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New EV Entrants Unlikely to Threaten Model 3

New EV Entrants Unlikely to Threaten Model 3

So there seems to be some disagreement about the current state of the EV manufacturing world. I've posited that the other automakers just don't get it. They will sell a few cars to a few diehards, but to really launch the transition to sustainable transportation, the OEMs need to start doing it right, or they are dead meat. Apparently Loup Ventures agrees. Here is their theory of the case-

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"In 2016, EVs accounted for less than 0.25% of cars sold in the US. In 2019, EVs will account for 2-3%. There are now 17 EVs in the US market, compared to 11 a year ago. Next year that number should rise to 24. The majority of these models fall into two camps: those with starting prices above $70,000, and those with ranges below 130 miles. These two camps are largely ruled out as a mainstream option given the high price or limited range. We view a more mainstream option as priced below $40,000 with a range above 225 miles. When filtering for prices below $40,000 with a range above 225 miles, the list narrows to five options, compared to three a year ago. Today, this list includes the Model 3, Chevy Bolt, Hyundai Kona, and Kia Niro. Within that group, there’s a wide range of design options, software functionality, and charging network availability. Considering those factors, Model 3 is the clear winner in terms of value.

Our conclusion: competition in 2019 and likely 2020 is not a measurable threat to Tesla. The Model 3 is unchallenged in its EV value proposition.

The prevailing wisdom holds that OEMs are quite good at producing cars and switching the drive train to electric will be simple, allowing them to profitably scale EV production and maintain their market position. If this is true, it would dramatically lower Tesla’s market share and make the story less compelling overall, but we believe Tesla’s 7-year head start sets the company up to control a significant share of the market for a long time.

Three key benefits from Tesla’s head start:

* 92% more efficient batteries than four other EV manufacturers, adjusting for differences in range evaluation methods.
* Vertically integrated Supercharger network is easier to use compared to generic charging stations.
* More advanced self-driving capabilities."

https://loupventures.com/new-ev-entrants-unlikely-to-threaten-model-3/

SamO | 13. August 2019

Check out the charts on the link.

Also, Loup includes the Volt in their "five options" but I've removed it for two reasons:

1. It's not an electric vehicle. it is a hybrid.
2. GM has discontinued production.

TranzNDance | 13. August 2019

They need to compete with their ICE vehicles which would be suicide to kill their profit makers. If they don't make compelling EV then they get killed. They're between a flesh-bacteria-covered rock and a spike filled hard space. Their short term tactic is to delay the inevitable.

andy.connor.e | 13. August 2019

The only thing that will threaten Model 3, is a vehicle actually in production. Hybrid vehicles are not competitors.

TranzNDance | 13. August 2019

The dealers are the alligator-infested water that they're standing in.

vmulla | 13. August 2019

I can only see VW putting out something remotely competitive - and that's atleast 4years away.

jimglas | 13. August 2019

the competitors cant even compete with the original 2012 Model S

andy.connor.e | 13. August 2019

"the competitors cant even compete with the original 2012 Model S"

Its important to note what @jim said, automakers have had 7 years to develop a competing product. So far..... well.... you judge that yourself.

andy.connor.e | 13. August 2019

I bet everyone was playing their poker hands 100% on Tesla failing so they wouldnt ever need to develop EVs themselves. Whoops!

gmkellogg | 13. August 2019

Tesla has the model and built it from the ground up. You can't just throw an electric motor and battery in a regular car.

calvin940 | 13. August 2019

"Tesla has the model and built it from the ground up. You can't just throw an electric motor and battery in a regular car."

This is known and clearly demonstrated by the non-compelling e-tron and i-pace offerings.

SamO | 13. August 2019

Don't forget the Bolt . . .

andy.connor.e | 13. August 2019

I forgot already. Thats the part that has a nut and washer right?

raqball | 13. August 2019

The others are so far behind I don't see anything taking on Tesla at the moment.. They are far behind in every area and that includes charging infrastructure,,,

I am sure they'll see some EV's to their base but getting others to make a purchase instead of a Tesla is a hard sell in my opinion..

