Elon Musk Shows the Germans How to Move Quickly
spiegel.de
spiegel.de
In my 5 years in Mech Engg, Germans were known for highly skilled labor, excellence in manufacturing tolerance + reliability and doing all of it in a stable and consistent manner.
Elon's Tesla is terrible at precisely these things. Manufacturing tolerance and reliability is notoriously bad for Teslas. Tesla also under pays and over works employees at a rate that's unheard of in the valley.
Tesla's strengths lie in battery technology, an army of blind supporters and it being run as a silicon valley tech firm.
> "Tesla, he (VW CEO Herbert Diess) said, isn't just a carmaker, but also a battery manufacturer, a dealer and a service provider. He says this enables Tesla to identify customer needs in an "unparalleled" way and to generate profits in areas that go "far beyond what we can do with our conventional car business."
He hit the nail on the head.
Elon Musk taught the Germans a vital silicon valley lesson. "Moonshot investments even in the most stable of times are necessary to not get caught with your pants down." (AKA, Buy Instagram and Oculus for $2 Billion, or else it will cost you 20$ billion (whatsapp ) or worse, it can consume your entire market overnight (Tiktok).)
Auto manufacturers tunnel visioned on gas vehicles, and made investments a bit too late. Now they've learnt the wrong lesson. Their foolish billion$ acquisitions of unproven self-driving car startups that have nothing to show for it, is proof that they are panicking.
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(edit, I do not mean to downplay the battery tech. If anything, Tesla's market position entirely showcases why it is so important. The blind supporters help, but the other 2 strengths count for a bit more.)
What makes you say that the supporters are blind? Judging by the success of the company, shouldn't its supporters get a little more credit?
It does mean that it did not fit into how they have traditionally computed value propositions.
A lot of the people who I know bought a Tesla, did it for other reasons. It was status symbol, a tool for virtue signalling, a luxury first and a car last. A ton of these friends were cross shopping the Tesla with a Civic, Corolla or a Prius. Because for these non-car enthusiasts, if not Tesla, they couldn't imagine spending that kind of money on a car.
It is similar to how Apple convinced non-traditional customers to buy a $500 watch or how Beats convinced your average person to splurge $300 on headphones that didn't even sound great. The first adopters ordered their cars 3 years out, before they'd even seen one reviewed.
The blind-ness comes from the numerous contradictions that Tesla represents.
The Tesla is fast, but it is bought by non-enthusiasts who never speed. The Tesla is green so it'd appeal to sustainability activists. But Manufacturing consists a bulk of carbon footprint, so if you cared you'd get a used car. Tesla also has toxic and exploitative work practices that someone who loves sustainability would generally disavow.
Teslas are great cars and provide a very different value proposition. But, the reason Tesla is doing well is not because it beat the Germans at their own game (as the articles want to imply). It is because they played a different game all together.
Tesla - " Exploration and exploitation "
And consumer products are almost always more then just pure base value.
> But Manufacturing consists a bulk of carbon footprint, so if you cared you'd get a used car.
So everybody who cars can never buy a used car and the people who buy new cars buy gas cars that eventually turn into used gas cars?
Do you really not understand how that makes absolutely no sense what so ever?
> But, the reason Tesla is doing well is not because it beat the Germans at their own game (as the articles want to imply). It is because they played a different game all together.
German game was to build expensive cars the people really wanted. And so did Tesla.
Did they? Last time I've checked EV market wasn't exactly eating gas market lunch. Sure, it's destined to, but as of today I don't think we have data to show that traditional OEM investments were too late.
Tesla/Elon hate is strong these days, probably outweighs the fanboyism.
It seems like they are externalizing their environmental impact, like a traditional multi-national but with the added business model of selling credits earned from selling electrics.
Or am I wrong? Is the pollution created by these huge batteries being netted out from their credits?
And only because the not so optimized yet supply lines is it even a question.
The thing is, you need to mine nickel/graphite once and then cycle it 5000 times. If you compare this to the equivalent driving distance in gas its not remotely close. Also, all of these batteries will be recycled, so it only needs to be mined once.
