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Elon Musk admits Tesla nearly died


silvrsvt

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There were some people in the media and investor community that were actually cheering on Tesla's "imminent death". Very inspiring how Musk and Tesla employees worked like superhumans to make sure their company didn't die.

All three major U.S. domestic automakers (GM, Ford, Tesla) have made amazing efforts in the past 2 years to ensure their survival. The list of dead U.S. automakers is a long one. And the three big U.S. automakers that are still around today have each faced near death experiences (GM went bankrupt as well).

GM and Tesla are currently the leaders in electric vehicles, and Ford is not too far behind. All three are doing well with autonomous vehicle development too. If they don't slack off, I think they will not only survive, but thrive as the automotive industry transforms itself in the coming years. 

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Why is GM a leader?  They had one PHEV (Volt) that was only mildly successful and is being killed and one BEV with a 200 mile range.   Ford has sold FAR more hybrids and PHEVs plus the Focus BEV experiment.  Ford uses electrics as part of their overall vehicle plans whereas GM likes to do one off PR vehicles with short lifespans while they ignore all their other vehicles.  I be they'll cancel Bolt within the next couple of years.

 

You buy into the Marketing and PR hype way too much.

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What it boils down to is that Tesla has the same "creed" that Apple had about 5-10 years ago-people are buying for the brand name, not the actual product. Once the EV market becomes commoditized (which will be happening in the next 2-3 years with all the major manufactures coming out with a BEV CUV or whatever), Tesla is going to be facing major headwinds in growing their marketshare.

They aren't going to survive on 200K units total sold a year.

 

 

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Tesla has one thing going going for them, name recognition.  When you talk BEV's, you say Tesla, nothing else.  Add that to the fact that Elon Musk is the new Steve Jobs, the hero of the 20-something generation.  I've been highly critical of BEV's, Tesla and Elon, bit I grudgingly admit he did the impossible, establish a new car company, and one based on a non-conventional powertrain, the BEV.  I don't know if Tesla has legs (actually, I kind of doubt it), but every car manufacturer out there developing a BEV, will automatically be compared to Tesla.  That in itself counts for something.

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40 minutes ago, silvrsvt said:

What it boils down to is that Tesla has the same "creed" that Apple had about 5-10 years ago-people are buying for the brand name, not the actual product. Once the EV market becomes commoditized (which will be happening in the next 2-3 years with all the major manufactures coming out with a BEV CUV or whatever), Tesla is going to be facing major headwinds in growing their marketshare.

They aren't going to survive on 200K units total sold a year.

 

 

The question will be if Tesla can maintain that "Apple" status - in that people continue buying them because they're an "Apple" (Tesla), or if as you point out - once the regular brands come out with similar options, will people jump ship and return to the traditional brands?

 

I'd guess a good chunk of those stuck waiting for Teslas will do just that (jump ship back to brand X, Y, and Z).

 

--

That said, that's assuming people are looking at it objectively, which is doubtful.   Will the electrics from brands X, Y, Z be "cool" like a Tesla, or is it just another product from those brands?

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18 minutes ago, akirby said:

Why is GM a leader?  They had one PHEV (Volt) that was only mildly successful and is being killed and one BEV with a 200 mile range.   Ford has sold FAR more hybrids and PHEVs plus the Focus BEV experiment.  Ford uses electrics as part of their overall vehicle plans whereas GM likes to do one off PR vehicles with short lifespans while they ignore all their other vehicles.  I be they'll cancel Bolt within the next couple of years.

Currently, GM sells more plug-in vehicles in the U.S. market than any other automaker except Tesla. Chevy Volt was the first true, mass market EREV, and Chevy Bolt was the first true, mass market BEV. GM will launch at least 2 new EVs within the next year, and 20 in the next 4 years. Additionally, GM has one of the largest EV battery research labs of any automaker (Warren, Michigan) and is partnering with Honda on battery R&D.

It's only very recently that Ford made "electrics as part of their overall vehicle plans". The Focus BEV experiment was little more that just that. Nobody including Ford itself considers that model anything more than a compliance car and testbed.

