German Automakers Act Like Tesla And EV Transition Is A Surprise

Tesla

OCT 28 2018 BY EVANNEX 198

GERMAN AUTOMAKERS ALARMED BY TRANSITION TO ELECTRIC CARS

While excitement grows for electric cars, questions remain. Patrick McGee writes (via Financial Times), “Can Germany survive the ‘iPhone moment’ for cars? The country’s profitable carmakers are being hit quicker than expected by the adoption of electric vehicles… some question whether Das Auto will survive such an industry transformation.”

*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 success of Tesla is raising questions in Germany (Image: Car)

Right now, “If the market is betting on someone building the iPhone on wheels, it is Tesla.” It’s reported that, “In the US, Tesla outsold Mercedes and BMW in the passenger car category. Globally, Tesla deliveries including cars and SUVs were lower than both, but they were double that of Jaguar and almost 20,000 higher than Porsche, according to AID research.”

“It gives you a glimpse of the future — of what it will mean when Tesla can serve the German market,” says Mr Herger, author of Das Silicon Valley Mindset, a manual for traditional industries to innovate like start-ups. “And this was the quarter when all you heard about at Tesla was their production problems.”

Granted, German automakers “are likely to produce a record 16m cars this year… [but] it is based on a product, combustion engine cars, that could cease to exist within a single generation. The engineering skills that have set German cars apart from the pack are likely to lose importance relative to software and imported batteries. And its strengths, from engine knowhow to world-class factories, could turn into a weakness as the industry undergoes a radical shift.”

Looking ahead, “If the shift to electric happens quickly, production assets in Germany could turn into expensive liabilities.”

Above: Production of internal combustion engine cars differs from factories producing battery electric vehicles (Image: The Manufacturer)

“The whole frame of the car is different when you move from gasoline to electric,” says Sven Dharmani, global auto supply chain leader at EY. “Entire plants are going to become obsolete. The companies that make pistons and crankshafts are not going to provide the battery.”

In fact, “The threats facing the German car industry could be existential, according to Herbert Diess, chief executive of Volkswagen.” Deiss told German newspaper Süddeutsche Zeitung, “Such an industry can crash faster than many people realise… I see our chances of keeping the lead position at 50:50.”

In the US, “Elon Musk, the Tesla chief executive, is driven by grand ambitions to wean the world off a fossil fuel based economy… [whereas] the Germans are unveiling EVs to avoid breaking EU rules.” The results are striking: “Globally, not a single German EV model makes it on to the top 10 list dominated by Tesla, Nissan, and Chinese producer BYD.”

Viktor Irle, analyst at EV-Volumes, says the German strategy is to produce as many electrified and hybrid plug-in vehicles as are required by law— rather than desired.“It’s ‘compliance hell’ rather than ‘production hell’,” he says. “They don’t want to sell them; they have to sell them.”

Above: Germany fights against EU emissions policy that encourages and expedites electric vehicle adoption (Youtube: France 24 English)

All this is happening against a backdrop where “Brussels recently launched a formal investigation into alleged collusion between the German carmakers, over a slow rollout of emissions technology… [and Audi’s] longtime chief executive Rupert Stadler was arrested for his alleged role in the diesel scandal in June. VW dismissed him this month.”

Inside the tumultuous auto sector, there appears to be a sea-change underway. According to Stefan Bratzel, director of the Centre of Automotive Management in Bergisch Gladbach, “For 100 years the automotive universe had established the rules of the game. Just a few people controlled the industry, especially the Germans. Now, the role of the German automotive industry is at risk.”

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Source: Financial Times

*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.

Categories: BMW, Mercedes, Porsche, Tesla

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198 Comments on "German Automakers Act Like Tesla And EV Transition Is A Surprise"

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Brandon

Great informative article Matt. Thanks!!

Roy_H

All this is good news. It is the German auto industry, mostly the high end M-B, Audi, BMW that has been hit hardest by the success of Tesla, and they are reacting. They have seen their share of this market fall and it is clear to them that they must get on board with the EV revolution. They will succeed! It is the other manufacturers like Toyota, GM, FCA, Ford and Honda that are most at risk because they are still in denial.

Dima

Toyota has the Prius Prime PHEV (albeit with pathetic EV range), while Honda has the Clarity PHEV (with at least some better all electric range), and GM has the Volt and Bolt.

Although they are behind in the EV game, it’s not impossible the transition will come quite quickly after 2019-2020, and when Tesla sales have passed 500,000 per year.

Drchaos

Where is the Toyota investment in an enormous battery factory and software? Panasonic is already married. The rest of the cell suppliers are Chinese and Korean who have no problem whatsoever nakedly favoring their domestic customers and screwing over Japanese.

German execs are at least sounding the alarm—perhaps the Diesel Cheat scandal changed enough executives and boards to make a difference.

Maybe BYD or some other company will build a factory in Germany and pick up the skilled engineers and workers left behind from the layoffs.

John Doe
Doubt there will be too many layoffs in Germany, for several reasons.. and it looks like most people in the US don’t realise some of the largest Mercedes anf BMW factories in the world are located in the US.. Some people should really read all the changes in rules and regulations related to the Green shift and industry 4.0 Yeah. . It’s a several hundrede pages, but it is interesting to see all the work the have put in place for reeducation of production workers, tax reduction for factory tooling and redesign, how many of the suppliers have changed their product development funds towards EV technology years ago. A piston factory may just as well be ready to produce a different product that is needed in an EV, a dual mass flywheels manufacturer may have EV related products ready (you know they are..). All the work related to charging, grid redesign, load balancing. . It is all clearly calculated what they must do. Look at infrastructure spending. Do you this they suddenly had to do a lot of maintenance, or are grid changes included.. Production skills, automation skills, quality control, material testing, testing and so on are all skills they… Read more »
ffbj

Closing the barn door after the horse has left.
There will be plenty of layoffs, no matter how many pages of text are published.
The German auto industry got fat and lazy, but now things are not good, as a perfect storm of badness is rolling over them and will continue to do so. It’s a tidal wave that will just keep coming.

antrik

Certainly there are plans to shift investments… But they are generally based on way too conservative estimates on how fast the transition will happen.

Spider-Dan

Again, automakers don’t need to own a battery factory any more than they need to own a lithium mine (and I would argue that the latter is more likely to be a bottleneck than the former).

Pushmi-Pullyu

Not being able to control their own supply of battery cells doesn’t seem to be working out very well for VW or the other German auto makers, now does it?

I continue to be surprised that people keep arguing with me when I point out that only Tesla and BYD will be able to ramp up their production of EVs as fast as they want, because they are the only auto makers who control their own battery cell supply. The other auto makers are standing in line.

We’re already beginning to see the effect of this; maybe you missed some of the recent IEVs news articles, Spider-Dan?

https://insideevs.com/vw-battery-gigafactory-sk-innovation/

Spider-Dan

I saw that VW invested in making their own batteries. So did Nissan… before they stopped and decided to just buy them on the market like they do for other components. And whatever problems the German automakers are having with EVs, “enough batteries to meet consumer demand” doesn’t seem to be one of them. So like you, I continue to be surprised that people keep arguing with me when I point out that non-Tesla EVs are currently constrained by consumer demand, not by battery availability… and there does not appear to be a product on the horizon that will create the kind of instant demand surge necessary to change that equation.

