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The Only Thing We Have to Fear, Is Fear Itself.

The Only Thing We Have to Fear, Is Fear Itself.

Patents?
Batteries?
Charging?

All available to any competitor that is falling behind in the race for EVs. The only thing missing is the will to accept the challenge.

Where are the competitor Gigafactories?

Where are the charging networks to serve those vehicles?

When will you understand the extinction level event that is about to happen to the auto industry?

Other than Model 3, where is the next everyman's car? A suitable replacement for not just the city, but for long distance too?

This is NOT an Elon Musk Cult of Personality.
https://www.youtube.com/watch?v=7xxgRUyzgs0

"You don't have to follow me, Only you can set you free."

Red Sage ca us | 24 april 2017

Willingness Limits prevent advancement at every turn for traditional automobile manufacturers. You are asking questions that no one among them expected would be even seriously considered, let alone answered, for at least five decades after their own retirement. So, for them, panic has ensued upon learning they may yet live to see their chosen path of pride and profession proven fruitless.

From their perspective, they must deny that Elon Musk knows what he is doing. They must claim that Tesla's goals 'cannot be reached' and that what Elon wants 'can't be done' -- for the sake of their own sanity. Because having to admit his attempt to 'accelerate the world's transition to sustainable transportation' is not only the right thing to do, but that it is working, is to say their own dedication to ICE is a mistake. Tesla's acelerated actions are literally decades ahead of anything that others would have done on their own. That is what makes it so disruptive, challenging to the sensibilities of established automobile makers.

I saw Living Coloür open ahead of Guns N' Roses at the Steel Wheels Tour for the Rolling Stones at the Los Angeles Coliseum. It was a great show. You know what? My ears may still be ringing.

polaris | 24 april 2017

The true evolution to EVs will not happen until someone makes a truly affordable car in the low to mid $20k range. For people who drive Corollas and Civics now. These cars need decent range 250 miles as well.

Doesn't look like Tesla is interested in that market at all - until that market gets solved, we will be living in the ICE world.

akgolf | 24 april 2017

Tesla may be interested in the lower end market such as Corollas and Civics, but they still need to make money on each car they sell.

Once the price of the battery gets lower I wouldn't be surprised to see them come out with a more affordable car.

dyefrog | 24 april 2017

Polaris;
For traditional ICEV owners, the total cost of ownership needs to be considered to validate parity. There are some here who will recount horror stories of EV's gone bad with early tech/production issues but the vast majority of EV owners will back up the claim that the true total cost of ownership is drastically less during the lifetime of the average car.

I started a thread on the general forum discussing how the expiration of the incentives will have little impact on Tesla however, most others will not be so lucky. Can Tesla continue to lower costs enough so that the $10k (just a guess) lifetime savings gets the Model 3 comparable to a Corolla? Definitely!

mos6507 | 24 april 2017

"until that market gets solved, we will be living in the ICE world."

Self-driving cars and how it relates to car-sharing will do more to take ICEs off the road than trying to drive the cost of batteries down enough for $20K or less EVs.

The era of everyone feeling like they need to own a personal vehicle is coming to an end.

SamO | 24 april 2017

+1 @mos6507.

Each autonomous car can replace at least 10 privately owned cars. I've seen math that shows it is up to 20.

This year in the U.S. there will be roughly 18,000,000 car sales. If every new Tesla Model 3 replaces 10 Camrys, Accords, Elantras, Prii, then far fewer cars will be sold overall for the same number of rides.

But . . . and this is a big one . . . more people will have access to cheap rides, thereby increeasing the numbers of new autonomous cars sold.

Unless you are a company selling these electric autonomous vehicles, you are in deep shit.

polaris | 24 april 2017

@dyefrog

Totally agree on the calculation however, I'm pretty sure the Model 3 @$42k which is what EM said would be the primary configuration rate cannot compete with a $23k Corolla in terms of value. Obviously, there are the social consequences associated with burning gas but speaking strictly on function and affordability - which most people fall under - I think it's not that close.

Re: Autonomous Driving replacing $20k cars. Maybe in the distant future - I don't see it happening now. Infrastructure would have to change completely to facilitate this world. I think this reality may eliminate the need for some secondary cars in households but for the immediate future - next 10 years, there is still going to be a high demand for vehicles in that price range and with Tesla's current plan, it doesn't look like Tesla is interested in that market and its imo that is the more important market in terms of wide scale adoption of EVs.

