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Comment by Tomte | Hacker News Reader

At least VW and BMW have real, practical and selling EVs.

But those are huge companies. They cannot say "let's only sell EVs". They can't even say "let's downplay gas-driven cars and emphasize EVs".

What do you want them to do? Fire 95% of employees and sell 1% of the cars they are selling today?

Of course Tesla looks forward-looking. They are all-EV, they are fighting for profitability, they don't have existing business to protect.

And protect you must your existing business. "Pivoting" is one of the favourite words in VC and startup circles, but it's also fairy-land, not a plausible economic decision in this situation.

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The conventional wisdom is that you must cannibalize your existing business yourself, otherwise someone else will.

Seems to me that VW and BMW are not really pushing for EVs as much as they should – at least, I don't know anyone who is buying them instead of a VW or BMW with an internal combustion engine. Then again, I live in Finland, where nobody has an EV anyway.

For me just the fact that they are not looking at gas cars as something to change as fast as possible and don't talk about its health problems mean that I don't want them to provide me with EVs in the future. I have a BMW, but it's my last gas powered car.

I would absolutely love to buy a reasonably priced EV from VW (be it under the VW, Audi, or Škoda brand). I have a Škoda, and it's going to be my last gas powered car.

So far, I haven't seen anything from VW or BMW that meets the performance, range, and cool factors anything like the Tesla does. I will not buy a hybrid, it seems like the worst of both worlds to me.

I live in Romania and why would I buy an EV? I cannot charge it over night because I live in a 10-stories-high building, not to mention that there are close to no public EV charging places spread throughout the country. On top of that an EV is expensive as hell. I've bought my SH petrol car around 2 years ago for 4,000 euros, and it's been a blast to drive it (I've done a 4,000 km European tour this summer with it). I don't see prices for SH electric vehicles going to under 5000 euros in the next 15 to 20 years. As a matter of fact, no-one is quite sure how reliable SH electric vehicles will be. As things stand out right now my iPhone4 might as well be from the stone-age (cannot install any new apps on it, almost all the existing apps on it have stopped working), and it's only a 4 to 5-year old piece of electronics.

An awful lot of people living in flats/apartments in older buildings in European cities are going to have similar problems. I'd like to try an EV or plug-in hybrid but the practicalities of living in central Edinburgh pretty much make it impossible.

If you only look at the part of the market that buys new cars (as opposed to second hand), the home charging problem becomes a lot smaller.

Once EV have reached a certain saturation amongst new car buyers, the second hand market might take some very interesting turns when that generation of cars is about to change ownership from original buyers with a high rate of home charging availability to second hand buyers with a low rate. If you are one of the comparatively rare second hand buyers with available home charging, you might see a very favorable market.

Self driving taxis solves that problem. Very few people will actually own cars.

You won't buy an EV, you will rent one or hire one.

Why would the level of renting/hiring be different for EVs than for conventional vehicles?

Would the parking situation not be amenable at all to metered chargers?

There's a lot of social conventions and what not to work out there, but I doubt any of it would be insurmountable. For overnight charging, a cord that you activate with your phone, with the activation locked to one vehicle, solves many of them.

I think he's referring to the idea that you'll use an Uber-like app (either Uber or if Tesla builds their own then the Tesla version) to order an EV to use it's self driving AI to come pick you up, take you to your destination, then drive off to service other customers.

https://newsroom.uber.com/pittsburgh-self-driving-uber/

I think you're right, but that change in behavior will come (if it comes at all) with self-driving technology, which is entirely orthogonal to EV's.

Honestly this is a city/urban thing. It's simply not something that on a large scale people who live in the suburbs on in the country will want to do. My vehicle sits practically outside my door at work and in the garage at home. I like the fact that I can go spur of the minute anytime anywhere and don't have to summon the vehicle or do any planning.

I don't even think it's a city/urban thing - I live right in the middle of a city and walk to work but the car is for getting out of the city to walk/bike/ski and I can't see a glorified taxi working in those situations.

I don't want to rent/hire a car, I want to own it.

If you're in the US this attitude is understandable, but in Europe, not so much.

I'm in Europe and you're wrong. Not everyone lives in a city, we have countryside here too you know.

Don't Europe's Uber drivers also live in tall apartment buildings?

Batteries are still too expensive to be 'really pushing' electric vehicles.

In the US with our low gas taxes, neither the Bolt nor Model 3 make a great deal of financial sense, even after the swell $7500 tax credit.

Lots of people already buy cars that are not the cheapest possible car. Sure, if electric vehicles were cheaper than an equivalent gas-powered car, then that would be awesome... but even if that isn't true yet, there are a lot of people who'd like an electric car anyway.

