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Most ICE car companies will have to be replaced

Most ICE car companies will have to be replaced

I'm going to go out on a limb and say that most ICE car companies are unable to adapt to the the realities of BEVs, and will have to be replaced. Hoping that they will "transition" to BEVs is futile and a waste of time.

Haeze | July 23, 2014

I have wondered if ICE manufacturers would simply open new companies to build BEVs... so far it seems they will not, but it may become necessary if they ever hope to bypass the Dealership requirements in most US States.

nwdiver93 | July 23, 2014

I call them the LAMEs; (Legacy Automotive Manufacturing Enterprises)

Grinnin'.VA | July 23, 2014

MOST ICE CAR COMPANIES WILL HAVE TO BE REPLACED
@apsley | JULY 23, 2014:

What we're seeing Tesla do right now is the early stage of the "transition" to BEV cars.
Keep in mind the source of Tesla's factory: an unused car factory left for dead by a failed ICE manufacturer. Lots more such "transistions" may be a big part of how this multiple-decade "transition" takes place.

IMO you're at least partially right: Some established car manufacturers will not participate. Those that fail to "transition" will die slowly.

Ron :)

Earl and Nagin ... | July 23, 2014

They will undoubtedly go the way of the Big 3 steam locomotive makers: Baldwin, American Locomotive Company, and Lima or Western Union. These are companies that were the giants in their day but never did take the new technology seriously and just withered and died. There's little left of them.

jordanrichard | July 23, 2014

If they die off, it will be the dealerships that ill be driving the hearses. It's the dealerships that lose out on EVs and they are the real customers for the car companies. Dealers are not going to buy/sell something that they won't make any money on the backend, on.

Dramsey | July 23, 2014

It's always fun to read these assertions that BEVs are the ultimate form of vehicle technology and that anything else, from ICE to fuel cells to hybrids, will not only fail but fail really hard.

Oh, and everyone else that doesn't believe this is an idiot.

Whether BEVs are viable long-term depends, of course, on bringing the cost down-- WAY down. And there are still range and charging issues of course.

How quickly these issues can be addressed, and to what extent, is still very much an open question. It seems as if we read about a new 1,000-mile-per-charge miracle battery that can be recharged in 10 minutes every week here, but I'm not really holding my breath.

In any case I think predicting the death of the ICE-- at least for any time frame of less than 20 years or so-- is premature at this point. Because right now all you have to make this prediction is faith, rather than numbers.

But in other news that tends to support the OP, General Motors has cancelled the Ampera...

Kleist | July 23, 2014

When is the last time you used film to take a picture? It took less then 10 years to transition. Yes, film lives on in speciality situations, but the bulk is done digital. Same will happen with BEVs and it will not be a gradual transition, but be rather sudden.
Once you can make a BEV for the same cost then it is done. Model 3 is supposed to achieve that and that is why the secret master plan end with Gen3. After that everybody has to scramble to put a competitive BEV out there, some will make it some will go away and new players will emerge.
That will be far in the future? Think again. Model S drive train has only a 30% disadvantage over ICEs today and cost is about 2x. That is very little. 30% specific energy is here today, just needs to be produced in large quantities. Vertical integration, GF, no dealers, etc will do the cost side... Elon is using every trick in the book

Once you realize that every improvement in gasoline technology comes with a cost penalty while every improvement in EV technology comes with a cost reward it is easy to predict the future. Model 3 is the transition and after that the only question is how fast can the World build a battery industry - now ICEs just cost to much to build.

GF2 and GF3 could kick start Toyota and Daimler with their own 0.5M per year car offerings each in a short time.

Exciting times to watch...

Timo | July 23, 2014

It takes longer than 10 years just because Tesla simply can't produce them fast enough, and there are no other major players in EV market. Also it takes time for ICE cars to die. For example because of idiotic car taxes nearly everyone here drives a car that is 10+ year old and very few buy new cars. I wish we could get cars as cheap as in US. But no, they just keep inventing new taxes for cars without removing old ones. Everything costs, buying, owning and using. Even if you don't drive a centimeter you need to pay taxes.

