Why Tesla is going to dominate for the next 5yrs

[michaelbmw]

It MAY make sense to pre-order and place a deposit on a model 3 because:

1. There is only one seller (Tesla itself) and
2. They are sold a fixed price.

It makes no sense to place a pre-order with a dealer unless you have more money than brains, because:

1. It ties you to that particular dealer,
2. The dealer knows you are desperate for the car and have more money than brains, so he will not cut the same deal as he would with a shrewd buyer who is willing to walk.

So the huge number of pre-orders with Tesla vs the few if any on the Bolt don't really mean much.

I expect my next EV to be a Bolt, which I will lease at a good price when the initial flurry dies down. I expect to have 30,000 miles on that Bolt ( 1 1/2 years or so) before I see any Models 3 driving around the neighborhood. When I return that Bolt, I will consider a Model 3 or whatever other good car is available at that time.

 

[WoodlandHills]

It MAY make sense to pre-order and place a deposit on a model 3 because:

1. There is only one seller (Tesla itself) and
2. They are sold a fixed price.

It makes no sense to place a pre-order with a dealer unless you have more money than brains, because:

1. It ties you to that particular dealer,
2. The dealer knows you are desperate for the car and have more money than brains, so he will not cut the same deal as he would with a shrewd buyer who is willing to walk.

So the huge number of pre-orders with Tesla vs the few if any on the Bolt don't really mean much.

I expect my next EV to be a Bolt, which I will lease at a good price when the initial flurry dies down. I expect to have 30,000 miles on that Bolt ( 1 1/2 years or so) before I see any Models 3 driving around the neighborhood. When I return that Bolt, I will consider a Model 3 or whatever other good car is available at that time.

Ditto! Our plan exactly....

 

[kzod]

None of the recharging options, that includes Tesla's and CHADEMO and CCS units, are great, and anywhere near as flexible as an ICE which can be quickly and easily recharged with fuel in short order nearly anywhere. Right now, if you want to take the road less traveled, you're out of luck with an EV. Not so with an ICE, or something with range extender aboard. We've had over 100-years to build up the fuel station to support ICE vehicles...I'm not sure government dollars will come with enough force to help, but the market does not seem to support them as private enterprise, and the car manufacturers, other than Tesla, don't seem to be in the large-scale implementation, at least in the USA. While there are some efforts, they are really all fairly small-scale compared to what's out there to support ICE. It appears that installing a gas station where the turnaround is likely in the 10-minute range verses 20-340 minutes for fast/slow rechargers, especially when you consider the volume of vehicles around just doesn't support things. Pulling into a gas station where all of the pumps are in use means, usually, no more than maybe 5-minutes to get started on yours. Doing the same at an EV charging station, should it be a popular spot, could mean hours before you could even get started. Then, someone may have left their vehicle there while they went out to watch a movie, or shop, or work for the day, or an ICE is blocking the spot, or, which still happens more than at a gas station, the device doesn't work.

I really like my i3, but when (not if) I buy something to replace it, assuming I'd like one car, it will have to be either a hybrid with enough normal EV range, or a serial hybrid like the REx or Volt, where it was designed to be able to easily and comfortably switch to one source of fuel or the other and just keep going, utilizing whatever is available to refuel when the time comes. Tesla doesn't cut it for me. I'm not alone, but then, I may not be in the majority, either. As batteries become more energy dense, the option to recharge at home will become more and more expensive, and less and less possible as it is often the case that the home is not designed to add that big of a new load. Upgrading, if possible, can often be quite expensive, and the public, whether free or not, recharger locations are not designed for everyone to just use them as their only source. There aren't, and probably won't be anytime soon, enough of them around. It's even the case that many of the level 2 EVSE's out there can't recharge the i3 at maximum, let alone a Tesla.

For most people, when we want to go somewhere, we don't always plan, and even then, at least today, you can't always go where you want to with an EV. Until that changes, Tesla, and others won't predominate new car sales.

