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The Future of the Auto Industry: Tesla versus the Rest: What is Their Plan?

The Future of the Auto Industry: Tesla versus the Rest: What is Their Plan?

My prediction is that: Toyota, GM, and the rest of Big Auto are either

1) Planning to milk the market for as long as they can, or,
2) Not really planning anything, just going along while they can still sell their obsolete product

I view the manufacturers of mainstream ICE autos in a place like the Sugar Industry is now, or where the Tobacco Industry was in the 1950s. Tobacco manufacturers sold their product as long as they could. The Sugar Industry is in that position today. Selling a toxin while they can. But like tobacco, they will soon no longer have the market they have had (See Gary Taubes's The Case Against Sugar, 2017, or his Why Wet Get Fat, 2012).

Musk's vision is the future of personal transportation. I don't think the ICE makers can do anything to stop where he is taking the auto industry. I don't think they have a vision.

I am indebted to this line of thought to Fast Girl, who wrote: "Those other auto makers aren't just going to sit around and watch Tesla take away their business. ;-)" and to carlk, who wrote "Their plan is simple. Get next quarter's number. Then the quarter after that and the next ... until the day to retire with a nice package. They will not take any risks to fxxk up that nice plan."

David N | 29 maart 2017

"What is Their Plan?"

Whatever it is, it certainly does not seem to include any "serious" EV vehicles. If they did have serious plans, we would have heard about them by now because the media would have jumped all over it as "News".
My concern is that each auto company will dabble in the EV market with compliance vehicles, but their cars will have one or more shortfalls when compared to a comparable ICE, which will hurt the overall perception of electric vehicles, in turn slowing adoption.
Without long range fast charging (Supercharging), all vehicles automatically fall short on day one. Sad.

vp09 | 29 maart 2017

David I think you are right about Big Auto not planning to build EVs for real.

I'm not sure I agree with or even understand your point about compliance vehicles hurting EVs and slowing adoption. Can you cite evidence-- (like, GM's EV1 hurt attitudes towards EVs-- not)?

David N | 29 maart 2017

"I'm not sure I agree with or even understand your point about compliance vehicles hurting EVs and slowing adoption. "

I probably did not do an adequate job in how I phrased it.
The "general public", the "Masses" will only make the change to EV's when they see more/better value compared to what they have now (ICE).
Model S did that. Best car ever (Consumer Reports). Supercharging completed the long distance travel issue.
The Model S can replace any large 4 door ICE sedans.
Other than the Model S, and X, is there any other EV that can meet and / or exceed its ICE counterpart?
Without Fast Supercharging, the answer is a no.
EV enthusiasts aside, the average Joe in the pew will not make the switch if its a step backwards (range, performance, braking, safety etc...)
Some will be OK with a "commuter car", but "some" will not cut it, we need EV cars that attract the "majority".
The current offerings do not do that. If average consumers look seriously at these current offerings, they will find deficiencies in comparison to their current Ice so their opinion on "EV's" continue to lag .
If we can get everyone to test drive a Model 3, well, opinions may very well change a bit faster.
Maybe I'm wrong, just my thoughts from what I see happening currently.
No long distance "fast charging" like Superchargers?, then change will take a bit longer.

flight505 | 29 maart 2017

Musk has a vision. He wants to save Earth's atmosphere.

Ford has invested $4.5 billion in an EV program and adding 13 new EV type vehicles by 2020. Mercedes has a big EV program coming, too, as do many other car companies.

But, none has a vision to save Earth's atmosphere. Their plans have to do with competing. Right?

vp09 | 29 maart 2017

What car will Joe Sixpack buy. Joe F 150. Joe my next-door-neighbor,with his 6 trucks and his 7 garbage bins. I showed him my solar panels. He said "well we'll think about it after we have our tax return."

What a ....

vp09 | 29 maart 2017

Porsche, Ferrari, exceptions. They will always have a market. Albeit a diminishing one ...

brando | 2 april 2017

batteries seem the limiting function

joemar10 | 3 april 2017

I got this in my Email today.

"Thank you for contacting me during the 2017 session of the Virginia General Assembly voicing your support of a Tesla dealership in Richmond.

