Have we misjuded Tesla

[GRG55]

Re: Have we misjuded Tesla

If anything offered in this thread has value, it should be very clear in the next year or so. In November of 2017 EV sales in the US were ~17,000 cars. In November 2018, ~44,000. A YOY ~150% increase. Where did it come from? Tesla. In November 2018 they controlled almost 56% of the US market and sold 24,600 of the 44,000 EVs sold. If the quality is as bad as proposed here, they're toast. Tick tock.

The quality couldn't possibly be THAT bad, or there would be a quantity of late models from disgruntled owners on the used market and Tesla wouldn't sell even this volume of new ones.

I don't yet see any real competition for Tesla, especially in the Model 3 segment. Its cars are attractively styled (the 'S' is just downright elegant, even years after introduction) compared to the competition, which persists in producing too many "statement" EV/hybrid designs, some of which really look a bit weird.

Tesla understands these are still a discretionary luxury item, and acknowledged last spring that the cost of the technology is not yet low enough to make it a profitable mass-market ($35k Model 3) option. So the kids, who might find the oddball designs appealing, can't afford them. And those of us who can are generally of a "certain age" and likely more conservative in our automotive styling preferences. Why is it Tesla is the only EV producer that seems to have figured that out?

As for the cars, an acquaintance in the USA recently purchased a used Volt. The car was not ready at the expected delivery time and the owner of the car dealership lent him his personal Model 3. He raved about it after driving it for the day. Absolutely raved. All of the Teslas are outside his price range, but there has to be something about the experience of driving one. I seem to recall a similar review from financier Jeremy Grantham (GMO) after his first experience in a Model S a couple of years ago. There's a big WOW factor at play here; it must go well beyond just the drivetrain, and that should not be underestimated.

No. I'm too dumb for that too. Tesla options are crazy expensive. It's stock moves based on both a buy-and-hold cult of Elon and a risk-junky chaos-is-a-ladder casino playground. It's prone to wild one-day swings. And analysts have targets anywhere from bankrupt to $4,000. So people load up on calls and puts and use it to imagine a hedge for all sorts of insanity...If you've got the stomach for it, you might make money. You might loose too. You might even go totally off the rails and get wiped out.

One thing Musk has that most CEOs don't is a massive PR infrastructure. Sites like Electrek and Teslarati and whatnot are just the tips of the iceberg. He can sway online opinion much faster and harder than most. He has always been super PR conscious...Why would Musk pay PR companies to maintain the lies in his Wikipedia article for years after the truth was out there? These are questions I don't have answers to. But I think it's a big part of building and maintaining the cult. And regardless it goes to show how little facts matter in Tesla world. Everything you hear is one part Goebbels.

Best to keep the company separate from the cars themselves. The PR is both the means to keep raising the massive amounts of capital required to pursue all the extraordinary dreams, and the primary product differentiation theme (owning a Tesla is still marketed as something "special"). In an age where Central Banks created enormous amounts of liquidity its actually easier to sell a "big story" than something smaller that has sound and verifiable financials backing the investment (believe me I know!). It does not excuse the behavior, the made up facts and such, but Musk (and the President) is a product of our times, and figured that out quicker and better than many others.

To me some of this is faintly reminiscent of drilling fund promoters during the heyday of the hydrocarbon industry. Or maybe it's Wall Street's scaled version of why people persist in playing the slot machines in Vegas?

...Since the Chevy Volt came out, I've owned 3 of them. Without really trying I'd average 100 mpg, when i got obsessive, I could reach 1,000 mpg. Who needs more than that in a commuter car. But GM can't sell them so they're going away. There are several other examples among the 40 some electric / hybrid electric cars. Only Tesla has created the circus atmosphere that make large numbers of people willing to buy an electric car. Again, who cares if Tesla is real, they've created a message that resonates and that message will survive.

I must admit the decision to discontinue the Volt really surprised me. Has the Prius cornered that market? It appears GM has decided pure EV is the future and they are going to try to be the mass-market provider of same, before Tesla gets there? Is the Bolt outselling the Volt? I suppose as the range issue is being solved, and charging networks expand, the need for the complexity and cost of a "dual drivetrain" hybrid diminishes rapidly.

I think the media is typically selling the last battle/war. They often project the recent past into the future indefinitely.

If Tesla sinks then any other electric-only car company will be viewed with deep suspicion.