Jim,
Given your position I don't understand why you would have got an i3 in the first place? A (boring) prius, mini, or a fiat (much more fun) would have saved you quite some dough without the hassle of charging batteries. I don't see how charging a denser battery becomes more expensive though. Even if the battery is good for 10,000 miles, you only need to recharge the tiny portion that you used. Personally, I recognize that EV's can be a more enjoyable way to drive while reducing pollution. Not sure why any EV fan would be against Tesla, but if the 3 actually comes out as promised it will be way beyond anything else we've seen to date. I'd rather stop for @20 minutes every few hours than a few minutes every hour if/when I take it on a road trip and not have to deal with an ICE in car the 90% of the time I don'y need it.

 

[jadnashuanh]

As of yet, and I do not think my thoughts will change when the EV range grows to 200+ miles on an affordable car, I do not see one (yet) being viable for the type of driving I do when I go beyond the range of my i3. Even with the REx (which I didn't opt for), the frequent stops just aren't all that convenient. Along the route I usually take, service stations average about 40-miles apart. That means with the REx, once the battery got down on a longer trip, you'd be stopping at almost every one, and that's more often than once/hour. Superchargers, if those 400,000 Model 3's actually get built and delivered in a timely fashion, will still mean longer waits along those traveled paths, and a tough situation even at a destination location. Realize that most EVSE's out there can end up being 208vac, and at 30-32A max, that's a very long time - much more than overnight, to recharge a 60-80Kwhr battery.

I bought the i3 because most of my travel is local, and on an ICE, the wear and tear of numerous short trips can be dramatic. The i3 doesn't really care about those. As a result, I don't see the usefulness of those longer range BEVs. I look at it sort of like train travel. At least in the USA, while trains are quite efficient, they don't go everywhere you want to go. AN EV, without a fast way to recharge it when you need it, is more like a paperweight if you need to go further than its design range, or there are no places to recharge.

If I could only afford one vehicle, it wouldn't be an i3, whether BEV or REx, doesn't matter. Same with any Tesla, or Bolt. The thing would need some onboard way to recharge or keep going with minimal stops for as long as needed. The Prius, and all of the other plug-in hybrids currently available pretty much were not designed as EV's first. The BMW I-series has been, and I'm hoping the i5 may meet my needs and then I'll downsize to one vehicle. If I couldn't afford two cars, I'd be using my ICE 100%. As it is, I can, and find the i3 both functional and fun, and ideally suited to most of my driving.

Since all i3's are able to be monitored by BMW, they have some statistics, and if I remember, my service advisor said up to now, at least in the USA, only 5% or so of the distance traveled on i3's was with the REx running. Seems their original thoughts were accurate, most people do not need the REx, and it is there mostly to overcome range anxiety, not actual need. It has helped extend the comfort level enough to sell more, so that's not a bad thing. ANd, yes, some people really do need the REx to make it viable. The Tesla's do not have the same flexibility...once you exceed their range, you're stuck. Hopefully, you have enough time and an open space to recharge it. Not an issue with a hybrid.

 

[vmSeattle]

As of yet, and I do not think my thoughts will change when the EV range grows to 200+ miles on an affordable car, I do not see one (yet) being viable for the type of driving I do when I go beyond the range of my i3. Even with the REx (which I didn't opt for), the frequent stops just aren't all that convenient. Along the route I usually take, service stations average about 40-miles apart. That means with the REx, once the battery got down on a longer trip, you'd be stopping at almost every one, and that's more often than once/hour. Superchargers, if those 400,000 Model 3's actually get built and delivered in a timely fashion, will still mean longer waits along those traveled paths, and a tough situation even at a destination location. Realize that most EVSE's out there can end up being 208vac, and at 30-32A max, that's a very long time - much more than overnight, to recharge a 60-80Kwhr battery.