The credits he refers to are fuel efficiency standards that manufactures need to have across their fleet.
Tesla was well on its way to profitability, and would have easily been without Corona. They managed to make a little profit anyway because the used credit sales. Even without Credits they would have had impressive results given the global situation.
In Q3 Tesla will make a profit way beyond credits and then this 'lets distract from reality' story-line can die too. And in Q4 people who made this argument will really start to look incredibly dumb.
Tesla is making money because they have really fantastic margin on their cars and have really good ROI but instead of talking about that everybody deflected and made fun of them that they made profit 'only' because of credits.
Then you got the other side that thinks Tesla is a grift. And mention that it appears they've been making a small profit on every unit shipped and those guys lose it on you.
Profit on units shipped is the mark of going business. Means the investors cash is being spent on building out the business not subsidizing a money losing business.
No one wants to discuss, they just want to make a point. It is similar situation with Apple's App Store. You see people, even on HN defending Apple, saying it is Apple's Platform they can do whatever they want. Which is fine as a statement, but without really ever addressing the question raised by the counter party.
At the moment, and likely for the next 5+ years, the EV industry is going to be dominated by battery technology. Batteries determine pricing, speed, charging speed, and range. You can't have a great car if you can't nail those things.
BMW & VW have managed to make EVs which are great in every other way, but without getting the basics right, nobody is buying.
> ...an army of blind supporters...
Tesla has some glaring issues (IMO largely around self driving and quality control), but they've nailed the things about a car that people care about: Price, Performance, & Range. Complaining that people like Tesla's while ignoring the obvious advantages Tesla brings to the table just points out your own biases.
BMW's best EVs have 60% of the range of the bottom end Tesla and only marginally better performance. That makes it a bit difficult to point at Tesla and say they are successful due to "Blind Supporters".
The Renault Zoe is the best selling EV in Europe so far this year. The VW ID.3 might manage to outsell the Zoe in 2020 even though the ID.3 has only been out for a month or so. It'll be interesting to see where the ID.3 ends up by year's end.
The acquisitions of Cruise, Nutonomy and the like were so inflated for the tech they had, that you can almost call it being fleeced. It was a good idea to get these companies as acqui-hires, but for between $0.5-1.5 billion the big companies got algorithms that would be obsolete in a year and a few talent employees, who they could have obtained for faaaar cheaper. (Zoox by amazon at least made some sense)
What is hilarious, is that Waymo is still so far ahead in the data game that I doubt it is possible for them to even catch up. Self-driving has become a tech problem, and suddenly the likes of Uber, Google and Apple find themselves far better equipped to handle what is now a data science problem than any of these traditional companies.
My prediction:
The breakthrough moment for self-driving will come from Waymo or Amazon's Zoox (the ones with tons of 3d data). The 'winning' company will then licence the tech to every 3rd party car manufacturer and you will have an android like self-driving ecosystem, where they are all more or less the same.
If you actually look at Tesla presentation, a huge part of the problem they are dealing with is handing things like 50000 different kinds of speed limit signs in every country in the world. Assigning lights to the associated lanes and things like that. Finding the 0.00001% cases like object falling of trucks on the highway. Understanding complex intersection without prior mapping data of any kind.
I have not heard a single clear explanation how Waymo will go from where the currently are, to overriding a global general solution.
Tesla is a silicon Vally tech company that is trying to get its hand on the exact same people that Apple and Google are. And they unlike Apple and Google have their own gigantic data-gathering fleet across every first-world country. They are so far ahead of everybody in terms of data and data gathering its not even remotely close.
The reason Tesla seems to get no respect is that (a) Elon Musk over-promised and now he is forever labeled a joke that can never be taken seriously (b) the consumer product on the road does not yet do all the things it claims it will one day do so it providing something for people to criticize.
This is especially true in heavy rains, snow and any driving condition that doesn't follow the nicest of layouts like the Bay Area. This means that occlusion will stay unsolved by definition. Even if it works out one day, my intuition is that 3D maps / LIDAR self-driving is going to be ready sooner than that, purely due to having richer data.
