Does Endless Big Auto EV Hype Help Or Hinder Tesla?

JAN 6 2019 BY EVANNEX 36

DOES THE HYPE SURROUNDING BIG AUTO’S EVS HELP OR HURT TESLA?

While they’ve been slow to cut the umbilical cord from gas (and diesel) powered cars, Big Auto is starting to open up to vehicle electrification. This sparked speculation, especially from financial pundits, that Tesla’s days were numbered. Would Big Auto’s newfound interest in clean cars squash the Silicon Valley upstart? Or, would their impact draw more attention to the electric car innovator.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: The Porsche Taycan was spotted this fall being benchmarked against Tesla’s Model S (Source: Electrek)

Regardless, the EV segment, once a small industry niche, is destined to expand. Stephanie Brinley, IHS-Markit’s principal automotive analyst tells Consumer Reports, “The more choice you have, the more attention gets drawn to the segment, and the more opportunities customers have to see it as something that’s attainable, that’s viable.”

And while Big Auto’s EV progress remains sluggish, there’s a new “crop of high-performance luxury EVs that won’t wear a Tesla badge. These new electric cars and SUVs are from traditional manufacturers, including Audi, Jaguar, Mercedes-Benz, and Porsche, and they’re entering a market that some analysts predict will explode in the next few years—with sales increasing sixfold in the U.S. by 2025.”

When asked for comment, a Tesla spokesperson repeated a statement the company made in 2016 when the Jaguar I-Pace EV was first announced. “Every compelling EV on the road is a win for Tesla,” the spokesperson wrote to CR. Some speculate, as JFK once famously said, “A rising tide lifts all boats.” Could the same principle apply to a flood of new electric cars?

Above: The Jaguar I-Pace and Tesla Model X (Image: InsideEVs

Regardless, Tesla maintains some hard-to-beat street cred in the EV world. “There’s no question that they made EVs cool,” says Chelsea Sexton, an industry analyst and EV advocate. In addition, “Most of these new luxury EVs from traditional manufacturers can’t match Tesla’s promise of 300 or more miles on a single charge, but… [they’re] hoping to capture something similar to Tesla’s magic.”

However, it could prove difficult for legacy automakers to take down Elon Musk. “Despite spending virtually no money on traditional advertising, Tesla is the best-known electric car manufacturer in the world, according to a 2017 survey from market research firm Dalia Research.” And obviously, “Tesla’s other big advantage in the EV space is its network of 644 Supercharger 480-volt fast-charging stations in the U.S. and Canada.”

But right now, “Tesla doesn’t currently have the production capacity to meet that potential surge in demand, Brinley said, and so that opens the door wide for these new offerings.” In turn, “To support the cars, automakers are building out [albeit slowly] a nationwide charging network to rival Tesla’s own Supercharger system.” And they’re also working hard to reach “technology levels that Tesla, headquartered in Silicon Valley, has already reached.”

Above: VW’s “Electrify America” initiative just installed its first charging station in Livermore, CA a few weeks ago (Source: Electric Revs)

In the end, Brinley told CR that Tesla does indeed stand to gain as other brands debut their EVs. “The more choice you have, the more attention gets drawn to the segment,” she says. “If you expect EVs to be a larger part of the marketplace, eventually other players have to come in,” she says. “Tesla can’t supply the world.”

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Source: Consumer Reports

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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36 Comments on "Does Endless Big Auto EV Hype Help Or Hinder Tesla?"

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It helps because if others do well we all do well and we always have Tesla to thank for getting the ball rolling but if others do poorly Tesla will look even better, either way, the train has left the station and isn’t coming back!

condition that Tesla maintains the competitive leading edge =price-quality,+techno innovations…..

It will help Tesla because much of the dealer network won’t sell them.
Audi dealers planning not to stock them for example, will bring those customers right to Tesla’s web site.
Witness the Chevy Volt, now cancelled, helping Honda Clarity sales.

It should be noted that Tesla has never paid a dime for advertising. They obviously benefit from having Elon’s public interactions/image help in that department, but point being is they have more demand than they can keep up with, and don’t currently need to aggressively seek more orders. What’s maybe lost to the analysts is the fact that they haven’t really aggressively sought out customers, aside from a handful of end-of-year/quarter sales pushes.