I bought the i3 because most of my travel is local, and on an ICE, the wear and tear of numerous short trips can be dramatic. The i3 doesn't really care about those. As a result, I don't see the usefulness of those longer range BEVs. I look at it sort of like train travel. At least in the USA, while trains are quite efficient, they don't go everywhere you want to go. AN EV, without a fast way to recharge it when you need it, is more like a paperweight if you need to go further than its design range, or there are no places to recharge.

If I could only afford one vehicle, it wouldn't be an i3, whether BEV or REx, doesn't matter. Same with any Tesla, or Bolt. The thing would need some onboard way to recharge or keep going with minimal stops for as long as needed. The Prius, and all of the other plug-in hybrids currently available pretty much were not designed as EV's first. The BMW I-series has been, and I'm hoping the i5 may meet my needs and then I'll downsize to one vehicle. If I couldn't afford two cars, I'd be using my ICE 100%. As it is, I can, and find the i3 both functional and fun, and ideally suited to most of my driving.

Since all i3's are able to be monitored by BMW, they have some statistics, and if I remember, my service advisor said up to now, at least in the USA, only 5% or so of the distance traveled on i3's was with the REx running. Seems their original thoughts were accurate, most people do not need the REx, and it is there mostly to overcome range anxiety, not actual need. It has helped extend the comfort level enough to sell more, so that's not a bad thing. ANd, yes, some people really do need the REx to make it viable. The Tesla's do not have the same flexibility...once you exceed their range, you're stuck. Hopefully, you have enough time and an open space to recharge it. Not an issue with a hybrid.

I think the majority of i3 owners do not have the i3 as the only car in the household. As such, the i3 is great for the majority of needs since most of the time (but not all the time), our range requirements fit well within the i3's range, even without REx support. EV's are transformative to the consumer transportation industry. Just like the car when it replaced the horse and carriage. If you are expecting a car to have the same, exact 100% end-to-end experience of a horse-drawn carriage, you will be sadly disappointed. Similar situation between EV's and ICE-based cars. EV's have their own advantages and disadvantages versus ICE-based cars. Will an EV be able to charge up as fast as filling up a tank of gas? Not anytime soon, but if the make or break decision for you is refill time, you should never have bought an EV. Back to the point of this entire forum thread, many people, 400,000+ at this point, have voted with their pocket-books that a 200mile range is good enough for them to make the choice to go EV with Tesla. Let me repeat that number for you. Four-Hundred Thousand. That's the population of a small city for a car that won't ship for another 2 years, and has only been up for pre-order for only 3 weeks.

Let's be honest here. ICE-based cars will continue to be sold for DECADES. Just like the conversion from a horse-drawn carriage based transportation system to a car based one, it did not happen overnight. What we are seeing is the start of the tipping point where EV's are mature enough to be compelling for the mass-market, versus the techno-centric early adopters.

Warning! Obligatory snarky comment! Proceed at your own risk!
with an ICE-based car, when you exceed it's range, you're also stuck ("I ran out of gas"). Not sure about the rest of the country, but in the PacNW, the tow-trucks here all have EV chargers in them to give you enough charge to make it to the next EV charger.

 

[OWG]

I do not have my i3 yet, am waiting for the 2017. However, it will be my only vehicle. I am the only driver in the house and it makes no sense to have two cars. But, that is exactly the reason I am looking at the Rex. I have a 180km round trip commute to work, 2 days a week. The only cars that meet the needs are the Volt and the i3. The volt would not have the electric range for even one way of my commute. I think running the motor regularly, makes no sense...may as well keep my Prius, it has better mileage in that regard. Besides, the i3 is soooo much nicer of a car than the Volt IMO. I will have chargers at work (later this year), but I don't want a vehicle that relies on the charger (i.e. Leaf, i3 BEV).

