Tesla Motors Just Needs to Keep Tracking the Ford Model T

2 years ago by Mark Hovis 83

Ford - Tesla

How close does the Model ≡ follow?

There have been many comparisons of Tesla Motors to Ford Motor Company, but the parallel in the production data presented by Bloomberg is facinating. Tesla Motors achieved the 10,000 autos produced milestone in 2013, the same milestone Ford Motor Company achieved in 1909 with the Model T. By 1916, just seven years later, the Model T broke the half million mark with 501,462 autos. This is within the same time frame that Elon Musk has set as the goal for Tesla Motors.

With the Gigafactory ahead of schedule, could the Model ≡ be the first auto from Tesla to launch on time thus possibly aiding in an uncanny mirror of the Ford Model T?

While analysts continue to try and understand and deal with Tesla’s CAPEX bonfire, one such analyst questioned Musk on a conference call last week on whether he stood behind the forecast.  “I do remain confident about half a million cars in 2020, and maybe being able to exceed that. That’s five years from now. If you go five years in the past for Tesla, we were producing 600 cars per year, now we can produce 600 cars in three days. So I think going from here to 500,000 cars a year is a much smaller leap.”

While the production ramp of Ford Model T and Tesla are uncanny, there are many major differences between the two companies. Some differences show where the money is going, of which CEO Elon Musk has declared as part of their capitol expenditure equation.

tesla fremont factory assembly 5

The success of the Ford Model T, largely came on the heavy investment of a new approach to manufacturing autos in the form of the first moving auto assembly lines, followed by integrated complexes like the River Rouge Complex.

Now imagine if Ford had also launched not only nationwide, but global dealerships? And what if Ford had also launched a global network of fueling stations owned and operated by Ford Motor Company?

In 1908, there were only 18,000 miles of paved roads in the US. A gas station did not exist on every corner. Now that they do, emerging technologies are expected to provide in kind, or offer an alternative solution. Tesla Motors has provided a network of superchargers in North America, Europe, and Asia Pacific to allow drivers to get a half fill in under 30 minutes. With most charging happening at home, Tesla owners by large part complete their remaining fueling through the company supplied network of superchargers. The cost of the fill is built into the price of the car for life. Imagine if Ford Motor Company had done that!

Tesla Service Center

Tesla Service Center

Another milestone for getting the Model T to market was building a network of dealerships to market the product. It was at this crossroad that Henry Ford, as well as all other major auto manufacturers to follow, sold part of their future to dealerships who took on the unknown risk. Right out of the gate, Tesla Motors plotted a path for direct sales. Not only has the cost of facilities and labor added to the cash burn, but they have also been met with extreme opposition by US dealerships banning the sale of Tesla in many states. While the directors of the Federal Trade Commission have voiced strong opinions in favor of Tesla Motor’s, the battle continues.  How would Henry Ford have handled this undertaking and the confrontation?

And finally the most comparable to Ford, Tesla has launched state of the art manufacturing facilities with the highest levels of automation available today. In comparison, the up front cash burn is great, while the long term gains are considerable.  From the advanced automation of the Fremont factory, to the $5 billion Reno gigafactory, the cost can seem overwhelming, but when comparing to Ford, it is hard not to make the comparison to the River Rouge Complex. A complex offering its own steel mill, glass manufacturing and more. A complex focused on handling its own energy. Sound familiar? There is one major difference. The River Rouge Complex began in 1917 after the Model T was established. Tesla’s $5 billion gigafactory  is being launched prior to the start of the Model  ≡.

Edison, Ford and Diesel favored renewable energy over fossil fuels

Ford, Edison, and Diesel agreed that fossil fuels such as oil and coal wouldn’t last forever. They saw the virtually untapped potential of renewable energy sources.

In 1931, the same year Thomas Edison died, Edison told his friends Henry Ford and Harvey Firestone: “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” Even Rudolph Diesel envisioned renewables in the form of peanut oil as the fuel for his invention. In 1912 he stated: “The diesel engine can be fed with vegetable oils and would help considerably in the development of agriculture of the countries which use it” and that “The use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in course of time as important as petroleum and the coal tar products of the present time.”

Tesla's Largest Supercharger In Europe...And Check Out That Solar Canopy

Tesla’s Largest Supercharger In Europe…And Check Out That Solar Canopy

Some eighty years later, Elon Musk is envisioning autos that do just that. Did Ford, Edison, and Diesel envision the same for their manufacturing? Musk has laid out plans for Tesla Motors first gigafactory to be powered by renewables. BMW is also taking a serious approach to renewable manufacturing.

Other auto manufacturers are taking notice. Currently there are 27 PEVs – (plug in electric vehicles) to choose from in the US market, with even more on the global stage. This number is set to double to over 60 by 2017.  In the early 1900’s, Ford’s Model T was met primarily by luxurious novelties opposed to affordable transport.

Clearly, most of the major players are investing a large portion of their R&D budget toward alternatives to ICE – (internal combustion engine). Companies like Nissan and BMW have also begun providing spotty deployment of charging stations, though pale in comparison to the Tesla Motors supercharger network. Many of the failed startups like Coda and Fisker failed to invest in the automation required to compete long term as Tesla Motors has today.

The single largest separator may be found in the decision Ford Motor Company made so many years ago, and that is the decision to turn over the marketing to independent dealerships. A decision that is now marked with legislation, at least in US markets.

So there are certainly as many differences as comparisons for Tesla Motors and the Model T, but following an uncanny track with the Model T production is very interesting. Can you see the launch of the Model ≡  falling in line on the Model T graph? If nothing more, it has to be seen as a good omen following the growth of the original game changer.