SamO | 13. August 2019

Agreed. The chances of GM, Ford, Toyota, Honda, Mercedes, VW, Subaru and Hyundai even continuing without entering bankruptcy or being acquired by a technology company seems remote at this point.

Just ask where an OEM is getting their batteries at scale. If there is nothing published at this point, then they are likely worth nothing.

Autonomy is more disruptive than electrification.

gmkellogg | 13. August 2019

Did Amazon go through with the Rivian acquisition? That was Ford's best shot.

calvin940 | 13. August 2019

"Did Amazon go through with the Rivian acquisition? That was Ford's best shot."

I thought it was just an investment, not acquisition.

gmkellogg | 13. August 2019

They invested back in February, but I've heard rumors they were looking to acquire.

calvin940 | 13. August 2019

Gotcha. I didn't hear about that one.

rdh37 | 13. August 2019

I am keeping a close eye on Rivian. My lovely wife really likes the idea of a pickup truck even though we do not necessarily need one. I am also hoping that Tesla develops a pickup so she can decide. While the Rivian seems to be a good design and idea, I am waiting to actually see one. Also, the supercharger network is a very high hurdle to overcome. Our car travels are primarily on the east coast of the US. While doing so, I have zero range anxiety and it is only getting better. Have a nice day.

jjgunn | 13. August 2019

I was going to say Toyota Mirai but that is a $65k-$70k vehicle.

The only real competition, in production, I see right now is GM, with the price point of the Bolt. Again it doesn't have the range or the charging speed of the Model 3.

VW is at least being forced to put out "Electrify America" so they have a shot but they were forced into it due to the smog test firmware hacking.

kevin_rf | 13. August 2019

The disrupter for me is AP/EAP. To me, it has more value than the Super Charger Network, and the LR's 310 mile range. I would even switch to a modified coal rolling planet killing F150 for it.

Until the other companies match it, Tesla will continue firing on all three cylinders (AP/EAP, SC network, battery tech) leaving them in the dust.

vmulla | 13. August 2019

@kevin_rf ,
Each of those disrupting factors is strong by themselves. The difference they make together is something else - My rank of high to low is: Supercharging, Battery/Drivetrain, AP, OTA upgrades

jjgunn | 13. August 2019

Does the Bolt have TACC? At a minimum?

vmulla | 13. August 2019

jjgunn | August 13, 2019
Does the Bolt have TACC? At a minimum?
---
No.
That was the reason I leased another Leaf. I really wanted to try leasing another manufacturer's EV, but Bolt really excluded itself out by not providing even the basic adaptive cruise control.

FISHEV | 13. August 2019

" The majority of these models fall into two camps: those with starting prices above $70,000, and those with ranges below 130 miles. "SamO

Except they don't so the rest of the muse is off target by same amount. Hyundai Kona, Kia Niro and Soul with 250+ miles and under $50K price with full $7,500 Federal Tax credit would be the EV's people are expecting and the mfg's are delivering in 2020. The luxury brands Audi, Mercedes, Jaguar will certainly have the $70-$100k range offerings but the volume will be the sub-$50k/250 mile EV's that are available now and will increase in volume in 2020.

bjrosen | 13. August 2019

In my estimation Tesla has a window of about 3 years before they'll have serious competition. It all boils down to charging, if you want an BEV that can go beyond your local metropolitan area the list is very short, Tesla. The Supercharger network is now good enough to go most anywhere, the CCS network is still several years away from reaching any sort of parity. There are a lot of CCS chargers around but they are mostly 50KW and much more importantly you can't count on them. When planning a trip in a Tesla you do need to look at the map to see where the SCs are but you don't have to worry if you can charge when you get there because there will be 8-12 chargers and if some of them aren't working you can count on some that do. If you are planning a trip on CCS the problem is that most sites have only one charger and you have no idea if it will be occupied, broken or ICEd when you get there. The other current problem for CCS chargers is the few high speed chargers that are available from Electrify America are really expensive. I'm sure that all this will be worked out in time but I don't see how they can do it in less than 3 years. The good news for the legacy automakers is that by the time the CCS network has been sorted out the price of batteries will also have dropped enough so that they will be able to build competitive vehicles.

