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Comment by dangrossman | Hacker News Reader

I don't think there's any "collusion" or other conspiracy to hold back electric vehicles, I think what BMW said is objectively true. Lithium batteries have cost too much in the past decade to put them into more than luxury cars or negative-profit compliance cars. Supply chains don't appear overnight. LG Chem, Samsung SDI, AESC/NEC, BYD, Foxconn, etc have been building factories and securing raw materials for many many years to have the capacity to sell car manufacturers enough batteries for a few million cars a year by the end of the decade. The price per kWh still makes the battery in a car like the Chevy Bolt a $8000 part, which means you're never going to make a $15K car with one inside. That price has been dropping year over year, and around 2020 is when it'll be cheap enough to make cars in the price range people actually buy them that have big batteries inside.

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I'm not saying there was conspiracy but there was complacency.

The reasoning "batteries are expensive" is circular.

As Musk said, technology doesn't advance as a function of time but as a function of R&D investment. See atomic bomb or space race for the most dramatic example of how throwing money at the problem compressed the timeline.

Car batteries did not get cheaper because 2 years passed but because Tesla and Panasonic invested 5 billion dollars in a giant batter factory. And by creating a demand for lots of batteries, there's incentive for many others to invest in researching better batteries. And before that, cellphones and laptops were driving investment in battery research.

I see no reason why all this couldn't happen 10 years ago if car makers invested a sliver of their profits into electric car R&D instead of, you know, putting it all in Diesel and then writing software to cheat emission numbers.

And as a corollary, if Tesla didn't push the whole field forward with giant investments, BMW would be "objectively" saying in 2030 that batteries are too expensive to make electric cars viable.

I think all of these things are relative. Imagine if Tesla had started in 1983 instead of 2003. We wouldn't have started mass producing electric cars in 2000 - but we'd probably get there earlier than 2020. I don't think the question of how much to invest and where to focus R&D is easy or straightforward. A lot of technological development is the story of unexpected jumps from one area to another.

Imagine an alternative reality where fast wireless communication was omnipresent and laptops developed as dumb terminals which used little power. Battery technology might be where it was 40 years ago. It's also possible that, in 50 years, people will look back at the Tesla of today as stupid and foolhardy - striving to make electric cars with stone age battery tech, when a revolution in 2025 changes everything.

Even that's idealized - it's not likely a production ready revolution in battery tech simply appears out of thin air. (In fact, there have been a number of revolutions that haven't managed to scale up to production quantity.)

> As Musk said, technology doesn't advance as a function of time but as a function of R&D investment.

Sometimes. Technology is very path-dependent; to invent z, you need to have invented w, x, and y first. And even with infinite resources that takes time. We’ve been working on fusion for half a century and it might be ready in another half century. Will more investment help? Yeah, but tokamaks take time to build, and you don’t know how to build the next tokamak until after you’ve done all your experiments with the current one. You can’t have iPhones in 1986 no matter how much money you throw at it because the underlying processor and battery tech isn’t there.

Without necessarily (or completely) disagreeing, I'm curious if you can further justify your assertion of the strong path-dependency. I am personally amazed when I contemplate the Apollo program or the Manhattan Project, and specifically the number of technologies that did not exist at the time. It strikes me that there's a clear observational bias here. Particularly in the modern era, we really only have a single data point around the development of any given technology (given how trivial communication and coordination are). Are there any examples from history of the same technology being developed independently with different dependencies?

Possibly relevant, given your choice of fusion as an example, is the somewhat famous graph from the 1976 U.S. Energy Research and Development Administration report on nuclear fusion[0]. We're obviously looking at a number of projections and can't know whether they were right or wrong, but it is noteworthy that we're not even pursuing a plan we believe will ever lead to nuclear fusion ("fusion never").

[0]: https://commons.wikimedia.org/wiki/File:U.S._historical_fusi...

You have to remember there’s a huge gulf between building something once and mass producing something, putting it in market and having it produce profits.

Electricly powered vehicles existed before the American civil war, it’s taken until now for them to have any hope of success in the market.

The Romans had steam engines, too. It took until the 18th or 19th century for metallurgy to catch up to the point where steam engines were worthwhile.

The Apollo program could never have happened without the decades of rocketry work that took place before that time. It's not like the US started from scratch in 1961 and landed a man on the moon in 1969; while the work involved to pull that off was incredible, there were decades of work prior to that, much of which involved the exact same people, that made Apollo possible.

Wikipedia, citing "Ward (2005). Dr. Space: The Life of Werner von Braun. ISBN 978-1-591-14926-2."

> Apollo program director Sam Phillips was quoted as saying that he did not think that the United States would have reached the Moon as quickly as it did without von Braun's help. Later, after discussing it with colleagues, he amended this to say that he did not believe the United States would have reached the Moon at all.

Wernher von Braun worked on rockets since the 1930's, inspired by the writings of Hermann Oberth, whom he later worked with at Peenemünde. The first V-2 rockets were launched in 1944. Von Braun continued working on rockets continuously until he retired in the 1970's, after working on the Apollo program.

