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Comment by propercoil | Hacker News Reader

Good strategy from Treelon overall. You'll have Tesla producing cars and employing thousands of workers in the U.S, China & Germany so that no one would stifle the company's path towards autonomous EV's.

This will produce pressure on Europe to ease for instance the AI regulations and basically removed Customs tax from many other countries because Tesla can send the cars from three different locations.

I just don't understand why Tesla is slow in expanding to other countries. Here in Israel we don't have Teslas and it's an extremely innovative place with very good conditions for an EV as Israel stretches 424 km (263 mi) from north to south. like two or three charging locations and you're done.

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> Here in Israel we don't have Teslas

You might have missed this very recent news:

> International car company Tesla published an ad seeking an operations manager in Israel, thus confirming that it plans to launch significant operations here. [1]

[1] https://www.haaretz.com/israel-news/business/tesla-to-launch...

Israel is so small that you can go anywhere on one charge.

It’s also a small market: 9 million inhabitants.

Tesla is a small scale producer, so their market sizes can be quite small (Norway's population is 5 million and a key market). What drives the market is desire, money and charging. It seems Israel has the first two but hasn't got a good charging infrastructure yet. Once it does, combined with increased incentives for electric cars, I imagine it'll be a good market for them.

What charging infrastructure? You would literally need two or three charging spots for the whole country.

Well, not quite. Electric cars are a good fit for a warm climate (so you don't have to spend too much power on the heater), lots of sun, and no oil.

Like Hawaii, which just passed 10,000 electric cars and has more solar power than the power company can absorb during the day.

That's not how people use their cars or charging stations! People don't drive to places to charge their cars, they drive their cars to get places and park where they can charge. A charging infrastructure needs to have charging stations a few minutes walk away from where people are going to.

Oslo is roughly 454 km² and it has over 400 charging stations. Oslo has a lot of electric cars because of incentives and the relative ease of finding somewhere to charge your car. Tel Aviv's centre is 52km² and its metropolitan area is 1,519 km², so it alone is going to need quite a few charging stations.

Plus, I remember seeing a video years ago from some electric car visionary (didn't went very far) that argued Israel is basically an island. In the west there is a sea and in the north/east/south there are hostile nations/deserts that you don't want to drive to.

Compared to most other nations it's easy to bootstrap an electric driving infrastructure in Israel, because you don't have to do a continental wide rollout.

Oh, Better Place. I met their CEO once. He's really good looking, he's a great speaker, and his business plan made no sense. They burned through about a billion dollars and never did more than a few demos and a few hundred Renaults driven by their employees. But he was really good at getting close to heads of state and issuing press releases.

The whole battery swap thing was a bet against batteries and charging technology getting better.

I didn't miss it. It doesn't really mean they will be selling here any time soon as they only published one position for now.

> I just don't understand why Tesla is slow in expanding to other countries.

They don't have the capacity. Last quarter, they made as many M3s they have the capacity to make, and sold all of them. Opening new markets just means underserving the current ones more. They will start operations in new countries as they increase capacity and start saturating sales in their current ones.

>Last quarter, they made as many M3s they have the capacity to make, and sold all of them.

We were told, repeatedly, that Tesla would be producing 10,000 Model 3s per week in 2019, with a single factory. Suddenly, now, they don't have the capacity at ~6,000 per week and need multiple factories on zero year-over-year growth?

Now, please be precise with wording. 2019 hasn't ended, and the 10000 figure was given with the second gigafactory in mind.(which will start production in this year, actually)

Israel is probably just too small of a market at the moment. In most European countries there still isn't a official Tesla store or service center.

I live in the Baltic's and a friend of a freind has a Model X which was involved in a minor accident (other drivers fault) last year. To get it repaired without affecting the warranty it had to be sent to Tesla, which meant it had to be taken to Finland (700km) or Germany (1000km).

> “Israel is probably just too small of a market”

I’m not sure if size has much to do with it. Tesla is in remote countries like New Zealand (1/2 the population of Israel) and Iceland (about 1/20th the population of Israel), as well as neighbouring Jordan (similar size to Israel).

I don't know about New Zealand, but Iceland is part of the EU's single market when it comes to selling cars. I'd expect for a company like Tesla dealing with regulatory overhead in new markets might be the limiting factor.

New Zealand is an English speaking country so perhaps it's easier for them, and to sell cars in Iceland you don't need to do anything more than ship cars you're selling in the EU over and pay import tolls & registration fees.

Yes, but it's not quite as simple as registering cars and shipping them to customers. The cars need to be serviced, which means opening service centres in the destination market, and hiring skilled staff to do the servicing.