I do have a deposit down on the Model 3, but it is less ideal than a 2017 i3rex (350km with Rex hopefully!). The model 3 would cover me as a single car family 99% of the time but the 30 minutes it would take to get an 80% top up at a supercharger, I could fill up the rex 5 times. So BMW, don't do something crazy with the 2017 like jack up the price. It is at the top of my limit I am willing to spend already! I am really hoping I have to go through the Tesla refund process in the fall.

 

[jadnashuanh]

I often take the road less traveled, so superchargers are mostly a mute point. I'm not going to be forced to drive along routes where they are. If you can live with that, it may be useful. While I could rent a vehicle for the longer trips and probably save money, it sort of takes the spur of the moment availability out of the equation. As it is, I thoroughly enjoy the i3, and my ICE, as it is still the best choice for my needs.

What, pray tell, would someone do if they were relying on a SuperCharger, and for some reason, it was down, or there was a backup of Teslas waiting in line ahead of you. That 20-30 minutes now might become an hour or more, and if the EVSE's are working, still will take you a VERY long time to get enough charge to the next one...with an ICE, except in very rare circumstances, there's another gas station within the next 10-miles, and often lots of them. Many of them are located near areas where you can catch something to eat...so, you decide to have dessert, and relax after your meal...your car is blocking the next person from using it, so 20-30 minutes may become pie in the sky, especially if you quadruple the number of cars on the road wanting to use them. People don't go sit down for a snack while their ICE is refueling, so they're normally out of there as soon as they're done.

Cruising along with my ICE, I've seen many trips where I've covered over 500-miles before needing to refuel...lots of opportunities to stop when I want with that, and quite quick in the process.

It will be interesting to see what the actual delivery times and out the door costs are on the Model 3. As mentioned earlier, it doesn't really make sense to plunk down a deposit at a local GM dealer for a Bolt, as it may not make any difference on when you get it, and it is likely to mess with your out the door price. Not the same thing when buying from Tesla directly...fixed prices, direct with the manufacturer, you can get an idea where you stand in the order process. But, given that they are going to prioritize sales to certain people (existing Tesla owners), and people living in certain areas, even if you were first in the order line, you may not get your car at the beginning. Tesla has not delivered one of their cars when they said they would or at the price point they announced...I don't have a lot of faith that it will begin with the Model 3. I also don't believe 100% of those deposits will result in the sale of a car. WHat percentage point ask for a refund, no comment, but I bet it's not insignificant. Given the price of the battery raw materials (in the last 6-months, futures prices have nearly quadrupled), starting a new production line at their Battery Gigafactory, all they're doing is cutting out a middle-man, so their prices may or may not undercut those from other suppliers used by other manufacturers. It's really hard to say what will happen in the next couple of years. One good thing, is the brine deposits in Nevada are rich with lithium, if you can extract it in an environmentally safe manner, but their new factory is not setup for that, but to use the already refined stuff. Maybe lots going on behind the scenes. Hope Musk has long-term supply contracts for his raw materials, or things could get really dicey really quick! There is not an oversupply of lithium on the market, and prices will reflect that as the demand goes up.

 

[TomMoloughney]

Here's my thoughts on how BMW can keep their customers from defecting to Tesla:

http://bmwi3.blogspot.com/2016/04/can-bmw-fend-off-charge-of-tesla-model_25.html

 

[i3an]

Tom - all good points, as always, on what BMW must do technologically to step up to Tesla's (promised) level. However, one area you have yet to address is what BMW must also do organizationally.
We have all had forehead-slappingly frustrating encounters with old-school ICE salesmen (yes, mostly men), managers and mechanics, and BMW could do everything you urge them to and still fail in the marketplace because of negative consumer experience with their legacy dealers. You know where I am going with this ... BMW should shamelessly copy many elements of Apple and Tesla's sales operations: a separate iDivision with separate company-owned showrooms and repair shops, with no-haggle fixed pricing. Heck, move into the malls and set up shop right next to Tesla so potential customers can make direct comparisons.
In short, it is not just the technology that is changing, it is also the retail experience, and BMW will be operating at a disadvantage until they can make the necessary structural organizational changes.

