https://dailykanban.com/2017/12/go-production-hell-went-prod...
Not on EVs in general, but just on their ability to actually outpace delivering the market (without killing anyone) before the old guard caught on and gets there first. Not a novel thought, but the factory analysis really put the nail in the coffin for me.
"How long does it take to build such a factory? From that other car company, you may have heard that car factories could be brought from no plans to mass production in two years, no time at all, or whatever is less. I ask Mr. Demeunyck how long the Luqiao plant took from start to finish, and he proudly tells me that it “took only five years. They do things fast in China”... "In Europe, or in other places with tight permitting, it would take a few years longer,” Demeunyck says. If anyone tells you he has picked no location, and secured no permits, but wants to have a new car plant up and running in two years, call an ambulance."
Apparently, what they are really arguing is not that Tesla is bad at production, but that Tesla is trying to do something nearly impossible. In this light, the problems Tesla faces are not because they lack the skills or expertise to deliver, but problems that any other car company would face if they were to do things on the schedule Tesla is trying to achieve.
Thus, Tesla is really just taking a huge gamble -- they have a chance to pull off something very impressive, even if they fall 6 months or a year behind schedule. And if they fail, they failed because they took on a challenge that was simply too hard for any company to achieve. To me, it really resembles the gamble that SpaceX took, which paid off very well in the long run. So while I think there's a real chance that Tesla will fail like all of their detractors believe, I think there is also a real chance that they will be wildly successful.
SpaceX launched 18 last year, all successfully, more than any other rocket. All recovery attempts succeeded, and several rockets were reflown. Their competitors have had to cut their workforce and are now feverishly trying to catch up with new designs (most of which are inadequate for even the current Falcon 9, let alone future rockets). The line between laughing stock and huge success is pretty small if you're in the exponential ramp-up phase.
And it also assumes that skill in the (relatively) low volume production of rockets can be transferred to mass production of cars.
If Model 3 is not a success money runs out. There will be large changes in the ownership. Musk might sell Tesla to some other manufacturer etc.
Not sure if Musk will be actually making any decisions here when things go south.
The Semi is a huge market.
And even if Model 3 didn’t exist and Tesla pushed itself as developing Model S as the number one car for self driving mobility services, they’d still have a claim at the lions share of the automotive market. Vehicle cost is a much smaller concern in the post-self-driving world.
Let’s imagine Model 3 only pulls Model S numbers, and their annual production only goes to 200k by 2020. I don’t think that’s enough to see a total collapse of the stock the way you seem to be suggesting.
I think Elon has many more cards in play than you let on.
I have yet to see any financial analysis based on Tesla financial that don't see Model 3 as a critical.
http://www.spacex.com/news/2013/09/24/production-spacex http://www.popularmechanics.com/cars/hybrid-electric/g877/ta...
The production rate is clearly changing from week to week, month to month (increasing at a decent clip on a percentage basis). As long as that is happening, they're still in the ramp-up phase.
>And if they fail, they failed because they took on a challenge that was simply too hard for any company to achieve.
From the way that Musk has recently embarrassed himself arguing with transit experts on twitter over the last few weeks I am increasingly believing in the possibility that Musk thinks he's the smartest guy in the room, is completely ignoring experts in the field, is trying to do something that actually is impossible, and he's doomed to failure.
Literally anything he has done is by definition not impossible.
He has done at least 2 very difficult things but let's engage in a discourse grounded in reality please.
Paypal, Rocketry and defense startup, hyperloop, electric cars, marketing, upturning the oil industry, etc. etc, not to mention his personal (non-business) achievements.
This is vaporware at this point.
However, I'm bullish, because these are solved problems that many other people have expertise in. It's easier for Tesla to find someone skilled in car manufacturing than it is for other manufacturers to build the brand demand that Tesla has. They have solved the hard problem, but failed the easy. And when they figure out how to build cars faster, the demand is there to meet them, which means that when they solve that easy problem, they will be sitting pretty.
You think they spend over half of their time on union busting?
All of Teslas woes make me bullish on companies like Toyota and GM that understand how to build cars.
I'm increasingly questioning whether the electric drive train and the batteries are actual difficult and novel part about building an electric car.
I think it's going to be easier for GM to find people that can build good electric engines than it is for Tesla to get upto speed on how to build their cars at GM scales.
Also FYI “electric engines” are not a thing.
The Bolt looks like a great car for a dorky family man while the Model S is a totally different market. Families have different needs than luxury car owners, and it's likely that these needs are not being effectively met by EVs such as the Bolt despite the a universal consensus that from car critics that the Bolt is an exceptionally good vehicle.
The Bolt is TINY! Family car? For what? A family of dwarves?
The base trim Model 3 and the Bolt are competitors.
GM should be capitalizing on Tesla's failure to bring the Model 3 out. They could absolutely sell the message of "Why wait 18 months for an affordable electric car when you can drive one TODAY?"
They could devour Model 3 reservations, but for some reason are choosing not to.