If hybrid and electrics are portions of bigger & established companies then so be it, but if Tesla fails, any stand alone startups focused on electric would get tarred and feathered by reporters writing the easy story about how they look a lot like Tesla.

I could not disagree more. This is not France, or some other jurisdiction fraught with old money conventions. The US economy and financial system are absolutely the most forgiving of failure; more than any other country on this planet. Lose some of your family wealth in Old Europe or in much of Asia and you are stigmatized for life. In the USA if you have an idea for a better mousetrap you can always find support, even if your last venture failed. It is the essence of why the USA continues to be the center of innovation worldwide, and one of the most important strengths that sustains the US economy.

There's another critical EV adoption development here that is key to the adoption of all new products: it takes time for consumers to put their initial fears and prejudices aside before you get to the the broader market of early majority consumers.



Range anxiety was the major obstacle for EV adoption. Tesla overcame that once it hit the 200 mile range threshold. That was the magic number.

Consumers decided that they almost never drive their commuter car that far in a day, can rent or use a second car for longer trips, and the cost savings and performance benefits of daily Tesla use made the range limit+time to charge vs performance+economy trade-off even easier to make.

Besides the Tesla PR machine, consumers needed to see many Tesla on the road and none by the side of the road out of juice.

But it sure took a long time and a pile of capital for Tesla to get there, starting with the Roadster 10 years ago.

I would bet the large majority of Tesla deposit holders have never driven one. If the Tesla/EV experience is really as remarkable as some are reporting then the compounding of demand for EVs is still ahead of us.

If companies like GM can bring the price point down and production volumes up there might be mass-market adoption and widespread displacement of ICE vehicles. If that proves unfeasible, for whatever reason, then for all but the wealthy perhaps expensive, limited production, technology packed EVs will be restricted to facilitating the self-driving, shared economy future some are painting, as governments tax both ICE vehicles and their fuel supply into extinction?

[vt]

Re: Have we misjuded Tesla

Today's electrics will be lapped by new designs and better batteries very soon:

https://www.roadandtrack.com/new-car...e-specs-price/

[GRG55]

Re: Have we misjuded Tesla

Today's electrics will be lapped by new designs and better batteries very soon:

https://www.roadandtrack.com/new-car...e-specs-price/

"Better batteries"?

I have long given up trying to keep track of all the new, revolutionary battery tech announcements over the years.

Seems to me the hard reality of battery technology is painfully incremental. They are, after all, chemical reaction devices. And when that is pushed hard sometimes they seem to transform into excellent fire starters.

[jk]

Re: Have we misjuded Tesla

Is the Bolt outselling the Volt? I suppose as the range issue is being solved, and charging networks expand, the need for the complexity and cost of a "dual drivetrain" hybrid diminishes rapidly.

no dual drivetrain. the ice in the volt is used solely as a GENERATOR. that allows it to be tuned to run only at the most efficient speed to generate electricity for the battery and electric drivetrain. so it still has the advantage of a much simpler vehicle, fewer parts to fail. plus unlimited range. when i learned about it i thought it was quite clever and would have considered buying one if it came with awd as an option.

[dcarrigg]

Re: Have we misjuded Tesla

I was re-reading, my post to see what set off your Tesla rant. I'm observing and documenting here, not cheer leading. Tesla no longer needs to survive, they've proven that the technology works. Not just for the environment, but for racing. Take the two latest super cars, the Porsche 918 and the Ferrari LaFerrari, they're hybrids. In my mind Musk is performing a valuable service, pushing automobile technology forward in ways that no other car company has been able to do. I don't care if he's a carny. I don't care if lots of folks get stuck with a car with no car company or a worthless stock. That's the gamble they're taking. I care about automotive / transportation technology moving forward.

Since the Chevy Volt came out, I've owned 3 of them. Without really trying I'd average 100 mpg, when i got obsessive, I could reach 1,000 mpg. Who needs more than that in a commuter car. But GM can't sell them so they're going away. There are several other examples among the 40 some electric / hybrid electric cars. Only Tesla has created the circus atmosphere that make large numbers of people willing to buy an electric car. Again, who cares if Tesla is real, they've created a message that resonates and that message will survive.

Just never been too keen on the ends justify the means business practices. Tend to generate long tails with unforeseen negative consequences.

[santafe2]

Re: Have we misjuded Tesla

I must admit the decision to discontinue the Volt really surprised me. Has the Prius cornered that market? It appears GM has decided pure EV is the future and they are going to try to be the mass-market provider of same, before Tesla gets there? Is the Bolt outselling the Volt?

