer with the Model S as it has with the Roadster. Tesla needs to reduce the service costs significantly in order to be successful.

 

[JRP3]

The S should not need any service, unless there is a defect, which is covered under warranty. Change your own wiper blades. :wink:

 

[dsm363]

How much higher is that service rate than other dealers? I thought I remembered something similar with my old Volvo? Hopefully, major service at least is very infrequent.

 

[jerry33]

How much higher is that service rate than other dealers?

I don't believe it's any higher than other premium marques such as BMW or Mercedes (not that I've owned any of those). Toyota service is $75/hr, but it's very poor in that you have to check everything they do. Even a simple oil and filter change is done wrong unless you give them a measured amount of oil--then they get it right most, but not all, of the time. The big problem with Toyota service is that you can't build up a relationship with the person who actually performs the work. Once your car goes in, it's a black box. Who works on it? Some high school kid? You don't know.

In these forums I read that the annual inspection is $600 or $50/month. My 2004 Prius has cost $96.45 per month for dealer maintenance and tires over 101 months of ownership (Oct 2003-present), $9741.74 total. That's 11.8 cents per mile for dealer maintenance, tires, and fuel combined over 132,319 miles (Fuel was $5,921.42). That means I can spend $1,114.80 on tires every two years and the Model S will cost no more, and I expect it to be a much better car.

 

[dhrivnak]

Wow that is a lot for maintenance for a Prius. I have had mine for 18 months and 22,000 miles and have not spent a dime at the dealer. I do do my own oil changes which only take me 20 min. The $1000 I spent on the last ranger visit ($600 service $400 mileage) is far more than I have ever spent on maintenance. I normally keep a car 100,000 - 120,000 miles and have been able to the vast majority of simple maintenance myself.

 

[Lloyd]

I pay $125 per hour for airplane maintenance. These mechanics have a lot more training and responsibility.