Techy James | 13. August 2019

There will only be one true competitor to the Tesla Model 3 SR+ that falls in the category described.
It's slated to begin production next year with deliveries stating in late Quarter 3 2020 baring no delays. It will be the first true disruptor to the American market that is currently dominated by crossovers. The issue will be can this car maker meet the demands that this car will have, or will we have a supply issue. My prediction for the Tesla Model Y there will definitely be a supply issue the first 2 years. It will topple the numbers and more lots of ICE cars will be scrabbling to figure out a way to clear their lots of excess inventories.
By 2022 The Big Two Ford and GM (Sorry Dodge your days are numbed) will be begging for another handout so they survive long enough to get some major EV R&D completed so they can hope to stay in the game. Or maybe because GM and Ford still want you currently buying their ICE SUVs and Trucks they just saying they aren't doing major development to bring their own EV's to the market.
Think about it, if Ford said they would have a new EV F150 coming in late 2020 and it would be better than the current ICE F150 for just a little more cost, what would happen to their number 1 line of Ford Truck sales between now and then. They would plummet. Also the Dealerships are scared of EV's because, they break the Dealership current business models for service.
Now the Oil companies on the other hand are really scared. They know the more EV's hit the road the lower the demand for Fuel there will be, and their refineries will be even at 50% production would be creating a oil glut by 2025.

andy.connor.e | 13. August 2019

The Hyundai Kona EV actually looks pretty good. 258mile range SUV starting at $37k. Not too bad

FISHEV | 13. August 2019

"Now the Oil companies on the other hand are really scared. They know the more EV's hit the road the lower the demand for Fuel there will be, and their refineries will be even at 50% production would be creating a oil glut by 2025."

Except demand for oil has been increasing steadily the last 70 years and is currently increasing at 1.5% per year rate. Do you think not understanding basic facts undermines the credibility of your story? Of Mr. Rickard's story?

FISHEV | 13. August 2019

For manufacturers like Audi, Mercedes, Hyundai, Kia et al the EV's in their lineup while competitive with Tesla in range and price are intended to increase sales of their own brands by offering those brand buyers an EV alternative. The competition are the similar gasoline vehicles in the mfg.s lineup, not Teslas.

Magic 8 Ball | 13. August 2019

Compliance BEV's are going to be handled the same way GM handled EV1. They will fail the customers to try and switch them back to ICE but the BEV momentum created by TESLA and a bit by Nissan is the future. Dinosaur car manufactures are reacting to being behind the curve and when you have folks like Jay Leno, a true car nut, say BEV's are the future people listen.

vmulla | 13. August 2019

@FishEV,
Ok. I get the logic now. Customers want EVs, so manufacturers are making EVs to compete against their ICE vehicles. Tesla is not a factor.

I'm totally ok with that. Whatever is said after 'Customers want EVs' is not as important to me.

Can we agree to customers wanting EVs? Or did you want to redact that?

Techy James | 13. August 2019

@FISHEV Look at the latest predictions on Demand, yes the last 70 years Oil was on a solid increasing consumption rate. But this year alone with EV sales breaking the 2% of all new sales are now reducing the demand slightly world wide. See this article: https://www.ogj.com/general-interest/economics-markets/article/17279017/...
EV's will be the same disruptive event that gas car was to horse & buggy sales was in the early 1900's. If you told someone in 1902 that in 20 years there would be more gas cars on the road then horses they would have called you a fool to think a horse could ever be replaced. EV's today are that same state, the capacity of the batteries are increasing and the Cost is decreasing. Those are the two main components that EV's need to be a disruptive technology replacing ICE cars.

andy.connor.e | 13. August 2019

Anyone else check out the Hyundai Kona EV? For an electric SUV its actually priced pretty well. Up to 100kW charging, and yes i know, it doesnt get to use Tesla superchargers....

majassow | 13. August 2019

There you go again FISH. You show a lack of understanding of the term Majority, and you move around the goal posts to meet your needs.. The article actually calls out the exact same vehicles you mention (except with a different cutoff: $40K, and you include a non-available e-Soul, with no current pricing available) , and then shows DATA about where they fall short. So you are saying that once Audi, Jag & Mercedes get into "high volume" their costs will drop to under $40K? Can you share what you are smoking?