I am not opposed to Tesla opening in Virginia however do feel that they should be required to follow Virginia’s franchise and licensing laws just like every other manufacturer and dealer. The General Assembly enacted motor vehicle licensing and franchise laws with a purpose. Licensing laws allow the state to take action if a dealer does not operate to protect consumers, fair competition, and the public interest. Franchise laws protect healthy competition. In particular the prohibition against a manufacturer owning its own dealerships ensures that independent business people, knowledgeable of the local market and laws, will operate and compete in the public interest and will be there for customers if the manufacturer goes out of business.

In 2012, Tesla wanted to own a dealership in northern Virginia and signed an agreement allowing it to own one store in Northern Virginia. Tesla then tried to get permission for a second location despite that agreement. In a September 9, 2016 opinion, the Fairfax Circuit Court expressly found that the 2013 tri-party settlement agreement “prohibit[s] Tesla from owning and operating a second dealership during the thirty month period after receiving its dealer’s license, and it does prohibit Tesla from owning and operating a dealership outside of specified northern Virginia locations.”

The Virginia Auto Dealers Association protested Tesla’s request for a second location through a DMV hearing that is now the subject of an appeal in Richmond Circuit Court.

This is not an issue about whether Tesla can sell vehicles in the Commonwealth. So long as it is compliant with the law, Tesla can sell its cars in Richmond and throughout Virginia without any delay.

Once again, thank you. Feel free to contact me if I can be of any assistance to you in the future.
Regards,
Chris Jones"

This is the kind of thinking the EV revolution specifically, and the renewable energy revolution in general, is facing. Needless to say, I replied to this Email promptly, giving my views on his decision.

"Mr. Jones

You are completely wrong in your assessment of this situation. Does Virginia require Iphones to be sold through franchises? No. Like Tesla they have a factory to consumer business model, cutting out the unnecessary middleman, and added cost to the customer. Tesla only wants a level playing field when it comes to selling their cars. "Big Oil" owns the Virginia Auto Dealerships Association as it does almost everything else automobile related in this country. Big Oil is going away quickly, due to the rapidly declining cost of solar and wind power and the myriad of medical problems and climate change burning fossil fuels in our atmosphere causes. Due to extreme short-sightedness, the traditional automobile companies will go obsolete, along with dealerships that make most of their profit on service. If Virginia does not allow more Tesla stores, more and more people in the south and western parts of the state will be going to other states to take delivery. I will be going to Raleigh N.C. to take delivery of my Tesla Model 3, and also have the little service it requires done there. Virginia's loss, North Carolina's gain. Electric Vehicle drivers do vote.

finman100 | 3 april 2017

That's an awesome reply joemar10! Thanks for being vocal and Tesla-friendly in a not-so-EV-friendly part of our world. Keep it up. One way or another, companies will evolve.

dchuck | 3 april 2017

The only big car makers that seem to understand are the ones based in Europe. VW, Mercedes, BMW.. and the only reason they have changed their tunes is because of Diesel gate. Diesels represent the majority of cars in Europe so they can already see the writing on the wall.

So long as there isn't a direct competitor to full sized pickups or Full sized SUV's GM and Ford don't really care. They will produce their big money makers and cash in. In a couple of years time when the writing is on the wall here in North America the Sr. Managers will leave taking all the big bonuses with them. New managers will come in saying the old managers screwed up and be looking for handouts to save all those valuable jobs.

Then and only then will they take what is left of GM and Ford and join the rest of the EV world.

mark.willing | 3 april 2017

@ flight505: "Musk has a vision. He wants to save Earth's atmosphere..." Then he might want to look into aircraft. http://www.worldshipping.org/industry-issues/environment/air-emissions/c... I was thinking that all of those big cargo and Navy ships are consuming so much fuel as compared to automobiles,...and they are,...but it seems aircraft are the worst polluters, by far.

vp09 | 3 april 2017

dchuck you are pessimistic but I fear absolutely correct.

vp09 | 3 april 2017

SamO ??

Remnant | 3 april 2017

@joemar10 (April 3, 2017)

<< Franchise laws protect healthy competition ... prohibition against a manufacturer owning its own dealerships ensures that independent business people, knowledgeable of the local market and laws, will operate and compete in the public interest and will be there for customers if the manufacturer goes out of business. >>

Yep ... lying protects truth ... debauchery protects virtue ... fraud protects honesty ... monopoly protects commerce ...
What a circus!

while reflecting on such elevated developments. we have hit the very bottom of protectionism with the "franchise laws". Whose interests are thereby protected? Not those of the competitors, to be sure.

