Video: Motley Fool Discusses Tesla’s Future $35,000 Competition


Will Tesla Motors have real competition in the $35,000, 200-mile electric vehicle segment when it launch Gen III in 2017?

This Article Triggered the Recent GM Versus Tesla Debate

This Article Triggered the Recent GM Versus Tesla Debate

Well, it wasn’t too long ago when General Motors CEO Dan Akerson stated that eventually the automaker would ultimately compete with Tesla, but Akerson’s comment included the word Cadillac, which leads us to believe that this competing Cadillac will go up against the likes of the pricey Model S and not the significantly cheaper Gen III.

What about Ford?  Recently, Ford’s director of vehicle electrification, Mike Tinskey. went on record saying that dedicated electrics aren’t part of the automaker’s future strategy.  So, we’ll say this counts Ford out of competing with Tesla, too.

Who’s left?


Definitely not Toyota.


Here, Motley Foll discusses the future possible competitors to Tesla’s $35,000-ish Gen III and though we can’t say that we agree with everything stated, we will say that, in time, every major automaker will have to take a shot at competing with Tesla.  The questions are, who will do it first and who will get it right?

Categories: Tesla, Videos

Tags: ,

Leave a Reply

40 Comments on "Video: Motley Fool Discusses Tesla’s Future $35,000 Competition"

newest oldest most voted

Great down to earth analysis by Motley Fool’s John Rosevaer. He is right: a statement like “we are working on…” doesn’t really mean anything. In most cases it probably masks a watch and see attitude from traditional carmakers waiting for the right battery tech to come along. Tesla is probably the only one that can actually do the $35K/200 miles car any time soon because they have fundamentally lower battery cost than anyone else, unless GM’s Envia Systems gamble pays of the way GM seems to be suggesting.

In that case GM might have exclusive rights to battery tech that’s substantially better than anything Tesla has to look forward to at this point which goes to show that battery breakthroughs are both important and a threat to Tesla’s future.

I’m not convinced that Tesla’s $/kWh advantage means anything, really.

I think the biggest competition for the 200-mile EV (whoever builds it) will be a 100-mile EV with a range extender. BMW is charging $4k for the REx because it has no competition, and even then it’s expecting the majority of orders to opt for it, but I’m sure a 25kW range extender can be built for $2k and maybe less. You won’t be able to add 30 kWh of battery for anywhere near that cost before 2020, and it still won’t be as versatile as a range extender. At best, Tesla’s Gen3 will match 100-mile EREVs in battery cost.

Now, does Tesla have inverter or motor cost advantages? We have yet to see.

Tesla has no $/kWh advantage. They are buying on the open market. Anyone can do that. And how they build the pack is similarly trivial.
Cost is actually Tesla’s weakness. They are selling a lot of cars at 100k$ average yet losing money anyway even if we ignore development costs. That’s actually quite spectacularly bad.
When Porsche sells a 911 for 100k$ they have a massive profit margin.

Please inform yourself before spouting nonsense.

Tesla has a very good gross margin, and claim that they’ll approach that of Porsche soon (they’ve already hit 22%). They’re breaking even overall because they’re installing superchargers and developing at least two cars off the income of just one.

22% margin on your company’s second model is spectacularly good, not bad. It’ll be really hard to match that with a car competing with the LEAF, Tesla is aiming for BMW 3-series pricing. I think they’ll have good margins there, too.

There advantage is:
1. No one else is using commodity batteries, which gives them a cost advantage. Other car makers decided it was too risky of fire to use them.
2. Tesla has designed their battery pack to minimize the fire issue and has patents in this area.
These two points gives them $/kWh advantage.

I’m not sure about the strategery of the whole picture, but Tesla’s pack is substantially different than others. They have a larger packs (216 & 306MJ), which allows the pack to only go through 300-500 charges per 100,000 miles, whereas LEAF goes through 1200 and the Volt goes through 2500 chargers per 100,000 miles (pure EV mode miles, which proud Volt owners strive for). This allows them leeway in some combination of price or density they might be able to get in exchange for lower guaranteed cycle life. The other OEMs should also be thinking about this as they move to 200 mile / 600ish-charge-cycle cars.

This is exactly what I was going to say. I’m not sure John Rosevaer understands Tesla’s advantage with the small format cells or the Envia nano technology, which could be a game-changer for GM. I would love to see Envia bring their higher density batteries to market, but I am very suspicious of how quiet they have become.