Red Sage ca us | 24 april 2017

polaris: I've been on these forums for a bit over three years, and every single time someone uses a phrase like "...evolution to EVs will not happen until..." they have been wrong. It doesn't even matter what parameter they choose to justify the viewpoint, they are wrong. Price point, quantity of charging stations, charging speed, availability of service locations, number of sales locations, ability to self service, third party service, blah, blah, blah, blah-blah, blah... it doesn't matter. They are always wrong.

You must understand that the reason why the price of new cars is going up is that the price of used cars is going up. Vastly more used cars are sold every year than new ones. In 2015 there were about 17,400,000 new vehicles sold in the U.S. But there were over 38,000,000 used cars and trucks sold the same year. And, while the average sale price of new cars was over $33,000 the average sale price of used cars was over $18,000. Further, those used vehicles averaged over 10 years of age.

When someone wants to be frugal with their money? They buy used. They wait until prices on previously 'nice' cars have dropped to a level they are willing to spend. You can't have ten-year-old inexpensive cars to sell used until you sell new cars first. Let's see... Are there any long range ten-year-old fully electric cars available for around $18,000 today...? Uhm... NO.

So, please, pretty please, with sugar on top, stop bellyachin' about 'affordable' cars. Because no one really wants to buy them -- NEW. Most people are perfectly satisfied with a car that is 'new to them'. Most people buy vehicles for which someone else has already endured the loss of residual value due to depreciation.

Sure, yeah, I know... Looking at the sales charts, the *majority* of new cars sold are priced between $22,000 and $24,000 -- but that does not change the fact that the *average* sale price is over $33,000. Americans in particular don't care so much about what they can actually afford so much as what they can 'get' and then 'make the payments' for on a monthly basis. Frugality is not a major concern when buying new, people care more about the terms of the financing agreement than the price of the vehicle itself. It's a happy delusion that keeps the economy going.

Already, most major automobile manufacturers have abandoned the sub-$15,000 price point, as they long ago did with the sub-$10,000 price point. I expect they will do the same at sub-$20,000 by/before 2020. The car companies that offer the majority of the vehicles that sell best with a base price between $22,000 and $24,000 also are able to manufacture in excess of 3,000,000 or 4,000,000 vehicles per year worldwide as a bare minimum.

Tesla does not have that level of industrial scale at all. Even after tripling the expected output of the Gigafactory #001, Tesla will only have a bit over 1,500,000 units of annual capacity once the building is complete in 2020. And, as Elon Musk has pointed out in his Master Plan Part Deux, the vision at Tesla is to not offer a new vehicle below the Model ☰ at all, but to instead offer a ride sharing service to those who are unable to buy new. There will be no Tesla branded analog to the Corolla/Yaris, Civic/FIT, Focus/Fiesta, Sentra/Versa, Cruze/Sonic, Elantra/Accent, Forte/Rio, or other types of 'cheap' cars.

This does not necessarily mean there won't be a less expensive version of the Model ☰ at some point. There may be, but the company will have to be very solidly profitable before it is offered. Once Tesla's internal cost for battery packs is below the $100 per kWh threshold (placing their battery cell cost at perhaps $84 per kWh), they may be able to offer the Model ☰ at as little as $27,500 and still enjoy a 12% profit margin. But, by the time that happens, it could be that the base price for cars like the Corolla, Civic, Focus, Sentra, Cruze, Elantra, and Forte is at/over $25,000 while cars such as Camry, Accord, Altima, Malibu, Sonata, and Optima have climbed to $30,000.

I expect that Tesla would be able to keep the base Model ☰ at about $35,000 for a long while, as the 'entry level luxury' vehicles flee into ever more 'exclusive' pricing levels to match their lower sales rates. This will contribute to the disruption of the ICE industry, as people were able to compare the Model ☰ to other vehicles on the market. I expect the Model ☰ will be sized as would be a typical Compact car, but due to internal passenger and luggage volume will be classified as Midsize. So it will be perfectly placed as both a bargain compared to 5-Series, A4, E-Class, GS, and Ghibli as well as a relatively minor upgrade from Camry, Accord, and the like. The sales of some will be devastated, while others will be at least sorely affected.

dave.m.mcdonough | 24 april 2017

I'm ok paying more for a car that I won't have to replace in 10 years. With any luck this Tesla will be the last car I ever buy.