The "commerce clause" was meant to defend free trade against abusive legislation by the States.

Yet, the canary has succumbed to the toxic vapors of "Progressive" outbursts.

Time to defend the Constitution, guys!

Check:
http://www.ballonoffconsulting.com/PDF/Limits.PDF

tstolz | 4 april 2017

People haven't quite caught on just how disruptive Tesla is yet I think. Anyone can make an EV and this is happening ... starting with VW, MB, and BMW. The rest will follow in reaction since they will lose market share if they don't. Model 3 will really speed up the pace and I expect by Christmas more OEMs will announce accelerated plans as MB recently did. Change accelerates.

Tesla's competitive advantage is not just that it makes EVs ... that is minor in fact. Tesla figured out long ago that they needed more to differentiate themselves. They did that with corporate ethics, OTA software updates, non-profit service model, no dealers, vertical integration, ... this is why Tesla will be the biggest car maker by 2030!

jordanrichard | 4 april 2017

Just to add to dchucks remarks, even Chrysler has given up on producing cars and now only makes trucks/Jeeps. They are in the midst of finding "a partner" to produce small cars for them which will be rebranded as Dodges/Chryslers just as they did in the 90's.

vp09 | 4 april 2017

What happens to Big Auto when Tesla offers a small truck? Is there a group of potential buyers that would prefer to burn gasoline?

SO | 4 april 2017

The only concern I have with towing with an EV is the drain on the batteries.

ken.hixson | 4 april 2017

Battery drain yes but also trucks can and do go more places than there are likely to be Superchargers. Let's face it, destination chargers really only work if they are conveniently located where we sleep; who would want to charge at 30 miles per hour?

Recreational towing aside, it shouldn't be much of an issue.

Frank99 | 4 april 2017

Most of the pickups I see around here (Phoenix) are my-commuter-car-is-bigger-than-yours vehicles. Most people working construction drive them also - but even those appear to be mostly used for commuting and trips to Home Depot for supplies. Both types of users would be well-served by an EP (Electric Pickup). There are still a lot that have a well-used trailer ball - landscapers, trades pulling trailers, etc. Depending on the use model, these may or may not be well-served by an EP.

vp09 | 4 april 2017

I'm wondering if the gasoline car market is smaller than everyone thinks. The latest quarter postings suggest that Tesla is favored and most other car makers are disfavored. Could it be that the motoring public is waiting for the better car, and Musk is the one with it?

I bought a 1987 Honda Acura Integra, brand new, in 1987. I drove it for 30 years, and then reserved a Model 3, and then bought two Model S90Ds.

Ten or 20 years after buying the Integra, I could have bought a new car. But I did not see another car better than my 1987 Integra. Only on 31 March of 2016 did I make the move to buy a new car-- a Tesla.

Are many of the motoring public in my shoes-- waiting for a good choice?

sosmerc | 4 april 2017

Things might change alot faster when someone builds a BEV (truck) that can really do serious work, yet still have all of the creature comforts that our SUV/Truck Loving drivers currently demand. They are ridiculously popular because of how capable they are. But that could sure change if the price of gas climbs again above $4 a gallon.

brando | 5 april 2017

Average age of US car 11.5 years.
If buyers are logical and knowledgeable of electrics, they can afford to wait.
Will be interesting to monitor.

vp09 | 5 april 2017

Tesla is busy with the Model 3, then the Model Y? Then the Roadster II? Maybe a small truck should be a priority.

On that note, my wife used Summon, her first time, at the post office parking lot this afternoon, because of a truck parked on the line a few inches from the driver's door. She said that the passersby gaped in amazement, as the car backed itself up. Tesla has so much to offer, and I can't see anyone wanting to go back to the old technology, after they experience Tesla.

brando | 7 april 2017

vp09 wrote:
==========
I bought a 1987 Honda Acura Integra, brand new, in 1987. I drove it for 30 years, and then reserved a Model 3, and then bought two Model S90Ds.