But since we’re citing IEV news articles:
https://insideevs.com/lithium-market-struggle-meet-demand-through-2025/

So no, Tesla and BYD won’t be able to “ramp up their production of EVs as fast as they want,” because they will be subject to the same bottleneck in the lithium market as everyone else. I guess every serious EV automaker needs to have their own lithium mine!

antrik

I mostly agree, except on the demand part: in Europe at least, almost all available EV models have months-long waiting lists — sometimes more than a year.

Spider-Dan

Well, I can’t claim to speak for the European market in 2018. I do know that the Ampera did poorly in Europe, and that (due to GM’s exit from the European market) the Peugeot-imported Ampera-e looks to be a far worse cost/benefit proposition than the Ampera was. But maybe none of that matters and the Ampera-e would sell like gangbusters.

However, the fact remains that the Bolt has had 50-state availability in the US for over a year, and there is plentiful inventory. Now, there are anecdotes (such as the one downthread) about people walking into a Chevy dealership with a briefcase full of cash towards a Bolt and being thrown out the door. But even if we accept those anecdotes at face value… how does GM producing more Bolts or building their own battery factory solve that problem?

If one truly believes that local dealerships across the republic are diabolically turning willing customers away just to protect their ICE racket, no supply-chain-side changes will make any difference and we should be blaming GM dealers, not GM leadership.

antrik

Owning battery cell factories doesn’t allow them to scale “as fast as they want”. Quickly adding capacity is just as challenging for a car maker owning battery cell factories as it is for independent cell makers getting additional orders.

David Cary

They don’t need to based on what? That they don’t need to make transmissions? Totally correct but they will not move as fast as they need to relying on others. The argument is that the market place is changing too fast and relying on the old way of doing things isn’t going to work. They don’t see it and now where are then going to get batteries for a million cars? They can lose $100 billion in stranded assets but a battery company just loses potential sales. Who has more motivation to build factories at high risk?
Either one can pour billions into a battery factory but relying on the vision of others is not how I would risk my company.

Null

Yeah, they can just bend metal. They don’t need to be involved in the highest value add of thier product. Just like they don’t really need profit.

Spider-Dan

Lithium ion batteries are a commodity product, used in everything from power tools to game consoles. It is not a productive use of automaker R&D dollars to invest in developing the best battery chemistry, any more than it would be a productive use of R&D dollars for (say) Nissan to engineer their own microprocessors to run their cars instead of simply buying microprocessors from Intel or AMD.

Let the battery industry compete on chemistry, then buy the best product for the price and put in in your car. Instead of hiring battery chemists, hire UI designers, structural engineers, and ergonomics experts. Separate yourself from your competitors on things that are visible to the customer.

If, as an automaker, your strategy is to win by having a battery chemistry that’s better than the rest of the dedicated battery industry, you are predestined to fail. If car battery chemistry is even a factor in 15 years, the EV revolution will have been a failure and ICE will be with us indefinitely.

REXisKing

And Panasonic has done everything it can to Slow Tesla Down.

Robert Weekley

Well, a Lot, for sure! But Elon just puts in less cells in the packs, and makes a new car option!

Null

No they have provided 10’s of billions in capital via production equipment.

They are wise to closely follow Tesla’s actual production as opposed to never realize stretch goals.

obtw, cells are not constraining Fremont production it’s the paint booth.

If it were cells. they would have procured for Samsung.

antrik

I’m pretty sure Panasonic won’t neglect Toyota as a customer just because they have Tesla… The real question is when Toyota realises that they need to place much larger orders with Panasonic: whether it will happen soon enough so Panasonic can build out capacity in time.

(So far, signs point to “no”.)

David Cary

Tough call for Panasonic. Vison vs Nationalism. At some point, Toyota could be a bigger customer but that window is slowly closing.

antrik

My point is that they don’t need to decide between one customer or the other: they can serve both just fine.

Null

Panasonic makes the cells, it’s the chemistry that’s special and that is owned and the research and development is all Tesla.

So yeah Panasonic could make batteries for others, and the do, like proterra and workhorse. But they’re not the $100/kwh cells.

Null

Hard for an old business that leads its Industry to destroy it’s old business. Inside the business the most successful executives have sought and achieved powertrain related positions now your believing that all the old power structures are going to self destruct. That’s not how people behave. They will treat any erosion of clout as a dire threat and reject change.

CPO

“Perhaps the Diesel Cheat scandal changed enough executives and boards to make a difference” Don’t count on it.

Chris O

Actually I do count on it. VW for one has start singing a radically different tune since diesel gate.

Dan F.

Everyone but Tesla is severely battery limited; Even Tesla has to keep pushing to stay ahead of the curve on batteries. Plus Tesla/Panasonic’s cell and battery appear to be superior to all the rest. Maybe when the hoped for transition to solid state batteries occurs the field will be leveled; until then the other makers are playing catch-up.

I do think, however, that the EV-philic people on this website are unrealistically optimistic about the rate at which EVs will supplant conventional vehicles; in five to ten years we’ll know a lot more.

Loboc

In 5 to 10 years it will all be over. Too late to build infrastructure or expertise.

Spider-Dan

What does this even mean? “Too late”? Will the world have ended? Will every human in the West be driving a Tesla? This kind of talk is way over the top.

Pushmi-Pullyu

For auto makers that have not made any significant investment in transitioning to building long-range, compelling BEVs within 5-10 years, it will (probably) be too late for them to survive the disruptive tech revolution which is the EV revolution. We are going to see some new players enter the field; Tesla isn’t going to be the only auto maker challenging the leading gasmobile makers for “a piece of the action” in first-world countries.

How long will it be before BYD starts selling autos in the U.S. and/or Europe? Remember what happened when Japanese auto makers entered the U.S. market in the late 1970s and early 1980s? Expect to see a repeat of that with Chinese, S. Korean, and possibly Taiwanese auto makers entering and/or expanding into the BEV market. (Selling in much greater numbers than the Ioniq Electric or Soul EV.)

Expect to see some brand-new players emerging from the startup field, too. Not all of them are gonna be caught in the starting gate like Faraday Future and Lucid.

Spider-Dan

I mean, if you want to say that Chinese companies are eventually going to come and eat the lunch of existing manufacturers in the West, that point applies to much more than just EVs.

But outside of the players in China, what company is going to show up out of nowhere and be able to compete against both the legacy automakers and Tesla? This is what I don’t understand about the “too late” logic: if it’s “too late” for billion-dollar legacy automakers to survive the EV revolution, then it’s damned sure too late for some ragtag startup to join it.

So according to this bizarre rationale, Ford won’t survive the EV revolution… but Ford could take far less money than they’ve invested in EV R&D, throw it at a startup, and that would stand a better chance of surviving? It doesn’t make sense.

antrik

China realised they they can’t compete on combustion cars. That’s why they decided to push EVs instead. So indeed Chinese makers eating into global makers’ market share is *strongly* tied to the EV transition.

Also, there are at least half a dozen start-ups outside China that have been working on EVs for years — along with any number of additional ones that haven’t left stealth mode yet… So no, they don’t need to show up “out of nowhere”.