Can you see GM making competent electric cars? Yes they can do that all day long. Can they make it sexy?
That begs the question if GM can make any sexy cars. I would say that the Corvette, Camaro ZL-1 and Cadillac CTS-V might be fair examples of what GM is capable of.
So the question is can GM make a sexy mass produced electric car? They haven't tried yet.
I was actually surprised by the Volt, since a lot of my friends and coworkers bought them. Those people generally drove Mazdas, Hondas, and Toyotas.
If Chevy kept working on their eco-friendly image and continued to produce decent enough quality cars that get good consumer reports ratings, they'll probably do fine.
Where are the billions of dollars in contracts for batteries? Until I see that or a gigafactory of their own the Bolt will be a compliance car in my eyes. Albeit perhaps the best compliance car on the market at the moment.
Because the Bolt’s a boring, though electric, compact car being sold at the price significantly above a similarly boring mass-market midsize plug-in hybrid (the Prius Prime) with sufficient all-electric range for reasonable commuting, and also somewhat above that of a competing boring compact all-electric (the Nissan Leaf) while Model S is a luxury mid-size electric vehicle with far less direct competition.
The Bolt is selling into a segment where utility/price is more important, and it's got strong competitors on that dimension. That's not a sign that GM can't make good EVs, but that GM is attacking the harder segment of the market; whether that's a good or bad business decision is debatable, but if EVs are ever more than a luxury niche item, the space the Bolt is competing in is going to matter a lot more than the space the Model S is competing in.
I think the second sentence is agreed upon/accepted knowledge. The batteries and electrics are NOT difficult.
I'm not sure if the third sentence is relevant. Maybe it is, maybe it isn't. Tesla-like success required thinking outside of the box. If GM just started cranking out mediocre electric cars like they crank out mediocre gasoline-powered cars, I'm not sure it would have made a difference. It took a new company with a fresh approach like Tesla to drive the market.
Whether it's a GM or a Tesla that ends up winning in the long term is up for argument, and it certainly seems like it SHOULD obviously be the big existing carmakers. But they didn't seem interested in doing more than bolting an electric drivetrain to an existing car, which wasn't enough to get people excited about the revolution that electric cars represent.
Toyota is another question entirely.
Electric cars have mindshare now. But unless Tesla can do something Toyota can't for the mass market, another automaker will likely, eventually, eat their lunch. There's no reason Toyota can't bolt on some sexy electronics; the charging network can be accomplished ... somehow, some other way. That doesn't mean Tesla goes away but it means there's a finite market of people willing to pay the premium for a Tesla the same way there's a finite market for people who want the intangibles of (say) a BMW. Unless we presume that Tesla can get their efficiency and margins Toyota-low, which.. again, they can't simply bolt on.
I suppose it's still possibly Tesla can leverage their battery and charging infrastructure to their advantage for long enough to hold off the competition though. Or at least enough to make themselves an acquisition target, but of course, their value needs to be something affordable.
Tesla's charging network is largely a US phenomenon, really. There are 1200 public charging stations in Ireland (owned by the state monopoly electricity distribution company; there are also some independent ones), a small country (many electric cars could cross it without charging) of 5 million people. Of these, 70 are 'fast' chargers (usually 50kW). Tesla charging stations? 2.
Tesla's fast charging stations are a big deal in the US, a very large sparsely-populated country. They are less of a big deal in many European countries, especially where there are robust non-Tesla networks being deployed. Ultimately, I suspect standard fast-chargers will win out over proprietary brand-specific fast chargers.
Setting up a supply chain to deliver as many batteries as 2015’s entire global production at below market rate is easy?
Because that’s what they’ll need to do if they want to sell the electric equivalent of a Toyota Corolla.
Batteries are made by Panasonic, who can also sell to other car makers. And both GE and Siemens have centuries of expertise in electric engines.
The biggest hurdle for the traditional car makers isn't technical, it's actually changing their mindset from a product they've been making for a century to a new one.
Tesla has an electric drive train, they have a car production line and they are producing electric cars.
Assuming it takes Tesla three years to reach their output goals on that production line, it will need to take Honda and Toyota less than two years to get up to speed producing fully electric drive trains, installing charging infrastructure around the world, and rebuilding their downstream in order to even have a chance of competing with Tesla in the EV market.
Nissan is the only viable competitor, and they have been competing on price against Model S. The Leaf is not a competitor to Model 3 even in the same price bracket. There simply is not the infrastructure to support the Leaf, or the salesforce willing to sell it.
This race is not just about a manufacturer building electric cars. This race is about who will be first to kill off or convert their traditional downstream to get EVs on the road at reasonable prices.
But Mercedes, Audi, BMW, etc., have an incredible amount of brand demand too. They'd have even more if they cut out their entry-level cars and only sold flagships like Tesla has done up to this point.