Ten or 20 years after buying the Integra, I could have bought a new car. But I did not see another car better than my 1987 Integra. Only on 31 March of 2016 did I make the move to buy a new car-- a Tesla.

Are many of the motoring public in my shoes-- waiting for a good choice?
==========

Taking care of your car for 30 years, is of course rare. Resisting Madison Ave. ads to upgrade is also rare.
And being able to buy two Model S sedans, rarer still.

I'd bet you'll never buy another car in your life time. Care to suggest what might possibly happen that I'd loose this bet?

PS- perhaps I'll keep my car longer, so far 28 years and counting. Love to drive a Tesla, but don't have a real need and therefore won't be buying another car in the foreseeable future. Fun to imagine anyway.

David N | 7 april 2017

"The Future of the Auto Industry: Tesla versus the Rest: What is Their Plan?"

Their plan seems to be " let's wait and see"

brando | 7 april 2017

GM plans are to make money (for managers and Wall Street Banksters) which is proven by the buy back of GM stock which is now up to $16 billion dollars worth. Go bankrupt during the next down turn and get bailed out again.

Better product, building a business (and the local community), customer loyalty, well, I guess the big truck buyers are plenty happy, even if I don't understand why. And GM is building the largest auto manufacturing in China and now imports Buicks to the US. Strange world we create when money is the only value that counts and we let the sociopaths write all the rules.

Tropopause | 7 april 2017

Ford's plan is NOT EV's but rather the misleading "electrification" approach which fools the public into thinking Ford is technologically progressive.

The Germans are tinkering with BEV's in part because Tesla is stealing market share from their flagship line-ups.

The Americans are backing away from BEV's in part thanks to Trump rolling back Obama's EPA standards.

As far as I'm concerned, Tesla has more room to become the dominate American car manufacturer and possibly one of the largest companies in the world, as Ron Baron predicts.

ken.hixson | 7 april 2017

Tropo --
"As far as I'm concerned, Tesla has more room to become the dominate American car manufacturer and possibly one of the largest companies in the world, as Ron Baron predicts."

Agreed . . . And that is the expectation for those that buy Tesla stock when it has capitalized Tesla to the same eschelon as GM and Ford, even though Tesla has only a fraction of their volume or profit. Tesla is not aiming to be a niche player but it is not a vision to be the new silverback in the jungle either but to make permanent change in the world. They are determined to either do it themselves or show others how but the end game is to cement the change.

Not only does Tesla have the moral high ground they have shown it is financially sustainable. The debate is no longer if it is necessary to the environment (indeed it is only a small piece) nor even if it is marketable and profitable but will others be able to change and survive?

vp09 | 7 april 2017

Ken.hixon + 1 !

vp09 | 7 april 2017

Brando, thank you very much!

>>> Taking care of your car for 30 years, is of course rare. Resisting Madison Ave. ads to upgrade is also rare.
And being able to buy two Model S sedans, rarer still. >>> I'd bet you'll never buy another car in your life time. Care to suggest what might possibly happen that I'd loose this bet? >>> perhaps I'll keep my car longer, so far 28 years and counting. Love to drive a Tesla, but don't have a real need and therefore won't be buying another car in the foreseeable future. Fun to imagine anyway.

You've lost already! I have two orders in for Model 3s.

My friend Bill bought a new Cadillac every 3 or 4 years during the 29 years that I drove the same 1987 Integra. I'm guessing I saved up enough for a Model S as the amount he lost by trading in for a new Cadillac every few years.

:-)

Haggy | 8 april 2017

There's no point arguing with a lawmaker in Virginia. It's not as if he cares what you have to say. It's not as if he's going to look at both sides of the issue and decide based on what makes sense. Instead, he is just going to try to present arguments that purport to support his position.

The problem is that you can't lie to somebody who already knows the facts.

Tropopause | 8 april 2017

"The problem is that you can't lie to somebody who already knows the facts."

The challenge is to get the facts out to the masses so the politicians must choose between money and voters.

vp09 | 8 april 2017

We are working to do that Tropopause. Today I took my wife and her two friends for an hour's drive. The one friend knew nothing about Tesla. First, she was wowed by Summon. Her mouth literally dropped open when she saw that, and again when I gave the car some juice on the freeway .... one more potential Tesla owner.

vp09 | 8 april 2017

Haggy the facts are that the car dealers have the money to buy the pols in Virginia, and Michigan, and Utah, and other states. How much longer is that going to go on?