What would be the point of pursuing fusion? We don’t even have the political will to deploy fission.

Funding a fusion program would be like buying a car while your license is suspended.

We should absolutely be deploying fission on a wide scale, but the issues with waste disposal and radioactive contamination, while vastly overplayed, also go away with fusion.

Also, fusion could be orders of magnitude more efficient than fission, to the point where we can solve literally all of our sustainability problems just by throwing energy at the problem. Too much CO2 in the atmosphere? Build a factory that uses electricity to extract CO2 from the air, combine it with water, and recycle it back into hydrocarbons. Not enough water? Build desalination plants--the only reason we don't is because they're energy-intensive and energy is expensive. Need a sustainable source of nitrogen-based fertilizers? Extract nitrogen from the air. Batteries don't store as much energy as hydrocarbons? Manufacture EVEN MORE hydrocarbons out of the air and water and then use them to power your airplanes, in a closed-loop system where you're not even increasing the net amount of CO2 in the atmosphere.

You can make a great sustainability case with fission. With fusion, you can make an incredible sustainability case and take away all of the fears involved. And by the time we get around to inventing it, odds are we're going to be fucked enough not to have any other choice but to adopt it.

Tokomak is uncharted territory. It’s hundreds of PhDs trying to solve problems literally no one knows how to solve.

A lot of what Tesla has been doing is low hanging fruit. Supply chain optimization. Industrial design. Roboticization. These things aren’t science, they’re engineering. They’re applying known principles to the litany of problems an electric car entails.

There’s not much new science in a Tesla. Most of it could have been done years ago. There is some iteration required of course, but that’s why starting earlier would’ve made a difference.

The whole reason Tesla can exist in the first place, and was founded in 2003 and not 1993 or 1983, is because of advances in battery technology that have already been driven by the consumer electronics industry. They're not solving hard problems now because the hard problems have already been solved by dozens of companies trying to make laptops and cell phones and other battery-operated devices. If they started way back when, they would have to solve those hard problems themselves.

If I remember it correctly, sustainable fuel was a big thing a few decades before these oil businesses started springing up, I believe it was Toyota and BMW who had an electric version back then.

But later, these oil mafias systematically destroyed that to the extent that many people in US believe that climate change is fiction.

My point being, sustainable sources of fuel are being either systematically undermined or for the lack of interest.

if we did not have $$$ from the oil interests against these alternate fuel then just imagine how much R &D would have happened till now!!

Even Nicholas Tesla had an electric car's design back in the 1800s, if that tech had been evolved to say Hydrogen fuel or ethanol or anything that doesn't shoot down our atmosphere then things would have been remarkably different now.

So, yes, there is a path dependent approach to science and technology, but for alternate fuel, the path was made ugly by $$$ from the oil interests

"technology doesn't advance as a function of time but as a function of R&D investment"

Car companies are not in the business of advancing technology but making money. They will advance technology if they can sell more cars. Now with Tesla they have to respond and are slowly doing so.

Musk's motivation is technology for technology's sake. That's a totally different motivation than traditional car companies and that's the reason why Tesla is ahead in technology. It remains to be seen who ends up ahead in terms of business success.

I'd argue that there are some conditional factors here and they largely revolve around human capital. In fields with a very small number of people with prior experience, throwing money at the problem won't necessarily accelerate the path as fast as one where there are a large number of qualified people to tackle the problem.

This said, continuing to throw money at a problem such that it leads to more and more people developing a skill set in the space would overtime help, but then again, they could reduce the amount of investment down the line, and you'd still have people who were highly specialized in said domain to target that problem anyways (abet being paid less).

Except batteries have become cheaper because of consumer electronics, not Tesla. https://assets.bwbx.io/images/users/iqjWHBFdfxIU/imonS5R0.ZB...

If what you said was true, only Panasonic would have cheap batteries. Not lg and Samsung.

Yep, especially since those companies really don't start with "we'll build a line that can assemble 100 cars a week and then work from there" like Tesla did - it's either a line that can assemble 10k cars/week, or nothing. And if the supply for whatever component isn't there yet to support that capacity, then it's not going to happen.

This is usually the case. Retooling an assembly line is a ton of work, and NOT producing at scale is impossible for modern, highly automated car factories like VW, Mercedes or BMW own.

Producing 100 cars is simply not possible in these factories, because it would mean massive losses to the factory owner.

Also, car manufacturers do not want one supplier for a part, they want several. Mostly as a backup and also to make sure they are not under any price fluctuations because they have more leverage over the parts supplier.

Making cars is a very, very thin margin bussiness, especially with cheaper cars like the toyota aygo, fiat panda etc. Minutes of downtime in a factory could mean having to sell a ton of cars at a loss to make up the cost.

Sorry, but that does not ring true to me.

I used to work on the assembly at a GM truck plant, and one of the amazing things was the range of different units that came down the line.

I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line.

Also by that logic there should be no Nissan Leaf.

Last but not least, if BMW waits too long they will lose customers not only to Tesla but also Porsche and Jaguar as well.