I had heard rumors for several months that this announcement was coming. The Volt was the first of this modern wave of electrics and hybrid electrics. Their market share in the US, (not counting 2010 when they were the market), has fallen from almost 50% in 2012 to 25% in 2013, to the mid teens and down to 6% in 2018. While the market has grown from ~50,000 to over 350,000 vehicles a year in those 7 years, the Volt averaged ~20,000 vehicles per year. Sometimes a little higher or lower but it's clear, this is a niche market. Now that people are comfortable commuting with electric cars, the Volt has no future.

The Volt and the Bolt sell through in approximately the same numbers. The Nissan Leaf, even worse. Have you looked at the Bolt and the Leaf? Apparently, people aren't willing to pay $30-$40,000 for a car that says, "Yes, I'm boring". The only company with important market share is Tesla.

Porsche are some of the best marketing people in the world. They've studied this market and have decided to come out with a well designed all electric Porsche to compete with the Model S. It won't arrive for another year but they've already sold out and are upping production plans. Pricing will be comparable to Tesla and because it's a Porsche, they're testing at the Nurburgring, not against a Dodge Demon at Ricky Bobby's drag strip.

As for GM, I've no idea what they hope to accomplish in this arena. Maybe their aiming ahead at driverless technology.

[santafe2]

Re: Have we misjuded Tesla

Just never been too keen on the ends justify the means business practices.

Fair enough.

[GRG55]

Re: Have we misjuded Tesla

I had heard rumors for several months that this announcement was coming. The Volt was the first of this modern wave of electrics and hybrid electrics. Their market share in the US, (not counting 2010 when they were the market), has fallen from almost 50% in 2012 to 25% in 2013, to the mid teens and down to 6% in 2018. While the market has grown from ~50,000 to over 350,000 vehicles a year in those 7 years, the Volt averaged ~20,000 vehicles per year. Sometimes a little higher or lower but it's clear, this is a niche market. Now that people are comfortable commuting with electric cars, the Volt has no future.

The Volt and the Bolt sell through in approximately the same numbers. The Nissan Leaf, even worse. Have you looked at the Bolt and the Leaf? Apparently, people aren't willing to pay $30-$40,000 for a car that says, "Yes, I'm boring". The only company with important market share is Tesla.

Porsche are some of the best marketing people in the world. They've studied this market and have decided to come out with a well designed all electric Porsche to compete with the Model S. It won't arrive for another year but they've already sold out and are upping production plans. Pricing will be comparable to Tesla and because it's a Porsche, they're testing at the Nurburgring, not against a Dodge Demon at Ricky Bobby's drag strip.

As for GM, I've no idea what they hope to accomplish in this arena. Maybe their aiming ahead at driverless technology.

Tesla (and Porsche, Audi, BMW et al) aren't trying to sell their expensive EVs as a way to save on fuel, or lower maintenance costs. That might be one of the outcomes, but the people who buy them aren't bragging how frugal they are when at the country club.

And that, I think, is one of the problems with the Bolt and the Leaf. They are damned expensive and just scream "eco-nomy car" when you drive up in one. I imagine vegans with man-buns living in converted warehouse co-ops in Seattle is a limited market.

As for GM, that corporation needs a major re-think. I thought the Volt, particularly Gen 2, was a pretty reasonable vehicle. However, compare the interior of a Volt with the interior of a Model 3. Just count the difference in the number of buttons. On every surface in the Volt. Looks sort of like the interior of an Impala. Or any other GM sedan. Nothing special to differentiate it as somehow more technologically advanced.

This is in the day and age most people run their lives using a touch screen phone. That flat sales statistic for the Volt you mentioned speaks volumes.

A couple of years ago Buick had this on their stand at the Detroit Motor Show. Hinted at some styling cues from the iconic late '60s Rivieras. Imagine if GM had screwed up the courage to put an electric drivetrain in this, and undercut the price of a comparably equipped Model S, with no wait time.

Hell, they don't sell this car in any form. Look at the plain vanilla stuff they are peddling. Fortunately the Buick brand seems to sell well in China. Gawd knows why anybody in North America would buy a Buick.

[llanlad2]

Re: Have we misjuded Tesla

If they no longer survive as a company (if it is more than a debt restructuring they go through & they actually fully go under) then the message they will have left behind will also contain that important piece of information.

And anyone else pushing to innovate on a parallel plane will have their assertions & statements called into question.

The mainstream media is reactive & narrative driven.