Most importantly though, your argument is self-contradicting. If you are saying that Tesla can’t replace all legacy makers alone (which is probably true), than that means there *must* be room for other start-ups. *Unless* legacy makers step up their game, and start producing competitive EVs in numbers large enough to meet quickly rising demand. If they wait another 5 – 10 years, it will definitely be too late.

Null

Turns out people also lke to breathe, and see. Those are the main reasons China is going EV.

Spider-Dan

China will be eating into global makers’ market share in nearly every industry. EVs are a drop in the bucket.

The startups outside China are, charitably, leagues behind even the meager efforts of the legacy German automakers. What’s the “best” startup vehicle by a company not named Tesla… the Karma Revero? One of the Zero motorcycles? They are all pretty clearly worse than the pure compliance cars like the Fit EV and the 500e.

Chris O

There seems to be a cultural problem. Legacy carmakers are indeed in a better position to catch up with the EV revolution than any start up but they are in fact doing a deer in headlight impression: they are bewildered by Tesla’s success but seem incapable of responding beyond some compliance efforts. It just beggars belief that BMW doesn’t even have a prototype Model 3 fighter ready despite the fact that Model 3 is shaping up to eats its bread and butter 3 Series luch. VW is perennially flip flopping on the decision to build its own battery capacity or buying from third parties, oh now, what to do….Too much legacy cost I suppose, too much of an ICE mindset. Lots of panic, not a lot of vision.

David

This isn’t just an EV race. It’s an autonomous vehicle race.

If each AV replaces three vehicles, 100 million annual sales falls to 33 million.

If the first mover becomes a dominant player they could corner 40% of the AV market long term.

That leaves 20 million vehicles sales annually split between the remaining companies. How many of today’s auto manufacturers will survive an 80% reduction in demand?

Kbm3

Read “The Innovator’s dilemma”. Effectively creating a new startup is the only way to survive disruption.

earl colby pottinger

The way IBM handled the micro-computer revolution was to spin-off a division just for them. On the other-hand, how many people have a micro-computer from Sperry-Rand or Honeywell both were big mainframe computer manufacturers but that did not make them sellers of micro-computers.

David Cary

Too late to catch up? I would argue that they still have some time but their past lack of vision shows that they still don’t get it. They have so many assets based on a model/technology that is inferior. Once the chopping begins, it may accelerate. Assets become purchased by the one holding the batteries…Tesla, BYD, and a couple of remaining companies – Nissan? GM? who knows.

Null

No it will be a done deal. At $74/kwh theres’s no room for oil burners on the market. Their fuel cost alone will more then all in cost.

Yes, current automakers make money but their expenses are immense! It’s a very short step from 0 margin to liquidation.

Once people in general realize there’s no need for gas/diesel residual value of used ice cars collapse. No leasing, heck it would be hard to finance cars at all.

Spider-Dan

The only automakers that have been battery limited are Tesla and Mitsubishi (Outlander PHEV), and both of those companies have shared ownership in their respective battery supply chains.

Every other automaker’s sales have been constrained by demand.

Pushmi-Pullyu

You mean, all the other auto makers have deliberately chosen to limit demand by making only plug-in EVs with very limited appeal, and/or (like the Bolt EV) by placing severe geographic limits on the market.

Not the same thing at all.

Spider-Dan

You’re still talking about “geographic limits” for a car that’s available across the country?

“Geographic limits” makes sense to explain the Bolt sales in Canada, or Australia, or South Korea. Please explain the Bolt’s sales numbers in the US.

Null

The U.S. is not the world. They could have easily and profitably sold twice their existing production to Opel. Even with the hobbling they ensured was on both the Bolt and the Volt.

antrik

Non-exhaustive list of car makers who have brought up battery supply as a limiting factor to quickly scale production in order to meet demand, during the last year or two: Tesla, VW, Renault, BMW, Hyundai, BYD… And probably a bunch I have forgotten. Indeed it’s hard to find one that *hasn’t* claimed a battery shortage.

Spider-Dan

Can’t speak to BYD, as I’m not tracking China. Tesla is obviously limited, but they own a factory, so that doesn’t exactly help the pro-factory argument. The rest of the examples I’ve seen of companies talking about battery supply have been talking about hypothetical future situations, which are hypothetical.

But if you can cite an example of a company actually having their current sales constrained by lack of battery supply, I’m all ears.

Pushmi-Pullyu

I do think that some people — and not just auto makers — expect linear growth in the EV market, despite the fact that every disruptive tech revolution shows an exponential acceleration in replacing the old tech with the new. The classic “S-curve” is almost certainly what we will see, and I think we’re finally starting to see the early beginnings of that.

As the proverb goes: Those who do not learn from history are doomed to repeat it.

antrik

Early signs? We have seen pretty consistent exponential growth for more than half a decade.

Robert Weekley

I would like to see what “EVTV.ME” could do, with a Colorado Pickup, and Drivetrains from both a Volt, and a Bolt EV! Put the Volt Drivetrain in the Front, and the Bolt Drovetrain in the Back!

If the Batteries in the Bolt can work to feed both motors, without mod, it should give us a 4WD Pickup, and add in a 6-8 Gallon Fuel Tank, and we could see over 100 Miles range, before the Genset cuts in!

Spider-Dan

You have to do some incredible mental gymnastics to arrive at the conclusion that Mercedes and Audi are indeed “reacting” to the EV market while GM is “still in denial.” GM has produced two of the best cars in their history – the Volt and Bolt – and they are readily available at nearly every GM dealership in America.

The two legacy automakers that have been the most forward-thinking in the current EV generation are Nissan and GM. If you lump them in with FCA and Honda then you haven’t been paying attention, and if you somehow put Daimler and Volkswagen ahead of them then you’re crazy.

Jelloslug

The problem with GM and the “best cars” is that they are not good cars going forward.

antrik

The Volt is nice for what it is. The Bolt would be nice, if it wasn’t a low-volume compliance car. Neither of them offers any conclusive prove whether or not GM is working on meaningful EV production capacity going forward…

Spider-Dan

The only reason the Bolt is “low-volume” is because people aren’t buying it. The car has had plentiful national availability for over a year.

Remember: GM originally planned to produce over 100,000 Volts in the first year. The only reason those production plans were shelved was because people weren’t buying them.

Terawatt

No. There is a lot of demand. For some reason GM refuses to sell the car in the markets that want to buy it.

Over here in Norway I see privately imported Bolt — with the warranty-related risks that entails — than Ampera-e. That should tell you everything you need to know about both demand and willingness to supply it.

Pushmi-Pullyu

“The only reason the Bolt is ‘low-volume’ is because people aren’t buying it. ”

Nonsense. There is much more demand in Canada and S. Korea than GM is supplying. Furthermore, there would almost certainly be even greater demand in the EU than in the U.S. if GM was serious about selling the Bolt EV there.

There is also very limited availability in U.S. States outside the CARB States.

GM could very easily sell far more Bolt EVs if they wanted to… and if they had the access to battery supply, which of course they don’t. If GM cranked up production to actually meet global demand, that would drop the unit price of the car substantially, and they could sell it at a decent profit even outside CARB States.

