Tesla’s Elon Musk Welcomes the Under-Performing Competition…Laughs at BMW i3 (w/video)

AUG 22 2013 BY ERIC LOVEDAY 61

Tesla Motors CEO Elon Musk has always welcomed more competition in the electric vehicle segments.

BMW i3 Makes Elon Musk Chuckle

BMW i3 Makes Elon Musk Chuckle

At times, Musk seems to even be on board with the idea that Tesla will be outdone by some other automaker.  For Musk, being one-upped would imply that Tesla needs to further perfect its product.

Tesla and Musk appear to have no problem with the competition stepping in to truly compete.  However, Musk seems put off by half-baked efforts.  Never was this more evident than during the investors call on second-quarter results.

During the call, the conversation turned to the BMW i3.  Musk applauded BMW for entering the segment, but says there “room for improvement” with the i3 and that he hopes BMW follows the route of constant improvement.  This is Musk basically saying that the i3 is not even close to being competitive with Tesla.

But that’s not the exciting part.  During the i3 discussion, Musk broke out in contagious laughter.  In a way, he seemed to be chuckling over BMW’s less-than-impressive attempt at building an electric vehicle.

Tesla’s Gen III will offer 200-plus miles of range at a price of around $35,000 to $40,000.  If Tesla can deliver on those promises, then the i3 will quickly become obsolete.

Now, before we jump on Musk for criticizing the competition, we must understand why Tesla’s CEO reacted in this way.  Musk wants electric vehicles to be seen as perfectly acceptable substitutes for all of the world’s drivers.  He doesn’t want them to be only suitable for some or only targeted at urban centers.  In Musk’s view, everyone should drive an electric and every automaker should make plug-ins that appeal to the masses.

For Musk, appealing to the masses means lots of range and acceptable (not questionable) styling.  The only tick against the Model S is its price.  If Tesla can overcome that, then why not buy an electric vehicle?  There’s would really no longer be a valid excuse.

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61 Comments on "Tesla’s Elon Musk Welcomes the Under-Performing Competition…Laughs at BMW i3 (w/video)"

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Musk should be cautious on this, because established companies have the R&D resources and power that Tesla hasn’t and if now Musk’s brand sits on top of the mountain, three years from now, when Gen III Tesla hits the roads, things will quite different, there will be a 2nd Gen Leaf, 2nd Gen Volt, new, improved, Infinity LE (or whatever it will be called), who knows how advanced they will be, but one thing is for certain, all those new cars will be developed with Tesla as benchmark and there won’t be the element of surprise anymore.

Three years is a long time in this segment, remember, in 2010 the best selling plug-in car was the Mitsubishi I-Miev, with 2.809 units, followed by the Tesla Roadster and the Think City…(http://www.ev-sales.blogspot.com/2013/07/memory-lane-2010.html)

My biggest fear and what I think is happening is that he might be thinking he is like Godzilla and is unstoppable but I think about half his luck is the major automakers so far have been asleep at the wheel and don’t really view him as a threat at this point. And at least half of them view electric compliance cars as a burden. But what he is starting to forget is that Nissan doesn’t view electric cars as a burden and GM is at least partly open to electric cars and GM did mention that they are worried about Tesla. What Elon forgets about is that if these major giants feel threatened by him they will wake up and could even come out with a mass marketed EV with 200 mile range next year if they felt endangered enough by Tesla.

Also Tesla still has a lot of criticism that he can’t hide and that it is a $72,000 luxury car for the rich and that is a big jump to go from that to say $35,000

Well, as has been established on InsideEVs and Green Car Reports, Tesla battery pack costs are a half to a fourth of the competition per kWh (currently about $230/kWh for current tech in Model S/X).

Tesla is the only manufacturer poised to be able to bring a competitive 200+ mile EV around the $35k price point to market by 2017.

Also, given the gestation for new vehicles, there isn’t any “next year” in the auto industry.

Nobody currently mass-produces a competitive EV, without a price premium within the given segment, with over 200 miles of range, except Tesla.

Nobody can compete with the low-costs and high reliability of Tesla’s battery tech.

Since there have been no production-intent EV prototypes announced by any other automaker, then it is clear that by model year 2017, Tesla will still be the only automaker mass-producing competitive EVs with 200+ miles of range without a price premium in their segment (Model S, Model X and GenIII sedan).

Speaking of what’s going to happen in 2016/7 in this segment like is reading the palm of your hand, no one really knows what’s going to happen , but one thing is certain, established brands have the money to develop brand new cars in 3 years and in the meantime Tesla has been talking about Gen III for ages and we will only see it in 2016/7.