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83 responses to "Tesla Motors Just Needs to Keep Tracking the Ford Model T"

  1. Pushmi-Pullyu says:

    The parallels between Tesla Motors and the Ford Motor Co. in the early years of the Model T are certainly interesting. There is an obvious parallel between Gigafactory 1 and Ford’s River Rouge complex. But that may be far from a coincidence; Ford’s success with its River Rouge complex may have inspired Tesla Motors to try to achieve the same thing with battery cell production.

    One thing is very different indeed: The Ford Model T had essentially no competition for a family car, for an “everyman” car. Contrariwise, Tesla has yet to produce an “everyman” car. Even the Model ≡ probably won’t qualify for that. At an estimated $35k, that’s rather more expensive than the best-selling American gasmobiles, all of which cost between $18k-25k.

    I certainly hope that Tesla can equal Ford’s success in growing quickly. But the market is quite different, and to grow, Tesla will have to steal customers away from gasmobile makers. In that respect, Tesla has a much more difficult task than Ford did. Whether or not Tesla can continue to sell every car it makes, as it continues to ramp up production, remains to be seen.

    1. Frank says:

      18k-25k$ + gas + maintenance > 35000$

      So basically a more affordable alternative to best-selling American gasmobiles.

      1. Robb Stark says:

        $18k-$25k plus gas plus maintenance < $35k plus electricity plus maintenance.

        Best selling segment in America is the compact SUV/CUV. The best seller in the segment is the Honda CRV. It starts at $23.6k and tops out at $35k.

        1. Ken says:

          After driving an electric car 100k miles over the last 4 years, id like to comment on your +maintenance comment. I’ve bought tires twice ($400 for a set of 4 each time). Ive went through quite a few $2 bottles of washer fluid and a few sets of $15 wipers. Everything has been installed by myself ( i do have a cheap manual tire changer and bubble balancer). So basically, there is no maintenance for an electric car. Well, unless you are counting the washer fluid, wiper blades, and tires that any car would have needed in addition to oxygen sensors, oil, oil filter, air filter, coolant, spark plugs, wires, brake pads, serpentine belt, timing belt, etc. At 120k miles, ill change the less than a quart of synthetic fluid in the final drive unit. That’s it. The electricity is roughly the same price as gasoline right now only if you are driving a 50mpg car like a Prius. Its the lack of maintenance and the fact that i fuel up in my own driveway while i sleep that makes me happy. So to me, my $17,698 (after fed credit and nissan rebates) Leaf is worth alot more to me than a gas car even if there is a cheaper gas car to be had. I realize this article is about Tesla. They sell a premium product and im sure their $35k model 3 will fair comparably to a $35 BMW 3 series if there is such a thing.

          1. sven says:

            You should change/flush the brake fluid if you haven’t already done so. Moisture can get into the system, which can lead to rust inside the system. The fluid also picks up contaminants like little bits of metal and rubber, and the fluid itself gets old and worn. If I’m not mistaken, I believe the maintenance schedule for the LEAF recommends that the brake fluid be changed out every 15,000 miles, which is more frequent than other cars. Two years would be a more conservative interval, but the maximum should be five years.

            1. Ken says:

              Exactly. They recommend an interval around 30,000 miles which is way too early. I think they just invented something for the dealership to do if someone brings a Leaf in. I will change it when i do the first set of brake pads or when i change the diff fluid whichever comes first. But i dont need the dealer to flush my brake fluid as they would have me believe.

            2. jelloslug says:

              I’m fairly certain that 95% of the cars on the road have never had their brake fluid changed.

              1. Sven is correct. Changing brake fluid is essential maintenance. It is no savings at all to not do this service. People who “save money” by not doing this service pay much more by having to rebuild or replace calipers and brake master cylinders later.

                – I used to be an auto tech including brakes.

                1. Dragon says:

                  Brake fluid changes on Toyota Prius have always been recommended as NEVER by Toyota. Users have looked at brake fluid after 100k or more and seen basically no degradation or contamination. They speculate this is because regenerative braking limits the amount of time the physical brake pads are used and that limits heat that degrades brake fluid.

                  So I have no idea why other car makers recommend replacing brake fluid so often on other vehicles with regen braking. Seems likely it’s a scam to make money on unnecessary maintenance but even Tesla recommends brake fluid changes something like once a year and I wouldn’t expect them to recommend unnecessary maintenance, so I don’t know. Maybe Toyota has used some advanced voodoo to make their brakes last.

        2. EV AZ says:

          The Model 3 needs to be a crossover like the CRV to have the sales explode. I just can’t see a small 4 door sedan warenting huge demand.

          If Tesla does produce the 3 as a crossover or hatchback like the LEAF then we may pass on the Outlander PHEV and wait for the 3.

          Exciting times.

          RAV4 EV
          5kw PV
          NPNS

          1. Like you I really hope the Model 3 is more CUV like. I have a Subaru Forester I would love to replace with something similar (better!) The Leaf is a great commuter, but can’t do the light off-road duty and snow we get here in the mountains the same as a Forester. I’m very interested to see what Tesla shows in March.

    2. ffbj says:

      I read the Model III was gonna come in around 60k, (on average) seems a bit high, I was thinking more like 45k, but I guess I undershot. I really don’t think we may ever see anything from Tesla under 30k, an every man car, ever, man.

      1. John in AA says:

        Read where?