We’ll know that GM is getting serious about making and selling long-range plug-in EVs in large numbers if and when we read about plans for building one or more high-capacity battery cell factories whose output GM controls… and not before. VW is the first legacy auto maker to publicly discuss serious plans for that; we can be sure other legacy auto makers will follow.

Spider-Dan

There is not “limited availability in the US outside of CARB states.” You can get a Bolt anywhere in the US. There is not a strong market demand in the US for non-luxury EVs in 2018.

You’ve been making these Bolt claims for nearly two years now. First it was that GM was sabotaging the car by only releasing it in CARB states, then it was that the car wasn’t available nationally. The Bolt has been available nationally for over a year, and now you’re forced to reach for international markets to try to maintain your position.

When will you finally admit that GM isn’t making more Bolts because the sales demand isn’t there?

antrik

So there is a lack of demand, and that’s why they have been only slowly trickling out sales to additional markets, and still leaving several grasping for more? Totally makes sense…

Spider-Dan

I would be more receptive to this argument if people were not making it about the US before the Bolt had national availability. Seems like goalpost moving to me.

You want to make an argument about foreign markets? Fine. But first admit that the demand in the US is not there.

Null

insisting doesn’t make it true.

antrik

It’s not as easy as scaling production to make it profitable. It wasn’t designed for profitable mass production. If they just increased volume, that would certainly improve margins, but *also* require significant additional CapEx…

Most likely the only way to reach true profitability (not only indirectly by avoiding penalties), is by introducing a better platform — which they have promised to do, at some point in 2020 or 2021…

DrDauger

Post evidence “GM originally planned to produce over 100,000 Volts in the first year.”, or else it didn’t happen.

arne-nl

First you said: “GM has produced two of the best cars in their history”

Then you said: “The only reason the Bolt is “low-volume” is because people aren’t buying it.”

Choose either one. But both can’t true at the same time.

(Doesn’t mean I hate the Bolt or Volt or GM)

RedModel3

The Volt is a fantastic car, and it looks good. The Bolt is butt-ugly. If Chevy had designed the Bolt to look good, I think sales would be higher.

ffbj

Only 40% carry the Bolt, so not every dealership as you so state.
The Volt is to be discontinued soon, and the Bolt is in low production mode, 25k a year or so.
Maybe more competitive than the Germans, but try to remain factual in your assessment.

Spider-Dan

You can get a Bolt at any GM dealership in the country. (Tesla is not the only company that can move product from one lot to another.) The Bolt’s production levels are as high as its sales, and its sales are not constrained by supply; if people bought more Bolts, GM would produce more.

GM has not made any announcement that the Volt is to be discontinued, and even the rumors claiming that it will be state that it will be replaced with another PHEV at the end of the current lifecycle.

Harold Roussel

Maybe in the US, not so much in Canada.

Someone my brother knows, in Baie-Comeau (in the province of Quebec), tried to get a Bolt. The local dealer said he was not selling any Bolt because “there is no demand” and they would have to train mechanics to provide service for the car.

That person had to go to another dealer, located south of the St-Lawrence, to get her car.

Sad story, considering the Bolt is such a good car.

Spider-Dan

I can’t speak to how hard it is to get a Bolt – or a Corvette, or a Malibu, or an Escalade – in other countries. I’m simply talking about the US market. And in the US market, Bolts are readily available.

Sammy

And the USA is not the biggest car market in the world any longer.
GM is a dead man walking company as far as most of the world is concerned.
As for getting a Malibu or an Escalade? Why would anyone outside N. America want one? A few corvette’s are sent overseas (outside N. America) but probably less than 1000 a year so really insignificant.

antrik

AFAIK GM is pretty big in China?…

Pushmi-Pullyu

“You can get a Bolt at any GM dealership in the country.”

Then why do we keep seeing so many reports from Bolt EV owners who say they had to drive hundreds of miles out of their local area to find any Chevy dealer which was actually interested in selling them one?

You appear to be merely mouthing the “party line” from GM, and ignoring what’s happening in the real world.

Spider-Dan

You can drive to any GM dealership and place an order for a Bolt.
Hell, you can check the Chevy website for inventory status. Give me a zip code and I’ll tell you what’s happening in “the real world.”

antrik

Sure, you know better than the people who are actually running into obstacles…

Spider-Dan

Anecdotes are not data. Give me a zip code and I’ll tell you the inventory numbers, straight from GM.

earl colby pottinger

Garbage! I tried to buy a Bolt with 100% of the cash needed in hand and was told I would have to wait a year plus, and to add insult the salesman kept trying to sell me a Volt and started to sprout lies about the charging stations in order to make the Bolt look like a bad buy.

Like fun GM dealers are ready to sell Bolts.

Spider-Dan

Let’s say, for the sake of argument, that you’re right and dealerships are the only thing preventing the Bolt from amazing record-breaking sales.

How does GM increasing Bolt production resolve that issue?

Null

Some might do a dealer trade but good luck when it needs work. Few invested to service vehicle.

Wait, is the Bob Lulz?

Null

Uhm, no they’re not available in every dealer. Outside compliance states it’s the rare dealership that invested to support the Volt. The Bolt is even worse.

antrik

Not sure about Daimler and VW — but BMW certainly still seems in deep denial, with the recent “85% ICE in 2030” comments from one of their board members…

Dima

German ICE vehicles were a bit overrated already. Japanese ICE cars were always more reliable, while German cars focused more on their image and branding.

Davek

…and interior quality, styling, design, driving dynamics, safety and technology. But yeah, other than that, what have the Germans ever given us?

Spider-Dan

At the high end? Sure, a $100,000 Porsche has all the things you just mentioned.
But Japanese automakers have done far more for middle-class drivers than German automakers, and it isn’t really even close. If I’m buying an ICE car for $25,000, Japan’s engineers are going to do a much better job than Germany’s.

I mean, by your logic, we should all be praising Italian automakers. I hear Ferrari makes some pretty impressive cars…

REXisKing

I don’t believe Lexus has matched BMW suspension technology.
Sure, though, they beat them on reliability.
However, I wonder that Lexus burning oil I saw yesterday, did they fill out the Consumer Reports survey?

Paul Smith

All that doesn’t seem to be helping them much in the battle with Tesla.

Alex
They’ll all go bankrupt! 🙂 German are since long time leaders in engineering, it’s not just cars, and it’s not just recently. That strength can shift but it’s too soon to see it coming when they’re selling even more cars than before. Shift for electric will probably make German cars less notorious, but mainly because they’re simpler and no EV car is going to be great because of the motor – they’ll be all equivalente (motor). Tesla is pushing it, but installed car makers don’t want to lose money and that makes them slower in my opinion. In time all cars will be electric and German ones will be as usually on the top. American companies are being more challenged – Tesla is American so they have internal competition, Ford seems way behind with BEVs, GM bolt is not receiving much love, they’ve smaller profit margins, they were bailed out recently. I’m an optimistic person, during industrial revolution machines were going to steal our jobs, computers were next, now are robots, … Humans adapt, companies adapt, … I wouldn’t be surprised if some will fall but it’s not going to be the end of the world. Digital cameras offered new… Read more »
Robert Quigley

In some ass backwards way the climate solution will provide more jobs than there are workers currently. Every aspect of 20th century will be rebuilt, redesigned, retrofited. No AI connected robot will be able to handle the work. Easily 50 to 75 years of employment for any ready willing and able human. Then it’s on to the next great adventure for civilization

REXisKing

True, the US Solar Industry now employs more people than the oil and coal industry.

antrik

The “machines stealing jobs” rhetoric always has been nonsense. But that has nothing to do with the topic at hand…

antrik

Now I’m curious: are these downvotes from Luddites who actually believe that machines are “stealing jobs”, or from people who think that this is somehow relevant to the disruption of the car industry by the transition to EVs?…

Spider-Dan

How would you personally categorize the automation of jobs that used to be performed by humans?
“Machines stealing jobs” seems accurate enough to me.