Tesla’s battery pack? How long do you think their deal with Panasonic is going to last? Yes, Panasonic will continue to supply Tesla but once they reach the end of their exclusivity clause are they going to just supply Tesla?

Comparisons of heavy(ish) engineering to the telco’s, software companies or computer manufacturers is somewhat pointless. The companies in these segments are almost totally reliant on IP and getting new products to market faster than anyone else with infrastructure being less important. Look at ARM (the people who’s chips are in almost all mobile devices) 300ish people in Cambridge (UK)? Not exactly an industrial giant.

The thing that is holding the EV segment back is being able to produce enough vehicles most likely due to the fact that they can’t produce enough batteries. If you wanted to produce 1 million Tesla sized battery packs you would need 85 000 000 000+ cells. That means a new Li mine and a good few new battery factories and that would only let you take a percentage of the market. Yes, their knowledge, IP and Brand have some value but they now need scale/boots on the ground.

~”How long do you think their deal with Panasonic is going to last? Yes, Panasonic will continue to supply Tesla but once they reach the end of their exclusivity clause are they going to just supply Tesla? ”
~”If you wanted to produce 1 million Tesla sized battery packs you would need 85 000 000 000+ cells. That means a new Li mine and a good few new battery factories and that would only let you take a percentage of the market. ”

I think you answered your own question. Panasonic is going to have their hands full just supplying Tesla for many years to come.

Panasonic would be in quite a good mood if that ever happened to where demand overloaded their factories. But the question is would a few other battery makers start making their own batteries like Tesla only better.

When I look at the Audi eTron R8 -Two electric motors with a total of 381 hp and 820 Newton meters of drive to the rear wheels of the e-tron. The lithium-ion battery development reflects the competence of Audi – it was designed and produced in-house. By regenerative braking, the battery is recharged on the move in the deceleration phases. The driver selects the degree of energy recovery in three stages (plus enable) via paddles on the steering wheel. During braking, it is particularly high because the electric motors take usually to about 0.3 g of the delay alone. The two electric motors on the rear axle of the Audi R8 e-tron allow an electric torque vectoring – the targeted acceleration of individual wheels and braking, which can be distributed in accordance with demand during fast cornering, the moments. At the wheel brakes on the rear axle is electro-mechanical spindle brake. Ball screws, which are electrically operated and controlled (by wire), press the coverings on the windows quickly. At the front works a hydraulic brake system, which refers to the required vacuum by two vacuum pumps. The disks are made from carbon-fiber ceramic.Eine weitere Innovation im Audi R8 e-tron ist… Read more »

There’s an old saying in silicon valley, “people who copy are always trailing”. Recall IBM which everyone said could crush all competition whenever they wanted to, and they indeed tried. They lost in the end because they were simply too slow and heavy to keep up with the market that they themselves recreated in their own image.

I’ve seen this movie way to many times, IBM, AT&T/Lucent (do you have a fixed landline phone now?), TI, others. Microsoft and Intel, the great eternal WinTel monopoly is bleeding to death as a speak. EM and others are right to say that the Silicon valley model is the one to look to, which is innovate or die.

Yes, except that this time anybody with a little sound judgment can see that Tesla left a huge gap in the market when they didn’t put the Model S 40 KWh on the market and left an even bigger gap in the market when they didn’t see that a Model S 40 KWh with a Flex-Fuel Wankel Rex in the frunk would come at both lower price and with extended range in 2013 instead of an hypothetic 2018.

Microsoft has always copied. A $275 billion market cap is not too shabby I’d say. BMW has invested as much R&D in EV as Tesla, and is one upping them with carbon fiber production. Tesla won’t be alone in 2017, which is a good thing. And not Nissan or GM, their tech isn’t really game changing. The only other contender I see so far is Mitsubishi, if they keep at it. Consider the 2014 Outlander…

Cautious?? Why?

If he has no problem with competition, if he welcomes competition, if he wished for competition, why would he have to be cautious about provoking it?

Kudos for Tesla’s Model S; however, Elon’s behavior often turns me off.

What does that mean? It means that I may admire the car, but I don’t really want to reward Musk by purchasing one. Perhaps after Tesla is bought out by another company (I’m more a 2nd gen type of purchaser anyhow).

Speaking for everyone I am sure:

What??????

I wonder why he would think the I3 is a joke. Its one of the more capable EVs on the market right now.

a) It doesn’t have the range.
b) It ain’t close to being sexy.

