The rapidly changing EV landscape. What does Gen III have to do?

The rapidly changing EV landscape. What does Gen III have to do?

The Fusion Energi last month moved into #2 in EV sales next to the Leaf. In my mind it is the first mass sales EV. No limited range and no need for SC's it's mid sized sedan normal looking give it broad appeal. Basically anyone who likes a Fusion has an EV option. I expect the Fusion Energi to move into #1 ranking and stay there until?
The Fusion is the first mass market EV that anyone can buy with limited understanding or worry about range or looking like a EV.

Audi has announced by 2020 plug in EV option on all models.

When the Gen III is released what is Tesla going to have to do to woo the Auto world? Things are already vastly different than when the game changing MS was released.

The $40k EV is already here of course Tesla will be pure EV but how much will that matter to the masses?

What can Tesla do to make pure EV's more attractive than say Audi's option of Plug in to every model?

Does anyone else see the landscape getting much tougher?

What will the Gen III have to be to stand out? And can it ever stand out like the MS did when it was released as the MS was just so far ahead of all others...

Bighorn | 2014年7月6日

With education, most people will recognize the drawbacks of any unnecessarily complex hybrid. I wouldn't worry about Tesla or any BEV that accomplishes the set-out goals for Gen III, especially with the plethora of free superchargers.

golftoday | 2014年7月6日

+1 Bighorn. As long as the Gen III lives up to the promise when it says it will, Tesla will be fine, and probably leading the pack.

Iowa92x | 2014年7月6日

I think Volley has a valid point. Many buyers treat cars like an appliance, often giving more importance to color and sunroof options than full EV vs. ICE. A plugin hybrid that offers 20+ miles on battery and 350+ on gasoline may be "good enough" for the appliance drivers.

Gen 3's main competion will be plug-in hybrids and not full EVs.

tes-s | 2014年7月6日

4 of my friends bought the Fusion Energi!! They can afford the MS, but liked the Fusion better. Elon got it right - people will buy the car they like.

It was not just the range - adaptive cruise and lane departure are two features they rave about. But what they really like is the ride of an electric car. That is what blew them away.

5 years from now I can see each of them in an all-electric. Once the features (collision avoidance, lane departure, adaptive cruise - and maybe cup holders!), fueling time/range of BEVs, and price catch up with the hybrids, I think people will move to BEVs.

Right now, and for the next several years, I think the hybrids will be driving more electric miles from the grid than the BEVs.

AmpedRealtor | 2014年7月6日

The Ford Fusion Energi is not an EV. It's nothing of the sort. The Ford Fusion Energi is a plug-in hybrid that uses an Atkinson Cycle engine just like the Toyota Prius. There is nothing EV about this car unless you are talking about its anemic 19 mile EV range. That's less than 10% of the range available in the S60. After depleting this awesome, amazing 19 mile range, you get a 38 MPG gasoline ride. Wow!

Just because you can plug it in doesn't make it an EV, I'm afraid. I wish we would stop conflating hybrids with EVs. Ranking the Energi as an EV against the Leaf is ridiculous - they are two completely different technologies. What we need is more education of the masses, especially the media who thinks just because you can plug something in makes it an EV. I can plug in my toaster...

Bighorn | 2014年7月6日

AR +1

I had to go and read up on the Fusion since it wasn't on my radar. Good looking car, but I agree that as an EV, that dog don't hunt.

Out4aDuck | 2014年7月6日

What does GenIII have to do? Simply put, it has to deliver gross profit in excess of operating expenses. Something that the Model S has been unable to achieve so far.

rdalcanto | 2014年7月6日

Out4aDuck - Do some research. The Model S has a health 25% profit margin. Money that Tesla uses to build Superchargers, Stores, and Service Centers all over the world, in addition to designing the Model X. The have positive cash flow. Reports of a loss based on GAAP accounting only count about $35,000 dollars of the $100,000 Tesla received on "Leased" vehicles. If you had to pretend 2/3s of your income didn't exist, when in reality it does, your accounting wouldn't look so good either.

rdalcanto | 2014年7月6日

To the OP -
There are very few EVs currently available, and none have more than a 100 mile range (other than the Model S), great performance, or an attractive package. All Tesla has to do is build the Gen 3 with a 200 miles range, great acceleration, and a nice body. If it does, Tesla will continue to be the only game in town.