        1. ffbj says:

          Yeah, I probably just assumed others had read it:
          Morgan Stanley is prepared for lower deliveries in the fourth quarter and 2016 than currently targeted by the company, because of the complexity of making the product, high price point and challenge in accessing the mainland China market. It expects the Model 3 average transaction price to be about $60K per unit, higher than the $35K that the company

          1. Ambulator says:

            Tesla never claimed 35k would be the average price. I think 60k is a bit much, but it could well start out at 50k or so.

            Judging by past performance the 35k-40k model would likely come out a year or so later.

            1. Vexar says:

              I think that the Model S is probably an example of what people end up doing. Don’t like plain black or white? Pony up a few hundred for pewter, reflex blue, or subtler shades of black, gray, white, and red. You like the idea of an autopilot? Add that in. Pneumatic, adjustable suspension? Supercharger access? Maybe that last one is standard.
              You can trick out most ICEs with options like multiple engines or a bigger gas tank, even a larger fuel port so you spend less time pumping gas. Well, they have some options, anyway.
              This applies as much to the Model X (eventually a $80,000 baseline car) as it does to the Model III. The average transaction will not be the base price, and it is as simple as that. If I was in the market for a Model III, I wouldn’t care about the color of the paint so much, but I would want a few options. I think $25k in total possible options is even conservative, but I doubt that will be the average. Range, quickness, interior aesthetic, convenience and comfort, technical abilities, that’s a lot to choose from. If the base is $35k, I’d say the majority of folks will spend at least $2,000 in upgrades. Only a couple percent at most bought the 40kwh Model S. Do I think the arithmetic mean will be $60k? No, nor do I think it is the median. I do think the mode will be closer to $40k.

              1. Ambulator says:

                I’ve always assumed that Supercharging would be an option on the Model 3. Tesla needs to make the base model at least somewhat unappealing to keep the average price up.

                I wouldn’t count on being able to buy it, though.

      2. MDEV says:

        Read it in troll magazine

        1. ffbj says:

          Not quite, though if consider an article that looks at the MS view of Tesla which in general very positive, I think it a bit startling but not all that unpredictable that the cost could go that high:
          http://www.marketwatch.com/story/telsas-cash-burn-outweighed-by-long-term-ambitions-morgan-stanley-2015-11-10

      3. Ken says:

        A Model S 70 starts at $62,500 plus destination. I don’t think even a fully loaded Model 3 would reach $60k.

        1. Pushmi-Pullyu says:

          Yeah. It’s not reasonable to think that the average selling price for a $35-40k car is gonna be $60k. Maybe, just maybe, a top-end Performance edition. But certainly not the average price.

          Besides, isn’t this a bit off-topic? Nobody talks about the average selling price for a gasmobile. The price cited for a car model is always the MSRP; the base model with no options, which just about nobody buys.

        2. Koenigsegg says:

          CPO Model S 85 with Tech Package and leather seats basic white 19’s was listed $47,500 in New York and was up for less than 60 seconds

          $47,500!!!!!!!!!!

          crazy. not a 60, an 85

  2. Mark B. Spiegel says:

    The U.S. auto industry DOUBLED between 1920 and 1925, allowing plenty of demand for EVERYONE, whereas today attaining market share except off a TINY base is an absolute dogfight.

    More importantly, do you know what a 1925 Model T cost? $260, which is $3500 in today’s money. Do you understand the significance of this in permitting ultra-rapid sales growth vs the cost of a Tesla?

    1. ffbj says:

      The comparison is not necessarily valid unless you factor in a number of variables which add complexity, with greater complexity your chances of being off the beam increase. You must include the variable of predisposition to reach a result that you favor.
      In other words don’t go there.

      1. Jay Cole says:

        Mark B. Spiegel,

        Not commenting on the conclusions or opinions of the author of this piece (or the observations by ffbj above), but the author is comparing Ford in 1909 to Tesla in 2013 (and then over the next few years)…so any “today”/inflation reference (that no one is looking/asking for) would between a Ford Model T of 1911 to a Tesla in 2015…not some random 15 years later in 1926 that best suits your position.

        In 1911, the Model T ranged in price from $780 on the base touring to $1,200 on the town – which would inflation adjust it to about $19,000 to $30,000. That would be the best apples to kinda-apples comparions to make…again, if it even made sense to do so.

        Sidenote: Not sure what saying a mass produced car from 1926 has an inflation-adjusted value today of $3,500 has to do with the ‘price of soup’ (even if it was on target to the article), given that no car in America can be had for even 4x that amount today?

        Sidenote 2: I think any (and every) auto forecaster in the business today will suggest to you that the growth of the plug-in segment over the next 5 years will be multiples higher than that of the doubling between 1920 and 1925.

        1. super390 says:

          Well, this gets us into another problem, which is that Ford used its economies of scale to drop real-$ prices in a manner similar to the computer industry of recent times, but the US also went through wild swings of deflation and inflation at the same time. The US had a bad “panic” in 1907, collapsing prices; WW1 caused prices to skyrocket, and the postwar depression caused another price collapse – especially among cars. According to estimates based on extrapolating back the Consumer Price Index (1967=100), these swings took the index from around 40 all the way to 80 and then back again, which is unimaginable today. So the real-$ price in 1918 might actually be lower than the real-$ price in 1921 despite the nominal price being higher.

          Beyond that, Ford was relying on the new class of better-paid durable goods industrial workers to buy his cars, especially his own employees, which is part of why he raised the latter’s wages to $5/day. It’s rare that a company can expect something like that to work. Tesla’s closest equivalent is the many tech-industry employees in California, and they are buying a lot of Teslas. But the rest of the country is not in that kind of shape, and doesn’t look like the rising industrial superpower of World War I.