Kleist | July 23, 2014

Timo - sure it will take more then 10 years worldwide. But we are already further then most folks realize... 37M e-bikes sold in China last year, BYD builds a 1000 e-bus factory,...
Tesla role is not to build everything, but just to change the perception of BEVs.
Also the real disruption will not happen in the car sector - that is just the lure, but in the energy sector... an industry that is much bigger then the car industry. Stop burning thing without using your brain. Germany as a country is already on a path to do so... others will follow.

Guy2095 | July 23, 2014

Death of the ICE in only 20 years? No, after all, they still sell these:

http://www.amazon.com/Weaver-Leather-BUGGY-WHIP-BLACK/dp/B005JESVHQ/ref=...

Red Sage ca us | July 23, 2014

Dramsey wrote, "It's always fun to read these assertions that BEVs are the ultimate form of vehicle technology and that anything else, from ICE to fuel cells to hybrids, will not only fail but fail really hard."

I think that people will keep buying ICE vehicles. That is, people who don't test drive Tesla Model ☰, will keep buying ICE vehicles. Those that do, will be infected.

It will be similar to what happened with the Tesla Model S. People who were looking for an Acura, Infiniti, Lexus, AUDI, BMW, Mercedes-Benz, or Porsche, just decided to take a test drive of the new Tesla on a whim. And then they were infected.

Dealerships found that it took a lot longer to move an AUDI A8, Porsche Panamera, BMW 7-Series, or Mercedes-Benz S-Class than it used to... They noticed that a lot fewer people were replying to the cards and letters that were sent as a reminder of the new models arriving... They saw that fewer people were doing a re-up on their leases of all types of luxury cars. And they saw that sales of the Tesla Model S were steadily climbing the whole time.

I think that when the Tesla Model ☰ comes along, people will be absolutely amazed by the driving experience. I think that people who were originally in the market for a 24-28 thousand dollar car, will consider spending 35-43 instead. I think that people will do the research, run the numbers, and make the decision that they really should by the Tesla. I think that some of them will figure they can keep driving their Camry, Accord, Malibu, Fusion, or Altima for another three-to-six months while they await arrival of the new car. I think that the allure of having a superior driving experience, and never buying gasoline again, will be more than they can bear.

This won't kill the ICE. It will make a significant dent in profits though. It will be like 2009 all over again, as dealer lots across the US sit, full of inventory that doesn't move, for months on end. Anything that gets less than 40 MPG won't sell at all. Everything that gets under 20 MPG will sit, and sit, and sit... So the rebates, and deals, and factory cash back promotions will flow like water, and to no avail. Pickup truck sales will be just fine.

Some automakers will respond by going all hybrid, across their entire product range. Others will grudgingly increase the electric range of their hybrids by adding more batteries. Some will offer pure electric vehicles, but only in limited markets, and in extremely low quantities for the sake of compliance. Others will keep pumping out gas guzzlers, hoping to 'win' on excitement and tradition, even at six bucks a gallon, please pay before you pump...

ICE won't fail outright... They'll just experience a gradual erosion sales and a constant decline of market share. Then, one day, they'll simply be marginalized, unimportant. They'll be run on closed circuit courses, on the weekend. Just like horses.

Realo.de | July 24, 2014

A lot of wishful thinking here:
1) we definitively should distinguish here between cars and companies/manufacturers. (In Germany, car companies are the amongst the biggest employers - just for that reason, these companies will not disappear
2) New/innovative/trendy cars will just be produced by these companies, which, in fact, are holdings: Smart is a brand of Mercedes-Benz, Mini a brand of BMW, Lamborghini a brand of Audi (which is a brand of VW).
3) The point I find really interesting here is the marketing strategy: maybe the whole "e-" is not a clever idea: look at the Opel Ampera: Opel is not well known as an innovative company (sorry, GM :-(), so, an "Opel Ampera" is kind of self-contradiction. On the other hand: A "BMW-Mini" is not associated with BMW - however, "Mini" as a different company can sell very well in its segment - that it belongs to the "BMW-Group" is just secondary, but gives the buyers the save feeling the buy a car from a "big company" (at the end) - same as true for Smart.
4) market vs companies: sorry, but it not true that GM killed the Ampera. It was us / the market. GM does not care whether the sell 1Mio EVs or 1Mio ICEs (with a reasonable margin) - but, no demand, no supply (golden rule of market).