Null

“No EV is going to be great because of the motor”?

True there won’t be endless variations of same old like in ice. However there is differentiation in electric motors just in Tesla. The motors in S and X are high output A/C. The 3’s rear motor is fmsr, and one of the most efficient electric motors.

Milfan

A diesel vehicle should be kept in he prison cell where the chief of automaker is placed and every day the vehicle should be turned on for that criminal to breath the air from the exhaust for few minutes.

Few minutes is a good enough punishment. Turning the vehicle for 1 hour means that guy will end up in hospital.
Only then they will realize the harm they have done to others.

Ziv

Lighten up, Frances.

S3XY

That’s what I say when they say diesel isn’t bad. Try inhaling the fumes for 10 minutes if it’s not bad then

Ted

The funny thing is that this seems both horrifying on one hand and too benign on the other. OP is suggesting that a corporate executive be exposed to his own product for a “few minutes a day” and it is literally torture. Makes you wonder how they are allowed to make that product in the first place.

Alex

And you should ride your horse to get the goods you buy from China :).

There’s no clear evidence that’s Diesel kills more than gasoline, actually I think climate changes are more troublesome and Diesel cars are better with CO2.

Pushmi-Pullyu

“There’s no clear evidence that’s Diesel kills more than gasoline…”

If that’s true, then it’s only because there is a much higher percentage of motor vehicles running on gasoline than on diesel.

Of the motor vehicle generated air pollutants, diesel exhaust particles (DEPs) account for a highly significant percentage of the particles emitted in many towns and cities… Compared with petrol engines, diesel engines produce far less carbon monoxide, but give rise to a greater amount of nitrogen oxides and aldehydes, which are particularly prone to cause irritation of the upper respiratory tract. Diesel engines also produce submicron soot particles that are believed to mediate several of the observed adverse effects. It has been estimated that the particulate emission from diesel engines per travelled distance is over 10 times higher than the emission from petrol engines of equivalent power running on unleaded petrol, and over 100 times higher than that from petrol engines fitted with catalytic converters.

http://erj.ersjournals.com/content/17/4/733

ebro

I’d say most German car manufacturers will survive (long term 2025+) just like GM, Ford and the Asians.

With solid state batteries we will see the return of the big boys, imo. The price of current batteries makes it simply impossible to build EV entrance cars (~ €25k) with a profit.

Dam

yes current batteries are barely adequate (heavy/expensive/fragile/hot/degrade), nothing much will happen until the tech improve substantially

antrik

Sales doubling ever two years isn’t exactly “nothing much will happen”…

Spider-Dan

It is if that number is still <1% after 5 years of doubling.

In order for the EV market to take off, one of two things has to take place:

1) customers become willing to also buy EVs that don't have a Tesla logo (in meaningful quantity)
2) Tesla enters the economy car market

If neither of those things happen, it doesn't mean a whole lot* if every luxury car on the road is a Tesla. Most people don't drive luxury cars.

*note: It's still better than them being ICEs! You take what gains you can get. But the luxury car market alone is not enough to accomplish our goals for the environment.

DAVID

Luxury car plus autonomous transportation as a service solves that problem. Next.

Spider-Dan

So the only people who will have cars will be luxury EV owners?

David

People won’t own cars.

antrik

Except that number is ~2% now… Welcome to the present.

Of the close to two million EVs that will have been sold this year, ~250,000 are Teslas. Almost everything else is *not* luxury.

As more models become available, specs improve, prices improve, charging infrastructure improves, awareness improves, the value proposition of EVs keeps getting attractive to more and more people — resulting in an ongoing exponential growth. Yes, a lot of further improvements are necessary before EV sales become a majority — but these improvements keep happening all the time! We don’t need a sudden magic battery breakthrough.

antrik

If it’s impossible, why is “big boy” VW claiming exactly that for 2020?…

And why would solid state batteries change the situation? Battery prices are falling rapidly. Any future advances (solid state or not) will be available to all makers, be they “big boys” or not.

(Also, 2025 isn’t long term. Long term is 2030 and beyond.)

Spider-Dan

If it’s impossible, why is “big boy” VW claiming exactly that for 2020?

So you’re saying that you find it implausible that the head of an automaker would make obviously delusional claims about the timeframe of a “revolutionary” new product his company is releasing… in the comments of an article about Tesla? Hmmm.

I also find it rather strange to claim that 7 years is not “long term,” but 12 years clearly is. Is that something like “if there hasn’t been at least three World Cups in the interim, then it’s not long-term” logic?

antrik

In 2025, EV share is expected to be ~25%, and laggards will only be beginning to feel the effects on a larger scale. By 2030, EV share will be close to 100%, and the laggards will have felt the effects for a couple of years. So yes, that’s a *huge* difference.

antrik

Yes, when someone claims that the “big boys” will rally and start selling €25,000 once solid state batteries become available, I find it perfectly reasonable to point out that one of these very “big boys” has publicly claimed they will do this long before solid state batteries become available.

(Of course I could make other points, based on simple maths… But in this case I thought it more prudent to point out that he is in contradiction with the very entities he is cheering for.)

Pushmi-Pullyu

Yup, there’s a lot of denial going on here, by GM fanboy Spider-Dan and a few others.

Don’t look now… but that “impossible” EV revolution is accelerating even as we speak!

“<1%" ??? I think they mean "<2%" , and in another 2-3 years it will be "<5%"… We can be sure they'll keep moving the goal posts. In another 15 years or so they'll be saying "Well, EVs are still less than 90% of the market…" 🙂

Spider-Dan

You’re being unfair.
I’m also a Nissan fanboy. 😛

JimGord

It does not really matter because the EV revolution is underway. EV sales will increase by over 40% due to demand pull from consumers rather than supply push from regulations.

Ted

I really hope you are correct. China seems a guarantee. Between their announced plans and current 60-100% growth rates that region will be solved. I really really hope Europe and the US can maintain 40% growth. Please happen! The world needs this for so many reasons.

antrik

I’m not sure about China: while they certainly have very aggressive mandates for the next few years, they do not seem to be planning for exponential growth beyond… Let’s hope at that point growth will continue naturally, without need for mandates.

antrik

What exactly does not really matter?… The entire point of the article is that planning growth based on mandates rather than demand pull will doom German car makers…

S3XY

Zuh germans dont know what hit em. Like in WWII

Salem

Evannex deviates so sharply from your usual articles, I can already tell who wrote it from the headline

Jim Whitehead, M.S.