    2. Mitch says:

      You know what else is DOUBLING every year. EV sales. CRAZY, right?

    3. notting says:

      I just wanted to write something like that, so thanks 🙂

      notting

  3. ffbj says:

    Human beings like to see patterns in things and make comparisons. There are probably some deep reasons why, such as to when to plant corn, when to get down, etc…But sometimes things appear to be similar, because we subconsciously want them to be so.
    In other words I find simply the numbers of vehicles sold and somehow extrapolating from that that Tesla is on track to sell a similar number of vehicles, 500k, in a certain time, 5 years, is a bridge too far for me. Though they could certainly do so.

    The two vehicles, Model T, Model S, and their target consumer could not be further apart, of course the article point this out too. The times in which these vehicles where introduced are worlds apart in many ways. One at the dawn of the ice, and the other in its twilight, the beginning of its inevitable decline. More accurate would be if Packard was mass producing vehicles during its time, then that would be more like Tesla is today.
    In most ways there is really nothing to compare Tesla’s repertoire of offerings to any vehicles produced historically, in that they are unique, and really have nothing to be compared to.

    1. m hovis says:

      Well said ffbj. Human beings make comparisons and count everything. Coming from the metrology business, I am guilty as charged. I don’t think the author of the Bloomberg graph was trying to imply anything anymore than I was, but like myself, was fascinated in the comparison. More than anything for me, it was an opportunity to look at the CAPEX of Tesla. As for the comparisons, hey, it’s what we do….

      1. ffbj says:

        Right. It was of an observation. I think though that you have many examples of seeing real correlating patterns, for instance in weather, where forecasts are both art and science.

        1. heisenberght says:

          “for instance in weather, where forecasts are both art and science.”

          I really like that one! 😉 And maybe we can generalize it. (With weather beeing a nice example…)

  4. Phr3d says:

    I see where you might be going, but it’s helpful to remember that a 1990 civic LX, pre-ABS,pre-airbag, pre-almost Everything that is required now was ~$8000, so your $3500 doesn’t translate well for cars, i.e., the civic was nearly the most popular car of the day so a decent competitor for the equivalent Model T.
    So the 200% price jump of the last 25 years needs to be added in — $35k is NO bargain, but $3500 is simply way off. Until we see how the model e performs, it is hard to know what to compare it to, as well.

    1. Robb Stark says:

      If you walk away from a major accident $35k is a major bargain vs a pre 1990 vehicle where you are rolled away paralyzed or dead.

      1. Phr3d says:

        my comparison was for Mark’s inflation comparison in that 1990 was the last year for No airbags-a Major cost factor of current prices.
        But it didn’t wind up as a reply to Mark and frankly Jay said it better anyway.

      2. pk says:

        Before I got my 2015 Nissan Leaf I had a 2010 Subaru Legacy. It agrees with you.

        https://www.dropbox.com/s/lh7n0zz0z13e0fh/IMG_20140624_172239.jpg?dl=0

        1. sven says:

          Yowzee! What hit you, the white CUV in the background? At first blush it looked like the other car’s bumper overrode your bumper, but a closer look clearly shows that your rear bumper was pushed into the your rear tires. I know the Model S has extra reinforcements when the rear-facing trunk seats are ordered, but I don’t know if I would let my kids ride back there while driving on a highway. I would still worry about a bumper override situation or getting hit by a very heavy vehicle at a high rate of speed.

        2. Lindsay Patten says:

          There’s some irony in that license plate…

    2. heisenberght says:

      It would be funny to see a Model T remake produced nowadays on a modern production line with no changes at all exept for beeing EV.

      1. Josh says:

        As I noted way down below, I have a 1911. In all honesty, you really don’t want to drive more than about 45 mph in one.

        There are tons and tons of Model Ts still around (look at those production numbers), so making a drop-in EV drivetrain might be feasible. Getting those old engines running is not easy, and the crank start is a forearm shatterer, if you don’t put an electric start kit on it.

      2. super390 says:

        I think it’s amazing that no one has mentioned a car that costs less than the inflation-adjusted Model T cost: the $2000 Tata Nano – which actually failed to sell well, perhaps because its cheapness was overly emphasized and became a stigma.

  5. SparkEV says:

    I guess I’m a loon who doesn’t believe we’re going to run out of fossil fuel any time soon. Billion years of carbon fuel accumulated run out in hundred years of use? Not likely. They will get more expensive to dig out, but not likely to run out any time soon.

    1. Alaa says:

      We will never run out of oil, but as Shake Yamani said a while back that the stone age did not end because we ran out of stones.

      I know that some will argue that we will run out of oil. A purest point of view I would say. From a practical point of view though all we need to do is look at the functionality of EV vs ICE. No comparison. Look at the very difficult way that we use to extract oil vs the very easy way to produce and store energy from the sun alone.

    2. danpatgal says:

      They won’t run out, it’s true. But at some point the energy returned on the energy invested (EROEI) will be too low to make it worthwhile. You might think the price would go up to offset that, to a certain extent that’s true (and is what happened 2008 – 2014) and it’s why non-conventional extraction (fracking) boomed. But, the price is somewhat artificial, pumped up by monetary policy (printing money and debt expansion). In 2015 we’re seeing that these price fixes have run out of potency.

      Other commodities suffer in a similar way, in fact our entire economy could suffer in a similar way with as much as we’re tied to cheap energy and ignored prudent fiscal policies. (And though I’m a huge EV fan, they can’t change this situation anytime soon … if ever.)