SamO | 2014年7月6日

Having driven the (NON EV) Hybrid Ford Fusion . . . it is awful.

Very slow acceleration. Cramped interior. Less storage in the trunk than the MS frunk.

Tried the self-parking and almost wrecked the car.

The idea of classifying this as an EV is ridiculous.

As a competitor of anything currently made by Tesla is a joke.

19 miles of terribly bland, cramped and boring electric driving will not entice anyone who drives a GENIII IF it is similar to a Model S.

carlk | 2014年7月6日

200 mile range, No?

Out4aDuck | 2014年7月6日

Maybe there's a better source for research, but mine comes from the quarterly statements. The line item in question is "Loss from Operations". This represents the Gross Profit minus Operating Expenses. The best quarter ever reported was 1Q13 when it was a $5M loss. Last quarter, it was a $44M loss. My point is that for the survival of the company, the GenIII must do substantially better than the Model S.

carlk | 2014年7月6日

Out4aDuck Gross margin of 25%+ is more than any auto companies could ask for. Tesla does make a lot of profit from producing and selling cars. It's just that they have spent all the profits for future growth in terms of SC built, new model and new technology development.

rdalcanto | 2014年7月6日

Wrong. The $44M was not really a $44M loss. Read what I wrote above, or the report which explains why GAAP accounting is not accurate when assessing Tesla financials. GAAP accounting only lets them count 1/3 of the cash received from leased vehicles. The other 2/3s, WHICH IS MONEY THEY HAVE IN THE BANK, IN HAND, AS POSITIVE CASH FLOW, isn't counted. Therefore it is not accurate. Do you know of any other leased vehicle where the owner pays 100% of the cost, upfront, in cash?

rdalcanto | 2014年7月6日

To add what I just wrote, look at their non-GAAP numbers, which are more accurate because of the leasing error in GAAP accounting, and you will see they are profitable, with POSITIVE cash flow.

Bighorn | 2014年7月6日

Clearly TSLA is a loser, hence the lack of investors--red ink as far as the eye can see.

Get real.

Iowa92x | 2014年7月6日

Amped and others, like it or not, many in the car buying public don't care much if a car is hybrid, plug-in or full EV. They spend $32,000 on average, want decent fuel economy and something that looks nice. That is why the Ford sells well.

Duck is correct, Tesla is spending more than it takes in. Nort sustainable, the Model X needs to correct that, stat!

rdalcanto | 2014年7月6日

Duck and lowa - last Quarter, they had a net income of $17M, or $0.12 per share (non-GAAP). The only people looking at GAAP (BECAUSE OF THE INCORRECT LEASE ACCOUNTING AS THEY APPLY TO TESLA), are trolls, TSLA shorts, or fools. Which are you?

cantcurecancer | 2014年7月6日

It needs to be designed well and look gorgeous. Ford hit a home run with the Fusion. It's a $20,000 car that looks like an Aston Martin. I see the Fusion literally everywhere. Beyond the basics, that's the only thing that matters to many people. As long as GenIII is beautiful like the Model S and it checks all the boxes, it will do well.

AlMc | 2014年7月6日

My father bought the Fusion energy about 6 months ago. He keeps asking me when the reservations open up for the gen III.

Volleyguy | 2014年7月6日

Much info in here.
The Fusion Energi not an EV? It is not but we have driven over 70% of miles in electric... So even with the small battery you still drive a lot in electric virtually not using gas... So not sure what that makes it not just a regular hybrid...

I meant on the original post will Tesla have some break through battery tech on the Gen III? Or just the MS battery in a smaller lighter package?

I like what the other poster said here once about Tesla being a battery company... The MS is a great car but what it really excells at is battery and speed of charge.

Don't get me wrong I really like the MS and wanted one but the SC issue in Canada stopped it. I am just saying I can not believe how many like the Fusion "because" it has a gas engine and no range anxiety... I love the idea of no engine and all it's parts but I am not so sure the public does? If the Fusion battery does degrade it is not a major big deal.

Like Tes-s said he knew of 4 people who bought the Fusion Energi who could have bought the MS.

Yes the Energi is really a loaded $20k Fusion that costs $40k but the MS even according to Elon is a $50k car with free charging...