The European car makers are investing billions in electric. The EU has legislated that 20% of cars sold by 2025 must be zero emission. 35% by 2030. VW have a 7 year car cycle and say the current cycle (that's just started) will be final ICE one. Volvo is stopping ICE soon.
The Europeans and (maybe China) will lead on electric because they won't or don't want to be held politically ransom by energy producers like the Russians and US. The US ability to pump millions of barrels of oil allied to its mass climate change scepticism will be a barrier to electric.

[santafe2]

Re: Have we misjuded Tesla

Tesla (and Porsche, Audi, BMW et al) aren't trying to sell their expensive EVs as a way to save on fuel, or lower maintenance costs.

Yes, they're all making well formed brand statements, unfortunately, GM was just being pragmatic and offering an excellent compromise. We early adopters were evangelizing but like most religions it never took hold.

...people who buy them aren't bragging how frugal they are when at the country club. And that, I think, is one of the problems with the Bolt and the Leaf. They are damned expensive and just scream "economy car" when you drive up in one. I imagine vegans with man-buns living in converted warehouse co-ops in Seattle is a limited market.

OK, that's TMI but I get your point. I'm fairly sure we're saying the same thing.

As for GM, that corporation needs a major re-think. I thought the Volt, particularly Gen 2, was a pretty reasonable vehicle. However, compare the interior of a Volt with the interior of a Model 3. Just count the difference in the number of buttons. On every surface in the Volt. Looks sort of like the interior of an Impala. Or any other GM sedan. Nothing special to differentiate it as somehow more technologically advanced.

How is it that two guys from apparently polar opposite energy backgrounds have the same view of GM? I have a Silverado and was ready to buy a new truck this year because GM had finally made some major upgrades that brought their trucks up to modern standards. But when I took a test drive it felt like i was sitting in the dugout of a double A stadium. It's so obvious, even the sales people are embarrassed. Unlike Porsche or Tesla, GM does not get that you can't do something 90% correct. Because I'm a fan, they make me crazy but I know I can't change their company culture.

[GRG55]

Re: Have we misjuded Tesla

The European car makers are investing billions in electric. The EU has legislated that 20% of cars sold by 2025 must be zero emission. 35% by 2030. VW have a 7 year car cycle and say the current cycle (that's just started) will be final ICE one. Volvo is stopping ICE soon.
The Europeans and (maybe China) will lead on electric because they won't or don't want to be held politically ransom by energy producers like the Russians and US. The US ability to pump millions of barrels of oil allied to its mass climate change scepticism will be a barrier to electric.

You make the all too common mistake of not only underestimating the Americans, but also completely lacking understanding of how its economy is completely unlike Europe or Asia.

When the Americans are finished with EVs everybody there will have one, while in Europe and China they will remain expensive baubles enjoyed by the upper class. It's what the Americans do best. Scale.

[santafe2]

Re: Have we misjuded Tesla

The European car makers are investing billions in electric. The EU has legislated that 20% of cars sold by 2025 must be zero emission. 35% by 2030. VW have a 7 year car cycle and say the current cycle...

The best thing that ever happened to VW was getting taken down for cheating with their diesels. It's no secret that great innovations will be coming out of them over the next decade.

[Techdread]

Re: Have we misjuded Tesla

The quality couldn't possibly be THAT bad, or there would be a quantity of late models from disgruntled owners on the used market and Tesla wouldn't sell even this volume of new ones.

I don't yet see any real competition for Tesla, especially in the Model 3 segment. Its cars are attractively styled (the 'S' is just downright elegant, even years after introduction) compared to the competition, which persists in producing too many "statement" EV/hybrid designs, some of which really look a bit weird.

Tesla understands these are still a discretionary luxury item, and acknowledged last spring that the cost of the technology is not yet low enough to make it a profitable mass-market ($35k Model 3) option. So the kids, who might find the oddball designs appealing, can't afford them. And those of us who can are generally of a "certain age" and likely more conservative in our automotive styling preferences. Why is it Tesla is the only EV producer that seems to have figured that out?

As for the cars, an acquaintance in the USA recently purchased a used Volt. The car was not ready at the expected delivery time and the owner of the car dealership lent him his personal Model 3. He raved about it after driving it for the day. Absolutely raved. All of the Teslas are outside his price range, but there has to be something about the experience of driving one. I seem to recall a similar review from financier Jeremy Grantham (GMO) after his first experience in a Model S a couple of years ago. There's a big WOW factor at play here; it must go well beyond just the drivetrain, and that should not be underestimated.