> I find it hard to believe that the major car plants can no longer make assembly lines that produce more than one design on an assembly line.

this is not the problem i described.

The problem is introducing a new model into an assembly line is a lot of work, and something which is not worth the effort if you are only going to produce a small amount of cars.

Absolutely not true. The Nissan Sunderland plant (which produces over 500K cars per year on two lines) produces both the Nissan Leaf and Infiniti Q30 in low volume on line two (might be line 1, not certain now). The Q30 was introduced from a slow ramp up without stopping production of the line around 18 months ago and is a low volume car.

It cost $375 million to retrofit the plant to support building the Q30: http://infinitinews.com/en-US/infiniti/usa/releases/infiniti...

That's in line with what the parent comment said; it's not cheap at all do add a new vehicle to an existing assembly line, and it's not worth it for low volume production.

Infinity also sold over 25 thousand Q(X)30s in 2017, so it's not as low volume as talked about in previous comments, either.

As an interesting tidbit on this point, the reason robotics is favored by car manufacturers in production plants is not because it's cheaper (it's actually more expensive), but because it's more flexible, i.e. changing a line to manufacture a new line is cheaper. This runs counter to most people's intuition of robotics.

BMW is in a pickle because there is a good chance their premium pricing advantage is going to up and disappear with the shift to electrics. BMW has a customer base that loves their esthetics and brando and ignores the very high cost of ownership. Shift to electric and the esthetic and brando go out the window.

See Harley Davidson.

Ugh, Harley Davidson is a company that sells awful, antiquated products at jacked up prices.

Say what you want about how much BMW charges, they make very technologically advanced cars and charge accordingly.

Their major fault is they tend to use very very expensive parts and overengineer everything to a fault. This tends to make them less reliable and very expensive to repair.

Case in point, the very popular and well loved BMW N54 engine used 6 piezo fuel injectors to move massive amounts of fuel. Each injector costs almost $300 at an online parts store. For comparison, a Honda Civic injector generally costs 1/5th the price.

https://www.turnermotorsport.com/p-207715-13538648937-genuin...

Both Harley's and BWM's have high cost of ownership and are on the lower end of the reliability curve. Yet owners buy them for the esthetics and Brando.

Put an electric motor in each and the esthetics changes. That causes Brando issues because customers will grumble that the new models are 'not really' models.

There’s some truth to this since pretty much all electrics have similar power characteristics. But handling may still be a sufficient distinguishing creature. And then there’s always leather upholstery and the double kidneys :-)

What? I don't see how electric versus petroleum drivetrain has any impact on esthetics and brand. People buy BMWs because they want to be seen driving BMWs, or they like the styling and performance. It's the same reason people spend 10 grand on a Leica camera and lenses when a $500 Fuji will do just as well if not better at the actual photography.

Do we have some data on how thin the margin is for entry level subcompact cars? I was always under the impression that cars are sold at the "market price", regardless of production costs which usually meant at much higher price than production costs.

Cars have huge costs besides just production - amortized R&D, depreciation/damage to the tooling, union benefits, rework, shipping, amortized cost of future recalls per vehicle, interest on debt payments.

Also, it's one of, if not the most competitive market on the planet. There's a large number of incredibly well funded entrants, with competition in every segment. It's as close to a truly efficient market as you can get, and it's getting more efficient as Chinese and Indian brands mature.

Some manufacturers sell their subcompact cars for little or no profit purely to drive up their corporate average fuel economy. This allows them to make large profits selling larger, less efficient vehicles that customers actually want.

I don't have hard figures but I remember Ford UK saying that the little Fiesta cost 90% as much to build as the big Mondeo ( Fusion in the USA ) but with much less pricing potential.

They are basically loss-leaders for the brand.

Nowadays, modularization is key. A common toolkit/template, optimized for keeping large parts of the manufacturing process the same.

Take VW for example, with their Modularer Querbaukasten (arguably the most well-known example, although others like Toyota have done this for longer). Cars from the Polo up to the Passat are based on the same platform, retooling is kept as low as possible.

All big players have gone modular. Everywhere, the number of different models based on the same platform has gone through the roof, with new (often relatively low-volume) variants arriving each year. (I swear, one of these days Mercedes is going to run out of letters! :) )

The biggest issue yet: Current toolkits aren't really geared towards EV - but: this is rapidly changing. As soon as the new generation of toolkits arrives, things could happen really fast.

VW has been moving almost all transverse front-wheel drive/all wheel drive cars to the MQB platform for a while now. This includes sub-brands such as Audi, Seat and Skoda. The benefit is that all cars based on this platform become much cheaper to design and build. The downside is that the cars end up being the same, drive the same, feel the same, etc - which I find quite boring, but that might not be an issue at all for the average motorist.

Only the cheapest (and TT) Audi models are based on MQB. From A4 up it’s MLB – the luxury variant. Also, for the new cars Audi will share the tech not with the cheaper makes, but upwards: with Porsche, Bentley, Lamborghini and so on. It already happened with Q7/Q8/Urus/Betayga.