The challenge was: price below $40k & range > 225 miles. If you want to pick your own criteria, write your own blog.

Wattsworth | 13. August 2019

@FISHEV, "Except demand for oil has been increasing steadily the last 70 years and is currently increasing at 1.5% per year rate. Do you think not understanding basic facts undermines the credibility of your story?"

Irrelevant. Just because oil demand has been rising in the past does not mean it will continue to rise in the future.

Besides that, automobiles are not the primary driver of oil demand.

U.S. oil demand was scorching hot last year – but gas-guzzling SUVs aren’t to blame
https://www.usatoday.com/story/money/2019/06/20/us-oil-demand-was-scorch...

Do you not understand?

FISHEV | 13. August 2019

" yes the last 70 years Oil was on a solid increasing consumption rate:@TechyJames

And still is increasing at steady 1.5%.

"EV's today are that same state, the capacity of the batteries are increasing and the Cost is decreasing. Those are the two main components that EV's need to be a disruptive technology replacing ICE cars."@TechyJames.

Subaru Legacy Sedan with Eyesight, Red, Wheels Top Safety Pick 32 mpgs, $28k.
Tesla AWD LR with AP, Red, Wheels $51k.

10 years of gasoline and oil changes and basic maintenance, the Subaru is still cheaper at $4 gallon gasoline.

Without government mandates to cut emissions and subsidies for EV's and vehicles that cut oil use and emissions, EV's will not be threat to oil use certainly for the next 10 years and likely beyond.

To the idea that auto manufacturers are aiming at Tesla, not really, they are aiming at capturing any of their customers looking for a EV version of their gasoline vehicles.

dmastro | 13. August 2019

@majassow: To be fair, the article states "Our conclusion: competition in 2019 and likely 2020 is not a measurable threat to Tesla." Considering the new Soul will be released by 2020 and is expected to meet the criteria of < $40K > 225 miles, it should be mentioned.

People seem very defensive about Tesla being the best and unrivaled. I personally prefer marketplaces where there is a lot of competition and choice. It drives innovation and pricing.

majassow | 13. August 2019

@andy: Sorry for feeding the FISH.
@dmastro: agreed, except we really don't know what the e-soul will be as it's not announced. If it does come in under $40k and >225 miles, then it would be worthy of adding to the list. But you can't really judge how it compares on things like battery efficiency, etc. without actually using the vehicle. We've all seen cars coming soon with outstanding specs which don't pan out in the market.

I'd love it if Tesla WAS rivaled. Competition is good all around. What most on this forum object to is the companies that put out compliance cars (if you can only buy them in certain states, that's a clue). And then certain well known individuals who point to these to claim the competition has already won.

thedrisin | 13. August 2019

* More advanced self-driving capabilities."

Standard AP includes adaptive cruise control and autosteer, available in many cars now. FSD raises the price and if there truly will be incremental increases, may be priced out of the range of buyers in this category.

Kary993 | 13. August 2019

I find this article to be reasonable and accurate in the assessment if a Tesla automobile were to remain an automobile solely....which is is not going to be in the future. I think Tesla is far ahead of even the best car manufactures which is all they are, car manufacturers. Tesla has changed that paradigm and continues to push it. I am not sure any of those car manufacturers will ever catch up to where Tesla is going. Today these players are at least three years behind with self driving tech, charging networks around the world, range, reliability, etc. SO what if these big boys catch up in 3 to 5 years with cars that have those things......Tesla will be on to fleets of FSD cars not selling cars to individuals. Yes that is years away but we are talking 3 to 5 years for them to catch up...where will Tesla be then? Well ahead still I am sure. Model Y and pickup struck and Semi's and solar panel/roof, and batteries are further revenue generators and ultimately necessary to achieve the renewable and sustainable goals they have set out.....the car manufacturers do not have any such goals.....

jjgunn | 13. August 2019

There is more to petroleum than just changing the oil in your car. That's about 25% of it. Tires use petroleum, lubrication for your hinges on the doors, lots of items not discussed here.

