Is it doomed?
Frankly, if so, I won’t shed a tear. I’ve never been a fan of companies that require government subsidies (as opposed to government contracts, as is the case with SpaceX) as critical to their business model. My only concern is any effect a Tesla bankruptcy would have on SpaceX, but there’s not reason in theory that it should, unless Elon has been continuing to fund it with his own money, which seems unlikely.
Bob Lutz is a funny guy. I wonder if he wrote this bio:
Bob Lutz has been The Man at several car companies, so your problems are cake. Bring ’em on.
If he did, I suspect the original version was a little more…er…colorful.
That article he posted is funny as well. He has very little clue about specifically what Apple and Tesla stores operate like, for instance. And mounting inventory, where ? Also, they are ‘losing money’ because they are sinking all the cash they have into future production capacity, i.e. a big ass factory.
The article was a little short on details to draw any conclusions from. Losing money on the sale of a car is troubling but it depends on how that number was reached. The real concern is having an inventory they can’t sell. Spending a lot to build out infrastructure only makes sense if they can move enough cars to keep up a good cash flow.
Teslas are fashion accessories. That’s great so long as they’re the current fad, but fashions can change almost overnight.
Otherwise, there’s nothing I care about that a $100k+ Tesla can do that our $25k Civic can’t…. and the Civic can be ‘recharged’ in less than five minutes at any gas station.
No? My brother has an S, and just got a completely automatic upload that does lane changing, and parallel parking. 0-60 in 3 seconds.
I don’t fancy shelling out that many bucks for a car, but it is pretty amazing.
I believe Honda has had automatic parking for nearly ten years in the Japanese market, but not North America. Not much need for it around here, where the parking spaces are built for pickup trucks. And the Civic is fast enough for pulling out on highways, so there’s no reason to pay an extra $75k for such high acceleration. I guess the Tesla needs it because it has to stop three times as often while driving along the highway.
I do think electric vehicles are going to be important, because there’s no gasoline on the Moon and Mars. But the Tesla doesn’t seem to do much to help develop those. What we really need is much better battery technology–not just for cars, but for drones and many other markets–and I believe Tesla just uses big boxes full of standard batteries? Or did they start doing something more sophisticated yet?
What I hear from you is “nobody needs a sports car”.
Which is … true.
But a bad analysis of the market for sports cars, no?
(The Civic is “fast enough” at 9.1 seconds.
But I prefer my XC70’s 6.4 time, because fast is fun.)
Tesla’s building their own battery factory to supply not only cars, but electric utility storage needs.
http://www.teslamotors.com/blog/gigafactory
Civic Si 0-60 is 6.5 seconds. I don’t know if that is fun or not, but my 180,000 mile S2000 is a lot of fun, and I could get 8 more of those for the price of a Tesla S.
What does this all mean? Not sure, but I really do miss Top Gear, which routinely showed the unless you could afford a supercar, then spend your money on a cheap car you don’t mind trashing. And if you really want to drive a Sports Utility Vehicle, try driving somewhere other than Chelsea. Oh, and I do think they nailed it with electric cars, give them trolley poles or bow collectors to recharge on the move (like bumper cars).
No. I quite clearly said “Otherwise, there’s nothing I care about that a $100k+ Tesla can do that our $25k Civic can’t”
I said nothing about anyone else.
Other people may be willing to pay $100k for a car that can do 0-60 in three seconds but can’t drive two hundred miles without stopping for an hour to charge. Most people aren’t.
That’s why they’re fashion accessories, not a serious means of transport.
I am more utilitarian in my choices but can’t deny that it is a cool car. I hope that rich people keep buying them for whatever reasons (usually misguided) and hopefully the price will drop so ordinary people can buy one.
A $25k Civic ain’t getting to 60 in 4.2 seconds.
The Tesla (Especially the P models) is a sports car, arguably a supercar.
I’m surprised you didn’t say “a $13k Kia”, for that matter, to even more completely miss the point.
(Not that I think the Tesla company is all that great, or that I’d buy a Model S if I had $100k to throw at the fast one, but it is legitimately a sports car; it’s not even in the same category as a Civic.
If you view cars as transportation appliances, you’re not the target market.
And if your goal is “maximum power for the dollar”, buy a Corvette – or, in the cheap market, a Mustang.)