Also, from what I know, (very little but) Tesla isn't THE company landing top self-driving and vision talent. They seem to be going to Waymo, Uber, Apple and Nvidia instead. Additionally, while I deeply respect Andrej Karpathy, he simply doesn't have the same research credentials as some of the distinguished professors who lead the other groups.
3D self-driving labs are all building on each other's work, as the cost of GPUs and LIDAR sensors has dropped by orders of magnitude over the last decade. Cameras and sensors on the other hand remain more or less where they were 10 years ago, and Tesla is left alone to compete with everyone else.
CommaAI also believes lidar are a bad idea.
Tesla has cars using their technology everyday all over the world and thus have 10000x more insight into how conditions effects their hardware/software.
While Waymo has spend 10 years testing in Arizona and basically never once had to contend with these problems.
And lidar does have its issues in certain conditions as well, its not some magic technology.
> They seem to be going to Waymo, Uber, Apple and Nvidia instead.
Very hard to judge that. I would like to see the numbers on that. The main evidence to me is that SpaceX/Tesla always rank highest on 'Where you want to work' for engineering students.
Also, it seems to me that Tesla is focusing very having a basic framework that non-super AI experts can improve the system. That is the only way you can even begin to manage the complexity of the global road network something people like Waymo has defiantly not yet even begin to solve.
> 3D self-driving labs are all building on each other's work, as the cost of GPUs and LIDAR sensors has dropped by orders of magnitude over the last decade.
And Tesla makes its own hardware that dropped even more compared to what everybody else uses.
> Cameras and sensors on the other hand remain more or less where they were 10 years ago, and Tesla is left alone to compete with everyone else.
Lidar by itself does nothing, you still need cameras and sensors as well, so it is purely added cost. There is simply no denying that high quality cheap lidar that can be deployed on millions of cars doesn't exist yet.
I would not be against Tesla using lidar. My more important point is that I think HD mapping is a horrible idea, lidar or not. And as long as that is the way you approach the problem you will never have a general self driving solution.
Couldn't resist a small dig here, but German cars are well known to be money-pits. :)
https://knowyourmeme.com/memes/events/neuland
Also maybe ambiguities between metric/imperial measurements, area of competence, having to ask around to be safe, waiting for answer/confirmation, and so on?
I guess the thing is - they're competing against cars that are not designed to come apart. Is it a sea-change to the models of televisions and computers that are designed to be purchased and disposed of at the end of their lives?
And yet the VW ID.3 is set to overtake the Model 3 in models sold in Norway: https://twitter.com/TESLAcharts/status/1316044411055243264?s...
Tesla doesn't have any technological secret sauce. Their battery technology is all from Panasonic, and their self-driving technology is behind Waymo. Other car makers have access to most of the same technology and much more experience mass-producing vehicles. I'm sure Tesla is worth plenty of money, but not several times Ford.
TSLA is also involved with other verticals, valued at "high" risk. i.e. B2C and B2B battery storage/generation systems for the house/grid, factory manufacturing consultant, and a ride-sharing / car rentals company.
I don't really have data, but would be willing to bet TSLA will likely start constructing houses / buildings in the next 10 years.
That said, its valuation is highly risky.
(disclaimer: I do not own any TSLA stock, but my parents do)
In the past, many of Tesla's side ventures have been abandoned or not come to fruition. Why should it be different in the future?
That said, given that TSLA's startegy is much like AAPL and AMZN, i.e. vertical integration, I don't feel they are "dipping their hands into many fields", but I do agree with the sentiment that they are "challenging an ever increasing number of incumbents" and its unlikely they can outperform all of them at the same time.
We will need to wait for TSLA's next 2 quarters to really know if they can sustain/grow their EPS. Which will be the only real test of "are they spreading themselves thin?" (compared with "spreading themselves thicc?").
This is the typical mindset of investors who look backward--P/E ratio--while attempting to value a growth company.