SamO | 24 april 2017

@dave,

I'll be ok just to make back my car payment by sharing the car in the Tesla Network.

@RS +*

polaris | 24 april 2017

@red sage

I'm not sure what you're referring to in terms of everyone else position on EVs. I'm not sure how you can say everyone has been wrong to this point because we have not seen full scale adoption of EVs so whatever people are saying at the very least could be partially right.

On the notion that car sharing services are going to eliminate the need for "cheaper" cars - that's purely speculative as well. There are car sharing services in play now all over and yet, those "cheap" cars still sell plenty. Everything in the future has to be monetized for value otherwise it won't work. What's a car sharing service going to cost for say a young family with one parent commuting 25-50 miles a day and then having to take kids to soccer and dance lessons? Will it be cheaper than buying a new Corolla?

I would also like to note that it's only because of incentives that the price of the Model 3 is even within grasp of some people. Right now, here in Canada - the 75D is $104k CDN. I am going to estimate that the Model 3 standard configuration is going to be close to $60k CDN. That is simply not in the affordable range for most people.

I have no problem with Tesla not going after this market - that's their choice. But at the end of the day, the goal is to move to sustainable transport for everyone. Someone needs to produce the practical EV with decent range at a lower price point for the masses to come on board. Needless to say, infrastructure improvements are part of this as well.

Red Sage ca us | 24 april 2017

polaris: Despite the insistence among some communities of religious zealots that the world as a whole is dangerously underpopulated, fact of the matter is that most educated people in so-called 'first world' nations are less likely to either marry or have children (contraception trumps celibacy). Young people are less and less interested in having 'lasting relationships' because they understand that statistically, few last anyway.

They similarly are less interested in owning a vehicle, or even learning to drive at all. Those who have grown up in a world with the internet, and smartphones, think that services such as Lyft and Uber are the coolest things under the sun, even if they have never taken an actual taxi/cab anywhere in their lives. "DUDE! Nobody has to be the 'designated driver'! Just don't lose your phone, and we're GOLDEN! Party ON!!! w00+!"

As those identified as 'baby boomers' age even further over the horizon of The HILL they will be less likely to drive as well, and there will be a lot fewer people around to take them anywhere. So, autonomous vehicles will be necessary to service their needs as well.

When a $40,000 'new Corolla' is $100,000 in total ownership cost over the course of five years of ownership (into an eight year loan) due to "$12 a gallon, please pay before your pump!" gasoline, you betcha, it will be less expensive to use an automated fully electric car service than buy one of your own.

At no point did I say the price of a new $35,000 USD vehicle was within the 'affordable range for most people'. I pointed out that most people buy used cars. For people that want to buy a new car and somehow believe they have 'good credit' a $35,000 vehicle is certainly within the range of what many are willing to convince themselves they can 'make the payments' for.

And c'mon, MAN... People who decide to have a brood of children eventually want more space, so they get a Minivan (or SUV) -- not a Sedan. Here's a list of some popular brands, their individual average prices, as well as their overall average price:

AVERAGE NEW MINIVAN PRICES
___ 34,400 ___ Kia Sedona
___ 36,795 ___ Chrysler Pacifica
___ 38,530 ___ Toyota Sienna
___ 37,588 ___ Honda Odyssey
___ 36,828 ___ TOTAL AVERAGE

Hey, look! All of them, every single one (well, but one) averages at over $35,000! And absolutely every one of them has a trim level that exceeds $40,000. While the two most popular ones each exceed $45,000 in top level trim.

Yes, someone needs to fill these needs in terms of vehicle configuration with an electric vehicle. It is very likely that Tesla will manage to do so at some point in the next eight-to-ten years. But no, they are not going to GIVE THEM AWAY for ten grand less than everyone else on average. Tesla has said all along that they cannot do it all by themselves. It is up to those companies that have multiple decades more experience, millions more units of production capacity, and extremely deep pockets overflowing with cash to do so in a timely fashion.