Estimating from the 400,000 Model 3 preorders, that group is in the low millions.

Meanwhile US auto sales are 1 million+ per month. The larger automakers are all working on electric platforms, they aren't ignoring the market that is there, or more importantly, the market that will exist as costs come down. But the point is that they don't really have much to gain from getting way out in front of the battery costs.

This just isn't true. The cost of ownership of a Model 3 vs even a Civic will save almost $2k/year.

Cost of ownership wise nothing will be cheaper. Check your facts.

So I'm wrong because a car shipping in volume in 12-18 months will be cheaper than a car I can buy right now?

I also wonder about the math. Edmunds puts a Civic at about $5000 a year (for 15,000 miles):

http://www.edmunds.com/honda/civic/2016/cost-to-own/

To save $2000 a year over that, a Model 3 has to go ~10 years with minimal costs beyond electricity.

I live in Seattle and electric BMWs are everywhere thanks to BMW's own ReachNow car sharing service:

http://www.bmwcarsharing.com/

Basically the cars are paid for by the minute and come with free street parking. You can unlock/lock through the app or a smartcard. This feels like BMW is trying to both figure out EVs and a possible post car ownership society.

Tesla will be similarly doomed when most people don't own their own cars (Tesla's most valuable asset is its brand and that means nothing when you aren't buying the car!).

I could see car sharing services being a route for having electric cars in older cities - we already have a City Car Club dedicated parking area close to us and I could see that getting chargers installed whereas I can't see them being installed generally for a long time.

Or maybe this is just their best effort at hitting fleet-average CO2 emissions goals without bolstering EV numbers by giving them away for free. It looks like cheating, but if this gets any kind of traction (and enable more non-poverty-driven carlessness), it will be a much better result for the environment than selling more, but slightly cleaner cars would have been.

Creative bookkeeping by selling to their own rental subsidies is nothing new in the car industry. The BMW carsharing fleets improve on that by not only creating favorable numbers, but also making them take part in a new market that might well be a significant part in future of car usage.

Considering only 1 of 3 models in ReachNow is an EV I doubt that's the case.

1. Tesla is pivoting into an energy company that happens to make cars on the side. If it doesn't die because Model 3 flops (not saying that it will or won't, mind you) its future looks quite bright.

2. Teslas driving around right now are doing what they call fleet learning for self-driving purposes.

3. Tesla is absolutely getting ready for post ownership era of motorization, in fact the autopilot effort and announcements regarding for-profit car sharing only being available through Tesla network directly confirm that.

> Tesla is absolutely getting ready for post ownership era of motorization, in fact the autopilot effort and announcements regarding for-profit car sharing only being available through Tesla network directly confirm that.

This is why I chuckle when everyone says "Look how few Tesla vehicles are produced!". They don't have to replace every vehicle purchased, just the vehicle miles driven. Cars sit idle 90-95% of the time, which means if you increase utilization with the Tesla Network, they need only 20-30% of total worldwide manufacturing capacity to replace all cars.

Total cars sold in the US this year? Just shy of 18 million. How many does Tesla need to build to replace that capacity if they're self driving? 4-6 million cars/year to start, decreasing rapidly depending on rideshare uptake. Easily doable with their automated manufacturing efforts.

Gonna be a bitch when Tesla manufacturing curve hits vehicle miles demand, and existing automaker sales plummet.

The idle time will not change by much anytime soon. Everyone commutes in the same hours and at night all cars stand still. Yes, society becomes more flexible and diverse but this is a very slow process.

Labor force participation rate will continue to decline quickly as all of the Boomers age out into retirement:

http://data.bls.gov/timeseries/LNS11300000

https://i.imgur.com/5YFhBpx.png

As well as the labor force declining in general:

http://www.factcheck.org/2015/03/declining-labor-participati...

"Still, Priebus’ comment, tying the entirety of the drop in the labor force participation rate to “the Obama economy,” ignores some of the demographic and structural forces that have been driving the participation rate down for more than a decade, and that are expected to continue to drive the rate down for decades to come."

5:30 PM in Seattle on a weekday is peak traffic, 1 in 5 daily use vehicles are on the road.

So in a hypothetical wherein Robotaxis have acheived full penetration, maybe we'll need 1/3 of the vehicles we use today.

There would likely be a lot less steel in those vehicles as well, since they'd largely be optimized for single commuters, and would need less of the redundancies built into current cars for safety.