“…Musk seems put off by half-baked efforts…”

Exactly. BMW engineers did an awesome job with the lightweight structural breakthroughs, then they (or their managers) decided to make a goofy city car (i3) with mediocre range like everyone else, followed by an over-priced sporty plug-in hybrid (i8).

They could have used this tech and made a 200+ mile EV sedan and high-performance roadster to compete toe-to-toe with Tesla.

They didn’t.

If that doesn’t qualify as “half-baked”, then I don’t know what would.

There is another serious competitor beat the TESLA. Here is an Audi R8 e-Tron on race track. 2014 Audi come out with it.

1) It is not on the market right now.
2) The i3 is a decent effort and has some interesting innovations but it is not in the same market segment as the Model S.

I wouldn’t blame Elon for laughing since the i3 is the smallest and ugliest car BMW has ever made but I would however note that Tesla is also making a mistake by not having a Rex option. Not a dyno style, gasoline only, based Rex, like in the i3 but a better system like a Flex-Fuel micro Wankel or a Free Piston Direct Generator. A Rex in an EV, even with batswap, even with fast charge, still make sense for blackouts and extra flexibility especially in places without Model S superchargers or simply to answer the conundrum “lower cost” question.

No. That’s not their mission, it’s not their view. Tesla’s aim is to usher in mass adoption of BEVs and, crucially, Tesla believes battery prices will continue to fall (and they’ll help them fall).

The i3’s REx option costs $4,000. If battery prices fall to $200/kWh, $4,000 is 20kWh of battery and that would both improve range and performance potential.

If the view changed and they expected battery prices to stagnate, _then_ they could think about range extenders.

Tesla already confirm that battery are nearly at 200$ /kWh, and there is no reason why price shouldn’t continue to fall. And I like to add that adding a 20 kWh would nearly add as much range as the Rex (wish can’t hold much gaz). Plus, it would extend battery life, and reduce maintenance cost. Only downside : it would be slower to charger than a gaz tank.

If you’re basing that on JB Straubel’s comment “most cases less than a quarter”, I’d suggest that if you work off $100k 85kWh as being typical, with the current narrow margin 1/4 puts you close to an average of $300/kWh. With marginal capacity likely cheaper, I’d suggest that 60kWh could still be closer to $300/kWh to $200/kWh.

Yes what you say makes sense, but that is if the battery price indeed goes to 200$/KWh and stays there despite the then following huge market demand increase. In a sense it could backfire on itself reincreasing prices due to high demand.
Then there still remain the interest of a Rex for blackouts and flexibility on energy source. This is especially true if the Rex size goes down to a shoebox, as I believe, and price also falls to something like 500 $.

Screwing around with ICE is what got Fisker in trouble…technologically inferior and unnecessarily complex. Tesla cannot promise their lofty margins, competitive pricing and superior performance with ICE baggage.

An ICE Rex is not particularly complex and certainly simpler if there is no clutch and gear box. It also becomes insignificant in weight and volume if smart technology reduces its size to a shoebox. Add to that a decent 15 gallon tank and the cost competitiveness of a rex in comparison to extra batteries for the few trips you have to do above 100 miles become really hard to beat on price level. Sometimes 99 % electric is better than 100 % electric.
Elon should actually know that since he very successfully applied that mantra to space X. 99% best technology for cost effectiveness is better than 100 % best tech at too high cost.

Priusmaniac, try taking an ICE apart and putting it back together, then do the same with an electric motor and then tell us which is more complex.

An ICE Rex is more complex than a motor agreed but less than a huge V12 engine with clutch and gears. A shoebox sized ICE based on a Wankel would be very compact, light and bring range at a fraction of the cost directly, not in four years for an hypothetical 40000 $, that in more translate to 50% more, thus 60000 $, once on the other side of the Atlantic. The model S is at 85300 € in Brussels that is 112000 $. We have been waiting decades for a 99% REEV, now that it is possible directly with a Wankel in the Frunk, will we be forced to wait another decade for a 100 % EV and still have to drive 99% non EV in the mean time?

If you’re looking to Tesla to give you a Rex, you’ll be waiting longer than that.

Rex runs on gasoline, the burning of which it is Teslas ultimate goal to stop – so NO.

Blackouts?
Gas pumps run on ELECTRICITY.
Big battery, big tank, similar range before ‘refueling’, for which electricity is needed.

Flexible energy source?
Rex would run a generator to make electricity.
Battery is a generator of electricity.

Rex – no advantage there.