You really think the analysts haven’t noticed? I would have thought it is pretty obvious to people who analyse financial reports they there are no advertising costs.

There’s a TON that “analysts” don’t recognize or understand about Tesla. Hell, what IS an analyst, anyway? I’d put way more stock in the non-recognized analysts that come to these forums over financial hacks that bounce from Pfizer to Tesla to Canadian cannabis, etc. The more I read the “analysts,” the more I realize they’re simply folks who write articles from their own bias with ZERO accountability for their performance on calling the market direction.

My point is that Tesla has more chess pieces (like advertising) left to play before they’re out of options with regards to competition. Unlike the Big 3, who are relentless in pounding the consumer with expensive TV commercials and other marketing tactics.

that is so far that Tesla has not paid.
I think that is about to end, esp starting with MY.

We have already seen Tesla offer lower priced versions of their cars (such as the newer “Model S60”), rather than resort to paid mass advertising. That has surprised me, but if that is Tesla’s business strategy, then I doubt they are going to change it anytime soon.

Actually they do pay for advertising, just not by the conventional media. They take their cars to auto shows (and they are not cheap). They offer many incentives to existing Tesla owners to get friends and acquaintances to promote their cars.

You’re dreaming John! Tesla has been beating the bushes for sales the entire Q4! New customers, supposedly 2/3 of M3 orders Q4, were sold cars ahead of reservation holders. Reservation holders could have taken the cars. Why didn’t they? I haven’t been hearing howls of protests by them – which there would’ve been if they wanted what was being offered to others. If they’re waiting for the S35k model Tesla has a big problem.

I didn’t say that Tesla hasn’t been looking for customers. I said they haven’t paid for traditional advertising. They still have that option should they need it in the future. The fact that they haven’t speaks to their need (or lack) of finding customers at this point in time.

As far as customers on the waiting list that choose to skip the current available models, I can’t speak to that. Maybe they are waiting on the $35k model. But Tesla is gonna sell the most expensive models first, once they see that slowdown, then it’s time for the $35k model. It’s all about survival, seems that many folks can’t really understand that idea. It ain’t personal, and if Elon could give out his product for free, I have no doubts he’d do so.

Exactly!

No effect. The ones who want a ‘smoke’ enema will take it and the real people will make up their own minds.

It’s very positive for Tesla. Lots of people still don’t realize Tesla exists or take Tesla seriously. The fact that there’s an endless barrage of stories about well established auto companies that are desperately gunning for Tesla sends a very clear signal to everyone that Tesla is the top company – they are the company to beat.

They are Apple and they have the iPod or iPhone. Everyone else is gunning at them – they’re the Nokia, Blackberry, Droid, Pixel, Zune, etc…

Do endless hype pieces by Evannex help or hinder Tesla?

Every time Tesla is mentioned it helps them more then we think.

Evenex didn’t write this story. Consumer Reports did. What problem do you have with Consumer Reports writing a story positive of Tesla? What you are doing is the equivalent of blaming Google News for the content of Trump’s tweets, because you read the tweet in a Google News story.

All you have done is show that you didn’t actually read the story, and realize who the primary source is:

“Source: Consumer Reports”

https://www.consumerreports.org/hybrids-evs/new-wave-of-upcoming-luxury-evs-takes-aim-at-tesla/

Link is a serial anti-Tesla troll.

then do not read it. In fact, start your own magazine on ICE. Im sure that you will be quite successful. ROFL.

If articles are too biased, while bashing others, and don’t mention negative things, or even say that a negative thing is designs that way, and call it a feature. . . Then people will hardly take notice of it, or don’t read it at all. All EV news are good news, but don’t have to copy Trump with alternative truth/facts. Add neutral facts, and clearly state I thìnk, or I belive this or that feature is the best – so the grader can clearly see it is subjective. Then objective facts can be added in a chart for example. Also, things that is compared should be similar products, with a similar function/price etc. But again. . EVs need attention, since we need EV companies to sell a lot of cars and make a profit – so they can develop new models, add features and improve the technology. People need to find an electric alternative for almost all car, pick-up, vans and what ever they want to drive. I would like to read more about Tesla equipment and after market parts for examples. I’d like to read about the small improvements in Tesla cars, even if it is tiny.