@Red_Sage: we already had some debate, but here I fully agree: in your post, you never argued with technology, but only with people! - fine, that's what I call "market". As soon as word-of mouth recommendation begins, the market penetration will increase…

Realo.de | July 24, 2014

@Kleist

When is the last time you used film to take a picture? It took less then 10 years to transition. Yes, film lives on in speciality situations, but the bulk is done digital. Same will happen with BEVs and it will not be a gradual transition, but be rather sudden.

Slight disagreement. There was a lot of different aspects for that change. Let's rather look at Polaroid: it brought the "instant photography", but at the expense of price/cost, image quality and camera handling… and it was "kind of" the analog photography…
In contrast, digital photography is a completely different metaphor. The "film" costs nothing, it is instant, image processing can be done everyone at any time…
I rather see EVs and ICEs as polaroid and analog film, not as digital and analog film (sorry, fans :-):-))

Kleist | July 24, 2014

@German_Tesla_Fan - no wishful thinking here, just learn from history.
The biggest employers are at biggest risk as they have the highest fixed cost. Did you expect Kodak to fail because something they invented and leading the technology for years? The problem are the legacy cost... how fast can you fire the exhaust guy? Profits assumed safe can disappear in a matter of months. As a German I am most concerned about the German car industry... brace yourself for some interesting times.

Kleist | July 24, 2014

"I rather see EVs and ICEs as polaroid and analog film..." - then you fail to see.

Instead of paying weekly rent at the gas station for the ICE instead I pay virtually nothing for electricity. Yes, it is analog vs digital - sorry.

Kleist | July 24, 2014

What I like about an EV...
- the lack of engine noise
- refuel at home
- can do all my tasks without restriction (Tesla)

The first two points I will never give up again. Charging at home is downloading your picture vs bring it to a lab for processing. That convenience is mine forever.

Realo.de | July 24, 2014

@Kleist

Kodak is a good - and bad - example. The problem with Kodak was that they simply did not see (or even wanted to see) the changing times. Canon, Nikon, Olympus, Konica, Pentax,… they are all still in the market (as brands), but now, produce digital cameras.

But, agreed, I never expected that such a market leader would completely disappear from the market. Porsche already offers a kind of "Hybrid-Panamera" (without going into technical details) and I place a bet that Porsche will still exist in ten years…

Instead of paying weekly rent at the gas station for the ICE instead I pay virtually nothing for electricity

Sorry, but that's not true: it's upfront vs continuous payment (the only "free recharge" is at SCs for Model S). That's kind of discussion like Diesel/Otto; a question of preference where is neither a clear answer nor any agreement. As already posted: assume 10.500k€ upfront payment and 1,5€/l, 7l/100km, and electricity for free (generous, again :-)): then you are break-even at 100.000km, fine.

Tiebreaker | July 24, 2014

@German_Tesla_Fan

The established ICE manufacturers who don't adapt, suffer from the Kodak syndrome. Can't see the changing times. Evolution is a bitch.

vperl | July 24, 2014

If one thinks vehicles powered by petro is going, not now. Guess no one remembers that it took 20-30 years after the first "new" teck caught on....
I worry not about petty discussions. Unless your 13 "forget about it!"

SamO | July 24, 2014

@gtf

You seem to get it wrong repeatedly.

There is no "upfront cost" for tesla fuel. In fact Tesla has no premium cost to its "competitors" therefore there is no "payback".

Unless you are comparing a much cheaper car. But you wouldn't make that logical fallacy?

Kleist | July 24, 2014

@German_Tesla_Fan

Kodak is actually a very good example because (a) they were very forward looking and (b) mainly the declining film processing business drowned them. The examples you mentioned did not have that burden.