Electric vehicle penetration will soar from 3% to 20% by 2025. Tesla volumes will soar alongside from 500K to 3.5M. That equates to 2025 EPS of $18 ~ $900 at 50x (2x P/E to growth ratio) and $600 present value.
"Their battery technology is all from Panasonic"
Panasonic manufactures 2170 and 18650 cells. Tesla provides the formula for the chemistry of those cells, and creates a proprietary pack from them. Tesla also has multiple breakthroughs with the introduction of its 4860 cell, now being produced at the Roadrunner facility on Kato Road.
"their self-driving technology is behind Waymo"
Waymo's release of "public-but you can't sign up" self-driving ride share service is a specialized solution restricted to a specific area. Deep NN require vast amounts of data that is well labeled, Tesla has an advantage here.
"Other car makers have access to most of the same technology and much more experience mass-producing vehicles."
OEMs will need to spend billions to retool their factories to produce EV. As EV penetration rises they are left with useless equipment, technology and engineers. Massive amounts of capital will be need to retool factories to produce EV specific platforms. Converting ICE platforms to EV has proved to produce inferior product. OEMs have little software expertise. OEMs may have had superior manufacturing skill, but with Tesla's cell-to-body, and metallurgy breakthroughs allowing giga-castings that replace hundreds of parts and processes this is no longer true.
The established players have massively more capital and expertise making reliable cars.
And expertise in EV production is already apparent: https://twitter.com/matty_mogul/status/1272948614822797313?s...
As for reliability, there isn't much data on OEM EV.
I think you and parent are actually in agreement
>The value would only be justified if Tesla is essentially expected to monopolice the global car market.
You're linking to a graph that shows 2020 deliveries, not cumulative deliveries. Also, this is comparing a car that's been on the market for a year and a half and is delivered continuously, with a launch of a new model that mostly consists of pre-orders being delivered.
Can't really tell much from this graph, but it would be a nice surprise of the state of global EV development if Volkswagen managed to produce and sell the all the 300.000 ID.3s per year that they intend to by the end of 2021. That would put them on par with the current Model 3 production rate :-)
They might end up with 3 of the top 5 again in 2021. The VW ID.3, VW ID.4, Audi Q4 e-tron, Audi e-tron, and the Skoda Enyaq will all be in the mix.
Earlier this month, Tesla opened up 12 new charging columns in the Schöneberg neighborhood of Berlin. The fact that it wasn't just any old fueling station was made clear by the guest list, with Economics Minister Altmaier showing up for the festivities. He held a speech full of praise for the company from California, saying German industry could only benefit. "Germany is pleased that Tesla is becoming a German brand," he said.
(Don't get me wrong, the BMW M line is pretty sweet)
Anecdote 2: I drove a friend's brand new Tesla and one of the rear doors totally didn't line up with the car's body.
So I'd say, German cars are a myth but Tesla's quality control sucks as well.
From what I've heard it's improved. They're neat cars, just sucks having quality issues with any high end product.
My wife’s BMW 335 started having massive problems right about the time the warranty expired.
Meanwhile I drove my Honda to 175,000 miles with never a single problem except the A/C broke once. I only replaced it with a new Honda because in wanted the new model year features.
(High) performance cars break faster because they are pushing the limits of what's possible and have way more components.
https://www.usatoday.com/story/money/cars/2019/11/14/consume...
https://thenextweb.com/shift/2020/06/25/study-tesla-likely-u...
I'm not assuming anything about your personal level of care, but a lot of people aren't aware of all the little things you can do to keep a car running longer. I'm not surprised that they encounter reliability issues with these complex vehicles.
in any case, I just thought it might be useful information to add to the thread. consumer reports does a pretty good job quantifying the reliability of a vehicle for a typical owner. it's a little harder to tease apart the difference between inherently unreliable vehicles and ones that just need a little extra attention.
https://www.motortrend.com/news/tesla-model-y-ev-safety-qual...
https://insideevs.com/features/437193/video-tesla-model-y-qu...
https://teslamotorsclub.com/tmc/threads/returned-my-today.20...
https://teslamotorsclub.com/tmc/threads/returned-within-7-da...