And the longer it takes for that to happen? The more likely that the EV products that Tesla is able to offer will become that much more 'affordable' relative to increasing prices on ICE vehicles. That's the beauty of it!

topher | 24 april 2017

"which is what EM said would be the primary configuration rate"

No. He said he expects that to be the average price people decide to pay.

Thank you kindly.

polaris | 24 april 2017

@red sage

New car ownership is not going to decline any time soon. With a burgeoning middle class in countries like China and India - global car sales will continue to climb. 2016 was a record year.

I'm really not sure what your point is to be quite honest. My point is simply that for their to be widespread adoption of EVs - someone has to make one that competes against the Corolla's of the world which has been consistently at or near the top of top selling car lists. Really, if Tesla chooses to avoid that market - that's their choice. My concern here is strictly for the world to move away from the ICE. I would love that transition to happen because of growth of companies that have a social conscience but that might be asking for too much.

SamO | 24 april 2017

Car ownership density will drop, while Tesla Network will increase access to those who are "vehicle insecure."

Full Self Driving capability will allow your vehicle to optimize use. I might only buy one Tesla, but subscribe and have access to Model X, Truck, Van or Semi for my move.

"You ain't seen nothin' yet."

https://www.youtube.com/watch?v=cFRk0FfaQi0

Red Sage ca us | 24 april 2017

polaris: It is a very simple point. Toyota is not going to replace the Corolla with the Yaris. Honda won't replace the Civic with the FIT. Ford won't replace the Focus with the Fiesta. But all of them will continue to move upmarket in pricepoint. Once they all exceed $20,000 in base price? Nothing will appear to replace them there, because that will be the sole domain of used vehicles. And, much sooner than you might believe, the Corolla, Civic, and Focus will all have base prices that are in line with where the Model ☰ will start. Tesla doesn't have to go 'downmarket' to them. They will all come 'upmarket' to Model ☰. Though placed against 3-Series, A4, ATS, C-Class, IS, Q50, and XE, the Model ☰ is not constrained to the same market principles as they are. The Model ☰ can become an 'everyman's car' without losing its appeal as a 'premium car' due to the advantages of its fully electric drivetrain. Therein lies the difference, because ICE vehicles will fall out of favor in direct comparison. While in a 'class of its own' Tesla will not have to play by the same rules as others. If the Model ☰ is selling at 1,500,000+ units annually by 2020 or so, you'll see what I mean.

JeffreyR | 24 april 2017

@RS +42

PhillyGal | 25 april 2017

I'd argue that EVs won't take over until 10 years AFTER they are available, new, for $20k.

You'll hear the average new car price is whatever it is... but I don't think most people buy new to begin with. In fact, I'm almost sure of it.

polaris | 25 april 2017

@red sage

That's all fine and dandy prognostication. I don't necessarily disagree that those models are going to increase in price however, I don't believe that those vehicles will increase in price while Model 3's stay the same.

Either way - what does that have to do with the foundation by which we transition to EVs worldwide? Which is the issue we are discussing no? What's it going to take for us to start seeing the scales tip? Obviously, it's not just one thing but I do think that some manufacturer needs to tap into that $20k-$25k new car with decent range market.

KP in NPT | 25 april 2017

While we've not heard any details, EM has said Tesla would offer a cheaper car than the Model 3 - eventually. So while there's been no announcement, I wouldn't say it won't happen. With Tesla's huge lead on battery cost I'd say they'd be the one to do it - unless the Chinese manage it first.

http://bgr.com/2016/04/26/tesla-model-4-price-elon-musk/

polaris | 25 april 2017

@KP

That would be great if true - the article did say the next car would be cheaper but we already know that the Y is next. Then talks of pick ups and semis plus on going production of SEX and who knows when this next generation car is in the works. Hopefully by then, some other manufacturer focuses on that segment!

KP in NPT | 25 april 2017

Agreed, Polaris - lots of other cars announced between now and then.

Personally I believe the Model 3 will draw from the lower price segments because of it being an aspirational brand, plus lower 5 year TOC. The Julian Cox video I posted previously pointed out how the Model 3 will actually be better than the Corolla in that regard.

https://cleantechnica.com/2016/06/27/tesla-model-3-will-upend-global-aut...