German engineering is awesome, so they will still be around, playing catch-up for a few years. But the leadership will change. Those like Jaguar that embrace the change may rise, while others will shrink and be taken over. This is a historic change, like 100 years ago, when blacksmiths and steelworkers that repaired horse buggies switched to repair cars, or they were gone.

Spider-Dan

Jaguar isn’t German, it’s British.

Paul Smith

Jaguar isn’t British, it’s East Indian. (Tata Motors) and it’s wonderful iPace is built by a Canadian company (Magna International) in Austria, powered by LG batteries from Korea, and power electronics from Continental (Germany).

Spider-Dan

So I guess you would categorize the Dodge Viper as a high-performance Italian sportscar, and believe Lamborghini is a manufacturer of exotic German hypercars?

No matter how you want to parse the corporate ownership structure, Jaguar isn’t German.

David Cary

He was just commenting on the complex international system, not saying Jaguar was German.

antrik

And you still fail to realise that *nobody* was claiming Jaguar is German. Maybe you should take some time properly reading the comments you are replying to, rather than spamming the discussion with an endless barrage nonsensical replies. You know, quality over quantity…

Spider-Dan

The OP was talking about the awesomeness of “German engineering,” saying that “they” (i.e. the Germans) will be playing catch-up, and “the leadership will change.” He said that “those like Jaguar who embrace the change” may rise.

Seems like a pretty clear line of logic to me. Maybe you didn’t read his whole comment before jumping in (again) to reply to me? For someone who complains about spamming the discussion with a barrage of replies, you sure do seem to love following me around…

antrik

Obviously. Your point?…

antrik

Well, Porsche at least looks like they are embracing the change going forward… The other brands admittedly still seem pretty inconclusive.

David Cary

The argument for EV comes way easier to high end performance brands. Let’s not pretend that Porsche has vision – it is just that they can’t compete at all.

Deckard Cain

I must say that I am feeling schadenfreude about this. Seriously, if the german manufacturers were serious about producing electrics Tesla would already have competition by now.
Why didn’t BMW do something better than the i3 yet? The i8 is a beautiful PHEV, but they didn’t develop a fully electric option.

And what to say about the pathetic evolution of the PHEV version of the 3 Series?? They just increased the range barely enough to meet the new emissions standards!
The car industry will just do the bare minimum to meet emissions regulations while Tesla is production constrained. In the US, Tesla is already eating the premium automakers lunch so they’ll have to react. The same is happening in China with the chinese manufacturers.

In Europe we are lagging behind because of the interests of zeh germans. Can’t wait for the Tesla Gigafactory in Europe! Can’t wait for the numerous EVs and PHEVs that the french manufacturers are launching. Germany will face a lot of tough times ahead.

antrik

I don’t get the impression that the French makers are any more serious than the German ones…

Pushmi-Pullyu

What? Don’t you think the Twizy is a serious EV?

(Pushy ducks… 😀 )

Link

Why is EVANNEX so obsessed with German car makers? Why aren’t they talking about Toyota or Honda or GM or Ford or Fiat?

Bunny

EVANNEX

Tesla good……………

the rest of the globe, universe, whatever bad

Jason

Probably because German are generally luxury brands whereas those others are generally volume brands. Tesla has really hit the luxury brands, not the volume brands. If Tesla makes a volume vehicle and hits that market like it hit the luxury market, then you will see these articles about the volume brands.

Paul Smith

Not hitting the volume brands? They are directly attacking Toyota and Honda and will shortly leave them in the dust as production increases.

Pushmi-Pullyu

No, Tesla most definitely is not “hitting the volume brands”. Two Tesla spokesmen specifically said that the Model 3 was aimed to compete in the market segment of the Audi A4 and the BMW 3-Series.

Now, if you look at what cars are being traded in for Model 3’s, then yeah, there are a lot of Corollas and Accords there. But that’s probably because the Corolla and the Accord are the top-selling sedans, so sheer numbers appears to be the cause. The Model 3 certainly is not aimed to compete directly with them!

antrik

How was talking about hitting, not about aiming.

John-EU

Because Toyota cs. are less arrogant than zeh Germans maybe? For years (since around 2012) zeh Germans have been playing poker and Tesla would go bankrupt anyway ´next year´. Toyota is building very reliable cars both hybrid and fuel cell is on the rise (whether that will work out in 10 years remains to be seen). But they are not arrogant as the great German deceivers (all of them BTW).

REXisKing

I think Toyota and Honda are lost causes.
They’ve been trying to sell Hydrogen, but only by using CARB credits, so an extremely slow rollout to failure. As I’m sure was the plan.

Honda having trouble with turbo-4-cylinder engines.
How are they going to be good at EV’s?

Honda specifically avoids selling the Honda Fit EV, and the Honda CRV Hybrid in the USA.
Either there’s an industry boycott or Honda’s CEO needs to be fired.

And the Honda Plugin looks like an Edsel.
Honda has executed a plan for EV and hybrid failure.

Lou Grinzo

The only way you can declare that any company facing massive disruption is a “lost cause” is if you know exactly what they’re developing that they’re not yet talking about. I don’t know what Toyota and Honda are doing behind the scenes, and neither do you or anyone else on this site. It might be virtually nothing, or Honda might have an updated Fit EV and 250-mile Clarity EV ready for production. And Toyota could have a 200-mile Prius EV and RAV4 EV waiting in the wings.

Yes, those two companies have dragged their feet and frustrated us for years. I agree 100% with that. But that doesn’t mean they aren’t waiting for one or more trigger events that (in their perception) will make it worthwhile for them to leap into the market.

Will

New RAV4 Ev will be my first buy. Clarity is to ugly unless they make it like the accord front

Pushmi-Pullyu

The Honda Clarity PHEV is very popular with those able to find one to buy. Too bad that Honda makes it in such limited numbers. But Honda certainly has shown its ability to do EV engineering well, with the Clarity PHEV. If you really think the Clarity PHEV is an “Edsel”, then you need to visit the highly popular Clarity section of the InsideEVs Forum! The Edsel wasn’t merely a car with questionable styling and poor market timing; it was poorly engineered… very unlike the Clarity!

https://www.insideevsforum.com/community/index.php?forums/clarity.53/

Toyota very well might fail to make the transition to EVs. If there is any legacy auto maker whose leaders seem very, very determined to bury their heads in the sand about the EV revolution, it’s Toyota.

But Honda? My crystal ball doesn’t work any better than anybody else’s, but I think Honda has a pretty good chance of surviving the transition, even if they have foolishly decided to waste money developing a fool cell car. At least they don’t keep claiming that fool cell cars are the future of automobiles, or that there is no market for BEVs, like Toyota has been doing for years!

john1701a
That claim about Toyota possibly failing is a narrative you should be smart enough to see beyond. You know Toyota is waiting for the cost tipping-point to be reached before deploying to the masses. It makes no sense doing that prior to the profitability stage being reached. That’s why rollout is being held to limited markets. The tech is being refined in the meantime. No legacy automaker can go all out with high-volume deploys yet. Batteries are still too expensive and density too low for that profitable level to be reached. It will happen, perhaps very soon. But until we see sales growth without tax-credits contributing to that, we haven’t left the early-adopter stage. Consider audience. Buyers of plug-in vehicles now are pretty much exclusively enthusiasts. Reaching mainstream consumers… those who basically just go to their favorite dealer and trade-up for the latest model of something there… will be extraordinarily difficult to appeal to. Current plug-in offers have too high of a price-tag still, even with the tax-credit, to be a realistic competitor yet. In other words, look at the preparation is each automaker is making to address their own particular customers. What must they do to achieve & sustain… Read more »
antrik

Well, we do know that Toyota has a dedicated task force working on BEVs, although they are keeping it somewhat low-profile, since they are still trying to sell the public on their hydrogen narrative…

Do we know anything about Honda having something like that?