A Flex Fuel Rex of course runing on cellulosic ethanol made from waste

I don’t agree. No EV need a Rex with 200 miles of range and a growing network of supercharger. Plus, adding a Rex is not a perfect solution : it makes your car heavier, so you have less electric range. It also increase the pricetag of the car. Finally, you have to maintain the Rex like a normal ICE car, wish is really annoying for something you will nearly never use because you have enough electric range and you can charge really fast.

Anyway, it wouldn’t be Tesla’s mentality. And in the a few years, we will see better and cheaper batteries coming to the market, so adding a Rex is not a long term decision. I’m pretty sure that in 6 or 7 years, i3 buyers might get the option to replace their Rex by a bigger and cheaper battery.

“It wouldn’t be Tesla’s mentality. And in the a few years, we will see better and cheaper batteries coming to the market.”
That is about what GM and Chrysler where saying about EV a decade ago, it wasn’t in their mentality and they waited for better batteries.
I just wonder, why can’t they all give it a chance and see that a union would get further in the form of an EV with a Rex, just give it a try like for batswap.

For the umteenth time, Tesla isn’t interested in fossil fuel burning range extenders. They don’t like them. They’re not going to make them.

There are several automakers that do make EREVs. Tesla is not one of them.

This has been explained to you several times in this thread alone. You are now entering Troll Territory.

Sorry but a flex fuel rex ius burning bioethanol made from waste not fossil fuel.

There are no EREV on the market but the ugly upcoming i3, all other are double motorisation cars.

If Tesla never use a Rex I Wonder how we are ever going to have an affordable car with 600 miles autonomy in our lifetime. We need to get realistic the petrol car competition is at 20000 $ with 600 miles autonomy, not 100000 $ with 200 miles autonomy.

Google “smallest BMW” and you will see the Isetta. Ugliest? Still the i3.

I think many of us, including Musk, just expected more from BMW. I think Musk is right about styling, just look at the Model S. It blends in with the rest of the great-looking luxury vehicles, so much that it’s hard to pick one out in a crowd. Ultimately that’s what will sell to the masses, after all the “look at me, I’m green” folks have their EVs.

Vin … I like your comment: ” … the “look at me, I’m green” folks have their EVs”. So true. I’d add that the least impact one can have traveling is walking, cycling, and using public transport – so those people already have a mode of transportation too. There is a lot of room, however, for opinions and options on what make a good vehicle, EV or not; the i3 fills a nice niche.

So, though I like Tesla and hope someday to own one, I’m also put off by Musk and his attitude and the techno-god worship that kind of swirls about him. I just wish he would generally credit more of the people around him that have helped make Tesla a success so far. If the company doesn’t have a strong team culture with him, it’ll be nothing without him – and he can’t keep doing this forever.

He has – see recent interviews published on CNBC’s site…

many times.

In one interview, the interviewer tried to give him credit for solar city.
Musk said that he has some say, but does not do much because the others are doing a fanastic job running the company and deserve most of the credit.

Elon Musk doesn’t believe in short-range BEVs so, he considers the idea that the i3 is _competition for the Model S_ laughable and I agree. That doesn’t mean it’s not part of a process of BMW becoming competitive in BEVs.

The i3 is competition for other BEVs. It’s also competition for the Volt, as in many cases the Volt was purchased by people who’d fit i3+REx.

I am not sure it was clear in this, but the analyst (Morgan Stanley, if I remember correctly), initiated the laughter on the “room for improvement” comment, and was in fact most of the laughing heard. Musk did join in, so I am not letting him off the hook.

This is the same analyst that spoon fed Musk the “are you going to make a capital raise anytime soon” question at the Q1 results. I’ll let the conspiracy theorists run with it from here.

Musk has made a laughing stock of the competition.
Therefore it is appropriate that he laugh.

Gen 3 is all about a cheap battery.

My guess is that he’s going to make his own on that chunk of land he bought.

Arrogance of this man will eventually cause his fall. He probably does not understand that Tesla is currently successful only because it is a niche product. Any of the big auto boys could manufacture equally good or better car if they chose to do so. He should be happy that they have not decided to compete with Tesla yet and pray for more time.

He is actually encouraging them to. As much of a businessman as he is, I think he would be much happier to see the electrification of cars.

His encouragement is irrelevant. For a car company, it is always business decision and not some ego knee jerking. For M-B or BMW going full speed to electrification is a serious decision. Any bumps on this road would affect their brand and market value. I am sure they will eventually manufacture competitive electric cars but it looks like they feet it is not the right time yet. They may be wrong but Musk should not misread the situation.