The reality is building a desirable car brand is not that hard. Just make absurdly expensive cars that few people can own and you're halfway there. Then slowly introduce more affordable models.
far too many people keep hyping numbers of Tesla's preorders or even sales of S & X while completely ignoring they don't even come close to equaling single lines of some other brands who do this year in year out
Unlike MB and Audi, BMW are invested in electric tech and have already been for a while with the i3 (both full and hybrid trims) and also the X series hybrid SUVs. So for them battery tech is a "solved problem". They already have a production capacity of 2.5m/yr and likely will keep the same capacity in the gas-electric transition.
> Just make absurdly expensive cars that few people can own and you're halfway there.
Not that the GTR was absurdly expensive, but i don't think that car changed the perception of Nissan much.
it's more of a cost-efficient, tuner friendly car that's loaded with tech, that can take-on pretty much anything, while offering the reliability of a Nissan.
Also both Audi and MB have hybrid and full EVs (well VW who own Audi, and share the same platforms).
It's definitely not their easy problem.
If supply was not a problem Tesla would still not sell as many automobiles as other brands. Ford sold something like 5 million automobiles in 2016. The Model 3 has 1/10 that in preorders.
Tesla has a great brand in EVs, and Tesla has great market growth, but it has to double several more times until it reaches the established demand other car companies enjoy.
I'm bearish on Tesla. Everyone ships more units then Tesla. Japanese companies are outselling Tesla on EV units. German companies are 1-3 years behind on luxury EV units in terms of quality.
I'm hedging my bet by considering the gigafactory. If we see 5 gigafacotries by 2022 they'll have a significant position in the entire CE & EV industry for decades.
https://www.greencarreports.com/news/1112878_china-to-build-...
You can’t compare demand for their offering to Ford’s until it’s actually... you know... offered. Model 3 is still basically in a Beta release.
Which raises the question, why didn't Tesla hire experts, like the company in the article? I suspect because Musk thinks his way is best, and, worse, hasn't yet realised that he's wrong. This would make me very concerned about Tesla's future. Ultimately, if Tesla goes bust, the brand will presumably be sold off, and someone who knows how to make cars will make Teslas, I suppose...
Production is coming along better than anyone realistic could have ever expected, and continues to do so at an impressive and steady rate.
i think he might have knowledge of tesla's "private expectation" i.e. what tesla is seeing internally, vs "public expectation" what tesla is telling the press.
If TSLA's 'private expectation' don't match what they're targeting, then Musk will be going to jail. The SEC doesn't mess around with that type of securities fraud.
That almost sounds illegal.
How long does the market need to wait?
And no, there’s nothing illegal about being bad at estimating.
It seems quite obvious that Geely represents the latest iteration of a continuously, incrementally, optimized production machine. That's great. That says nothing about Tesla. They aren't there yet, but they could (should) get there and hopefully exceed it.
Does it? The impression I get from the article is that it's one of many. There are plants like this all over the place.
Why would anyone say thats even in the same ball park as a company building a assembly line for a new class of product at over double the capacity and doing it in one third the time ? Of course their factory is going to be a smoother operation they have been doing it for decades, when will volvo make a mass market electric vehicle ? You would think with the kind of demand there is for the model 3 Volvo, BMW, GM, or another one of the established manufactures would be able to exploit their knowledge of car assembly and take market share from Tesla, but so far the best anyone has done is the 30,000 units a year the Chevy bolt is expected to manage and it isn't planned on scaling much past that.
So the factory situation is a mess, but I don't think a peachy PR piece about a very different situation is any kind of nail in the coffin, just a reminder of how much the current state of the art in car manufacturing is being changed. Even companies that have internal combustion down to a science can't manage to put together electric cars. To me it shows how far ahead Tesla, it would appear the current plan for everyone else it to let Tesla figure it out and poach their executives.
What I fail to see (that this article really drives home) is that they aren't actually building anything resembling a defensive moat...because they're going to run out of time. You could absolutely make the case that if they got to (mass) market significantly faster than existing car companies they could devour market share and suck the air out of the room and really springboard into their existing valuation...it just feels like they're burning the candle at both ends and that scenario seems a lot less likely (to me).
By the time they figure it out...the companies producing significantly higher volumes of cars (for a hundred years) may simply surpass their ability to ship a great EV in large numbers.
The Bolt / Leaf / i3 are basically the first-gen "hobby" projects to dip their toes in the water and get some EV mindshare. Do we really think a company like BMW can't make a desirable EV halo car + econo EV literally whenever they want as battery capacity tech progresses and mass market demand picks up? Drop an electric motor into an existing M4 and an X1 (I realize its more complicated than that) and you're basically there.
I'm guessing here, but I think the BMWs and GMs and Toyotas of the world all must be extremely happy to be last mover here for a tech that feels like, at this point (thanks to Tesla!), will become an inevitable commodity technology. Meanwhile they let the Tesla brand do the hard work of getting the pubic amped up about EV with none of the risk and swoop in when it makes sense to them to move their existing brand onto a new and better electric platform.