Will

Where you like? I have a dealer down the block in Ohio that have three in stock

Will

Fool cells are for thier home market and Bev for the rest of the world

john1701a

Fuel Cells are a diversification effort, a wise business move… especially when you study the different regions & markets to be served.

As for Toyota’s approach, it has always been subdued. Their first plug-in hybrid with AWD is coming out soon and most people won’t even notice, since it will have a Subaru body. The tech in Prime is being shared… another way to diversify.

antrik

In case you haven’t noticed, the EVANNEX writers are just picking up whatever sources (fitting their narrative) they happen upon. Apparently there just happen to be many articles out there about the challenge facing the German car makers right now…

(Which is probably a good sign: at least the problem is getting attention in Germany now… Others do not seem to be at that stage yet.)

Pushmi-Pullyu

Bingo! Volkswagen may be moaning and wailing about the difficulty of making the transition to EVs, and whining about the limited supply of batteries, but at least they appear to be in the process of taking steps to deal with those situations. And even if all their claims are just more vaporware, at least they are seriously thinking about it, and presumably at least making contingency plans.

Other auto makers, perhaps most notably Toyota and Ford… not so much.

john1701a

Just because an automaker doesn’t say much or doesn’t complain is not reasoning to draw a conclusion with. It’s called anecdotal observations… and sometimes, fake news.

Warren

I knew this was from Evannex before even clicking on it, lol.

F150 Brian

OK, let’s assess reality for a minute.
1) Tesla is kicking ass with one product: Model 3 (S and X are doing well, but their volumes won’t put anybody out of business)
2) There are lots of market segments that are still 100% ICE
3) No other manufacturer of EVs is threatening ICE sales in any meaningful way
soooooooo, unless Tesla enters many new markets quickly, or someone else steps up to be like Telsa, there will be plenty of profits in ICE-land for quite some time.

Now, what are the Germans up to? The VW group and BMW seem to be making a lot of moves in the right direction but clearly don’t have a significant player available yet. These two both understand that EVs must be done in volume going forward to be profitable.

The race will come down to who can get volumes in each market segment first. Tesla is good at picking a segment and doing it well, but are on a one new product every two year cadence (Model Y is planned to be years after Model 3 volume started). The door is still wide open in many markets for a dominant player.

Dante

I think what Tesla is doing is tackling markets as quickly as their ability to manufacture EV’s at a compelling price point emerged. You can’t expect another company to swoop in with a $25k full electric pickup from a stand still because the technology to get there requires a decade of experience in mass-market EV-making.

BMW has the most to lose here in my view. The Model Y will tackle the last segment they have that isn’t directly competing with Tesla and it’s months from reveal. The only thing they can do in 2019 is wait until the Model 3 goes global and then survey the damage. That’s not a good position to be in honestly.

Will

BMW is the leader in EV tech

William

BMW is leading in what specific EV tech, and what current EV is that leading Tech available on? Is it the BMW i3 by any chance, which now has barely adequate niche sales globally?

earl colby pottinger

With what? And please do not point to be one of the ugliest car I have seen lately.

Doggydogworld

Market segments aren’t set in stone. Model 3 pulls buyers from a bunch of different segments.

Tesla is the only real disruptor in western markets, but EVs hit 5% market share in China last month with little help from Tesla. It was almost all Chinese companies plus some Chinese-western JVs. German and US automakers are at risk there. China wanted their ICE technology but what do they bring to the table in terms of EVs? Local companies like BYD and Nio are racing ahead of the JVs.

antrik

You have a point there that Tesla seems to be almost alone as a disruptor, and has limited capacity, giving the incumbents some time.

FWIW, Elon recently has talked about the necessity of working on several new vehicles at the same time going forward, though…

David Cary

This is what I think Tesla is planning.
Roadster – late 2019/early 2020
Model Y – late 2019/early 2020
Semi – 2019
Pickup – 2021

Why would we expect the same rate of introduction as history provided? Does Tesla have the same number of employees as it had in 2015? Did the Model 3 experience show that they can gradually work the price down with volume? Did the profitable quarter just double the number of people who believe Tesla will survive and prosper? Does anyone doubt the Model Y will have demand for 500,000+ vehicles worldwide?

ffbj

As recently as last week shorts were touting the new German evs as competition that would crush Tesla.
How can anyone in their right mind believe that? All indications are to the contrary as Tesla takes share away from all the legacy manufacturers and soundly beats them in performance. Also Tesla has a SC network, ota updates, superior technology and a rabid following of true believers.
I think German auto makers may survive, but in a different form and much smaller.
What’s happening is similar to what happened to American auto makers when the smaller well made cars from Japan destroyed demand for crummy American land barges.

Mister G

If that’s the case germany will have to bailout BMW, MB, VW and all downstream businesses. GO TESLA GO DESTROY DIRTY GAS GUZZLERS AND DIESELS CONNECT THE DOTS ON CLEAN AIR WAKE UP EARTHLINGS Co2.earth

Forever Green

I don’t believe all the German automakers will survive the transition to Electric. Within the next 10 years we will have a clear indication of who will survive and who will go under.

Pushmi-Pullyu

Almost certainly correct.

Tomas

The biggest problem here, which most of you are forgetting is profitability. Tesla have massive debts. I`m big Tesla fan but we need to be realistic. Toyota is producing hybrids for 20 years. Hybrids use batteries and electric motors.

Doggydogworld

Tesla debt was large for the $10b company they were last year. Not so much for the $30b company they will be next year.

theflew

The profit margin they have now is because the started with the high end model 3. As the model 3 product mix normalizes the profit margin will drop quit a bit. This isn’t even including the $35k model which they can’t afford to build yet.

Doggydogworld

Model 3 ASP will decline every quarter, but so will Tesla’s costs. Margin depends on both factors, so it’s premature to say it will drop. Huge numbers of buyers willing to pay $49k+ are buying lots of time to get costs down.

drpawansharma

The profit margins on SR would be smaller, no doubt, but they would also sell much more of them.

Pushmi-Pullyu

And as Tesla continues to ramp up the volume of Model 3 production while continuing to find ways to reduce costs, the unit cost for making the TM3 will continue to drop, which means Tesla will be able to make a profit on lower trim levels. In fact, it already is… witness the Mid Range Model 3.

That’s pretty basic economics; trading off lower profit margin for higher volume. That’s often, perhaps usually, a winning strategy for a company. So it’s odd you’d try to mis-characterize that as a bad thing.

antrik

Yeah, I’m sure they are lying about further cost reductions. Just as they have been lying about achieving profitability and positive cash flow in Q3, right?…

Paul Smith

Tesla debt is not that large at all and now they are in a profit situation and will quickly pay off debt and start taking orders for the Model Y, which will likely out sell the M3.