With gasoline cars you pay for advertising - about $600 per $30k car. Superchargers are Teslas form of advertising - little billboards around the World - and it is entirely paid out of the advertising budget. $2K advertising for a $100k car is in line with the industry. If you buy a Toyota, MB, VW,... you pay the same and can enjoy radio, TV and magazine advertisement, with Tesla advertising you get to plug-in at a nice place.

The advertising war the traditional car makers entangled themselves in are part of the huge legacy cost. Toyota can not just stop advertising or Honda will take serious market share. And the customer pays for it up front.

Bubba2000 | July 24, 2014

Usually when there is a tech shift, the old companies get swept away. With cellphones, Motorola was the leader in 1G analog tech. Then 2G got dominated by Nokia, Moto got swept away. Then came the 3G and QCOM driven tech that propelled Apple and Samsung to leadership. Nokia got wiped out. Same with computers : IBM, Univac, DEC, Sun Micro, MSFT/Intel. etc.

However, with BEVs we need disruptive innovation in battery tech. $/KW-hr needs to drop by 50% and KW-hr/hr needs to double. Tesla' innovations help, but I am not sure we are there. Should Tesla lead the battery innovation, market cap with exceed GM, F combined. Look at what Netflix did to Blockbuster.

centralvalley | July 24, 2014

Red Sage may be onto something when he stated,

"Some automakers will respond by going all hybrid, across their entire product range. Others will grudgingly increase the electric range of their hybrids by adding more batteries."

A couple of reasons: Big corporations will not be eager to go "all in" with pure BEVs. This do-or-die business model will not be in the best interests of shareholders, particularly the gazillion mutual funds and pension plans that rely on the dividends and capital appreciation of the securities.

Second, there are tens of thousands of miles of highways and roads (especially in the West) where charging stations may never be ubiquitous, yet the highways provide vital access for residents, tourists and emergency responders. Cities are 80-150 miles apart with nothing in between. A plug-in hybrid (100 miles on battery; 150 miles on gasoline) would serve these outlying areas easily, affording owners a viable reason for their use.

(As a parenthesis, upon traveling east on US6 there is a sign that reads "next services 163 miles" as you leave Tonopah NV towards Ely. And there are several summits to surmount on this stretch.)

Haeze | July 24, 2014

If any of the major manufacturers announced they were going head-first into BEV technology, I would wait for their stock to drop like a stone, and buy the crap out of it, because they are the company that will survive the impending "Judgement Day" for vehicle manufacturers.

Iowa92x | July 24, 2014

I watched a GM commercial recently that talked about how their LED light in the bed of their pick-up truck is 'innovative." I did a face palm and yes, that proves their obsolescence. iCE companies are a joke.

elephant in a bottle | July 24, 2014

Iphone and Androids did not take 10yrs ..
ICE manufacturers are still in denial right now.
Usually the last person to know he has body odor is himself.

Dramsey | July 24, 2014

Don't bet on BEV to necessarily win just because you think it's the best possible personal vehicle technology.

Even if it is, the best tech doesn't necessarily win. Anyone here old enough to remember how VHS beat out Betamax in the VCR wars?

Will the Mod 3 change things? Maybe. That $35K price is a goal, not a promise. Also, remember the several rounds of price increases the Model S went through last year. A Mod 3 at $50K will still be a game changer if all the other specs are on, but it won't kill ICEs unless oil's at $150/barrel.

Tiebreaker | July 24, 2014

@Dramsey - Betamax VS VHS was a matter of standards, and the numbers of VHS makers. However, all irrelevant once the DVD showed up, because it made the VCR obsolete.

Bubba2000 | July 24, 2014

Dramsey,
BEV tech has a long way to go before it takes out ICE. Energy density needs to double cost drop big with probably a new chemistry.

Kleist | July 24, 2014

@Bubba2000 - competitive days of ICEs are numbered.... what is needed? Two items..
(a) pack specific energy from MS 160 Wh/kg to 210 Wh/kg
(b) retail cost from MS $320 per kWh to retail $150 per kWh

Both you can expect to be achieved with Gen3... after that it is just designing new cars. Further improvements just worsens the competitive position of ICEs.