“I am very suspicious of how quiet they have become”, and you should be. I have read about dozens of battery breakthroughs, some at the face of it very promising. Invariably things get very quiet after that. Can’t believe that none of these breakthroughs never had any potential to be turned into a viable product.

When GM started designing the Volt they didn’t even have a battery. I think they were half way or more through the design stage and still had no battery. I mean, if you actually think about it, there’s no reason you can’t design the entire car even if you have no battery to put in it. You can add the battery later or try different kinds in it. All you have to do is design a different battery pack as long as it fits into the car. I’m sure they need to update firmware to handle different chemistry types, etc.

Tesla is probably doing that right now. The most logical place to start would be to scale down the S or the X…..but that would be boring so they need a new body style in a slightly smaller car. Plenty to work on that’s for sure. I wish we had a peek at some of the design sketches.

Tesla still needs that 60KWh battery pack for a real world 200 miles EV range….

Hatchback hatchback hatchback hatchback… for the love of all that’s good in the world, please Elon make BlueStar a hatchback.

Why does Tesla get to dictate 200 Mile as the target number? For me a 120-mile to 150-mile is my sweet spot. And I think I could do fine with a 100-miler as long as it offered a field upgradable battery in 5 years when densities increase.

Car makers like Ford and GM need to modularize the packs and offer 120-mile, 150-mile and 200-mile as variants on the AER of their BEVs. It is already done by many Prius plug-in conversion kit makers (do you want 2kWh, 4kWh, 8kWh? We have them all…)

As batteries become denser and battery cases become smaller and more manageable – this should be how BEVs are sold in the future. Various range models, easily convertible at the dealerships – or at home if commoditization occurs.

Modularizing battery packs is a great idea, but won’t work for the traditional dealership model. It works well for Tesla because they custom-build their cars. However, dealerships like to have cars on the lot. At that point, if you want the red car with the larger battery, they either have to order it or somehow swap batteries with the blue car.

Dr. Kenneth Noisewater

From a manufacturing standpoint, it makes sense to software-limit a commoditized battery. Fewer variables as far as suspension, tires, weight balance/handling, etc. go, economies of scale, and ease of resale (since the dealership can reprogram the range based on what is in the highest demand). So, for example, put 80-100kWh batteries in every Model S and Model X, and license them to a certain range/performance level, then sell/rent access to higher performance or have it be a dealer-settable thing for resale.

Anything Software based will be hackable. I’ll buy the small, and change the software to allow using it as the largest.

Dr. Kenneth Noisewater

Not if you want warranty service, and given that all Teslas have some form of packet comms there could be a protected path to, say, the VIN that needs to periodically refresh with the MotherShip with whatever Tesla says you have registered. So, for instance, you hack your range out and a week later the car reports back to the mothership that you hacked it. Tesla then sets you back and gives you a warning, 3 warnings and your car is no longer under warranty and they won’t take it in trade or service it.

And you want to carry that additional 20KWh (which weighs upward of 500 lbs) for nothing?

Modular design for expensive components doesn’t make sense until it is something people can “add” when needed…

There are other considerations with this issue, though. If you have a larger battery you can have more power to the motor because that power is distributed over a larger number of cells. So each cell, individually, doesn’t have to work as hard. So if you take a Volt, for example, and reduce the size of the battery in half, then you are most likely going to need to limit your peak power at a lower number. The Energi twins as well as the PiP get away with this concept because they can run their I.C.E. to supplement additional power when needed.

I’m not saying you can’t do this. I’m just pointing out that the higher capacity models will also have other benefits beyond just more range.

Note that there is a way to circumvent this, it is by using a supercapacitor as power buffer. This is possible because really high power is usually required for short periods. The most evident case is getting from o to 100 mph in 10 seconds, but once you are at 100 your power requirement drops a lot.
It is perfectly possible to have a battery able to supply the average power, for instance 50 KW and have the supercapacitor able to give the extra 50 KW for the 10 seconds you really need it.
This can work perfectly 99% of the time, the only exception being a Tesla that would be towing something heavy up a steep slope and fast, in that very special case, the capacitor strategy would be unable to supply.
Would that be unacceptable, well if you inform people about it in advance, I think most people would agree to live with it in exchange for a cheaper battery pack.

For cars that use CCS or Chademo, then the range doesn’t necessarily have to be 200 miles – range could be 150 and then fast chargers within the city to provide quick charging on cold winter days when you are worried about range.