Since Tesla doesn't sell through dealers, they also usually open a sales centre / Tesla store (which often also acts as a service centre).

In Tesla's case, they also invest in building superchargers in the countries they operate in. All of this adds up to a fairly significant capital investment before they start selling vehicles in a new country.

Sadly, that is just where Tesla is in terms of making replacement parts, the same holds true within the US.

Even getting parts to certified shops anywhere right now is particularly challenging, its is one of the reasons I think they aren't profitable yet--they have to pay for a loaner car.

They've made a ton of progress and can now mass produce S/X/3 with reasonable turn around, but with the recent production hell ramp up with 3, they had to direct all resources to those desposit holders and that meant slowing down part manufacturing for non deliverable sales.

The factory in Fremont is HUGE but near there is a body shop where you'll see a ton of S/X/3 waiting for parts to be shipped out. I honestly thought it was an auxiliary parking lot when I saw it.

What part of he Baltics? With Rimac putting its footprint down you'd think that area would be have more of a Market for EVs.

There are some costs to expand in European countries. EU passed a law (GVO) in 2004 saying something like that: one can repair a car in any mechanic shop and still don't loose warranty.

Shop has to: - have access to service manuals using Pass Thru - this is requirement on the car producer. - document all repairs - do the repairs in a way the producer documented them

And these are very good regulations. I don't know if it's because of them, but dealing with car problems is local, fast and easy.

Yes, I agree. Authorized services ask ridiculous amounts for e.g. changing oil.

Slow to expand to other countries? I would say they are operating at lightspeed! Think for a moment the colossal effort involved in expanding a car company around the world. And not just a car company, but a direct-to-customer model with a completely new fueling method.

>I just don't understand why Tesla is slow in expanding to other countries

Tesla is expanding as fast as they can. After huge struggles they finally got their Fremont plant working right. Then they immediately set to work building a plant in China, and got done remarkably fast.

Now they are going to build a plant in Europe. Probably next will come India, and then maybe Latin America or the Middle East, and there I suppose Israel would be the best location.

Israel is not a good location for a Middle East factory. Most countries in the region will not trade with it, and even those that will, like Jordan and Egypt, do not have free trade or good transportation links with the country.

You know, that's a good point. Maybe I'm wrong.

no one said building Teslas in Israel... They don't sell here at all.

GP did say that:

> Now they are going to build a plant in Europe. Probably next will come India, and then maybe Latin America or the Middle East, and there I suppose Israel would be the best location.

ROI may be? the market size in Israel is not as big in other countries, so it makes sense to target bigger audience first. Also does Israel have any good local EV manufacturers that can give Tesla any competition?

No competition for Tesla at all, only e-tron is selling here a bit and I think the model 3 and Y will crush it here. In terms of market size, well they have them in Jordan next to us which have the same population size and they don't have half the country working in the tech space as our GDP per capita is way higher.

Well, you probably not very interested in politics, if you was, you would know the answer...

I’m mildly interested in politics and don’t know the answer.

I have a degree in politics and don’t know the answer.

If their neighbours really want a Tesla they'd have to get it from Israel.

> the market size in Israel is not as big in other countries

Why, comma, you say that as if building a car outside of Germany and selling it inside of Germany would face some sort of unfair obstacles, rather than being a straightforward and painless process as it ought.

I think the main issues are shipping costs, supply chain, and skills base. So you’d have to argue for Israel on those three points.

I don’t think the domestic market size is primary. They built a factory in Nevada.

Nevada is in a pretty stable free trade deal with the other United States.

That made me laugh

> Inside of Germany

That should be "Inside of Europe" because the barriers to selling cars in the EU are just about the same as selling Nevada cars in California.

For US->Europe tariffs for cars are around 10% I believe.

Not true. There can be huge import taxes on cars depending on country, even inside EU.

There are no* import taxes on any goods moved within the EU. That's a fundamental principle of the thing.

The fee to register a car for use on public road varies. It's very high in Denmark (120% of the value or something) but the place of manufacture doesn't affect that. Second hand imported cars still need to pay it.

* Exception is the duty paid on alcohol and cigarettes, depending how you define it.

Paying a tax on something you import from the EU which you don't pay if you buy in country is difficult to see as anything other than an import tax, no matter how it is named. See VRT in Ireland for example.

VRT is paid whether you buy a new vehicle from a manufacturer in Ireland or elsewhere in the EU. It's also paid if you buy a new vehicle from outside the EU, but in that case there will additionally be import taxes.

It might be that the administration is different (e.g. the large vehicle importer usually pays it, but you pay it yourself if you're buying some exotic Lotus direct from Britain).

Right you're correct. Yet it's basically the same function.