Feel free to search reddit or Tesla forums for "rejected delivery" and "returned" as well.
EDIT: Have owned both (SLK350 and M5, respectively). Would not buy again. Currently own only Teslas (S, X, Y).
BMWs, otoh, you would be lucky if you went a few years without encountering any mechanical issue. And when you do, you are more likely to have to take it to their dealership, and my friends' experience of visiting those hasn't been great either.
I heard this in the context of someone marveling at the layout in an engine bay of a 80s Toyota, but it also applies to a friend's brother who restores boomboxes. This gentleman was describing how a single motor turned a bunch of different things, depending on which switch was pressed, and how elegant and simple the design was.
They've always struggled with resale value due to early reputational issues, but I'd say the build quality is now very close to the top 3 Japanese manufacturers. The 10-year powertrain warranty was a low-cost move to regain the market's trust -- I doubt very many people cash-in on it (the engineering is excellent nowadays)
When I was looking at cars some time ago, an accessories fully-loaded Hyundai was about the same price as a bare-bones Honda or Toyota. The discount rate may have leveled off these days.
Mechanical failures - Water pump, air condition compressor, loose seat bushings
Sensor failures (Possibly all from the same sensor supplier) - fuel level sensor (!), all oxygen sensors ($$$), passenger seat airbag sensor (!), air mass-flow sensor, engine air intake sensor, rear ABS brake sensors, coolant temperature sensor, cam position sensor
These are known problems and fixes documented on car forums, thus home garage repair was possible for everything except the AC. The price of parts and sensors is high (compared to Honda).
Tesla on the other hand, took a different approach. They offer new software features for additional price. Their cars are not designed to break down.
My brother had to replace a blown engine in his VW. My sister in law broke down 3-4 times with electrical issues with her VW until she sold it.
- ABS sensor on one wheel broken.
- Long running problem with the fault indicator light suggesting some problem with the intake. Opened and cleaned the intake valve. Didn't help. Then found out a plastic cogwheel worth maybe 10c for controlling a valve in the intake manifold was broken. But you can't buy that, have to buy the entire intake manifold for EUR 700. Thanks VW. Then the shop doing the work managed to forget a bolt in the combustion chamber when changing the intake manifold. So new engine block needed, since in order to save cost the fricking engine doesn't have separate cylinder liners. Luckily the new engine block was on the shop's insurance. On a positive note, the new engine was a slightly newer model which had the fixed camshaft chain that had been a common failure with that engine model.
- Alternator failed.
- Turbo charge air pipe fell off.
- Rear brake pads jammed and had to be prematurely replaced. Again, a common problem with VW disc brakes if you drive carefully and not that much.
Currently I have a Toyota, which I also had before the VW. So far so good.
2 $10-50 at pull-apart/wreckers
3 $200 autozone, $100 Amazon if you feel adventurous. 60 minutes replacement with youtube tutorial playing on tablet/phone
4 meh
Its only expensive if you go to the dealer.
And while they have some issue, the quality in terms of the actual core component of the cars is superior to what anybody else has. Not to mention things like software that absolutely suck ass on my cars.
Just look at all the recent issues other companies had with quality of these things. But of course those are not in the media even 1/100 as much so people who only look for reasons to disparage Tesla find easy ammunition.
Is this even legal in Germany, which is mostly devoid of 24-hour stores, where even supermarkets close on Sunday so those workers can have a life, and people seem to have a very strong sense of egalitarianism in labor standards? Also, I would have thought there to be more automation in an economy like Germany's and not people working around the clock.
I interned at a company in Germany before and my biggest takeaway was that everything was extremely high-efficiency and well-planned during work hours, and off hours were off hours, during which people enjoyed their lives.
It seems like a random American dude invaded and set up an sweatshop that is completely contradictory to the work-life balance and mental health standards that the rest of the country seems to have. I'd love to hear what Germans think of this.