      Anyway, as far as “peak oil” goes, I’ve found it is useful to think in terms of a human energy equivalent to extract, transport, refine … a usable energy product. If the human energy to get fossil energy exceeds what we get from that fuel, we’ll not do it anymore. (If it costs more to work, buy, and fuel your car than just walk – you walk). It’s a simplistic example, I know, but it illustrates what the peak means. It’s not physically running out of something, it’s practically running out of it. (Another example: I can still get Renault LeCar parts, but it’s not worth it financially to keep that kind of car on the road … I do it for sentimental, impractical reasons only.)

      1. Bang on, EROEI ratio is what matters in the long run for the real economy (not the $ printing economy). And the reality is that renewables will never have the EROEI of > 100 that the sweet light crude had in the early 1900’s.

        I haven’t kept up on the current ratios, but my guess is that the hard to get oil is probably getting close to single-digits, which is about the same order of magnitude as renewables. Bottom line the real economy will have to adjust to new reality of amount of energy available to society.

        Our relative wealth will be determined by how efficiently we use that energy, and how much we change our society to value something other than consumption.

          1. Thanks for that link – I missed that article several months ago. I found the comment by “Chris C” to be interesting (3rd one down) – it isn’t clear to me from that article whether the solar EROEI was based on 1 year of output, the life expectancy of the panel, or some other metric.

            Unfortunately anything involving mining (ie materials for panels and batteries) will always be a bit of a moving target, as those resource bases involve a similar pyramid to that of oil. We are into much more diffuse deposits than decades ago. Hard to say whether that has been offset by increases in recoveries or not.

            Anyways, the point stands that we need to be thinking with a longer-term vision than any private company (or current government) is doing.

            1. SparkEV says:

              Well, that’s only based on current tech. We didn’t think fracking would do much until it happened. If there are self-replicating, self-healing oil extracting robots to do the bidding, it could get cheap yet again. The point being, we’ll have oil physically probably forever. But in short term, it’ll be up and down due to extraction issues.

              Meanwhile, we just have to hope that next big thing (Mr. Fusion?) comes along before more oil can be dug up cheaply. I wouldn’t mind oil as much if not for so much coming from corrupt countries. Either that, or oil leads to corruption.

              1. danpatgal says:

                The increase in fracking wasn’t a technological, it was financial. Fracking has been technologically possible since the 1940’s, but the costs too high relative to conventional oil available (even in the Middle East with additional transport costs).

                I am a technology fan, but there is no fusion fix. No magic unicorn energy that will allow us to “replace” liquid fuels as they have been available to us in the past 100-150 years. Well, at least I think that’s what your describing when you write:

                “If there are self-replicating, self-healing oil extracting robots to do the bidding, it could get cheap yet again.”

  6. Peder says:

    Mark,
    Great article and comparison, I loved it! Thanks for writing!

  7. Foob says:

    “just”

  8. Bill Howland says:

    I’m going to take the opposite view point for these reasons:

    1). Ford didn’t have much low-cost competition. In any event ford was usually profitable, whereas the financials for Tesla are somewhat suspect. Say what you will, Tesla’s stock valuation is in Bubble teritory, compared to the number of vehicles they sell. Some financial guys claim Tesla loses $10,000 on each car they sell. This is not my field of expertise, but I would be foolish to ignore their statements unless I had clear evidence they’re mistaken.

    2). Ford didn’t make that many design errors to my knowledge, whereas I am intimately familiar with Roadster problems that shouldn’t have been (Lotus already perfected certain designs that Tesla inexplicably decided to not use.)

    2a). Many S owners seem to have many more problems that an otherwise ‘elegant’ car shouldn’t have.

    3). The Faraday Future company may be a fly by night, but they are a company (and there are probably plenty in China) that at least plans on going against Tesla head to head.

    Its true that at one point ford started making cars only they could fix, but the result was that year their sales fell through the basement, and they quickly learned their lesson.

    Tesla seems to be taking much longer fixing nagging warranty issues, and repeating some of the old mistakes.

    My own experience of having to fight for my warranty rights left a bad taste. Ford in the early years to my knowlege never reneged on anything substantive.

    1. RexxSee says:

      Unless we read all the books and all the daily news from the papers of that era, our knowledge of what mistakes Ford did is full of holes.

    2. Pushmi-Pullyu says:

      Bill Howland said:

      “Say what you will, Tesla’s stock valuation is in Bubble teritory, compared to the number of vehicles they sell.”

      Yes; even Elon has at least twice said that the price of Tesla’s stock is inflated beyond any reasonable level, or words to that effect. What bothers me is when people conflate the performance of TSLA, the stock, with the performance of Tesla Motors, the company. Both Tesla bashers and Tesla cheerleaders are guilty of doing that, and doing it frequently.

      Just because there is a lot of speculative buying and selling of TSLA doesn’t mean the company is doing badly… nor, contrariwise, does it mean it’s doing quite well. There is a strong disconnect there because of the high level of stock speculation; performance of TSLA is not reflective of the performance of Tesla Motors, and vice versa.

      “Some financial guys claim Tesla loses $10,000 on each car they sell.”

      It’s truly amazing how many people who apparently know a lot about finances, nevertheless describe Tesla investing a lot of money in future growth as “losing money”. I think they have been educated in financial matters beyond their intelligence; you don’t “lose” money just because you invest it!

      “Ford didn’t make that many design errors to my knowledge, whereas I am intimately familiar with Roadster problems that shouldn’t have been (Lotus already perfected certain designs that Tesla inexplicably decided to not use.)”