It’s also not exactly true that the driving characteristics are the same across the board. Usually Seats are on the sporty side with stiff ride and precise handling, Skoda is softer, and VWs are in between. Same chassis, different setup. It’s not FWD vs RWD magnitude of difference, but it’s there. The same goes for Audi: Q7 is not the same as Urus.

But yeah, the unification is bad from the car enthusiasts POV. The Ateca not only has the same chassis, but the whole body (bar the front fascia) and even the colors palette is straight from Skoda.

Another worrying thing is that apparently someone in Wolfsburg noticed that Skoda sells better than VW, despite the cheap plastic interiors, and now the new VW cars (T-Roc, Tiguan) also don’t have the premium quality that had been reserved for the mother brand. Could be an aftermath of the dieselgate as well.

Sure, a Golf GTI and Leon Cupra has different suspension set up, but the cars more or less drive the same and feel the same, at least on track. I love the EA888, but it’s ubiquitous in the VAG range. I’m super pleased that the hot hatch market is so competitive in 2018 because there is so much consumer choice now.

Sure they do - especially when the supply chain itself already offers services for that kind of volumes. Take Magna for example, they have worked with both BMW and Daimler(-Chrysler) on modern low to mid-volume assembly projects (while also manufacturing the G class super old-school style :) ) and their plant in Austria is specialized for quick retooling to new models. They're starting with the new Jaguar I-Pace EV this year.

BMW is one of the most progressive major auto maker in the world today. This news is not news at all and was in line with previous announcements on BMW i-series, which is the only current BMW line up that contains fully electric vehicles. Mass making electric vehicles at the same being profitable is HARD given the current technology status quo, yet crucial for any auto maker want to be in the game long term.

By 2025, BMW fleet will almost all(25 models) be electrified, and half of them (12) will be BEV (battery eletric, aka fully eletric.) This is the company that's determined to be ALL-IN on electrification on their cars. The current i-series are just too damn expansive to make (carbon-fiber unibody etc.) and not sharing many parts to the existing BMW line ups, which cost it much higher to make. So until the iNEXT platform is ready, they aren't going to mass produce EVs. [1]

[1]: https://www.cnet.com/roadshow/news/bmw-bets-big-on-solid-sta...

"By 2020" -> "By 2025" -> "By 2030". It's all vaporware marketing announcements meant to gloss over the fact that the only pure EV they currently sell is the laughable i3.

The i-Series are not all-electric: only the base-model i3 is - which has an unimpressive range without the optional gasoline-powered range extender, while the i8 is a hybrid with a 3-cylinder engine.

Range extender on i3 is a motorcycle gas engine that serves as a generator to continuously recharge the car's lithium ion batteries. i8 does use the same engine for powertrain though.

There is certainly a relutance from car companies to start making electric cars and the proof of that is Tesla. They have been fighting hard for years to secure supply chains for their battery packs, what's stopping the current car companies of doing the same with their infinite cash reserves? Why are they only starting now when Tesla has been planning it for years?

Also, you are giving those numbers without any source in them, so I will call this a very deceiving comment. Electric cars are marginally less complex than a regular ICE car, which it makes them simpler and cheaper to manufacture.

Way I see it Tesla proves that a mass market EV is still not possible. Either you take it from the fact that they failed to come up with anything revolutionary in terms of the Model 3; price/range still on par with other offerings. Or you take their lowest cost estimates for their battery packs and then you try to build the rest of the car with the remaining $12k (for the total price of a people's car that everyone can afford), and you realise that it is not possible.

The German Post approached VW to have them develop electric cars for deliveries in cities. VW refused, so they just hired a couple of students and started/bought their own company. They get requests from all kinds of businesses now.

https://en.wikipedia.org/wiki/StreetScooter

To me that doesn't sound like there is no market, it sounds like big car manufactures want to milk their ICEs as long as possible.

I'm thinking of starting a blog about RC planes, but I'm going to outsource the development. I submitted a bid to IBM but they haven't replied!

On top of that Boeing said they're not interested in assembling my plane!

Clearly these incumbents are holding me back.

Sarcasm aside maybe it just wasn't worth it to VW to take on a relatively small project outside of their core competency?

If making delivery vans for one of the biggest users of delivery vehicles in Germany (that uses tons of VW vans currently) is "a small project outside their core competency", VW really is in trouble.

Does VW already know how to make electric vehicles? How many would they sell relative to their total sales of existing ICE vans? Is it worth starting up an entire new business for one customer?

I think this can be explained by VW just deciding its not worth it rather than saying VW is trying to suppress electric vehicle development.

If you want to get serious about developing EV technology, why not start with a big customer that has a use case that makes the problem a lot easier?

Also, small vans for use inside cities is a big market. All delivery services need them, all kinds of workmen need them. With bans for Diesel cars in German cities on the horizon all kinds of businesses are complaining because Diesels are the only offering in that category.

Sure, but can we at least admit that maybe VW did the math and decided it wasn't worth it to them? And that they could have arrived at this conclusion without deciding to sabotage EV development?