“His encouragement is irrelevant”. Irrelevant to who? I was speaking to you. You said “He should be happy that they have not decided to compete with Tesla yet and pray for more time.” However, he feels just the opposite, and wants competition. He is already selling his technology to companies like Mercedes & Toyota. I think a more electrified auto fleet only helps his business more, and this will require all of the auto companies to get serious about EV’s (i’m looking at you Chrysler).

You were speaking to me so I am answering you – “His encouragement is irrelevant” to other car manufacturers as it is irrelevant to me. I do not take that man seriously. He is already flying to the moon. He is not really selling his technology to M-B, they are simply experimenting with it at this point. So is Toyota. No matter what the effect of the experiment is, those companies are too big to make themselves dependent on Tesla. They may eventually buy Musk though. I like Tesla as a car but its technology is nothing special. All it has is a big battery and a big LCD screen. I thought about buying it but decided to wait for Outlander. The way I see the market now the optimal electrified car is a plug in hybrid with around 60 miles AED and highly efficient engine on board (light but with plenty of power; Wankel?; plastic?). I see those cars coming to the market within next 3-5 years. Despite all the Tesla hype, BMW i3 and i8 are more important to promoting electrified vehicles. Tesla may be popular on this portal but outside of the aficionado circle it is unknown… Read more »

LOL. Riiiiiiiiiiiiiiiiight!
Butt hurt much there Rob?

in 2014 most people cancel their orders with TESLA buying an AUDI eTRON R 8 as you can see on youtube
Audi Etron R8 on track http://www.youtube.com/watch?v=lHeTmMyfThU

If the technology is nothing special, than no car of any kind is special, and most would be far, far less.
How about that it was done by a small and new car company, an achievment realised by no other small and new car company?

I agree that the incumbents are more important to the promotion of evs, but only because they are more known.
However, do you really believe that BMW would have built the i cars if it weren’t for the vanguard of other companies, including successful unknowns?
Bob Lutz went on record as saying the Tesla roadster was the magic ingredient to convince the gm board to green light the volt.

And you do not take a man seriously would led a private rocket company and new car company, offering only the less popular electric powertrain, to great financial and critical success?
Yeah, because, since he can be a bit arrogant, is not all that difficult, right?!?

Actually I would quiet get along with him since I have the same mentality. I don’t think it is arrogance but simple love of technology at its best. Doing what is possible, seeing a thing in true even if only an evanescent concept at present. I know it is not true, but I have even problems in making a difference between a possible concept and having it in matter. To me once the concept has no flews it is real no matter if virtual or not.

I wonder what Elon thinks about the Detroit Electric?

http://www.detroit-electric.com/

“During the i3 discussion, Musk broke out in contagious laughter”
—————

If you listen to the audio, it’s actually the interviewer that starts laughing, and then Elon joined in.. almost seemed like out of courtesy.

Yeah, and their giggling was triggered from basically nothing in a way that didn’t make sense. I think they were having a tickle-fight! 🙂

The i3 works fine for 2014 and onward but by 2017 BMW will have to drop the price to sub $30k if they are to be competitive with a $35k Bluestar.

Hopefully BMW will offer additional larger battery packs rather than just the REX option in the future.

GM will be getting the DTF reports on this issue soon!

I agree to a certain extent. A lot is being assumed by the Tesla Gen 3 due in 4 years; who knows if it will be as cheap as promised. The i3 is out this year in Europe and next year in the US. It is entirely possible for BMW to release an i3 in 4 years that has double the AER (it doesn’t even have to be an new model).

As a Volt owner, I’m seriously going to look at the i3 REx when my lease is up in Nov ’14. I want to see the final EPA numbers and detail on the REx performance.

If Tesla came out with a 35k car that had 100 miles range, I’d probably get one. Mileage is not the only thing that Tesla has been outperforming the competitors on, and its an overrated figure. The folks who are not satisfied until electric cars have 300 mile range and can be recharged in 5 minutes aren’t going to be satisfied until every single gas station in the country has a fast charger, the things are cheaper than gas cars, and all their friends have one. Ie., they are not customers until the revolution is over.

BTW, way to tip your hand that you are a serious EM fanboy 🙂

(so am I, unfortunately)

dont waste your money wait for the Audi Etron R 8

I still can’t believe that BMW designed such an odd-looking car with the i3. That hood looks like two cars rendered on top of each other.

I thought the same thing – it looks like a deformed car.
BMW seems to like that: they have a crossover/suv type vehicle that does not have a hatchback, but an almost normal trunk.

BMW had better sell all they can while they can, because the Tesla Gen III is going to send it crying home to Momma.