Volleyguy | 2014年7月6日


We will be just like your father. My dad wants electric as well...I am not anti Tesla in any sense still want one the original thread only meant the landscape is getting better.

carlk | 2014年7月6日

Add to what rdalcanto said GAAP numbers also treat stock options issued as company expense. That skewed the bottom line and mis represented company's financial health since there is no actual money spent. That's why financial institutions only look at the non-GAAP number while shorts always want to mention the GAAP number.

Gen3Joe | 2014年7月6日

Tesla is not netting profit because of the massive amount of money they are spending on expanding distribution and R&D for future models. The money they are spending here as a percent of their revenue as they start selling these new models will drop in the future and they will become profitable. It is expensive to grow fast and introduce radically new game changing technology at the same time.

Cut TM some slack. We shouldn't expect them to operate like the cash cow milkers that are Toyota, GM, Ford etc.

rdalcanto | 2014年7月6日

I agree the fusion looks good. But, I test drove the fusion hybrid and the Volt before I discovered Tesla. 10 seconds into the Fusion and I knew I would never buy one. The handling is absolutely awful. I drives like I imagine a 10 year old Crown Victoria with worn out shocks driving. Mushy feeling, lots of body roll. Just awful for anyone like me who likes a tight, European sports sedan feel to their cars. But, like everyone said, a car with a gas engine and less than 30 miles of electric range is not an EV, it's a hybrid with gas station anxiety. With my Jeep, the few times I need it for towing, I'm always looking at the gas gauge, stressed out, wondering when it will get low enough that I have to find time to go fill the tank (which will probably be on the day I'm in a hurry). I NEVER have anxiety with my Tesla, because it is full every morning, with 5 times the range I need on any given day.

tes-s | 2014年7月6日

The Fusion Energi as an electric car drives just like my MS. Just slower and not as far.

EV button
This mode provides an all-electric driving experience using plug-in power. The left-side information display will change to an Energy Use screen that supplies EV-specific tools and functions. The vehicle may accelerate more slowly and the top speed may be lower than in Auto mode. The vehicle may automatically enter Engine Enabled mode if system conditions require it. A message Engine Enabled for System Performance will display if this occurs. This is normal function, and your vehicle will return to EV Now when possible.

My friends all paid less than half for their Fusion that I paid for my MS. They all love it. 3 have commutes where they drive all electric, except in the winter when the engine provides heat to the cabin. The 4th is mostly electric commute and plugs in at work. It is also more "familiar" to them - they don't "have" to plug it in, and it has features they wanted that are not available on the MS.

MS is not for everyone, and neither is the Fusion. No surprise the MS is the car for most people on this forum, including me.

I think Fusion owners will be very likely to buy a pure EV as their next car - of all the features, the think they like the best is electric drive. 5 years from now they will be able to replace their Fusion with an EV that:
- has less price disadvantage
- more features (collision avoidance, etc)
- better charging - faster, more prolific (fast trip chargers and regular destination chargers)

I believe hybrids are a 30-50 year bridge to pure EVs. We are about 15 years into it with the Honda Insight/Toyota Prius. Over time the advantages of hybrid over pure EV will give way to the disadvantages.

Out4aDuck | 2014年7月6日

The deferred profit due to lease accounting accounted for $21M last quarter. I have no heartburn about including this when evaluating overall profitability. But I still contend that for a high volume product like the GenIII, GAAP profit will be a must.

Al1 | 2014年7月6日

"I believe hybrids are a 30-50 year bridge to pure EVs".

Within that time frame price of oil will for sure go up. Current fracking boom can only buy 5 - 10 years window at best. Actually even if there is no shortage of oil, prices will keep creeping up or new investment into fracking will end. Already many of current investments might never break even. Everybody will want price of oil to go up, except for little guys stuck with their ICE cars.

However nobody will wait 30-50 years until ICE car makers learn to make real electric cars.

Volleyguy | 2014年7月6日

Of the 10 people say that have talked to me about the Fusion 9 like it because it has a gas engine and one liked it but would not buy it because it had a gas engine. I am still shocked at how many people have not even heard of Tesla. In fact Ford has not even advertised the Energi that I am aware of?

I was shocked by how many liked the gas/electric as I am more on the simple one drive train mindset but we have no SC's. Off this forum though there seems to be a reason 100 years ago people went gas over electric when the two battled it out and many people still want the comfort of gas.