Sure, maybe they did the math, maybe they just couldn't be arsed. But whatever the real reason why they didn't take the job - someone else (DHL itself) actually did the correct math and is now actually a viable competitor for VW in this area. So yeah, again, maybe but they failed at it.

Don't they have an e-Golf? They know how to build an electric car. It's building one that's actually profitable without heavy tax subsidies and at VW's build quality that's a problem. Tesla hasn't figured that out either.

Most van companies offer a "chassis cab" option [1] - basically a van with the cab present, but most of the back missing.

There's then an ecosystem of companies that will work with end users to design, build and fit custom van bodies. If you want a mobile broadcast van, or an ambulance or a mobile command centre? That's where they come from.

If you see delivery vans that aren't standard models, they've almost certainly come through the same ecosystem; companies like VW generally aren't in the business of working with end users on custom products.

[1] https://www.google.com/search?q=van+cab+chassis&tbm=isch

Deutsche Post uses a fair amount of the standard "van-type" vans by VW, and even if someone else is making a custom body electrifying the chassis is clearly a job for VW.

Given that VW's CEO has been whining to the press about how annoying it is that VW is now not their customer but a competitor, they clearly now think that they should have wanted the job more. My guess is that they did not expect the Post (which as a massive, formerly state-owned company you'd expect to be fairly conservative) to risk going their own way and succeed with it, and thus misjudged the risk involved with letting them pass.

There are companies that convert gas trucks to electric: http://autoweek.com/article/ces/your-electric-pickup-here-wo....

Based on this knowledge it's not clear to me the responsibility of creating an electric variant is the responsibility of VW.

Their core competency, beside ICE engines, it's furnishing out vehicles with all the expensive, heavy cruft customers have come to expect from big brands vehicle makers, even in supposedly utilitarian delivery vans.

The streetscooter, on the other hand, is really just the most barebone thing you could build around a battery. This saves a lot of money for a startup, but at a big brand with all the processes for sophistication, deviating from the established path would eat much of the savings.

But that's not the only problem: many of the same people who are enthusiastic about the pragmatic minimalism of the streetscooter due to the underdog image would punish the same car if it was made by VW or any other of the big ones. And that's not just interior finishing and amenities, the same applies to more serious things like safety and reliability. People will cut streetscooter a lot of slack where they would be unforgiving towards a big brand.

Yeah, I know about these. But these are intracity delivery vehicles. The restrictions in their domain of use make the problem simpler. My university has a couple and all they do is transport stuff between the two campuses. I think, although the average commute is probably way lower than a 80km, people would still be reluctant to buy it. For example the Mitsubishi i-MiEV has been around since 2009, is the least expensive amongst EVs (besides Chinese EVs probably) and has a range of 100km to 160km (depending on different metrics) and that didn't sell very well. Only 38.000 units sold.

The market is very niche. One of the best values in cars right now is off lease Volts — my neighbor just picked one up for like $16k.

Personally, I’m an ideal EV candidate. But it just costs more, especially when you price in electrical work for home chargers, etc. The TCO of a nicely equipped Accord is far less, and will be for a long time.

On lease EVs are extremely cheap but only because the market is niche. Dealers desperate to get them off their lots stack up incentives on top of existing rebates until people get to lease 40k cars for 100$ a month

I have to disagree, most of the current electric car offerings on the market are more expensive than the base price of the Model 3 (looking at the BMW i3 in Europe, the base price is 45000 dollars).

Tesla is a company that was built from the ground up, without any prior design and manufacturing experience, and they have been mass producing cars for only 5 or 6 years. You can't simply expect them to have the same business agility as BWM, which is a company with over 1 century old.

The lack of "better" product offerings from Tesla is not due to the technology, is due to the infancy of the company.

The base price on the Model 3 today is $49,000 and Tesla's own IR documents state that they don't expect to have a positive gross margin, even at that price point, until some time in the distant future after production is fully ramped up at both Fremont and the Gigafactory. It's not a very good example of the point I think you're trying to make.

They definitely haven't said that margins would be negative until the "distant future".

They are selling for a loss currently. Any margins from model S and X are being used to subsidise model 3 and overall they are still losing tons of money, profitability not even on the horizon. I wonder how long their current runway is without raising new cash again.

That is mostly right, but I was responding to someone who said that positive gross margins for the vehicle were only planned for the distant future. Their financial statement for last quarter implied that the 3 would have positive gross margins in late 2018.

Their cash position decreased by about 162 million last quarter and they have ~3.3 billion on hand at the end of Q4. There are a lot of risks still out there due to the production bottlenecks that currently exist (and maybe more on the horizon with S and X), but the cashflow situation isn't as horrible as some want to believe.

No the base price is $35,000. They simply haven't started letting anyone buy the $35,000 versions yet. You can say this is a failure on the part of Tesla. But this is not the first time they've had a lower end model that was planned but not immediately available upon production. Case in point when the All Wheel Drive Model S was announced, they didn't make non-performance versions available for several months after.

It doesn't stop everyone from saying they make $35,000 cars. So it's a success, not a failure on the part of Tesla.

If someone fails to do something, that proves nothing. Can't prove a negative like that.