Right now Tesla is the undisputed leader in BEV that customers actually want to buy. GM and VW Group are next. As I mentioned previously, Ford should catch up quickly in the next few years but right now they have practically nothing to offer in the BEV area.

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Tesla's biggest obstacle?  The lack of a dealer network.  Elon chose not to use the conventional dealer network, which has hurt the company.  I've been emailing Henry Payne, an auto critic for the Detroit News as to his views on BEV's.  He recently took delivery of a Model 3.  The nearest "dealer" to Detroit was in Ohio, which is where he got his vehicle.  Good luck to Mr. Payne if his car ever needs servicing.  OTOH, two years from now, if I chose to buy a Mach 1, I'll be able to buy it at my local Ford dealer, about ten miles from our house.  So why would I buy a Tesla?

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4 minutes ago, mackinaw said:

Tesla's biggest obstacle?  The lack of a dealer network.  Elon chose not to use the conventional dealer network, which has hurt the company.  I've been emailing Henry Payne, an auto critic for the Detroit News as to his views on BEV's.  He recently took delivery of a Model 3.  The nearest "dealer" to Detroit was in Ohio, which is where he got his vehicle.  Good luck to Mr. Payne if his car ever needs servicing.  OTOH, two years from now, if I chose to buy a Mach 1, I'll be able to buy it at my local Ford dealer, about ten miles from our house.  So why would I buy a Tesla?

Michigan has been extremely hostile to Tesla in terms of the company's ability to open stores, service centers, and galleries in the state. Texas has also been this way, though Tesla does have 2 service centers in the DFW Metroplex now. One in Dallas, one in Plano. Tesla is growing its network of service centers pretty quickly.

Tesla also has home delivery and mobile servicing options for its customers. https://www.tesla.com/service

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5 minutes ago, rmc523 said:

Neither is Volt that you mentioned.

And I said electrics, not BEVs or pure EVs.

A BEV is simply a PHEV without the ICE and with a bigger battery pack.  PHEVs are harder to build because you have to manage the interaction of the ICE and the electric motors.

Ford has had the ability to create a BEV for years - but there was no profit in it so they chose to go after hybrid and PHEV versions of regular vehicles.  And they're continuing that with their hybrid plans for almost all vehicles in the lineup.

 

They're applying battery electric technology to mainstream vehicles AND introducing a badass BEV, whereas GM just did Volt and Bolt.

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3 hours ago, mackinaw said:

Tesla's biggest obstacle?  The lack of a dealer network.  Elon chose not to use the conventional dealer network, which has hurt the company.  I've been emailing Henry Payne, an auto critic for the Detroit News as to his views on BEV's.  He recently took delivery of a Model 3.  The nearest "dealer" to Detroit was in Ohio, which is where he got his vehicle.  Good luck to Mr. Payne if his car ever needs servicing.  OTOH, two years from now, if I chose to buy a Mach 1, I'll be able to buy it at my local Ford dealer, about ten miles from our house.  So why would I buy a Tesla?

I know multiple people in the Detroit area, service really isn't an issue for them. They have an issue, a truck shows up in a few hours; they load the car onto it and away to the service center it goes and they drop a loaner. They are in the process of opening a service center here which would fix that issue. I'm sure it is super expensive for Tesla but for the owners its no different than a regular car.

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2 hours ago, mackinaw said:

That may be, but Ford has over 3,000 dealers in the U.S.  GM probably has far more than that.  There's little incentive for many of us to buy a Tesla based on that alone.  

Back in 2014, Elon Musk told Autoline that Tesla would need to consider a combination of factory direct stores and franchised dealers as Tesla's sales volumes grew. Don't know if that's still planned at this point. https://www.hybridcars.com/elon-musk-says-tesla-may-need-franchised-dealerships/

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3 minutes ago, jasonj80 said:

I know multiple people in the Detroit area, service really isn't an issue for them. They have an issue, a truck shows up in a few hours; they load the car onto it and away to the service center it goes and they drop a loaner. They are in the process of opening a service center here which would fix that issue. I'm sure it is super expensive for Tesla but for the owners its no different than a regular car.