      This is an apples-to-oranges comparison. The Model T was never intended to run at modern highway speed for long distances. Anyone who thinks that the Model T will stand up to that, or even to run for hours at a speed of, say, 40 MPH, has never tried to take a road trip in one. Back the days of the Model T, you could never give anyone who lived a long distance away an estimate of when you would arrive, because breakdowns and flat tires were so frequent. If you doubt this is true, then talk to someone who grew up in that generation.

      As I think most readers here know, Consumer Reports recently downgraded the Model S to “below average” reliability. It’s amusing to think what CR would say about the Ford Model T, if it was rated on the same review system! It would not be pretty… 😀

  9. kubel says:

    Tesla is going to disappoint if you think it’s going to track the Model T. They won’t be selling the M≡ in any significant volume until probably 2019.

  10. rs_rwc says:

    “Tesla Just Needs To Keep Tracking the Model T” – they need to do a lot more than that! By 1931 GM had, from scratch, surpassed Ford in market share. Being a “Fast Follower” (GM in the 1920s) is a much better strategy than being the “First Mover” (Ford Model T). Tesla is in the sorry position of being a First Mover. This article from Steve Blank, a prominent Silicon Valley guru, says it better than anyone else I have seen:

    http://steveblank.com/2010/10/04/why-pioneers-are-the-ones-with-the-arrows-in-their-backs/

    There are multiple potential Fast Followers (GM, Nissan, Ford, BMW, VW, Hyundai, Volvo, Mercedes, chinese) continuing to watch Tesla take the arrows in the back and likely getting ready to, over the next decade or so, seriously introduce EVs according to market and regulatory demands using their vast financial and production resources.

    Tesla is of Silicon Valley, and is behaving exactly according to the First Mover script – the exit strategy is to get acquired. To quote from the article “First Movers tend to launch without really fully understanding customer problems or the product features that solve those problems. They guess at their business model and then do premature, loud and aggressive Public Relations hype and early company launches and quickly burn through their cash. This is a great strategy if … you are going to bet it all on flipping your company for a sale.”

    Like Crocs (CROX) with a new type of shoe, it looks like Wall Street has decided that Tesla’s story is credible enough for them to use as a plaything and hype and so inflate Tesla stock and make a ton of money. This is a huge problem for Tesla in that now it cannot be flipped – no one will pay $25 Billion for it. The only buyer with enough cash and strategic interest even at $50/share is perhaps Apple. This is why Musk reacted to the story about Apple hiring Tesla engineers – if there is the perception that Tesla talent is leaving to Apple, Tesla loses a lot of flip value.

    With no buyers due to over-achieving on the hype, Tesla has no option but to desperately continue raising capital by means of printing more shares of its inflated stock and keep up a crazy burn rate against all odds, hoping that someone will buy them before multiple, well resourced Fast Followers overtake them. Tesla has no fundamental technological or other intellectual property moat around it. The crowd of potential Fast Followers are happy to watch Tesla keep taking the First Mover arrows in the back.

    1. heisenberght says:

      “There are multiple potential Fast Followers (GM, Nissan, Ford, BMW, VW, Hyundai, Volvo, Mercedes, chinese) continuing to watch Tesla take the arrows in the back and likely getting ready to, over the next decade or so, seriously introduce EVs according to market and regulatory demands using their vast financial and production resources.”

      Yep! We are seeing a pretty race from which all of us will benefit 😉

      However I have some problems with seeing big established car companies as “Fast Followers” Let’s just ask physics:
      E=cash
      m=money invested in machinery
      E=mc² (cash can be invested)

      F=m*a
      I have no doubt that there will be “Fast Followers” but to get big car moving we’ll need a lot of Force!

      Who will win the race depends on the speed of light. How fast can potential fast followers invest their money? In fact I really don’t care.

      Just sit back and enjoy the race! 🙂

      1. kdawg says:

        I think that was Elon’s mission anyway, to force the auto-industry to become “fast followers”. I’m sure he’d be pleased with those results.

    2. Pushmi-Pullyu says:

      rs_rwc said:

      “There are multiple potential Fast Followers (GM, Nissan, Ford, BMW, VW, Hyundai, Volvo, Mercedes…”

      I’m sorry, but you have completely failed to understand the concept of “fast follower”.

      Here’s an example: Apple was a fast follower of Blackberry into the smartphone market, and it took over the lead so forcefully that Blackberry was forced to drastically shrink the company, very nearly driven into bankruptcy. You will note that none of the cell phone market leaders of the time managed to do so.

      Fast followers never come from leaders in the old technology during a tech revolution. Kodak didn’t become a “fast follower” after other companies took the lead in the digital camera revolution; it went bankrupt instead. Some of the companies you listed will go bankrupt; not a single one can possibly become a “fast follower” because they’re much too heavily invested in gasmobile tech.

      Now, you did throw in a generic “Chinese” at the end of your list. And there, you might well be correct. There is a strong possibility that a new or currently tiny Chinese auto maker will find a way to grow and challenge Tesla for the lead in the EV revolution. It’s a strong possibility because China is in the midst of an industrial revolution outpacing any other country, so that’s where real growth is coming. India is another possibility.

      1. rs_rwc says:

        Kodak didn’t become a Fast Follower in digital photography because it was the First Mover. By combining/licensing their digital imagers with the existing camera bodies of others they taught them enormous lessons about the technology and how to market it.

        https://en.wikipedia.org/wiki/Kodak_DCS

        All the Fast Followers in digital photography were also leaders in film photography. Cannon, Nikon, Minolta, Olympus, Fuji, Hasselblad, Leica – all made the transition. Kodak failed due to bad management/high cost, but they still had tremendous digital market share in the mid-2000s. Camera stores today carry the same brands they did in the heyday of film.