DSMTesla | 9 april 2017

Absolutely nothing will change until EVs account for a very significant part of the overall auto spend. Period. There is plenty of oil in the world, and while its dirty and causes environmental issues , that lobby is powerful and isnt going away.
As long as governments allow donations from powerful lobbying groups there will be people willing to vote NO on ev friendly rules.

brando | 9 april 2017

vp09 - and now I know what would make you buy your 3rd vehicle.
I guess an average of 16 years vehicle ownership still breaks many records?

vp09 | 9 april 2017

DSMTesla I want to argue that you are wrong. What about the case of Big Tobacco? Their donations didn't keep them from losing market share. Big Sugar will be in that position soon. I'm afraid that blaming "powerful lobbies" or "Big Oil" is in the nature of a conspiracy theory-- like blaming Big Oil for the fact that we don't all have solar panels on our roofs, or that several men not just one killed JFK.

Americans believe that Big Oil is keeping solar panels off of our roofs, but no goons from Exxon came out to stop SunPower from installing my panels.

vp09 | 9 april 2017

Brando, 16 years, absolutely.

In my case I just couldn't find another car that seemed better than my Honda-built 1987 Acura Integra. Not until last March 31st. No engine work in all the 230,000 miles, and it still delivered 29 mpg, same as with the first tak of gas. Never leaked oil. Towards the end of its service, the sunshades were falling apart and my mechanic kept saying he couldn't find parts (e.g., some a/c parts). Great car.

brando | 9 april 2017

How about Warren Buffet in Nevada, after he bought Nevada Power and got the rules for net metering changed?
No conspiracy there. SolarCity had to close down in Nevada. Perhaps you didn't follow that?

vp09 | 9 april 2017

I am sorry I did not adopt early like so many on the board did. Yesterday at the Los Angeles Tesla Club event I talked with a man who arrived in his 2008 Roadster. No, that was another man, the president of the club. This man had a Signature metallic pink Model S. One of the first. I acknowledged that he helped Elon keep the dream alive, and I should have been there with him. Instead of waiting.

vp09 | 12 april 2017

General Motors-- are they really planning to stay in business very long?

vp09 | 13 april 2017

I want a pick up truck.

Elon says Tesla will have a pick up truck in 2 years.

I predict that Ford Motor company can pack up its trash and fold its tent.

brando | 14 april 2017

Since Saturn was "given" the EV-1, let us review how successful Saturn was in general and how well GM capitalized on Saturn.

https://www.forbes.com/2010/03/08/saturn-gm-innovation-leadership-managi...

vp09 | 16 april 2017

Brando, well worth reading. Here's the conclusion:

To all the outsiders who have witnessed Saturn’s failure, if you ever find your corporation in a losing position in the marketplace, if you feel your people just can’t compete with world-class, if you don’t believe your organization can make enough changes to stay in the race, or if you feel someone else needs to bail you out, just remember–you can create a different kind of company and a world-class product.

That is Saturn’s legacy.

Madatgascar | 17 april 2017

All manufacturers claim the future is in autonomous driving. If they really believed that ICE was a part of this future, they would be working on a snake bot to put gas in their driverless ICE cars, right?

SamO | 17 april 2017

Tesla Robot Charger A.K.A. Proctobot . . .https://www.youtube.com/watch?v=uMM0lRfX6YI

RedPillSucks | 17 april 2017

@vp09
While I'm not a fan of conspiracy theories, you need to keep in mind that the goons don't always bust down your door looking like "goons". Most times they look like well dressed/paid lawyers/lobbyist who suppress legislation.
Think of it from this perspective. How long ago did both the medical community AND the tobacco companies know that smoking caused cancer and how long did it take for that to become general knowledge and affect the smoking habits of the American populace. Also, note that big tobacco is not dead. There's a huge market in Asia and they're making tonnes of money there where American tobacco is seen as superior.

vp09 | 17 april 2017

RedPill,

I am trying post my reply. But I am being blocked by the Censor. I'll attempt to post pieces.

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