More complex ICE technology doesn't make an ICEs more cheap to build... Panamera hybrid price was just announced yesterday - starting at $76k - Model X looks good price wise.

It will only change gradually in the beginning, but around 2020 it will flip... and then it is up who can build battery factories fastest.

Don't get me wrong... there will be ICEs for special situations for a long time, but at what numbers and at what price.

steviez2005 | July 25, 2014

Something missing from this debate is the fact that oil companies are in bed with auto manufacturers. When the M3 comes out, oil companies will spike their prices to protect against losses and then drop them to get everyone crawling back to gas as the most economical choice. It's the old retail scam, jack a "regular" price up so 50% off looks like a good deal. Consumers see numbers but can't do math. And far to many make decisions with their wallets in mind over social and environmental impacts. ICE manufacturers and oil companies have been in the game a long time, they're too far in the heads of consumers.

In my opinion, the only way to get the transition to stick is to fix the job situation in the US. Hook 'em in college and pay them well when they get out, the Millenials are less than a decade away from having the bulk of the buying power.

Realo.de | July 25, 2014

@Kleist

Kodak is actually a very good example because (a) they were very forward looking and (b) mainly the declining film processing business drowned them. The examples you mentioned did not have that burden.

Fully agreed. I have seen Kodak as both, a camera and a film company. So, Fuji may be a better example. The other examples just show that camera manufacturers were able to develop new technology and still survived at the market.

With gasoline cars you pay for advertising…

A very interesting argument, indeed. I have not seen that many Tesla-ads, it seems to be more "word of mouth recommendation". But, in general, eCars are "perceived" as more expensive (a Citroen C1 costs 10k€, a C-Zero 30k€). To me, these cars are comparable and the C-Zero has upfront cost of 20k. But that's interpretation…
Let me just say it in other words: I have heard a lot of pro arguments for EVs (green car, lower driving cost, less risk of expensive repair) - I never heard the argument: its cheaper than an ICE.

Realo.de | July 25, 2014

@Bubba2000
exactly, I fully agree. If EVs can provide a "disruptive innovation", then ICEs will disappear. Innovation could be performance, range, price, noise, green (all points are already on the table here). But currently, there still are too many disadvantages of EV, no disruptive innovation yet.

one word on politics/government: in my opinion, we have to distinguish two perspectives here: the car owns rather don't care about noise and green factors, they want to drive cheap and also in cities. The residents don't not care about the cars' prices, but on noise and green factors. Government could easily block cities for ICEs or increase taxes for ICEs substantially. This would give EVs an innovation advantages but now we come to politics…

Realo.de | July 25, 2014

@Dramsey, Tiebreaker

both you are right, and it shows the dilemma: the VHS-example shows: the better technology does not always win and "de facto standard committees" are industry consortia. Ogg/Vorbis is by far better than mp3 and is "de jure standardized", but it is not a "de facto standard" - guess why.
DVD - true, new technology. But, to repeat my argument above - Sony is still in the market…

Realo.de | July 25, 2014

@Kleist
sorry, I usually agree with you, but would you really compare a Panamera hybrid with an MS (I suppose you mentioned MS and not MX).
Look at alle the performance figures and the luxurious interior - no, sorry, but that's not the same segment…

pvandeloo.ipod | July 25, 2014

@Kleist
"It will only change gradually in the beginning, but around 2020 it will flip... and then it is up who can build battery factories fastest."

Let me get this straight: You believe that by 2020 the technology of a BEV will be superior to the internal combustion engine.

How will that happen?

Range needs to improve by a factor of 3.
Charging networks are no in place; most cars are parked curbside.
Cost needs to come down by a factor of two if you ignore battery degradation. If you include battery degradation it will have to come down by a factor of 3.

Your uber bullish stance is not warranted.

If BEV technology can reach the milestones; I expect very slow improvements of 3-5% per year on average.