        So your Kodak analogy is so twisted, it is not even wrong. Let’s take it apart –

        “Fast followers never come from leaders in the old technology during a tech revolution” – nope, I just bought an excellent Olympus 4/3

        “Kodak didn’t become a “fast follower” after the other companies took the lead in the digital camera revolution” – Kodak was the First Mover, by definition not a fast follower

        “Not a single one can possibly become a “fast follower” because they’re much too heavily invested in gasmobile tech” – Nissan, GM are doing great things with BEVs for non-millionaires. Ford is #2 in US EV sales in 2014 and so far in 2015, I drive by their Palo Alto corporate research lab (which is 1 block from the Stanford campus) and the parking lot is overflowing – they sure look busy. I see no evidence that any of these three are going to let the EV transition bypass them.

        Mary Barra has an MBA from Stanford, Mark Fields from Harvard. They well know the theory of disruptive technologies, first/second mover, and are taking action.

        In my mind, the lesson of photography transitioning from film to digital is this – just like the brands in a camera store didn’t change much, it could very well be that neither will the makes of cars.

  11. Cavaron says:

    Looking at the production comparison for the next year – with 17.000+ cars made per quarter (goal for the actual quarter), Tesla can get to the 180.000ish total produced cars by the end of next year. Will be interesting to watch.

  12. Alaa says:

    I think that scaling production now days is much easier and by far quicker than that what Mr. Ford did. Robots and CPUs are the reason.

    1. Aaron says:

      Great point. We know how to make manufacturing lines because of the early trailblazers already doing the hard part. Where I believe Tesla won’t keep up with Ford in this case is because the Model T didn’t have as much competition.

      Horses were the Model T’s competition and they were good competition for yesteryear’s unpaved roads. Eventually, the Model T showed people that cars were SIGNIFICANTLY BETTER than horses.

      Today, the incumbent technology is ICE vehicles, and they’re very, very good. Over 100 years of improvements do that to a technology.

      Tesla needs to show the “Wal-Marters” that their vehicle is SIGNIFICANTLY BETTER than their ICE vehicles, and that it’s not just a vehicle for treehuggers or 1%ers. That will be difficult and it will take years, but it will happen.

  13. Martin T. says:

    Go Tesla,

    Positive times ahead with model III price down and greater battery range for your $.

    The future looks very sunny – charging on solar even better!

  14. Steven says:

    Two questions…

    1.) Was the horse and buggy industry as openly hostile toward Ford’s Model T?

    2.) Was See Through’s great-grandfather trolling Ford also?

    1. Big Solar says:

      yes and yes. The model T was also much much quicker than the Model S.

    2. Pushmi-Pullyu says:

      Steven asked:

      “Two questions…

      “1.) Was the horse and buggy industry as openly hostile toward Ford’s Model T?”

      Have you heard the expression: “Get a horse!” ?

      “2.) Was See Through’s great-grandfather trolling Ford also?”

      Nah, he couldn’t afford to send 50 repetitive, anti-Ford FUD telegrams a day to newspaper editors. 😉

  15. GeorgeS says:

    Major modes of transportation get replaced with something better. The steam engine and trains replaced the horse and buggy. Then the automobile and airplanes replaced trains as the favored form of transportation.

    Will electric vehicles displace the internal combustion engine?

    I’d say there is a good chance.

    Hey Mark H.

    I think you would like this book about the era when the railroads ran this country. Quite a fascinating tale about how they grew from nothing to everything and then just died.

    This very same thing could happen with the current auto industry. It’s basically “change of die”…….and it looks like our major players like Ford, Chrysler and (GM?) are on the fast track to an early grave.

    It is about Fred Harvey.

    http://www.amazon.com/Appetite-America-Business-Civilizing-West-One/dp/0553383485

    1. ffbj says:

      Where the Harvey Girls came from:

      I grok your things change. Few would get a reference to the ’20th Century Limited,’ which at one time, in the hay day of the passenger train, everyone would have.

    2. RexxSee says:

      Does it tell something about the great conspiracies from Firestone, Standard Oil and GM in the ’30s that killed the street cars? It could have happened (still happening?) also for trains, bullet trains subways etc…
      Logically, the Oil Cartel attacked all that competition with using oil. The big spread out of the highways was supposed to protect evacuation in case of a nuclear war. The Defense was run by a former GM vice-president.

  16. RexxSee says:

    1- The first Ford’s company “Detroit Automobile Company” was a total failure.

    2- John D. Rockefeller and 2EXXON (Standard Oil) financed Ford on it’s 11 years battle against the Selden Patent, thus Ford and Rockefeller were partner at some point. And it’s not difficult to imagine Rockefeller pressuring Ford to build gasoline cars exclusively, and helping finance his R&D as well.

    Now Tesla is going AGAINST the huge global petro-automobile cartel.

    1. RexxSee says:

      More, the petro-automobile cartel is a big chunk, but only a part of the Industrio-military complex , including wall street and most of the medias.

    2. m hovis says:

      I don’t like to feed conspiracy theory, but it was also kinda unsettling that while Rudolph Diesel was promoting his invention with a bio-fuel solution, was found mysteriously drowned at sea, and six months later Standard Oil had a new fuel solution for his invention.

      1. RexxSee says:

        The expression “conspiracy theory” is a spin put in place by P.R. companies paid by the mega ones instigating all the big conspiracies. Nature is full of conspiracies, sport, hunting, competition are based on conspiracies. And all of a sudden there are none whatsoever conspiracies in the corporate world????