Reducing oil changes to nil is a large portion (~25%) that oil companies don't want to lose but there will still be a need for petroleum products.

FISHEV | 13. August 2019

“Tesla will be on to fleets of FSD cars not selling cars to individuals. “@Kary993

Uber and Lyft are losing billions on fleets of “self driving cars”, why would Tesla want to add to its losses by adding the “robo-taxi” losses. Tesla’s mission is EV adoption not self driving. Musk’s confusion of the Tesla mission explains Tesla’s failure in both, losing money on cars and no FSD. Had Tesla purchased Subaru’s award winning Eyesight system and it would have like saved at $2B and been profitable in 2018 and 2019. FSD has nothing to do with EV adoption, it just adds cost which lowers EV sales.

calvin940 | 13. August 2019

Based on my experienced with the car I am driving, I think Tesla's playbook is doing fine by me. It's the best car I have every driven (and I have driven a few other so called good quality cars). I'll take their car that can improve itself over time over anything else out there hands down. thanks much.

I can't wait for V10 abd beyond all delivered while in the comfort of my own home thanks very much.

andy.connor.e | 13. August 2019

Yes Tesla should purchase some other companies product. Because thats pretty much been a huge factor in why its taking so long to get FSD working. If you recall, they phased out many manufacturers of their components like Nvidia, and they are making everything themselves.

Also im not really sure how you think Tesla will just automatically lose money doing driverless Tesla taxis just because some other company is losing money. News flash, Uber and Lyft dont own their vehicles. Uber and Lyft also dont have FSD. That being said, FSD doesnt exist yet. So im not sure how your statement is even a valid sentence. "robo-taxi" losses, How can you lose money on robo-taxis that dont exist?

Kary993 | 13. August 2019

I have to ignore Fish, just alot of confusing arguments that don't add up.

Tesla is building their own much like Apple because independent supplier don't have the drive nor attention to achieve. EM said that about Nvidia which is why there is a hw3. Vertical integration. Buying someone else FSD? Who? EM has been clear the others are not on the right track, in his opinion.

FISHEV | 13. August 2019

“Also im not really sure how you think Tesla will just automatically lose money doing driverless Tesla taxis just because some other company is losing money“@Kary993

That two companies modeling the on demand car transport are losing billions and had the worst opening IPO in the last 50 years would seem entirely a very topical lesson for Tesla or anyone else looking to get into that market. The driver is the cheapest part of their economic model and full self driving the most expensive and as yet not nearly realized part of Tesla’s on demand transport model. What could go wrong?

But to this topic, Audi, Hyundai, Mercedes they are not looking to compete with Tesla as much as with their own gasoline models and customers who want that kind of vehicle but in an EV. Jaguar’s iPace is best example of this, it resulted in 17% net increase on Jaguar’s Pace series of SUV’s with all the growth in the EV sales, gasoline sales were steady. So they lost no gasoline sales and gained all those customers who wanted at Jaguar SUV EV. Net gain. Same will be true for Kia with the Soul EV at other end of the price range.

Kary993 | 13. August 2019

@FISHEV - I did not write that.....wake up and pay attention.....

FISHEV | 13. August 2019

Sorry about that, it was @andy.connor.e comment that was quoted.

howard | 13. August 2019

There are a lot of EVs in the pipeline. Tesla S and X sales are already falling off. The 3 and future Y will stay strong for the foreseeable future but a lot of really cool EVs are coming from very established companies.

Globally, automakers are investing $225 billion to develop EV cars through 2023, according to AlixPartners.

www.investors.com/news/electric-cars-must-have-these-features-mass-elect...

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