Best to keep the company separate from the cars themselves. The PR is both the means to keep raising the massive amounts of capital required to pursue all the extraordinary dreams, and the primary product differentiation theme (owning a Tesla is still marketed as something "special"). In an age where Central Banks created enormous amounts of liquidity its actually easier to sell a "big story" than something smaller that has sound and verifiable financials backing the investment (believe me I know!). It does not excuse the behavior, the made up facts and such, but Musk (and the President) is a product of our times, and figured that out quicker and better than many others.

To me some of this is faintly reminiscent of drilling fund promoters during the heyday of the hydrocarbon industry. Or maybe it's Wall Street's scaled version of why people persist in playing the slot machines in Vegas?



I must admit the decision to discontinue the Volt really surprised me. Has the Prius cornered that market? It appears GM has decided pure EV is the future and they are going to try to be the mass-market provider of same, before Tesla gets there? Is the Bolt outselling the Volt? I suppose as the range issue is being solved, and charging networks expand, the need for the complexity and cost of a "dual drivetrain" hybrid diminishes rapidly.



I could not disagree more. This is not France, or some other jurisdiction fraught with old money conventions. The US economy and financial system are absolutely the most forgiving of failure; more than any other country on this planet. Lose some of your family wealth in Old Europe or in much of Asia and you are stigmatized for life. In the USA if you have an idea for a better mousetrap you can always find support, even if your last venture failed. It is the essence of why the USA continues to be the center of innovation worldwide, and one of the most important strengths that sustains the US economy.



I would bet the large majority of Tesla deposit holders have never driven one. If the Tesla/EV experience is really as remarkable as some are reporting then the compounding of demand for EVs is still ahead of us.

If companies like GM can bring the price point down and production volumes up there might be mass-market adoption and widespread displacement of ICE vehicles. If that proves unfeasible, for whatever reason, then for all but the wealthy perhaps expensive, limited production, technology packed EVs will be restricted to facilitating the self-driving, shared economy future some are painting, as governments tax both ICE vehicles and their fuel supply into extinction?

Mass market appeal is not what the new generation of cars need, only the rich and car enthusiasts will be purchasing cars the rest of us will make do with leasing cars.

China will lead this as they have the systems and the mindset to make this happen relatively quickly.

America's days of leading innovation are over. Trump has the right idea in trying to clip China's wings but the centre of gravity is moving eastwards.

[seobook]

Re: Have we misjuded Tesla

Mass market appeal is not what the new generation of cars need, only the rich and car enthusiasts will be purchasing cars the rest of us will make do with leasing cars.

The fewer people who buy cars the less of a print run there is on each vehicle & the higher the cost to manufacture as the fixed costs are spread across a smaller number of units.

I think this will ultimately be a lot like Lyft & Uber drivers: sounds like a good idea, but ultimately high churn because the numbers don't really back out well for many people.

Have you seen what has happened to any of the markets that have re-consolidated away from competition?

Uber folded their Russian division into Yandex.Taxi, their China division into Didi & their south east asia division into Grab.

In markets where there is still stiff competition many of the platforms are still losing money. And on the markets that have been re-consolidated there is often a 30% to 50% higher price for booking along with in some cases longer wait times & lower quality cars on average. And in some cases the percent that goes to the driver is shaved down a bit too after competition in eliminated through merger.

China will lead this as they have the systems and the mindset to make this happen relatively quickly.

Their social credit system is going to create a lot of unpeople. Over time it will have hundreds of thousands or millions of false positives. When people are punished for doing nothing wrong & it hits tons of people, how do they maintain social cohesion if/when/as their economy slows down?

And how do they build a stable economy if they never allow recessions to happen? Suppressing volatility ultimately leads to it showing up in a more extreme & concentrated form later.

Trump has the right idea in trying to clip China's wings but the centre of gravity is moving eastwards.

how does AI work in a society with the 50 cent army and many banned terms?

[touchring]

Re: Have we misjuded Tesla

Mass market appeal is not what the new generation of cars need, only the rich and car enthusiasts will be purchasing cars the rest of us will make do with leasing cars.

China will lead this as they have the systems and the mindset to make this happen relatively quickly.

America's days of leading innovation are over. Trump has the right idea in trying to clip China's wings but the centre of gravity is moving eastwards.

China has a huge demographics issue. People living in the West and who only visited Shanghai and Beijing will not understand.