        Likewise, Stanley Meyer was poisoned at a NATO reception, and Paul Pantone was accused of insanity.

        In the late 1800s the empire of John D. Rockefeller was built on domestic lighting, replacing whale oil with 10x cheaper and less smelly kerosene.

        In the early 1900s he saw is business rapidly declining with introduction of the ELECTRIC bulb.
        There were more electric cars than ICE then.
        Taking his revenge on ELECTRIC cars was, I guess, a strong motivation not to loose the other half of his huge empire to the ELECTRIC marvels.

        The 1914 fire at the Edison battery plant may be another “business as usual” hidden historic fact. Edison lost more than 100,000 of his famous Nickel-Iron batteries in this fire. He had a deal with Ford for 150,000 electric Model T a year for 1915.. There were two prototypes. Maybe Ford proposed a bogus plan on purpose… we’ll never know for sure.

        1. Bill Howland says:

          I was always quite mad that, who was it? Chevron? …. sat on the perfected battery for the EV1, thus ensuring that nothing would really come along until the Laptop/Cellphone craze generated too much demand for Premium Batteries that could no longer be squashed.

          Perhaps Lutz’s Volt tended to fool the Oil Cartel, since they thought it would mostly use their product when in actuality it does nothing of the sort.

          1. super390 says:

            That was Chevron. It bought Evonics’ Ni-MH patent, and then refused to license any manufacturers for batteries of large size. At the time that seemed to prevent using them in EVs. The coming of the Li-ion laptop battery led to figuring out ways to wire many, many small batteries together to drive a car. I do not know whether someone could have done the same in the Ni-MH era to evade Chevron’s obstructionism.

        2. SparkEV says:

          When it comes to ICE vs EV in early 20th century, conspiracy theory need not apply. Even if those EV sold in some numbers, the improvements made to ICE would’ve easily made EV obsolete.

          Now we’re on opposite trend. There’s only so much you can squeeze from ICE in terms of emissions and fuel economy while EV will only get better. I have to wonder if there will be gas bags in the future who claim there was conpiracy against superior gas cars (ie, lower emissions and higher fuel economy than EV), because of today’s EV subsidies.

  17. no comment says:

    i don’t think the tesla – model t analogy is a good one because the circumstances are so different (i appreciate that the author has noted differences between ford and tesla). with the model t, you had a materially new mode of transportation being made affordable. the automobile was not equivalent to the horse and buggy becausee they operated in very different ways.

    the icev and bev/phev/fcev are basically equivalent; the difference is in the underlying technology. but while ev enthusiasts are enthusiastic about technology, i would suspect that the vast majority of the car buying public is not greatly concerned about the technical details of what goes on under the hood.

    so if you can’t differentiate the product, then it comes down to a price play. in other words, it is not worth it to most people to pay a premium to drive an electric vehicle.

    what is driving electric vehicle development is regulatory pressure. that means carb requirements, incentives…the whole shot. i personally think that’s a good thing, but my point is that you can’t compare the early days of the automobile industry to today: in the early days, the comparison was between car and horse/buggy; today the comparison is between one car and another car. the factors that would lead to a growth in tesla will be different from the factors that led to the growth of the model t.

    yes, i get the total cost of ownership arguments, but most people make car buying decisions based on sticker price, i doubt that many people even consider finance charges when making an auto purchase, so you know that they aren’t going to consider such relatively esoteric details as the cost of gasoline and lifetime maintenance.

    as to the issue of direct sales, i can understand why there would be some opposition to that, certainly existing dealerships are primarily concerned with their own self-interest, but there is a consumer interest as well. consider the circumstances facing some model s customers who have to have their cars transported to other states to have the cars serviced. that’s not a big deal to the wealthy car buyer (who would have other cars anyway), but it is not a good thing for those who aren’t so wealthy. it really is true that the government does need to impose regulations to protect uninformed consumers from making bad decisions.

    1. RexxSee says:

      You speak like someone who never drove an EV! So much quieter, powerful, clean, maintenance free, easy to recharge, simple. it is NOT like an ICE car. This is why 9 out of 10 owner of an EV will never return to ICE.

      And BTW we have the ugliest crisis the human race has ever faced to solve, and it is URGENT!

    2. SparkEV says:

      Umm. SparkEV can be cheaper than Spark gas version. Typically, it’s within $1000 for Spark gas version while being quicker than any car under $20000, including much more expensive “sporty” ICE cars. The myth that EV is more expensive to buy than ICE was debunked with SparkEV.

      Heck, SparkEV lease was cheaper than $1500 used car between Apr and Oct of 2015.

      Yet sales still lag. Why? One would be GM’s unwillingness to market it. Another, based on comments from here, is that buying a vehicle, EV or ICE, is not solely on price and performance. They want leather or don’t like plastic interior or some other mumbo jumbo.

  18. Jeff Songster says:

    Or maybe since they are now worth ‘too much’ just like… Apple… they will follow that approach. Grow and grow into their current over valuation and then beyond it. Not everyone is motivated solely by making more money.

    I think Mr. Musk may be somewhat more progressive than many think. His earlier days seemed obsessed with cash… now that he has gobs of that he seems more interested in actual change in the world… might have coincided with becoming a dad. Either way… good for the world if it works.

    1. RexxSee says:

      He the green David against a bunch of brown stinking Goliaths.

  19. Josh says:

    I ironically own (inherited) a 1911 Model T Roadster. I had crazy thoughts at one point of converting it to EV, but the money is much better spent and a highway capable modern EV.

    In terms of this comparison, my Model T would be the equivalent of a 2015 Model S…is there a trade in program for that?