It is a completely different purpose.

Denmark has high taxes for registering a vehicle for public use to pay for road construction or maintenance and to discourage car use (or rather, to make the people using the roads pay their way).

The EU has import taxes on vehicles to protect its own vehicle industry, to both maintain that industry and the jobs within it.

MobileEye (which was acquired by Intel) does not make cars but is a competitor in autonomous driving technology. They're based in Israel.

It sounds likey they've been hiring in Israel. Maybe that will change soon.

They just put up one hiring position which is exciting but nevertheless, it's been 11 years since Tesla's inception so we are not holding our breath. Ordered a Tesla hat though! haha

I will say that Tel Aviv and Haifa both have excellent engineers. As Tesla grows I'd be a bit surprised if they didn't have engineers in Israel. That said, most of the engineering is still based out of Silicon Valley, so that might be why?

As a tesla fan and owner, I hope you get your superchargers. I've heard rumors that they've just started seriously producing the supercharger v3 hardware at the Buffalo, NY factory (Gigafactory 2), so maybe as that ramps up you'll be good.

Consider tweeting @elonmusk and asking. I did that for slow parts delivery and had the issue resolved in two days.

He got hammered by us but unfortunately nothing from him referencing Israel. I don’t blame him, no one can filter all these tweets.

They need some good engineers, sure. But what they really need is someone who can produce better welds.

For Y they are just going to stamp the whole frame out in one fell swoop.

> Another new innovation revealed in the patents is a “Multi-Directional Unibody Casting Machine for a Vehicle Frame and Associated Methods.” Musk himself let this cat out of the bag earlier on by revealing the new casting machine will be capable of casting almost the entire body of a Tesla EV in one piece.

> This startling innovation will virtually eliminate the need for a tremendous number of welds across an EV body.

They also reduced the total length of wiring from 1.5km to 100m in the Y.

Nah that’s SpaceX, not Tesla. The S and X use a lot of friction stir welding, which machines do anyways not humans.

A human still has to configure that machine.

Yeah, but it takes a lot less of them than it does to manually weld. I’m not saying this is better or worse, but stating what it is.

Isn't the issue in Israel that you must have a local importer and dealer?

No, but worst case you simply register a local company that will act as an importer (like anywhere else). This company will declare profits of 0 every year as all revenues will be shipped to Tesla U.S.

The issue is with Tesla, they still didn't make the move on us I guess. At least I have my Tesla shares though.

How are the temperatures in Israel? I could imagine the summers get too hot for Tesla to guarantee battery performance?

Way colder than in Nevada. And also they already have them in Jordan next to us so that's not the culprit.

Israel may be cooler than Las Vegas but definitely warmer than Reno, NV where the gigafactory is located. Reno gets 22 inches of snow per year.

Our north snows every year and it gets really cold in the winter (the center of the country Jerusalem snows every other year too).

Also, Jordan next to us has Teslas and we have lower temperatures so it's not the climate.

https://weatherspark.com/compare/y/1548~98866/Comparison-of-...

Appears that Reno gets colder for several months and hotter for about 2 months

If you don't mind, this always fascinates me. What does "really cold" mean to you?

"really cold" is incorrect in a global context. The coldest place in Israel[1] gets to only just below freezing temperature in the winter.

1 - https://en.wikipedia.org/wiki/Mount_Hermon#Climate

For comparison, it is now -14C (7F or so) outside. It is considered 'brisk' (as opposed to 'really cold') by local standards.

We do have Teslas all over the place.

-9C here and I didn't wear my coat today. Naturally it's unsurprising that relative perspectives vary. I'm just always fascinated by how other people experience existence. For me really cold and really hot is -30 and +30. I'm going to bet there's a billion or so people who would laugh at the idea of +30 being "really hot".

One thing I haven't really thought of, until I recently went to Israel, is that people drive only in Israel. It's like an island. Technically, I guess, people could drive to Jordan and Egypt, but no one does that. It's a limited range then, fwiw.

I don't understand your post at all.

"so that no one would stifle the company's path towards autonomous EV's."

Who is "stifling"? And many companies work on autonomous cars.

"This will produce pressure on Europe to ease for instance the AI regulations"

What AI regulations in Europe? And what is Europe? The EU?

"and basically removed Customs tax"

This is not how custom taxes work. The EU is one of the biggest free trade zone in the world. If Mercosul joins, it is the biggest.

"I just don't understand why Tesla is slow in expanding to other countries. Here in Israel we don't have Teslas and it's an extremely innovative place"

Because Tesla is burning through cash like a motherfucker. And Israel is a tiny place. This is also why, to my knowledge, nobody build cars in Israel. I mean, why not Dubai?