Tesla is dictating 200 mile range because that is what it’ll take to get from Supercharger to Supercharger. There is a sleeping giant of a service business model in the Supercharger network – charging affluent EV owners $$ to fill up their Gen 3 cars (since Model S and X will be free for the life of the car, but I don’t expect it to stay that way for all Tesla-made cars).

There is also the sleeping giant that, once Tesla has its network built out, and has collected and analyzed the data of usage (to ensure they don’t restrict Tesla owner charging access)… they could possibly add CHAdeMO/CCSS ports… for a fee… on their network, not only making a little money and becoming the Electric Chevron, but also getting direct marketing access to all those non-Tesla EV owners.

Tesla chose 200 mi. based on the fact that they are planning to have their Superchargers 150 mi. apart. Each Supercharger gives 80% charge in 30 min. 80% of 200 is 160 which will get you the 150 you need plus a 10 mi. cushion to account for driving and temperature variables.

Only a small percent of Tesla owners use the SCs. Who says that Model E will have supercharging included. I suspect a similar $2000 add on option.

What about Infiniti? The LE was delayed by a year or two to align with new battery tech. Even if it doesn’t meet the “magical” 200 miles, would a 150 mile Inifiti not compete against a Tesla?

Also, don’t forget / underestimate infrastructure. CHAdeMO is the only thing that comes close to competing with Tesla’s superchargers today. GM’s bet on CCS could be what kills their 200-mile EV.

I think the omission of BMW in this “who will match Tesla” article is perfect as I don’t believe they will directly compete with the gen3 Tesla. in 2009 BMW had the Mini-E which went 80-100 miles with a 35kwh battery (crazy expensive) In 2014 BMW will have the i3 which goes 80-100 miles with a 22kwh for a net $33,000. Add a range extender for 180 miles and $37,000. The key technology in this advancement is lightness and CFRP. By 2017, BMW will have 3-4 years experience with the i3 and will be filling out the rest of their i line between i3 and i8. They are already working on those cars. The lightness of their cars (with CFRP,) the experience and development of their drive module, and semi autonomous driving aids such as adaptive cruise control, collision avoidance, ped avoidance, parking assist etc. will be the tech advantage that Tesla does not have and in my opinion, will not be able to match. I see no reason at all why BMW will not be able to meet head to head with Tesla With a lighter, faster and equal range car by 2017. The advantage is CFRP. The question… Read more »

CFRP is carbon fiber reinforced plastic.

CFRP isn’t a big deal. BMW is using it in the i3 as a technology hook for EV buyers and as a launch pad for using the tech in higher volume cars. It’s not a game changer for EVs.

Weight affects range in two ways: acceleration energy and rolling resistance. For the former, EVs with good electronics can recapture up to 90% of kinetic energy, so that’s a minimal issue. For the latter, we’re looking at maybe 20% of highway drag at most being due to rolling resistance, so 20% less weight in the i3 only gives it a 5% advantage in economy/range.

Their real advantage is the REx. They leveraged their motorbike engine to make a small 26kW generator with little investment. If Tesla or GM ever go down that road, they may need to subcontract the engines.

It is a game changer in EVs, as far as inertia. And no, they can’t recapture 90% of the energy. Think about that statement. If it were true, would the difference between city and highway be 5 miles on, say, the Volt? The gap widens for cars with KERS, but City/Hwy numbers would blow out if recapture were anywhere close to 90%. I’ve heard 30% through brakes and 35% through transmission, for the Volt. I’d sooner believe that. The I3 should do well in the city, at ~2,700lbs.

Carbon fiber is like bicycles. It did so much, to put stiffness where you wanted it, and to dial out stiffness where you need compliance. Auto manufacturers have the world as their oyster to work with this stuff. Torsional stiffness will see a new paradigm, sort of like what carbon does for “bottom bracket flex”. That’s not to say it won’t take time to use CFRP properly.

The last fifteen miles of a battery are unuseable due to the fact if you get stuck in traffic or have to take an alternate route you need a little to avoid range anxiety. So basically my Focus has about a 60 mile useable range. If the car had a hundred mile range instead of 75 that would be a 50% increase in range which makes all the difference in the world

A 200 mile range will have a real-world 120-150mi range. It will take a real-world 120mi range for me to have a BEV as my primary car.

Last Friday, for example, I had to drive to work and back (44mi) and then to Ft. Worth and back (25mi) and then some other running around with no opportunity to charge. About 80 miles total mostly at 60mph+. Had this been in winter with heat running or any delays due to accidents or weather, I would need at least 120mi to be ‘safe’.