The difference between the Tesla and Civic probably comes down to the number of airhead liberal college chicks picked up.per month.
By the way, I also wasn’t too impressed with the article. Tesla seems to be selling everything they build, and they keep building. Doesn’t sound too bad to me.
And I’d rather subsidies go to make something neat than the usual down the drain stuff. If this is R&D, maybe sometime soon enough of the infrastructure will be in place so that the rest of us can afford one. Subsidies for R&D are the best place to use them.
I’m not opposed to subsidies for R&D per se, but this is a consumer product, albeit high end.
In my comment above, I linked to Tesla’s website about their battery factory.
In this case, the tail may wind up wagging the dog. If the numbers are correct, they’ll make more money selling batteries to electric utilities. They have invested large sums in “renewable” wind and solar and they need to either find storage for that power, or build baseline plants to overlap.
As usual with new tech, the path to that point is uncertain and probably filled with detours, but if it works out, building a LARGE battery plant may well be worth a subsidy. As was said in an entirely different context, “Quantity has a quality all of its own.”
While there’s something to be said for that, “we can sell you a car at a loss, because we make it up in volume” isn’t a sustainable business model.
Unless the costs assigned to each unit drop as they are shared across more units. The article didn’t give us enough to know where the $4k loss is coming from. And considering it’s a vanity car, would a small price hike turn people away? Economics doesn’t seem to be one of the reasons people buy these things.
I expect they’re making up for it with volume…
The article makes no sense. It starts by opining that low gas prices are bad news for Volt and Prius, but worse for Tesla. Seriously, they think gas prices are the main driver for sales of a 100k car? I’m sure as heck no fan of Tesla, and think it’s more likely than not to fail or be massively downsized to niche status, but even I found the article largely fact-free and full of hyperbole.
I strongly dislike Tesla for three reasons. The first is it’s all-electric, which is a total PITA if you’d using it for anything other than a daily commute. The second is the automatic software changes, which you can’t opt out of (I’ll never use Windows 10 for that reason, even though there apparently are ways to opt out of that. The only software updates I ever allow for anything are manual, by me.) And thirdly, they track your location, routes, etc – a built in spy, just like the Onstar system. Oh, and possibly a fourth issue, though I’m not certain; you can’t park the thing long term because even is sleep mode there’s significant battery drain. Leave it somewhere like an airport or park-and-fly place for a couple of months, and it’s likely to be a brick. (on a regular car, I just disconnect a battery lead).
I also detest the subsidy system (which goes well beyond the several thousand per car we taxpayers kick in as a buyer credit) Tesla exploits, though I blame the fact it’s there, not them for taking advantage of it.
I also detest the subsidy system… though I blame the fact it’s there, not them for taking advantage of it.
So, you don’t blame immigrants for taking advantage of government benefits after all — as long as they’re billionaires who do it on a massive scale?
I’ve seen more Lotus Elises in the past few years than Roadsters. That doesn’t say much about the lifespan of a Tesla, but since it’s basically a fashion accessory maybe that’s ok.
The article suggests that Tesla come out with a gasoline hybrid. That seems an awfully expensive way to make ends meet–it’d essentially be designing a new car (as well as admitting that we’re not quite ready for electric cars). If the Model S had a tow capacity maybe they could create one with a 20 kW-hr battery pack, a stripped down interior, and build a trailer with a gasoline charger. That’d probably need around a 20 hp engine to maintain highway cruise. I’m not at all sure that that would be legal in all 50 states.
I’ve seen towed generators talked about as range extenders for taking EVs on road trips. Apparently, you can’t charge while driving due to something to do with the car, but you can pull over and have a 220V “charging station” at hand whenever you need it. But, you’ll pull over a lot because towing that generator will vastly reduce the EV’s already poor range.