I imagine they will continue the path of building cars that sell to enable the lower priced model(s) - so maybe once things shake out they'll move on to the "model 4."

dyefrog | 25 april 2017

Polaris;
My personal experience is education and exposure is our best tool to expedite the transition. I have a co-worker that leased the Leaf about 2 years ago. It was unique, interesting, but not compelling, until the simplicity of the mechanics hit me. The more I researched it, the more obsessed I became that this was the future. No more laying on my back on my garage floor as hot oil dripped down my arm while changing the oil. Or fumbling with a socket that dropped into the nether regions of my engine bay trying to get to spark plug # 5 on a V8. If you don't do your own wrenching, your wallet will notice just the same.
It reminds me of an old snowmobile ad from the 70's where one guy says to other, "you mean you don't spend your weekends fixing it? You just ride it? That's the beauty of EV's, I've reached that time in my life where I'd rather do other "fun" things than preventative or necessary maintenance on my cars. I don't have the tools, experience, or willing to spend the money to keep up with them anymore.
So, purchase price is almost secondary to true cost of ownership. The used EV market is prime with bargains galore and will always be the case as the technology surpasses the obsolescence. There exists now and always will an EV for every wallet. It's just a matter of getting the word out there.

Red Sage ca us | 25 april 2017

polaris: Take a look at price ranges of the competitors to the Model S over the years since 2012. The Flagship vehicles from AUDI, Porsche, BMW, and Mercedes-Benz have all gone up, in base price, and maximum amount.

Take a look at the engine specifications for top-of-the-line Performance editions for A8, Panamera, 7-Series, and S-Class since the 2012 launch of Model S. You'll see they attempted to differentiate themselves from Tesla by posting higher peak horsepower numbers, and that it didn't work, because the electric car was still quicker, even before the Model S P85D debuted.

This is the same pattern that became apparent after the launch of Lexus and Infiniti, with cars that were simultaneously just as, and arguably more, 'luxurious', better performing, at least as good looking, while also costing quite a bit less than German competitors. The German marques raised their prices, turned to more powerful engines, improved the look and feel of their plain, stodgy interiors, and began to pay closer attention to exterior styling that had stagnated as well. Since buyers decided their higher prices were 'worth it' for 'German engineering', reliability, status, 'luxury', heritage, tradition, 'exclusivity', and whatever else they imagined -- they got away with it.

Problem is? It doesn't work against Tesla Model S. Because of the fully electric drivetrain.

Germans were able to maintain their status over ICE based challengers from Japan and Korea because ultimately, they offered nothing that was really 'new' beyond badging and nameplates. So people who had decided what they 'always wanted' simply continued the same buying patterns in the long run.

AUDI, BMW, and Mercedes-Benz will, almost immediately following the introduction of Model 3, attempt the same tactics again, in the vain hope that their loyal Customers will fall for it. The A4, 3-Series, and C-Class will go up in price, perhaps by $5,000 to $10,000 to somehow 'separate' themselves as a market apart from Model 3. It won't work.

Because, sensing an opportunity, competitors from Cadillac, Chrysler, Lincoln, Acura, Infiniti, Lexus, Alfa Romeo, and Jaguar will all follow suit. Bigger engines, more power, and more standard features, will be accompanied by higher prices, worse fuel economy, and higher emissions. Because they will all seem the same, the only standout will be Model 3.

Which will cost less, drive better, be more 'fuel/wallet' efficient, have a 'nice enough' interior, and outsell all the rest, many of them combined. It won't be a flash-in-the-pan, short term, passing fad. It will be the wave of the future, and suddenly more affordable than the rest than originally anticipated.

Sure, some won't get the message in time. And others will grasp tight to their ideals of what true, traditional 'luxury' is all about. But they will be in the minority. Dinosaurs.

Meanwhile... As the so-called 'entry level luxury' cars fully abandon the $30,000 to $40,000 price range in search of ever-elusive 'exclusivity' (and escape from Tesla)...? Honda, Toyota, Nissan, and several others will be happy to move their top selling vehicles into that market space. That will drag their second tier of products above $20,000 for good.