I would guess that by 2035 more than 90 percent of vehicles will still be internal combustion engine vehicles.

Dramsey | July 25, 2014

Steviez2005: When the M3 comes out, oil companies will spike their prices to protect against losses and then drop them to get everyone crawling back to gas as the most economical choice.

I can always count of the membership of this form for the most amazing conspiracy theories!

Kleist | July 25, 2014

@German_Tesla_Fan - yes, I meant Cayenne...

Kleist | July 25, 2014

@pvandeloo - by 2017/18 BEV technology will be equivalent to ICE technology. By 2020 it will become clear even to the blind.

Range - only 30% needed... 265 EPA to 350 EPA = 96% of all needs met.
Retail battery cost - from $320 per kWh to $150 per kWh.
Battery degradation = FUD ( 500k miles not enough? Car will have no paint left and seats are gone. I estimate my battery to be at 70% in the year 2076 )

I am not bearish or bullish... I just see what is happening as an engineer.

What percentage of cars will be ICE by what date is dependent on how fast the World can build the required factories.

Nanana26 | July 25, 2014

The realiy is that an ICE company having EV cars is a very low risk investment.

A car company that relies solely on EV is a very high risk investment, because if for some reason lithium prices rise sharply, or hydrogen cars take off, EV car manufacturers are extremely vulnerable.

ICE car manufacturers can bet on multiple horses, pure EV car manufacturers don't.

If EV cars take off and nothing goes wrong, Tesla will do very well, if anything goes wrong, they will go be the most vulnerable and ICE car manufacturers will be able to take the hit.

pvandeloo.ipod | July 25, 2014

"What percentage of cars will be ICE by what date is dependent on how fast the World can build the required factories."

The factories will be built if demand warrants it.

"Range - only 30% needed... 265 EPA to 350 EPA = 96% of all needs met."

I disagree. 265 EPA rated miles; 200 real world miles. Due to very long charging times (every 100 miles 20-30 min wait time) the range needs to be higher than for gasoline vehicles. It needs to cover 99% of long ranged trips (hollidays etc). So 400 miles is needed (rest after 3.5 hours, recharge another 170 miles); Total trip would be 570 miles (many families drive for hours to get to their holiday destination and switch drivers.

Also if you do not have widespread infrastructure for curbside parked cars, you need very long ranges due to long charging times. So either you need a massive infrastructure built up in cities or longer ranges (800 mile plus).

The facts:

-range will be a problem for model 3 as the battery will be reduced in size to save costs

-model s is a factor of 2 more expensive than comparable gasoline vehicles and a factor of 3 if you include battery degradation (at 70% capacity the car is reduced to a inner city car due to limited range)

-infrastructure is lacking in cities (most cars are parked curbside)

My timeline would be:

2020: electric vehicles are a niche market (size and technology wise)

2035: electric vehicle production is still below 10% of worldwide production

second half of 21st century, probably after 2070: 50% of cars on the road are fully electric (this of course assumes that battery technology is up to the task at least theoretically)

2114: full electric fleet.

Nanana26 | July 25, 2014

The oil-ICE conspiracy theory is ridiculous. VW has had EV bus years ago, Honda had an EV car in the 90s. ICE car manufacturers aren't in bed with oil companies and never have been. It's like arguing Tesla is in bed with Enronn.

The reason car manufacturers have been reluctant to introduce EV is because of the cost of a battery. Nissan just said that a replacement battery is sold at a loss. We're still nowhere near the cost with EV as ICE cars, and without subsidies EV cars would be even more expensive.

Established car manufacturers just aren't willing to take the same risks Tesla takes, let's not forget that prior to Tesla, many EV manufacturers went bankrupt.

It is not some "conspiracy", it's simply risk management.

Grinnin'.VA | July 25, 2014

@Kleist | JULY 25, 2014:

"What percentage of cars will be ICE by what date is dependent on how fast the World can build the required factories."