I’ve never tried a road trip in an EV, nor would I want to, but something like that would be the only way I’d even consider it. I suggest reading Car and Driver’s interesting and hilarious article “Alexander and the Terrible, Horrible, No Good, Very Bad Tesla Model S P85D Road Trip” for a look at just how awful road trips in EVs can be. And that was in the eastern US, where you don’t have the vast empty stretches you do in the West.
http://blog.caranddriver.com/alexander-and-the-terrible-horrible-no-good-very-bad-tesla-model-s-p85d-road-trip/
Tesla really got a kick in the pants from Consumer Reports retracting their, “Perfect Score”, rating with a real world user rating that showed the car had a ‘worse than average’ reliability rating. When, the initial rosy rating at the beginning of the year came out, I knew something wasn’t right. My own curious reading on car forums and youtube reviews of the Model S seemed to show the car had a number of issues one might expect from a new car company. Sure enough, Consumer Reports went through their user surveys and saw that the car is plagued with battery replacement, electric motor replacement, leaking weather seals, malfunctioning door handles, flaky touchscreen console, and mileage ranges that are drastically reduced in cold weather. Why it’s almost like, 120 years ago automobile manufactures tried to use this wondrous electric motor technology and found it decidedly lacking in most every way compared to petrol engines. We are doomed to repeat the mistakes of our past.
If Tesla is only losing 4-5% per car, then that’s low. Tesla’s stock price is incentivizing revenue, not profits. Lutz’s view that an end to electric car subsidies will hit Tesla hard. But what support is there for ending them? I found a February Bloomberg article advocating them, but right or wrong, they’re still the law. An end to the subsidy would cut profits another 10+% if Tesla lowered its sale prices for the Model S. But the incidence would likely fall on both Tesla and consumers. No reason they wouldn’t continue to pay albeit with a demand down 5% or so. The gas price $2 is a canard. People only consume about 450 gallons per car per year ( http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0208 ) so $2 is $900/year vs. $4. This invalidates Lutz’s hypotheses about reduced demand because if potential buyers think they’d buy at $4 vs. $2 that’s about the same impact as a future elimination of the subsidy amortized over 10 years. Gas prices in 2013 were $3-$4 and Model S sales are triple at $2 gas this year.
The real question is whether this thing is where some show-off drops 10K to place an Apple Lisa on there desk in the 1980’s whereas today, something thousands of times more powerful can be had for a couple to a few hundred dollars in 2015 money?
Or is this thing something else?
There will always be early adopters and gadget freaks spending every dime they have on the latest thing, and those early adopters are paving the way for the rest of us to have whatever it is at an affordable price down the road.
But does Moore’s Law apply to battery tech or to windmills or solar cells or any of those other things?
Moore’s law is that a computer that once filled a building (the SAGE air defense computer) then filled an office desk, after which it sat on a desk and today can fit in your pocket. It doesn’t say that the computer filling a building (i.e. the rooftop solar cell array) became any cheaper nor the computer filling an office-desk sized cabinet (the battery pack on the Tesla).
Forget about the complaints about the auto magazine guys who drive like leaded-footed nuts having difficulties on a road trip or the somewhat reduced range on cold days. People can adapt. If this thing “works”, it could address the energy-storage side to renewable energy.
But does this thing scale?
Elon has shown his ability to adapt to changing environments. They sell a different mix today than when they started and the mix will be different when they adapt to a future environment.
He’s building collectibles today. The volks car is coming. He is too early based on battery energy density and his solutions are what we call a kluge. I expect a small, very cheap, finely tuned turbine will one day be added to extend range.
“2. Tesla reported adjusted loss (excluding one-time items other than stock-based compensation expense) of $1.01 per share in the third quarter of 2015, much wider than adjusted loss of 29 cents incurred in the year-ago quarter. Moreover, the loss was significantly wider than the Zacks Consensus Estimate of a loss of 71 cents per share.
Adjusted revenues improved 33% year over year to $1.24 billion in the reported quarter and steered past the Zacks Consensus Estimate of $1.21 billion. The company anticipates 17,000–19,000 vehicle deliveries in the fourth quarter. For 2015, Tesla lowered the higher end of its vehicle delivery guidance range to 50,000–52,000 units from 50,000–55,000 vehicles guided earlier (read more: Tesla Q3 Loss Wider than Expected, Trims Delivery Target).”
http://finance.yahoo.com/news/zacks-analyst-blog-highlights-tesla-143002660.html;_ylt=AwrBT4dBwTxWlnAALJlXNyoA;_ylu=X3oDMTEzYjZoaWZtBGNvbG8DYmYxBHBvcwMyBHZ0aWQDVklQNjE0XzEEc2VjA3Nj