 

[Boatguy]

ICE may have a shorter life that we think. Both the Netherlands and Norway are considering bans on ICE sales after 2025 and the entire EU is considering a ban on ICE in cities by 2050. Given China's pollution problems and the ability of their government to make sweeping laws without the need for much public approval, I wouldn't be surprised to see something happen there as well. Those are ideas that would never have been considered even 5yrs ago. Things are starting to happen fast (which is good given that so is climate change).

As many people point out, 125mi will cover 95% of daily driving, the longer range vehicle is for traveling away from home; but most people expect one car to do both. The point of my original post was that without a national high speed charging network, the longer range vehicle is not very interesting and cannot become a person's only car. The 200+ mile EV without a high speed charging network is in a marketing no-man's land, unable to be used for long distance trips and always more expensive than the same car with the 125mi range that covers the 95% of daily driving.

Only Tesla has built, and continues to expand a national high speed charging network.

Is some energy company going to step in and spend a few $B to build out a national charging network for CHAdeMO and CCS? NRG is definitely not doing it. It takes years of location scouting, negotiations, permit applications, construction, etc. I fully expect all the major car companies to offer a bunch of EVs in 2018-2020, where is the CCS network?

And then of course both the CCS and CHAdeMO plugs are a monster compared to a Tesla plug. And if it bothers me that every time I use a public J1772 or CCS charger I need to wash my hands afterwards because the cable has been dragged across a dirty parking lot or flower bed, you can imagine how women feel about it. Tesla' superchargers are always clean, the cable rarely touches the ground and it's usually not necessary to handle the cable much at all.

 

[Boatguy]

Tom - all good points, as always, on what BMW must do technologically to step up to Tesla's (promised) level. However, one area you have yet to address is what BMW must also do organizationally.
We have all had forehead-slappingly frustrating encounters with old-school ICE salesmen (yes, mostly men), managers and mechanics, and BMW could do everything you urge them to and still fail in the marketplace because of negative consumer experience with their legacy dealers. You know where I am going with this ... BMW should shamelessly copy many elements of Apple and Tesla's sales operations: a separate iDivision with separate company-owned showrooms and repair shops, with no-haggle fixed pricing. Heck, move into the malls and set up shop right next to Tesla so potential customers can make direct comparisons.
In short, it is not just the technology that is changing, it is also the retail experience, and BMW will be operating at a disadvantage until they can make the necessary structural organizational changes.

+1 !

After almost two years my dealer still laughs when I ask about an i3 loaner. And at the last service visit they advised me that they only have an i3 mechanic on site three days a week. This is in California where almost half of all EVs in the country are sold.

Dealers = Dead Dinosaurs. Dump the dealers!

 

[Schnort]

ICE may have a shorter life that we think. Both the Netherlands and Norway are considering bans on ICE sales after 2025 and the entire EU is considering a ban on ICE in cities by 2050.

https://www.youtube.com/watch?v=nIZ73q9M-Gk seems mildly apropos

 

[jadnashuanh]

Tesla's 2016 first quarter shows a loss of 'only' $.56/share, and production down nearly 20% from last year to date. They're talking about needing double the capital to be able to consider ramping up production to meet demand meaning the horizon to become cash flow positive is likely at least 3-years away...how long with the investors be willing to wait to see a dividend? How will they feel about a new stock offering to be able to expand production even higher than previous predictions diluting their holdings? How likely is it that this can all happen? Two of their highest ranking people related to production have left the company in the last month (well, one is sticking around to help with the transition). How does that bode for trying to keep on 'schedule'? Not particularly well, not that they've ever met a self-imposed deadline.

I wish them well, as I think they've been a factor in pushing the rest of the industry, but I wouldn't put money into the company.