Keep in mind that BEV factories don't have to be built.
As the mix of cars manufactured shifts from ICE to BEV, I'd expect a lot of factories that once made ICE cars to be converted to making BEVs. Just like the current Tesla factory. Consequently, I don't think building new factories to make BEVs to be a limiting factor at all.

Ron :)

Tiebreaker | July 25, 2014

Oil price manipulation is not a conspiracy, it is a business method, albeit unethical, and frequently illegal:
http://www.forbes.com/sites/timworstall/2013/05/15/the-investigation-int...

OPEC routinely cuts production, when the oil prices get too low.
http://www.ibtimes.com/opec-needs-cut-production-prevent-falling-oil-pri...

And increases production, when the oil consumption decreases due to high prices, or alternative fuels. Not to mention the embargoes etc...

7thGate | July 25, 2014

Range on EVs doesn't have to increase by a factor of 3. The model S range is already sufficient for the vast majority of people unless you drive on the autobahn, where the high speeds will drain your range too quickly. There just are not that many people that actually drive over 200 miles on a regular enough basis for it to be an issue, and taking an extra 3 hours for a once a year trip is just not that big a deal.

Although a substantial number of cars are parked curbside, a high percentage are not. Most people who have to park on the street are not going to buy an electric car (although some will probably put up with the hassle for other perceived benefits), but again, that leaves many people for whom these are not concerns. As EVs start to gain significant market penetration, people will start to offer charging at apartment complexes and at shopping locations because it isn't very expensive to do and attracts tenants/clients (the same reason why apartments offer parking in the first place, or why malls have drinking fountains).

I think the changeover will occur relatively quickly once an EV with 200+ mile real world range and supercharging type capabilities is introduced at a competitive TCO to existing ICE cars, but that it will be impaired by battery construction constraints and the long lifetime of automobiles. Assuming the specs Elon has been talking about come to pass and we get a $35,000 gen III, that will be pretty close. I know I'll be considering getting one as a replacement for my honda fit (probably in competition with another fit, that car has been great).

My prediction is that we'll see about 1% of worldwide production as electric in 2020, growing by about 30-50%/year until you hit around 50% in the early 2030's, with ICE becoming niche some time in the 2040's to 2050's. I expect that my grandchildren will probably regard ICE cars the same way I regard record players (I'm 29, no kids yet); I know what they are, I saw some when I was little, and I know there are enthusiasts who still have them and use them, but I don't actually know anyone who does and haven't seen one in years.

Brian H | July 26, 2014

One genius difference between spending on advertising and spending on SCs is the latter have customer utility for the duration of car ownership, and advertising has none at all. There are more, like perpetual public visibility, etc.

Näky | July 26, 2014

GTF wrote:
"Let me just say it in other words: I have heard a lot of pro arguments for EVs (green car, lower driving cost, less risk of expensive repair) - I never heard the argument: its cheaper than an ICE."

Here in Finland car tax is by CO2 emissions, its between 5% and 40%, then ad VAT 24% to that. With EVs (zero CO2 emissions)car tax is 5%. Both taxes are paid from base price and options, so same option cost more for car with bigger CO2 emissions. As told our legal speed limits are 120 km/h (capped max). That makes especially MX more affordable than MB GL, Audi Q7 or Cayene (is that even available as 7 seated?) with similar performance (as in acceleration etc.). Acceleration around legal speeds is metric that that sells ICE with bigger engines, and also MS85 vs. 85P.

Cheap is maybe wrong word for cars around 100k.

GTF also wrote:
"sorry, I usually agree with you, but would you really compare a Panamera hybrid with an MS (I suppose you mentioned MS and not MX).
Look at alle the performance figures and the luxurious interior - no, sorry, but that's not the same segment…"

Yes, here Panamera S e-hybrid is more expensive than MS, and with comparative base price Panamera S have more than 42k€ more tax than hybrid version (Panamera turbos car tax from base price is more than 100k€). MS accelerates faster and hauls more cargo though. Family cars are not intended for race track IMHO.

Red Sage ca us | July 26, 2014

steviez2005 wrote, "When the M3 comes out, oil companies will spike their prices to protect against losses and then drop them to get everyone crawling back to gas as the most economical choice. It's the old retail scam, jack a 'regular' price up so 50% off looks like a good deal. Consumers see numbers but can't do math."