And the ball will keep rolling from there.

polaris | 25 april 2017

@KP

I think the only thing with Julian Cox's to consider is how long it would take people to figure this out because historically we are very short-term thinkers and we live in a world of influence and misinformation. Our collective inability to objectively work through things like this and our relative ease by which we can be controlled through PR and lobbyists I feel will keep us in the ICE world for a while.

@dyefrog

Totally agree on education. But to my point above - sadly, most people are easily influenced with mistruths and flat out lies.

polaris | 25 april 2017

@red sage

Thing is - you keep referring to the luxury segment. I mean really, even Musk says only 50% of the car buying population will be able to afford the Model 3 and that's at $35k base. With each $10k you go up in price - that's less and less.

It's not like those in the other 50% are going to start being able to afford $30k - $40k cars. That segment is large and will always exist. The sooner we can get an EV into market for that segment - the sooner the adoption.

SamO | 25 april 2017

@polaris,

It doesn't matter when the cost of a lux segment Model 3 Tesla Network ride is 50% of an Uber ride.

Tesla will own the top and work its way down to everyman.

Red Sage ca us | 25 april 2017

polaris: It isn't possible to 'get an EV into market for that segment' in a profitable manner yet. Not for Tesla. I've already pointed out, they will need more Gigafactories, more assembly facilities, more manufacturing capacity, at least 3,000,000 to 4,000,000 units per year, before they can manufacture vehicles at a sufficient quantity that economies of scale allow them to ~*profitably*~ sell at less than $25,000 per unit.

Once again, even at their accelerated rate of growth, that will take time. Perhaps 3-to-5 years optimistically, more likely 5-to-8 years realistically. During that time frame, it is far more likely that litigators, regulators, legislators, and insurance companies will allow autonomous driving technologies to be widely used on public roads than you seem to think. And that availability will be much less expensive than either purchasing a $20,000 to $25,000 new car, or buying a $15,000 to $20,000 used car. People who do not have credit cards, debit cards; or who don't own smartphones and are uncomfortable with online commerce; or simply prefer hard cash transactions will buy used cars on the cheap instead.

Once that time has passed? I guarantee that the base price for a Civic, Corolla, Cruze, Sentra, Focus, Elantra, Forte, or similar ICE car from traditional automobile manufacturers will have a base price that is at, near, or over $25,000. They will probably all be hybrids or plug-in hybrids within the next decade. So they will be rewarded with no less than 40 MPG ratings by the EPA, and possibly higher, up to and above 50 MPGe.

With luck, there will also be fully electric, long range versions of those cars offered within the next decade.
Thus, it is much less important to replace those vehicles with fully electric ones than it is to take on the gross polluters and gas guzzlers that Tesla is already targeting with future products: semi-trucks, pickup trucks, and SUVs.

Red Sage ca us | 25 april 2017

SamO: Yes. I can see it now...

"No. I didn't buy a Tesla... But I ride in one every day!"

polaris | 25 april 2017

@red sage

So, you think autonomous driving will render the necessity of the $20k - $25k car segment obsolete?

Again - I can understand why Tesla is not going after this segment. It's simply that for there to be widespread adoption of EV globally - someone is going to have to come up with the decent range EV at that price point. If indeed that segment disappears because of what you believe will happen - then, a tip of the hat to you. I don't really see that segment disappearing any time soon.

Red Sage ca us | 25 april 2017

polaris: The $20,000 to $25,000 segment of new vehicles is destined or obsolescence regardless of what Tesla does. Once again, because of what I told you before... During 2016 the average sale price of used cars had crossed $19,000 by August. It won't be going down. For every one new car sold between $20,000 and $25,000 during the next five years, there will be more than two used cars sold for the same amount of money. It's bad enough to compete against dozens of ICE competitors' new offerings with a 'cheap' car. It becomes far worse when you also have to compete against up to ten years worth of their previously sold ICE fleet. Better to offer an autonomous mobility service that undercuts the day-to-day real world costs of either new, or used cars while offering a more satisfying, comfortable, and 'green' experience.

mos6507 | 25 april 2017

"New car ownership is not going to decline any time soon."

Long-term it definitely will. The value proposition at the low-end simply is not there. Sure, people will buy as a signal to others that they've entered the middle-class, but those who just want to get from point A to B will start using ridesharing in a big way.