Sounds like a RAV4 EV would be perfect for you.

ERav4 is NOT available in TX…..

Toyota doesn’t want to sell EVs….

Motley fools are generally always wrong and this John fellow is no exception. The irony is that Tesla Motors can probably raise more money than the big automakers can at this point so if it was an issue of flexing capital strength (which it isn’t) then Tesla could play along. So all in all a completely worthless analysis. As always from Motley Fool. Tesla’s problem is that they have so far been very poor at doing a profitable production. They aren’t good at bean counting. Going to anywhere near a 30k$ price point will be a stretch for them. Model S was supposed to be a 50k car, it’s selling for 100k and they are still losing money despite much higher sales than expected. The roadster was supposed to be 90, it sold for 114 to 150 and they still lost 100k on each one. That’s the problem, not GM spending money on batteries. Fortunately battery demand hasn’t yet lead to higher prices and they need to stay in that industrial mindset. If they start to be conceited and want more money for their product because they are popular then that will grind things to a halt. That has unfortunately… Read more »

I grant you that Tesla hasn’t got the degrees of price freedom with this car, but you are agreeing with Motley Fool, to say “That’s the problem, not GM spending money on batteries”.

Personally, I think all of the mass market car companies are working on plug-ins in varying shapes and forms. Even if their public statements are cold towards EV’s. And I agree to with the Motely Fools in that the large car companies are taking a wait and see approach as well. Especially if your name is Toyota or Ford or VW.

When ships travel through the Artic circle, is it easier to be the ice breaker in front, or the ship coming on behind? These guys figure let Tesla make the discoveries as well as the mistakes, learn from them, and go in later.

The problem with the wait and see approach is that Tesla harvests all the glory and the others look like retarded douches. One very poignant example of this is that Tesla motors would never have had a profitable quarter had it not been for the reluctant car makers paying them dearly in zev credits. The illusion of profitability in Q1 that would otherwise have been a devastating 60-70m$ loss is what catapulted TSLA into the hundreds on the stock market and subsequent billion dollar stock offering that wiped away their billion dollar debt and made them look like a raging success and catapulted them up to 200 🙂 Had that not happened TSLA would run out of money and be forced to raise capital on a record of eternal losses and the stock could have been 10 and heading down and sales enthusiasm could be dramatically less. It was a hugely pivotal moment. All because the established car makers didn’t even throw in a compliance car. The problem with the ice breaker analogy is that there is an audience cheering. As a result TSLA is now worth HALF of GM and more than Porsche. More than Peugeot, Citroen, FIAT, Opel… Read more »
Tesla will be able to sell every single Gen lll it can make. It will be a benchmark in that price range, just as the Model S is. Tesla says 200 miles of range is the lowest they want to go, and their Supercharger network is based on that. It will be a powerful combination that will work just great for them. Don’t sell Tesla short on autopilot functions either. 150 miles AER will probably work fine for the others, as long as the price reflects the lowered range. Looking at the cost of the i3, it’s hard to see how BMW will compete with Tesla. They may be able to make an EV comparable to the Gen lll, but they’re going to have a hard time matching the price. The rest will be pitiful in comparison. It will take years for the rest of them to get it. With so many years of sitting on the sidelines, it’ll take them a long time just to get the circulation back into their legs. As for Nissan, while they deserve credit for pioneering EVs in the marketplace, the Leaf falls short in several key areas, and I don’t just mean range.… Read more »

It may come down to the sweet spot where Tesla can be alone and profitable, but the big boys don’t join because ICE competition is more profitable for them. Or, they do EREV, which on the whole is something we might be able to thank Tesla for hastening, as a form of competition. That second point is most likely, IMO, and it will be history thanking Tesla, and Nissan for paving the way for PHEV.

I would agree that in the tight margined, 35k price bracket there is still a big gap between 200 range in BEV vs. EREV. I don’t see anything convincing me that the “J” curve will be that green weighted.

It is quite evident that there is a forgotten product that can be a huge opportunity for the first one that makes it. It is a sedan EREV with no fancy CFRP, perhaps not even aluminum, but simply high strength steel with the same 18650 battery approach as Tesla but of smaller size good for only 100 miles but with a micro range extender. No dead animal skins leather products, no fancy wood, strange doors or exaggerated i stuff, but normal tissue, plastics and a Prius like dashboard. All of it at a decent size of 4,6 m and for a price of 30000 $. That is what can sell in the millions, what can be everybody’s car that everybody can afford and enjoy driving.