EVs have been around for decades, and that's the issue here. They weren't ever cool and it was never particularly cheap to buy one. California used to (still does?) give rebates and an okay to use the carpool lane, and that didn't even cause a significant bump.

All Tesla did is prove you can sell an EV at a high price point to tech people who love all sorts of trendy things that don't sell outside that sphere. This in no way says EV is a mass-market vehicle yet.

Tesla did bring many infrastructure issues to the forefront, and that's no small feat.

Tesla is not proof of that. Tesla is an EV company from the ground up. They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc.

Moreover, car companies do not have "infinite cash reserves". Retooling factories for EV production is an expensive undertaking. Combined with the expense of lithium cells and supply issues, it's not a simple or cheap task.

VW's profit in 2017 has been more than ten billion Euros. That kind of money could fund a lot R&D and retooling factories.

It does fund a lot of research. Volkswagens investment into electrical cars exceeds Tesla by a factor of five. The article suggests that manufacturing at large scale is not yet profitable, not that they're not actively working on R&D.

> They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc.

I don't buy that for a second, esp given that they are now out-selling the S Class[1].

[1] https://electrek.co/2017/05/26/tesls-model-s-leading-us-larg...

To be fair - the S Class is a relatively low volume car. I don't have exact figures, but I'd expect it to be in the range of 2-3% of the cars Mercedes manufactures.

BMW made nearly 2,000,000 cars in 2015[1], and this year, best case, Tesla will make 150,000. That's an order of magnitude difference in scale.

[1]https://en.wikipedia.org/wiki/BMW#Production

Yes, but in the context of a single production line that I feel like that reasoning doesn't stand. Yes Telsa doesn't make as much in volume, but we're already only talking about cars in the EV segment.

The S class is a prestige product for Mercedes, its volumes are minuscule compared to other models.

Tesla made about 100 000 cars in 2017. Mercedes produced almost 2.4 million.

Tesla had to raise a lot of money from investors to keep the business afloat. In 2017 alone, they had to raise a debt of $2bn to keep their cash reserves alive so that they could continue investing on their products. Volkswagen, on the other hand, had a revenue of $230bn in 2017 alone.

It doesn't seem to me that money is a problem for the already established car manufacturers. And looking at Tesla's finances, starting an electric car business wouldn't make much of a dent on Volkswagen's finances.

So yes, Tesla is proof that there is some relutance in moving to a fully electric business in the car industry.

I think the fallacy in thinking that "supply chains don't appear overnight", is that if no one makes intermediate or full sized investment leaps then they the supply chain may be slow to appear or never appear in the volume needed. If you are too accustomed to a very mature supply chain (like IC drive trains fall into), I think a risk is leaning too much towards waiting for maturity.

It's hard to interpret from just the article if BMW is saying not 'til 2020 as their development of the supply chain isn't ready yet, or that they're waiting longer to capitalize a supply chain until some cost reduction 'appears'. There are statements on either sides if those paths forward in the article. So it could be simultaneously true for different links of the supply chain.

It’s not a conspiracy, its the innovator’s dilemma. It’s the fact that getting to a point where you can compete on margins would force you to invest all of the margins of your existing company (and possibly then some), and being unwilling to do so.

I believe this is shortsighted thinking. They’ll have fat margins for now, and then a few years from now it’ll be too late. Companies like Tesla that are fine absolutely incinerating cash and playing with death in order to make it work will have a serious headstart.

Sure, I’ve owned multiple Volts, and I’ll keep buying them because they’re affordable (until a “luxury” car is mostly* electric).

I’d love to have a BMW. I’m finally in the bracket I can afford it, but I refuse to own a non-electric vehicle.

People want electric vehicles and they want luxury, but Tesla’s are out of the price range for most people (for now).

BMW can wait til 2020, but by then they’ll have missed the boat.

* by mostly I mean a daily commute round trip

Many would also say that Tesla's are only luxury in price. The interiors are not nearly as nice as those from BMW or Mercedes.

Exactly! Besides maybe the “entertainment package”.

I’ll end up buying a Tesla because it’s fully electric. I was on the wait list for a Model 3, but my previous volt lemon’d and I couldnt wait until an unknown delivery date, so I bought another Volt.*

The volt for now gets me the round trip. I need to charge anything beyond going to work and back.

I’m at 5000 miles with NO GAS! It’s rad!

* I know “you bought another volt when your first one lemon’d?!” Yeah totally. It was an awesome car and between GM and California’s lemon law I pretty much sold my old one back to GM for just shy of the original purchase price.

Their build quality is atrocious, too. When stuck behind one on 101, I can see that gaps are uneven right from my driver seat. For a Yugo it might be OK. For a car with a luxury price tag that's just wrong.

Luxury is the wrong word for the segment Tesla is competing in. “Premium” is closer, but still wrong.

“High end” feels a lot closer. A kitchen aid mixer isn’t a luxury item, but it has a good profit margin and people who love mixers will buy it.

Tesla is more like that... there’s no hand stitched Italian leather or whatever, but the software is top of the line, the drivetrain is top of the line, it has unique features that make it a better car, without competing on who can make the prettiest mahogony inlay.