This thread was does with anyone expect a game charger technology from Tesla on the Gen III? The MS was leaps and bounds beyond anything else and still is but there are lesser good enough options (for many) that were not there before.

Sales numbers for the Fusion Energi a year ago 400, today 1900 a month. Is the Fusion already becoming the Gen III mass market EV/hybrid? What will Tesla do to better it?

No hard feelings here I want a Gen III so this is not an anti Tesla guy. The landscape is just changing so fast.

lolachampcar | 2014年7月6日

This will all sort itself out when G3 ships. It will be a shrunk down version of the Panamera Hybrid v. MS battle with similar results.

Do remember that, even if Tesla can build the batteries to build their 1/2M G3 per year they would like, there will be no where near enough of them to compete with the Hybrids (of which, as the OP points out, there will be a lot more of in three years). Elon is right. We need other manufacturers to hop on the band wagon if we are going to get rid of ICE (including the ICE side of hybrid) anytime soon.

As for the poster that wants to take on Tesla's financial performance, I just can not go there with a straight face so you win :)

proven | 2014年7月6日

I think the key to success for Gen III or any other BEV is simple--range and fast charging.

When I show our MS or talk about it with people, the one question that stands out is what do you do for a long trip. Even though the vast majority of people's driving is short distances, the worry about range is the main problem.

Sure, right now we can drive pretty much anywhere in our MS's, but not without careful planning and long stops. Not to mention making sure you have a way to charge at your final destination. If you charge at your average level-2 chargers it's quite a long stop. If you charge at a supercharger it's a shorter stop, but compared to gas it's still a long stop.

And gas is is what the average person is going to compare it to. When I used to drive from FL to NC alone, I could do the 700 mile trip driving 80 MPH with making one 15 minute stop to get gas, go to the bathroom and pick up fast food. According to EV Trip Planner I would stop to charge up to five times in my MS and the trip would take several extra hours. And there are still some places where taking the MS is tricky because of a lack of superchargers or good public charge points.

For me, the MS is still worth it. But for the average person out there, that still sucks compared to gas. So I think once an electric car can go 350 miles and charge in less than 20 minutes, the majority will switch.

Al1 | 2014年7月6日


Ford Fusion has sold so far 165,498 in 2014. 27,604 just in June.
Whatever hybrid car sales dynamic you've got there is just drop in the bucket.

I will believe Fusion Hybrid is a game changer when stats are actually the other way around 25,000 hybrids versus 2,000 ICE cars. Until then I think the only reason people are buying hybrid Fusion because there is no Tesla at a comparable price point. And they think they've found a proxy for Tesla.

tes-s | 2014年7月6日

I think the key to success for Gen III or any other BEV is simple--range and fast charging.

I think it is simpler - the key for the success is the same as the key to success of any other car: produce a car people want, meets their needs, and can afford (for emotional buyers), produce a car people believe is a good value, meets their needs, and can afford (logical buyers).

proven | 2014年7月6日

@tes-s: I think that's actually more complicated. Range and fast charging is really just a perceived need. I didn't mention anything about value or affordability!

tes-s | 2014年7月6日

Yep, guess I should have said it is more complicated than range and fast charging, otherwise nobody would buy the GenIII. They would all buy the MS or MX.

dlake | 2014年7月6日

+1 proven.
As range increases due to larger battery, charging time will decrease.

I completely agree that people will compare a Gen III with their lifestyle with an ICE. People will only change from ICE to BEV if it fits their lifestyles.

In an ICE, you can go where ever you want, whenever you want without planning. Most people don't plan and time is more valuable than the cost of fuel.

We also need Blinks and Chargepoints to become superchargers so they become almost as ubiquitous as gas stations. I hope opening TMs patents will facilitate.

Volleyguy | 2014年7月6日

Interesting numbers on Fusions I am really surprised that the Energi is getting close to 10% of Fusions sold in the U.S. last month. In Canada way less is my guess.

That is a pretty main stream car with a stiff cost penalty (almost double the money of base Fusion) to even hit 10% EV share when there is the still good on gas hybrid. I take this as almost 10% of people paid a premium for the exact same car to drive on electric sometimes and the number is growing fast! 5x as many as a year ago.

I take this a VERY bullish for EV's! (in general) And very bullish for Tesla.

The Fusion right now stands as an excellent marker on people's desire for electric driving and it is higher than I thought! (the only car sold in 3 formats isn't it?)