It will actually be worse than that... They will change the pumps in the United States of America to display liters instead of gallons. People will be so happy to see signs that say fuel is only ~$1.50 again that they won't notice they are paying the equivalent of, "Six bucks a gallon! Please pay before you pump!"

Americans are desperately afraid of mathematics. They'll still think in terms of 'gallons' no matter how often they are told the unit of measurement is 'liters'. They'll keep running out of gas for a while. Then some moron on the radio or FAUX News will start blaming the shorter range that they get when putting in 'five bucks worth of gas' on, "This new, 'green gas' that the hippie tree huggers have forced on us all!" Somewhere in there they'll blame the French for the Metric System.

Me? I'll be driving a Tesla. Laughing at them all.

German_Tesla_Fan wrote, "I never heard the argument: its cheaper than an ICE."

But you DO know that is coming. Right? In direct comparisons with similarly priced vehicles, with similar performance numbers, the Tesla Model S is less expensive over time. The same will happen with the Model X and again with the Model ☰. That is today, next year, and within three years.

In three years an electric vehicle will cost the exact same as a hybrid electric car. Ten years from now the initial cost of an electric vehicle will be lower than the cost of an ICE, and most of them will be hybrids. Ten years after that, with decreasing sales, every ICE will have a higher price, and every affordable one will be a hybrid. Ten years after that, no pure ICE vehicles will exist at all and the hybrids will be outsold by pure electrics. Hydrogen Fuel Cell Electric Vehicles will finally be perfected -- but no one will care.

[ASIDE]
FYI... The reason that Beta lost to VHS was because SONY refused to license the technology for use by pornography producers. The backers of VHS didn't care. Video rental companies mades something like 90% of their profits from the wares on those shelves in the corner that were behind a curtain. The pornography industry has driven more improvements and adoption of new media than any other. Videotape, videogames, DVDs, BluRay, video streaming, digital photography, digital videography... Advances in market acceptance for each of these was driven by pornography.
[/ASIDE]

Strawberrylove summarized, "It is not some 'conspiracy', it's simply risk management."

Who Killed the Electric Car?

The electric cars you mentioned were destroyed. They were compliance vehicles only. As soon as they didn't have to do it anymore, auto manufacturers washed their hands of them, and built more gas guzzlers. The way that traditional auto makers are reluctant to take electric vehicles seriously for mass production may not be a conspiracy, but it is certainly an agenda, a strategy, or a philosophy, at work. It just 'happens' to benefit oil companies. What a coincidence.

Tiebreaker | July 26, 2014

@Red Sage - The Betamax losing to VHS because of prn is a myth:
http://knowledgenuts.com/2014/03/05/betamax-didnt-lose-to-vhs-because-of...

I am old enough (cough-cough) to remember. Matsushita, Phillips and others were OK with poorer quality and longer recording times, and banded up against Sony, flooding the market with VHS. Consumers also liked the lower price.

However, as the DVD came around, Sony adapted, become a leader and won the recent Blueray/HD-DVD war.

This is relevant here - cars, EVs, ICEs - because of a customer input that resolved the DVD standard issue and :
Before the DVD standard was finalized, another format war was going on, along the familiar recording length VS quality lines. Then IBM stepped in: they needed DVDs for data storage. They called a conference, got all the warring parties on the table, show them the money and demanded an unified standard format. In a few months a compromise was reached, the DVD standard solidified, and DVD went to become the fastest growing recording format ever.

Giving the customers what they want is the key to success, although they sometimes don't know they want it until they are told so. Is it a car with a foot massager, or with electric propulsion?

just an allusion | July 26, 2014

Personally I don't see any need for the conventional automobile manufacturers to be "replaced", per se, they just need to rework their operating paradigm to conform with the emerging/prevailing consumer interests/mindset to insure that they'll be able to provide a product that their core clientele, i.e., the entire commuter market, wants...It's simply business acumen.

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