Regardless of how good or bad the product is, it's still a publicly held company, and not a charity...profits DO matter! My thoughts agree with more than one analyst that does this for a living, but I concur...not sure how long they can go on without showing a profit.

 

[Boatguy]

Perhaps you'd also like to opine on Amazon's financials, dividends and profits?

 

[jadnashuanh]

Perhaps you'd also like to opine on Amazon's financials, dividends and profits?

In three out of the last 5 years, they've made money...Tesla has never made money and it's likely at least a few more before any is possible and that's IF things go well. http://www.marketwatch.com/investing/stock/amzn/financials

 

[OWG]

From what I understand of Tesla, the Roadster, S and X were never intended to be money makers. They were to prove a point. On that front, Tesla has been extremely successful and a smart investor will see that and the full picture. If Tesla priced the current vehicles to be revenue generating, they would be too expensive, exotic and out of reach for all but the .01%. The fact that the S and X are within reach of many of their investors splits the line between a misunderstood supercar with it's alternative technology and their entry to for-the-masses.

I actually think that their strategy was carefully planned and executed. A car that is built to perform with cars 5 - 10 times the price and accessible to a relatively wide audience only builds the hype below the executive salary threshold. Case in point, where I live (Toronto area), I see probably 50X as many Model S as I do BMW i8's. In fact, I probably see 20 Model S for every 1 i3. Tesla is reasonably understood by average everyday Joe's because those people see their bosses, mentors, leaders driving a Model S. The i3 is only understood to those of us that have put the time into reading, trying the car, knowing what makes it special.

I do believe Tesla will be extremely successful; they will redefine the way cars are designed, manufactured, sold and supported with their customer base. Other manufacturers will take notice and adapt or they will die a slow death.

My 2 pennies.

 

[Tirpitz]

As noted earlier I'm considering a used i3 purchase later this year. So I'm happy to see the pre-order success at Tesla. I've been following the story closer than I usually would have.

Capital should not be a problem for Tesla. I think they can raise whatever they will need. They have good will and a big potential order book now. They will need to spend not just on the tooling and factory stuff but on their sales and support infrastructure. They need to handle a lot more customers if all those pre-orders come to pass.

It seems to me that the really challenge is on the production side. The task Tesla has set for itself is enormous. The numbers that stand out to me are that Musk wants to produce roughly 500,000 cars in 2017 with 100,000-200,000 of those being Model 3. So far in the entire 13 year history of Tesla they have produced roughly 125,000 cars. That increase in volume, half of which will be a car they have never built before, is an epic challenge.

That is not to say it can't happen. People under pressure can do amazing things. However, I'd say given their track record on meeting deadlines it is likely the Model 3 is going to be in production by end of 2017 but it will still be the initial low volume production not Musk's flood of 100,000 cars. Either that or they will slip the timeline and push production into 2018. Whatever happens prepare to see some bumps in the road as this journey continues. If I was interested in buying a Model 3 I wouldn't want one of the initial ones while they are still learning how to build the car.

 

[Boatguy]

Perhaps you'd also like to opine on Amazon's financials, dividends and profits?

In three out of the last 5 years, they've made money...Tesla has never made money and it's likely at least a few more before any is possible and that's IF things go well. http://www.marketwatch.com/investing/stock/amzn/financials

Check the first 15yrs...

 

[jadnashuanh]

Tesla is now saying that they plan to get to 500K vehicles/year by 2018. Considering the lead time on stamping molds and factory bits, and if they're lucky, they may hit 80K this year (some think 70K is more likely closer to reality), on a new car that they haven't' shown the final form on, trying to first order the molds and machinery, installing it, hiring and training enough people, programming the robots, to then more than quadruple their output just doesn't seem realistic, regardless of how much money you may have available.

Time will tell.

 

[I33t]

I agree, Jim.

The wild card is that Telsa is not a traditional motor vehicle manufacturer. We just don't know if they can get close to their own projections. Time will tell!