Not sure how this is incompatible with any of the stuff you mentioned. Someone can work 4x a week on the 6pm to 2am shift and still have all the things you mentioned.
And who takes a massive quality-of-life hit for not being able to eat dinner with their family 4X per week, as well as a physical health hit for having to switch their sleep cycle so often. Per my other comment I was thinking that maybe the government had some controls over doing things like night shifts for non-essential work, but wasn't sure, and welcome insights from people who understand German labor laws about why Tesla's operation is OK but 24-hour stores are mostly nonexistent even though they would theoretically also operate by the same type of shift schedules.
In the US I am surrounded by 24-hour supermarkets and that's because the US government doesn't give a crap about the existence of night shifts for non-essential things, and I thought initially that the lack of 24-hour supermarkets in Germany was due to explicit regulation against that practice, but I may be mistaken.
The only overnight operations during my short time there I really saw were essential services such as in security, hospitals, and transportation industries.
Night shift workers do take a huge health hit, both physical and mental, and a social life hit, and I could see a government like Germany's putting some controls over night shifts for non-essential services, so wondering if that was the case or not.
24 hour stores not being a thing is a separate issue: there are laws that regulate opening hours for stores and they generally do not allow for 24/7.
I see. So (assuming you're speaking from Germany) is this the reason why e.g. 24-hour supermarkets and convenience stores don't generally exist, but factories do? i.e. supermarkets would not be profitable to have night shifts with those massive overtime figures, but factories remain profitable despite that?
Different states have different laws regulating store opening times, these are independent of labour law.
Here's the overview of the different times for the states https://de.wikipedia.org/wiki/Laden%C3%B6ffnungszeit#%C3%9Cb...
> mostly devoid of 24-hour stores
Different laws regulate store opening times.
Since 2006 the states can overwrite this law locally and most did. But they are only allowed to open on at max 4 sundays each year. Many allow 0-24 but it's culturally barely used. Out of the shops i lived closed to only one even opened from 7 till 24, which was right next to the biggest student housing.
Besides that, there are additional costs for employees after midnight, so it is not very attractive to open for the stores at those times.
This is vastly different in industrial production factories where shifts covering the full day are much more common.
For opening hours see: https://de.wikipedia.org/wiki/Laden%C3%B6ffnungszeit#Regelun...
If we define burocracy say, in the simplest possible terms, that is, amount of paperwork to do, possibly Italy and Germany are both bureaucratic, however, at the end of the day, what matters is how much is done.
An example is the mean time to a court hearing: 10 years in Italy, 6 months in Germany.
Ultimately, efficient and bureaucratic are not in conflict - a country may be ultimately efficient and bureaucratic because the processes are completed efficiently.
Also having more customers using their tech pushes them to develop and improve their tech. Other manufacturers have driving assistant techs for years. They never caused hype because only a small percentage of their customers have it with their order. And for the same reason they also didn't bother to make it more advance.
Does he really? What about that autopilot thingy which doesn't really deliver, for a few thouand bucks more?
With more EVs during a travel season, cars would have wait in queues for long time to find free chargers on highways and road-trips will become problematic.
If you buy an EV today, you are still an early-adopter in my opinion. Prices are too high for what you get and range isn't enough yet.
The best you can get right now is probably plugin-in hybrid cars. You get enough EV for your daily commute and short distance usage, and you still can go to road-trip without spending too much time at charging stations.
[1] https://duckduckgo.com/?q=texas+tesla+tower
Yeehaw!
Dude: But this dock is covered in bird poop
Reporter: Never mind that it's a great view
Dude: I am never going to hear the end of this
When it comes up Elon is pretty consistent in giving credit to the employees - it's just he's the only one talking and giving credit isn't a goal either so that gets lost.
But I agree, it seems like it's easier to think only about the leader while it's actually the work of thousands of humans.
Are you referencing look/design of Tesla's cars?
Question, if I may: do you think the Tesla Model S was in good taste when it came out in 2012? I believe that there's only been one or two relatively small exterior design refreshes since.
Thanks!