I think Consumer Reports buried the most important line at the bottom:

“If you expect EVs to be a larger part of the marketplace, eventually other players have to come in,” she says. “Tesla can’t supply the world.”

But, they can supply 20%.

If you think the market will remain static this is true, they’ll never offset the 86 million passenger vehicles sold annually.

If you look to a future where autonomous driving fleets replace a large portion of passenger travel, each autonomous vehicle can replace 5 privately owned vehicles. 86 million / 5 = 17.2 million per year. It’s not inconceivable for a single manufacturer to corner 40% of this market, that means they’d only have to make 6.8 million vehicle per year. Which equals approx 7 gigafactories.

Wouldn’t the US government force the company to spilt up in at least two parts if they dominate the market too much?
25% is no problem, but if they had reached 50-60-70%. .

Not that I belive a single EV company will ever reach or keep even 25% in a 3-4 years period. Too many players enter the market, and there will be 25+ models to choose from. Add another 3 years and there will be 50+ models to choose from.

The growth will of course give Tesla a solid salesnumber, since more EVs are sold year by year. If they can keep their market share (percentage), they will have to work hard to make enough cars.

Volume sales of cars require cheaper models too. When you can buy 4-15 cheap ICE cars for the current cheapest Tesla, we know many people will continue to buy super cheap cars – until super cheap EVs can replace them.
The super cheap EVs are not going to be made by Tesla, but maybe Tata motors, or a Chinese brand.

No, Tesla will not supply the whole world. The real problem is, who will be in there? New Chinese junk, or old legacy car makers desperate to stop EVs?

All of the above, plus some new players like Rivian.

“… the barrage of Tesla killer announcements is rampant.”
Can we drop the “Tesla Killer” crap? This is a term used by media and people commenting on articles. Big Auto does not claim they are or produce Tesla Killers.

The answer to the question is so obvious, I’m going to answer a completely different question. How many legacy auto companies will be still in business five years from now? Not half as many as there are today.

Very few legacy auto makers will be out of business in 5 years. The automotive market cannot change that fast; it takes too much capital investment. New auto makers can’t replace the volume produced by legacy auto makers that fast.

However, 15-20 years from now, you may be right about half of legacy auto makers having failed.

Everytime they announce that they have a ‘tesla-killer’ and it is something like the leaf, i3, or bolt, all it does is make Tesla move that much further ahead.
Im not convinced that any of the new stuff coming are tesla-killers, but they WILL kill their ICE vehicles. IOW, Taycan may not kill Model S (though I suspect that it might compete), but I promise that it WILL kill a couple of porsche models, as long as dealers have it, and have to push it.

Most of the legacy auto dealers are going to fight the EV revolution tooth and nail. The EV revolution isn’t just going to replace the gasmobile, it’s also going to change the business model for selling cars.

Volkswagen is already changing their arrangement with auto dealers in Europe. I expect that’s the harbinger of things to come.

I think it helps Tesla, because it makes EVs seem more mainstream, more like “normal” cars to the general public, and therefore they become more receptive to the idea of buying one.

Rather similar to what Stephanie Brinley is quoted as saying, in this article.

Note, I live near the “actual” first Electrify America charging site in Chicopee, MA (May 2018). The Livermore site was the first in California – might want to check your facts. I believe they have another 50+ installed and 200+ permitted based on plugshare so the fact that traditional OEMs are building out 150KW infrastructure “slowly” (before there are even any cars available to take that charge) is also a bit misguided. Do we have to be constantly pitting Tesla vs the rest? Can’t we all just get along in the EV world?

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It helps Tesla and here’s why:

The Big 3 automakershave been promising the public “the car of the future” for around 60 years.

They’ve steadfastly failed on those promises for just as long.

So when Tesla shows up and actually delivers a real car, for sale, that seemingly comes from the future all of those broken promises from the traditional auto industry come home to roost.

Those broken promises manifest as pent up demand that gets released by purchasing a Tesla.

Legacy auto makers cannot simply “jump in” and ramp up with EVs. Their history and experience in the industry is as much a liability as it is an asset. They all have to learn to make an EV – an ICE converted into an EV is a sad and undesirable product. They will go through the same seven hells as any startup, and never get past the millstone of their dealer network.

The Mission requires many more EV makers in addition to Tesla. All hands on deck to change the global personal and commercial transport energy equation.