Pushmi-Pullyu

Tesla has massive debt because it has borrowed heavily to finance its rapid growth. Mass producing cars is capital intensive, and Tesla is growing wildly faster than any other sizable auto maker.

In business, managing that kind of a growth rate while increasing assets faster than debts is called “success”… a very solid success! 🙂

Go Tesla! Keep going Tesla!

antrik

It’s not as simple as that: if debts from investments were so large that the income resulting from them could never actually cover the debts, the claim that there is no true profitability would indeed be right…

However, at this point it’s hard to deny that Model 3 profits will cover the investments 🙂

Mart Shearer

It’s not an “iPhone moment”, it’s a “Kodak moment”.

theflew

I hate when people use Kodak as example. Kodak made digital cameras and was one of the largest sellers. The problem was digital cameras, PDAs, MP3 players, and phones all converged into the smartphone. Kodak made the first digital camera. Their problem along with Canon, Sony, Fuji, Nikon,etc… is they didn’t account for the smartphone eating 90% of their market. All the camera makers are pretty much out of the consumer digital camera market. The only niche surviving is professional, pro-consumer and high zoom. Things cell phones can’t do with their size.

Pushmi-Pullyu

No, that was certainly not Kodak’s major problem. People preferring to use cell phones to take pictures instead of cameras certainly was not the cultural phenomenon it is now when Kodak was experiencing decline. You didn’t see cell phones with 1+ megapixel cameras in them back then!

Kodak had two reasons to resist entry into the consumer-grade digital camera market: Kodak film and Kodak film cameras. Dumping film cameras in favor of digital cameras was bad enough for Kodak’s core business, but the business of selling camera film falling from a major product line to a niche market was a blow that would have at least required a major downsizing.

I agree that Kodak in the digital camera revolution is a poor analog (altho a very convenient one) for legacy auto makers in the EV revolution, but that’s because (A) making digital cameras is light industry dependent on the rapidly falling cost and size of computer chips, vs making automobiles, which is heavy industry not subject to rapid declines in cost; and (B) in the automotive industry, there isn’t any analog to Kodak dominating the market for film.

antrik

I’m pretty sure Kodak went bust before cell phone cameras were good enough to significantly eat into dedicated consumer camera sales…

earl colby pottinger

Is Canon making cameras today and money from the sales? Yes.

Is Sony making cameras today and money from the sales? Yes.

Is Fuji making cameras today and money from the sales? Yes.

Is Nikon making cameras today and money from the sales? Yes.

Kodak problem is it wanted to make it’s money from film and printing, meanwhile people like me who had early digital cameras loved them because we could take photos and store them on our computer for viewing. We could not afford to go Kodak’s route and once digital cameras got good enough we quickly switched.

Look, some of my early pictures are only 1024 by 800, but I still have them. And my newest pictures are 4K by 3K in size. I have backup to three hard drives and over 10,000 pictures.

How much would that have cost me in film and printing. Also my pictures are stored in sub-directories and have meta-data attached to the files. I can find most pictures I am interested in less than a minute. My mom who had her old photos in albums could spend up to a hour to find the right photo.

REXisKing

What it comes down to is: There’s an industry Boycott on EV’s and Plugin Hybrids.
( Look at the Ford CMAX 20 miles of range for 7 years, for example, and the Chevy Bolt with a torture beam rear suspension. )

This is why Musk looks like a Genius.

theflew

Until Tesla can actually make a $35k car the Bolt EV still holds the record for the lowest cost high range EV.

G2

With the very few Bolts made….

Pushmi-Pullyu

And the Model 3 is now outselling the Bolt EV by, what, about 12 to 1 globally, or even more?

Tesla will cry crocodile tears about Chevy beating them at having a lower priced BEV.

Lou Grinzo

For the most part, until Legacy car companies are convinced that their ICEv sales will be crushed by EVs, they will do very little to push EVs. Once they realize that they have a choice: Decimate their ICEv sales with their own EVS, or watch them be decimated by other companies’ EVs, they’ll have their grand epiphany.

antrik

They already know this. The problem is that even knowing it, it’s in their best interest do everything to proliferate their combustion car sales as much as possible, to reap as much profit as they can before writing off their combustion car investments…

Dave100e

I don’t think losing 1 in 10 sales is enough to give them their “grand epiphany”.

earl colby pottinger

It will not be even for everybody, for some brands it will be 1 in 2 sales that are lost to EVs.

I also think the transition to EVs for the majority of new passenger cars will happen in one automotive generation, which is about 6-8 years. Big SUVs would go hybrid, then PHEV with larger and larger batteries before going EV.

Will

I’ll say two generations. Battery production is not there yet to mass produce 20 million of those things a year

Speculawyer

LOL, I can go back 5 years and find posts of mine telling the German car companies that they better get off their asses.

They have no one to blame but themselves.

Loboc

The Germans are not in peril. Although Tesla S is touted as luxury, it is far from being a 7-series. Tesla 3 is not close to a 3-series in content or customer experience either.

Tesla has some smoke but they’re not all that yet. Tesla has no compelling SUV or depth on their bench. Try putting a ski rack or canoe on top of an ‘X’. Heck, the back seats don’t even fold down.

Even a Tahoe is better in many ways than a Tesla X. Especially price.

Will

He does have a point. You can make your car dance but can’t put Boards on top

Speculawyer

The objective sales numbers of the 7 series and the Model S really do not back up your view.

Pushmi-Pullyu

Yeah, it’s a surprise… for those auto makers who have followed these directions since 2008 (when the original Tesla Roadster started selling):

comment image

Terawatt

Many of the strengths of Germany apply just as much to EVs as to other cars. They are very good at engineering and in the long run should be well placed to compete — as a nation.

The German incumbents is another matter. They have the classic problems of legacy, and very seldom do companies manage to overcome them. IBM is one famous example, transformed from a mainframe manufacturer into a business management consultancy. But it’s worth noting they didn’t change into a manufacturer of microcomputers — the thing that killed the mainframe.

I think it’s very likely several of the incumbents will disappear, maybe all of them. Many jobs will also disappear, but there will be lots of people in Germany working in the car industry — both in the supply chain and in the design headquarters of perhaps Chinese-owned car makers we’re not familiar with yet.

antrik

Isn’t “microcomputer” a synonym for PC? Last time I checked, IBM was instrumental in making these respectable, and remained the leading producer for many years…

(Also, last time I checked IBM was still making mainframes.)

earl colby pottinger

Not really, IBM itself spun off a separate division that had NO connection to the mainframe division to make and sell micro-computers. And really Commodore and Atari pushed micros into the home market and Apple into the education market.

What IBM’s micro-computer division did is make micros respectable to own in the business market.

Maxen

“The engineering skills that have set German cars apart from the pack are likely to lose importance relative to software and imported batteries.”

I hear Volkswagen has some pretty inventive software people though.

Clive

Bless their little hearts ‼️

Will

Lately then been going away on pro Tesla article bias. That’s great

Windbourne

German gov subsidizes the car makers. How about helping those small companies that make engine parts to move to making batteries and cells.
That is far far better than importing from China.