Maybe cars sit idle 90-95% of the time, but isn't it the same 90-95% of the time? I would imagine the peak utilization is much higher. Furthermore, if self-driving cars become a reality, then I imagine utilization would dramatically increase. Now that I can just send my car to pick up the grocery, I'm much more likely to send it on random errands.

> Now that I can just send my car to pick up the grocery, I'm much more likely to send it on random errands.

I expect local governments to enact per mile taxes, replacing gas taxes, which at some point makes this unaffordable to constantly have your vehicle on the move for you (but still affordable if its part of a rideshare fleet generating revenue).

disclaimer: I work for Volkswagen.

that being said, Volkswagen certainly is pushing electric vehicles now, all internal talk, newsletters are about the MEB (modular electric "toolbox", same as the current MQB for our conventional vehicles). The next investment meeting for the following 5 years is this november, a lot of money will certainly go for investments in electric vehicles.

>Then again, I live in Finland, where nobody has an EV anyway

Because very few people buy $75,000 cars, period. I don't know a single person either, and I'm in Canada. I know people here act like Tesla has already built and sold all these $35,000 Model 3s, but the truth is nobody has built an EV for the mainstream yet. Because it's hard.

They wouldn't have to sell "only EVs". They could have continued selling EVs while selling their soon to be vintage cars.

All three companies have several brands (VW has Porsche, Audi, Skoda etc.) and each of their brands have several models. They are also produced in several factories in different countries.

4-5-6 years ago, when Tesla demonstrated to the world that an EV can have longish range and look attractive, the traditional car companies could have allocated resources and production lines to develop and produce competitive EVs. They would have been in a much better place to compete than tiny Tesla 5 years ago. But now, they are late in the game.

It's more a symptom of failed management than some function of a business law.

Tesla has a somewhat of a competitive advantage here not related to timing. Structurally EVs are giant battery packs with attractive packaging, therefore the biggest cost component is the battery pack itself. If you can commit to bulk orders (like Tesla did with Panasonic), you can get the price of the battery pack down.

Everybody else pays the market price, which explains either vehicles at higher cost (BMW i8) than Tesla or vehicles with severely reduced range (VW eGolf).

The i8 only has a small battery. It has a high price because it's a luxurious high-performance car.

My tesla 85D has better performance in every way. More horsepower, faster 0-60, more space etc. Etc.

Hidden in your argument there is an even bigger one: traditional car manufacturers have outsourced almost everything to their high level suppliers except for the engines. When they switch to EV they give up on the only part where they have a considerable depth of added value. They could become their own cell manufacturers (and in fact almost all of them have tried, before learning that batteries are too much of a commodity for them to be competitive on the small scale of early EV introduction), but there is zero knowledge transfer opportunity from ICE to battery.

It's not difficult for them to build EV. But it is nearly impossible for them to do so earning money, when they are essentially repackaging third party batteries into shells consisting of all the other stuff they are buying from their existing suppliers.

I think you are overlooking the fact that very few people buy cars for the engine technology.

They buy on design, price, prestige, history and possibly other 'soft' aspects.

But if scale is key to winning here, can anybody compete with china - for mass market vehicles ?

We're already starting to see BYD aiming to have 34GWH battery manufacturing capacity in 2020, same as Tesla.

> Fire 95% of employees and sell 1% of the cars they are selling today?

I am no expert at history, however, during the 1930's Henry Ford did something similar to introduce the Flathead V8. Factories were closed, hundreds of thousands made unemployed, then, in secret, Ford worked on the V8 and the factory to make the new cars. When he was ready the gates opened and new hires were made.

Great, now they just have to wait for the next bank crash and following economic depression and then they could try that tactic.

I think the point is not that VW should stop selling gas-powered cars completely yet, but that they should at least match Tesla in investments and strategy when it comes to EVs. Right now they are far behind, and that's beyond shameful - it could cost them the company in 10-15 years, because EVs are the future. And they are still not quite acting like they are.

They're still treating EVs as another "market segment" and that's a problem - for them.

In this market, even 3 or 5 years is not that far behind. People don't switch cars like they switch cellphones.

Even though you don't like it, EVs are still a market segment. There are still lots of use cases where EVs don't make sense.

Very true. There is a lot of information we re missing to just say all german auto makers are making the wrong decision. They could as well time their entry into EV market in order to make the most of it. Wait for battery price to go cheaper, infrastructure to get better and so on.

So... Innovator's Dilemma?

I'm pretty sure that all the members of the VW/BMW/Mercedes boards have read "Innovator's Dilemma" by now.

Buy plenty of people who have read it fail to act on it.

Yes, usually by rationalizing with the help of management consultants that somehow it isn't applicable to their particular situation.

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