With the MS there is many reasons to buy not just electric, Looks, speed, exotic, new or tech. With the Fusion Energi you get the same car just for a lot more money... (and people are doing it!)

mrspaghetti | 2014年7月6日

+1 @AmpedRealtor

In a discussion about electric vehicles this car is a non sequitur.

Red Sage ca us | 2014年7月6日

Volleyguy asked, "What will the Gen III have to be to stand out?"

A whole lot more than only 20 miles of pure electric range.

Volleyguy | 2014年7月7日

Red Sage
A different kind of battery? (some kind of battery break through) Or just a scaled version of the MS battery?

lolachampcar | 2014年7月7日

Elon has already spelled out the battery picture.

7-9% increase per year in capacity is the norm. I suspect they need less average over the four to five years between MS and G3.

Significant reduction in cost resulting from their own facility and economies of scale. I'm not certain they were thinking their own facility in the beginning which is why they are now so bullish on their cost projections.

Both of these items are coming to tuition and, as Elon has said, there is no magic needed to reach Tesla's G3 target; only time and hard work.

lolachampcar | 2014年7月7日

arg, autocorrect | 2014年7月7日

cantcurecancer said "... It needs to be designed well and look gorgeous. Ford hit a home run with the Fusion. It's a $20,000 car that looks like an Aston Martin..."

Wow, you need glasses.

The Fusion is a piece of junk made to look like an Aston Martin.

I suppose you would consider a Lamborghini Countach replica to be as good, if not better, than the real thing.

Please go back to watching television, and let the grown-ups talk.

lolachampcar | 2014年7月7日

uncalled for

tes-s | 2014年7月7日

Lot of criticism for Ford Energi EV that outsell the MS. So do the Leaf, Prius Plug-in, and Volt.

I think the Leaf and Volt replace more gasoline miles than the MS, and looks like Energi will bump the MS down to 4th place.

There is more than one way to skin a cat; good thing Tesla is not the only one making EVs. Choice and competition are good - exactly what Elon has been asking for. It will make everyone better.

The ideologues are concerned about technology and definitions; most consumers really don't care what is under the hood. They simply want a car they like at a price they can afford.

This website has sales estimates for EVs:
They show Leaf +46% YTD through May, and MS -15%.

tes-s | 2014年7月7日

Correction: that should be -23%, not -15%.

jjs | 2014年7月7日

The existing EVs and hybrids are no match for a 200 Mile, sporty, high performance, $35,000 Gen III.

They will either be more expensive, both in initial price and in TCO, and will not have the performance of the Gen III, (Volt, Energi) or will have very limited range (Leaf).

I applaud Nissan, Ford and Chevy for their gas replacement tech. But if Tesla hits their goal with the Gen III it will not be even close.

The Gen III will speak both to the minds and hearts of car buyers. O, and did I mention safety?

Red Sage ca us | 2014年7月7日

Here the thing is... I'm really not comfortable with using the term 'EV' to describe vehicles that can't make the 'average' daily driving of 40 miles entirely on electric drive on a full charge. That is a really low bar and with smaller plugin cars should be manageable with only about 16-24 kWh of battery capacity. Barely electrified, so-called 'mass-market hybrids' that barely make it 1 mile (Prius), or 10 miles (Prius PHEV), or 20 miles (Fusion Energi) on pure electric drive... but get 'REALLY GOOD GAS MILEAGE!!!' are simply NOT EVs, in my opinion. These are basically an ICE design with battery backup to an over-sized alternator to yield improved field economy. You are still tied to the pump -- forever. At least owners of the Chevrolet Volt can legitimately claim to only use electric power 'around town' and then only use gasoline 'on the road'.

tes-s | 2014年7月7日

I consider anything that drives miles from the grid an electric vehicle, since I think it is important to replace fossil-fuel-based propulsion with electric propulsion. I also like vehicles that get great gas mileage like non-plug-in hybrids and efficient diesels that reduce the amount of fossil fuel used.

Pure EV will come - it is simpler and will eventually be less expensive they hybrid. In the meantime, I'm glad the other manufacturers are improving fuel efficiency and replacing oil miles with grid miles.

MNGreene | 2014年7月7日

+1 tes-s for this:

The ideologues are concerned about technology and definitions; most consumers really don't care what is under the hood. They simply want a car they like at a price they can afford.