Like, not having to stand at a smelly gas station in your heels and pump your gas is a luxury. But Tesla doesn’t sell you a wall charger with gold accents.

But then it's not even that they are competing in that segment, they are that segment. Outside of people with sufficient disposable income who hate fossil fuels so much they are willing to wait for a full charge (and I've seen some of their supercharger centers; might be better than your average gas station ion a middle of nowhere, but not really a place where I'd want to spend well over an hour for a full charge, when I can be in and out of a gas pump in 5 minutes). It's a legitimate niche, but not necessarily a very large one.

Also, I am not sure if they really make a better car. Unique, for sure. Myself, if it doesn't have AWD, I don't buy it...

I think all of Tesla's lines have AWD?

They do, eventually, but as many things with Tesla it is sometimes hard to tell what is actually available (as in you can go and buy it) and what is to be available "real soon now" for several years. It is not cheap, either.

2 of 3 shipping cars -- while dual-motor Model 3's have been spotted in the wild, you can't order one yet.

Didn't AWD on Model S become widely available only relatively recently? I seem to remember it being an option last time I looked at it.

October 2014 is when it became available, not sure what you mean by 'widely available' and 'an option'. From launch it was available at both smaller and larger battery sizes, now they've started offering it as the only choice for some battery sizes.

Well, an option, as an option on Model 3, yeah. Can't quite buy it.

In any case, yes, it seems that it is more available now than I thought. Now if it only felt as a 70K+ car...

>BMW can wait til 2020, but by then they’ll have missed the boat.

What boat? Are people going to stop buying cars in 2 years?

We aren't talking about cellphones here, 2 years, or even 5 years is nothing in the automotive industry. The current 3-series is 6 years old and a good 3-4 years behind competitors and is still selling strong.

Having a 2-3 years lead in this industry is literally less than half the lifecycle of a model.

The boat that has all the $100k sales on it from people that don’t want to wait 2-3 years for a BMW.

That boat. It’s red row boat in case you’re curious.

That boat is super niche. Numbers of $100k cars Tesla sells per year is very small and actually is not growing. So that boat is quite small and I don't see the issue for BMW.

You have to remember Tesla is losing hundreds of millions of dollars, so clearly that boat is not going to get far until they can start making money. Even Elon Musk won't be able to raise big rounds of new capital indefinitely.

That super niche boat is in a fleet of boats that are killing off old businesses that are lagging behind. Sure BMW may be doing great today, but how long until they’re a Borders.

I don’t agree with you, but I did use your golang auth project the other day. Good work! Thanks!

That would be the boat of early adopter people who are willing to pay top dollar for a car that, apart from Superchargers and a large screen is not on par with BMW and the like in things that actually matter to luxury car buyers, like build quality and comfort and handling? Actually, on build quality Tesla doesn't really compete with cars that are half the price.

Does not seem to be a huge boat to me. Not that BMW couldn't screw it up before then, but they will need to try really hard to screw up.

Yeah so to my orginal point - I want a BMW, but I also want a fully electric vehicle. The later is more important to me.

You'd just have to wait then...

Also, BMW and Tesla operate and vastly different scales, and I am not sure there are enough people who consider electric more desirable (or feasible) than "a bimmer".

>> That super niche boat is in a fleet of boats that are killing off old businesses that are lagging behind. Sure BMW may be doing great today, but how long until they’re a Borders.

But is it killing businesses? At least from my European perspective I don't see VW, BMW, Daimler losing business to Tesla really, they seem to be doing fine (the only problems they are dealing with are of their own making like the emission scandal). In Asia I also don't see automakers like Toyota losing to Tesla at all. The moment Hong Kong stopped electric car subsidies the number of sold Teslas dropped to 0.

Maybe your American perspective is different? Do you think US car companies like GM, Ford etc are losing badly to Tesla? Is Tesla so popular? I thought owning Tesla was something akin to owning Porsche of Ferrari, it is a status symbol for very small minority of wealthy people. But I don't see Tesla becoming mainstream car for middle classes any time soon.

And then in 5 years when it's time for them to buy a new car and they're sick of the cheap plasticky interior of the Tesla, BMW will be there ready for them.

2020 is less than two years away. They will not have missed the boat by any stretch of the imagination. Most people will still be buying petrol cars in 2020.

If companies can make compliance cars, then regulations work.

The answer is expansion of these regulations because the industry will be dragged kicking and screaming into the electric future.

Why 2020? It's China's deadline for auto manufacturers to provide mass market options in the china market or be fined/removed.

Regulations? Need MOAr.

The two are not exclusive. The batteries have indeed cost too much until 2015 or so, which is still 5 years earlier compared to the 2020 target BMW is giving.

However, it's undeniable that the carmakers weren't in a hurry to build EVs because EVs would be too much of a disruption to their businesses. Maybe a linear 0.5% growth per year? Yeah, they could deal with that. But they'd hate it if the EV market explodes to 10% in 2022 and 20% in 2025, and 50% in 2030.