But what if you live in a rural area, like me, hundreds of miles away from any major town?  Realistically, I think Tesla has written off the rural areas and is concentrating on the major population centers.  Totally understandable, you go where the market, and money, is.  But for me, if I do buy a BEV someday, if I can't have it serviced in my small town, I won't even consider it.

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1 hour ago, mackinaw said:

Realistically, I think Tesla has written off the rural areas and is concentrating on the major population centers. 

That's correct mackinaw sir. I think that the metropolitan areas of San Francisco-Oakland-San Jose, Los Angeles-Orange County, San Diego, New York City, Washington, D.C., Denver, Seattle, and Portland, Oregon alone account for more than half of all Tesla vehicles sold in the U.S.

Many Tesla supercharger locations are in rural areas along major interstates, though.

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20 minutes ago, rperez817 said:

Many Tesla supercharger locations are in rural areas along major interstates, though.

There's one about a 30 minute drive from our house, in the parking lot of our local Meijer (a Michigan grocery store chain).  It services traffic from I-75.  We shop at Meijer a few times a week and I always make it a point to drive by the Supercharger station when in town.  I've only seen two or three vehicles use it over the past two years.  

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12 hours ago, silvrsvt said:

What it boils down to is that Tesla has the same "creed" that Apple had about 5-10 years ago-people are buying for the brand name, not the actual product. Once the EV market becomes commoditized (which will be happening in the next 2-3 years with all the major manufactures coming out with a BEV CUV or whatever), Tesla is going to be facing major headwinds in growing their marketshare.

They aren't going to survive on 200K units total sold a year.

 

 

And a big difference between Apple and Tesla is that it's easier for Apple to come out with all new or updated products every year where the Model S has pretty much been the same and I don't believe a second generation is planned anytime soon. Apple owners enjoyed something fresh that made buying their newer products attractive, although the current generation Apple products have not changed as significantly and sales suffered.  I believe the same will happen to Tesla soon if second generation cars are not developed.

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1 hour ago, silvrsvt said:

Thats the other thing-How much service is going to be needed for an EV? Outside of brakes and tires, I can't really think of any maintance that is going to be needed a on regular basis. That is going to impact the dealer model down the road too.

Bob Lutz says the car dealership as we know it today is doomed. He thinks autonomous, shared vehicles (most likely electric) will kill dealers within 20 years. http://www.autonews.com/article/20171105/INDUSTRY_REDESIGNED/171109944/industry-redesigned-bob-lutz

 

"Car dealers will continue to exist as a fringe business for people who want personalized modules or who buy reproduction vintage Ferraris or reproduction Formula 3 cars. Automotive sport — using the cars for fun — will survive, just not on public highways. It will survive in country clubs such as Monticello in New York and Autobahn in Joliet, Ill. It will be the well-to-do, to the amazement of all their friends, who still know how to drive and who will teach their kids how to drive. It is going to be an elitist thing, though there might be public tracks, like public golf courses, where you sign up for a certain car and you go over and have fun for a few hours.

And like racehorse breeders, there will be manufacturers of race cars and sports cars and off-road vehicles. But it will be a cottage industry.

Yes, there will be dealers for this, but they will be few and far between. People will be unable to drive the car to the dealership, so dealers will probably all be on these motorsports and off-road dude ranches. It is there where people will be able to buy the car, drive it, get it serviced and get it repainted. In the early days, those tracks may be relatively numerous, but they will decline over time.

So auto retailing will be OK for the next 10, maybe 15 years as the auto companies make autonomous vehicles that still carry the manufacturer's brand and are still on the highway.

But dealerships are ultimately doomed. And I think Automotive News is doomed. Car and Driver is done; Road & Track is done. They are all facing a finite future. They'll be replaced by a magazine called Battery and Module read by the big fleets."

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