Germany and EU very obviously have a policy preference to any large auto-companies that both operate and sell there.

It’s not going to be written down on paper but there’s plenty of evidence to support it through their history of actions. And Germany has the largest influence on the EU economy wise having the largest GDP by far.

Completely dropping customs tax because a foreign company factory opened there is a bit much though.

> "and basically removed Customs tax" > This is not how custom taxes work. The EU is one of the biggest free trade zone in the world. If Mercosul joins, it is the biggest.

Wait, isn't this is exactly how custom taxes work? Say the EU charges a 10% tax on all imported passenger cars (it does, and 25% on pickups and other trucks). Now, if Tesla sells cars to the EU that were made in the USA, wouldn't it trigger that import tax?

Now, say Tesla builds a factory inside the EU and makes cars there (as it plans to do). When sold in the EU, those cars wouldn't be charged an import tax because they're not being imported.

Right? What am I missing?

You’re right on both. Just as an added plus Tesla will have better tariffs to other countries while taking advantage of each of its hosting jurisdiction’s bilateral deals, so the impact is larger.

EU regulations prohibit the turning angle of the wheel unlike the U.S. You simply can’t navigate on autopilot in the same way. Also the EU makes money from the auto companies in their jurisdiction and they don’t want a U.S auto company competing with them. Now that Tesla opens a factory in Germany “massages” things.

The customs tax is in regards to countries/jurisdictions other than the ones with the Tesla factories. For instance a country like Israel might have a 20% tariff from Europe but 0% from China due to different bilateral deals so Tesla will send cars from there.

Israel is different than Dubai because literally a third of the population are in the tech space. Israel’s main export is tech and the tech ecosystem will build on-top of Tesla (Waze for example was founded here and there are many auto security startups for instance).

> EU regulations prohibit the turning angle of the wheel unlike the U.S. You simply can’t navigate on autopilot in the same way.

You seem to be overstating the issue, Tesla has already adapted their software to the new rules, and they seem to be related to EU safety standards:

https://www.engadget.com/2019/05/17/tesla-updates-autopilot-...

>"EU regulations prohibit the turning angle of the wheel unlike the U.S. You simply can’t navigate on autopilot in the same way."

I've never heard anyone complaining that their car is too safe.

How many people have been killed in autopilot-related accidents in Europe vs the US?

>"Also the EU makes money from the auto companies in their jurisdiction and they don’t want a U.S auto company competing with them."

Carmakers can make cars in the EU and pay taxes. Or they can import them from the US and pay tariffs.

Exactly as EU carmakers are treated in the US...

I wouldn't say limiting the wheel's sharp turn when you need it to do a sharp turn is safe.

No one said that Europe is doing something that the U.S wouldn't do in return. Just stating the facts as they are.

> Also the EU makes money from the auto companies in their jurisdiction and they don’t want a U.S auto company competing with them.

I believe that Ford might have something to say about that. They've been in Europe since... 1967.

Or GM since 1986 (now Opel and Vauxhall).

Or the existing Fiat-Chrysler.

> Who is "stifling"

No one yet, but it means the company is less beholden to a single regulatory environment. This is generally a good thing.

> What AI regulations in Europe?

https://www.jdsupra.com/legalnews/the-european-strategy-of-r...

https://www.ft.com/content/4fd088a4-021b-11e9-bf0f-53b8511af...

https://www.theverge.com/2019/4/8/18300149/eu-artificial-int...

https://www.loc.gov/law/help/artificial-intelligence/europe-...

Also, most of the self-driving car regulation is state-level until the DOT pushes something through or Congress passes something, so for now, there are fifty different regulatory environments to pick from here.

> Mercosul join

If a whole other continent joins, it will be the biggest? The whole point is that Europe has geographical and (some) cultural continuity. Mercosul is South American. Why would it join the EU, especially considering that it would be out-numbered by its former colonial masters?

> Israel is a tiny place

No one said build there, people mentioned selling. Apparently, they're also sold in neighboring Jordan. I really can't understand why they wouldn't sell in Israel; it's a richer nation and a better market.

"If a whole other continent joins, it will be the biggest?"

Yes. The biggest free trade zone. Read the news from time to time. The EU-Mercosul FTA is supposed to be signed but may not due to Austria and partly also to France.

It may be the biggest already: https://www.scmp.com/news/asia/east-asia/article/2177749/eu-...

>" Mercosul is South American. Why would it join the EU..."

Nobody's talking about joining the EU, but rather a free trade area. Regarding cars, the free trade area makes sense as many EU carmakers (Fiat, Renault, etc) are active in South America.

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