I am wondering if, after 2020, western countries would not need as many cars that they used to have. It feels like new generations do not own as many cars as their parents. If self-driving are indeed coming soon, dropping the cost of transportation, then we might need less cars than we currently use (or not use as they are parked 95% of time, http://fortune.com/2016/03/13/cars-parked-95-percent-of-time...). So maybe a production of few million electric cars a year might be sufficient in 2020 ? It is 2 years from now, and with Tesla pushing, and giving the pace, the landscape could be very different from today. BMW might need to reassess their prediction then.

After 2020, western countries are probably not the biggest market for new cars.

I agree, although not sure if the current main legacy car manufacturers (VW, BMW, GM, even Toyota) would necessarily be the leaders in non-western countries. They might be losing on both sides, the high-end electric vehicles (less volume, lower margin) and the cars needed for developing countries. Feels like, current car manufacturers have a lot to lose in the coming years...

> It feels like new generations do not own as many cars as their parents

This seems to be a myth, at least in the US https://www.bloomberg.com/news/articles/2017-08-22/millennia... https://www.cnbc.com/2017/08/30/millennials-like-buying-cars...

It's also not helping that oil is relatively cheap at the moment.

That might very well continue to be a theme. Every time there is a significant tick upwards in EV usage and a corresponding drop in demand, the price of oil drops significantly. It's extremely sensitive to fairly small changes in demand.

it isn't just price

- they weigh a lot for the range them can provide - the recharge rates even on "superchargers" is not good - the range loss in cold climates is very high, can be a third of your range - charger standards are not aligned

I hope we solid state batteries can solve all of these, if not the weight component by removing the liquid electrolytes. Is there really much more that can be done with lithium batteries?

I am still a fan of smaller EV range backed by a REX; how that REX is done going forward is up to technology but I don't really want to have to haul a thousand pounds of batteries around just to exceed two hundred mile range in mild to warm weather

What is the cost of a transmission and a fuel tank and exhaust system? Maybe $5000? With LGChem's pricing of $150/kWh, that'll buy you a battery bigger than the Leaf's.

Good point. Lets see: transmission, clutch, ignition, catalyst, exhaust, radiator, fuel tank, oil tank, possibly urea tank, ICE engine. Thats worth something.

This is just straight up baloney. The Nissan Leaf and the Chevy Bolt show this to just not be true at all.

It's not that car companies like BMW and Honda and others who are being slow to release EVs are colluding so much as they are just dragging their feet because ICE engine vehicles are much more profitable right now (not requiring changes to their supply chain and manufacturing methods, or training of dealerships and service departments, etc.)

The Nissan Leaf, with a 68% smaller battery than a Tesla, cost more to build than its selling price until 2015 (5 years into production and 7 years after breaking ground on the battery factory) according to Nissan's CEO. GM only made about 25,000 Chevy Bolts last year and lost money doing it.

If anything, they're both perfect examples of what I said.

Nissan had to start building a supply chain for the Nissan Leaf in 2008 to make it profitably in 2015. It took nearly 10 years for them to replicate the battery assembly lines, electric motor assembly lines, and car assembly lines for Leaf across 3 continents to sell it worldwide at "mass production" volumes.

> The Nissan Leaf, with a 68% smaller battery than a Tesla

Dude, that figure is kinda bogus. You can't just cite a random number like that. The first Leafs had a 20 Kw battery which is pretty close to your figure compared to a base 60 KWh Tesla Model S. But that was only the very first years, they went up to 24 KWh then 30 KWh and the current Leaf is 40 KWh.

They're still smaller than the base Tesla battery, but they are also cheaper. THey've always been way, way cheaper than a Model S or Model X, and the current Leaf is still cheaper than the Model 3 (and you can actually buy one now.)

> Lots of stuff about the Leaf and Bolt not being profitable.

Companies like to make a lot of hay about how much money they are losing on the stuff they are selling to seem like they're doing us a favor by selling it to us. This is always at least a little misleading. For example, they will roll in the cost of the R&D and building factories and updating their tooling and supply chain and say "Well we are losing money on Bolts this year" because of all those costs.

But those costs are investments. It's not like they are costs that go into every Bolt they make. It's an investment they have to make up front and they get to make this kind of spurious claim they're "losing money" because of it. They aren't any more than the "lose money" whenever they update a model of car.

Technically whenever they update a regular model the "lose money" on some number of them due to the costs of updates to the manufacturing and tooling and supply chain. But you don't hear anything about it because everybody knows it's a stupid way to look at it.

We should pay no more attention to these claims as they ramp up to make EVs.

Again I say; EVs are here, you can buy them, they are great, stop listening to B.S. And most importantly, stop repeating it!

> Lots of stuff about rolling the R&D/factories into "losing money"

Actually that's not the case. This was the quote from Nissan's CEO about the Leaf turning a profit:

"We are getting there. Are we amortizing and depreciating everything we have spent? No. But if you look at margin of profit — the direct cost of the car and the revenue of the car — we are getting into positive, which is good for this technology."

So he's talking about reaching positive gross margins on each car, not the point when they fully cover the development costs.

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