SamO | 25 april 2017

@Red Sage,

Exactly. Some of the sock-puppets on this site are hilariously clueless. When you can purchase the best car ever made for $0.50/miles, then the $20,000 car buyer and up are riding a Tesla. Good luck to GM, Ford, Chrysler and the low end. There's no profit in the segment. Most of their money is made on trucks and SUVs.

Red Sage ca us | 25 april 2017

PART 1

polaris: As to your point that I, "...keep referring to the luxury segment..."

You must understand that owning a new car is, in and of itself, a 'luxury'. Beyond that, you should also know that every major traditional automobile manufacturer in the world fancies themselves as a desirable, 'luxury' brand, and markets themselves that way. You can see the evidence of that fact by doing a simple Google search on their websites to see the results when looking for the word 'luxury' alone...

___ SEARCH RESULTS FOR 'LUXURY', PREMIUM BRANDS
_____2,170 ___ acura com
_______143 ___ alfaromeo com
_____1,860 ___ audiusa com
_____2,220 ___ bmwusa com
_____2,620 ___ buick com
_____8,440 ___ cadillac com
_____3,100 ___ chrysler com
_____1,870 ___ genesis com
_____3,230 ___ infinitiusa com
____10,900 ___ jaguar com
_____4,590 ___ lexus com
_____3,950 ___ lincoln com
_____5,100 ___ maserati com
____18,400 ___ mbusa com
_________2 ___ porscheusa com

___ SEARCH RESULTS FOR 'LUXURY', REGULAR BRANDS
_____1,330 ___ automobiles.honda com (5,860 with base url)
_____5,500 ___ chevrolet com
_____1,690 ___ dodge com
____17,200 ___ ford com
____19,000 ___ hyundai com
____11,800 ___ kia com
_______180 ___ mazda com
_____6,420 ___ nissanusa com
_____7,150 ___ toyota com
_____2,380 ___ vw com

Among these, it seems the three least luxury oriented are Alfa Romeo, Mazda, and astoundingly, Porsche. Hmmm... I may have put Ford, Hyundai and Kia in the wrong category listing, judging by the voluminous results returned.

Red Sage ca us | 25 april 2017

PART 2

polaris: As to your point that I, "...keep referring to the luxury segment..." (Continued...)

Tesla prefers the word 'premium' (14,100) over 'luxury' (8,190). Typically, they are quoting others whenever the word 'luxury' appears in their current promotional materials (and, I suspect some results come from arguments in these forums). And usually if they use it themselves, that is on older releases, before the Model S was launched.

See, many of the 'normal', 'ordinary', 'regular' brands for ICE vehicles strive for the level of respect they see lauded upon those that offer 'exclusive' vehicles of the 'luxury' designation. They try to associate their own cars with the same ideals. You can see it in their marketing materials, due to the constant use of the same tired old words and phrases. You know the ones: 'tradition', 'desire', 'heritage', 'ambiance', 'history', 'craftsmanship', etc. It's all a bunch of [BOLSHEVIK].

Many companies would love to be able to get away with building and selling only 3,500 or fewer vehicles per year worldwide while enjoying the radiant levels of prestige that Rolls-Royce garners with ease. What stops them? Money. Their greed for it. Because despite arguments that maybe offering the CLA-Class 'cheapens' the Mercedes-Benz brand, it still sells well enough to make them a lot of dough. Even after Lexus became successful, popular, and profitable, the Toyota brand was not shut down -- because it is the primary money maker.

Here is the fundamental difference: While traditional automobile manufacturers want to offer expensive, exclusive, rare cars... Tesla is going the opposite direction, looking to offer affordable, attainable, ubiquitous cars.

Tesla is not a 'luxury' car company. Tesla currently offers expensive, performance, economy cars. They cost a lot to buy, are fun to drive, and don't burn any gasoline. The Model ☰ won't break the bank, will still be fun to drive, and still won't burn any gasoline.

polaris | 25 april 2017

@mos6507

It's reasonable to think new car sales will decline at some point but it's not anytime soon. Also - the concept of a decline is a bit misleading. There were like 88 million new cars sold worldwide last year. I'm not sure how many were EV or even PHEV but not many. These are all cars burning gas. Every year in the next little while is going to be the same.

I'm talking strictly the transition globally to EVs instead of ICE. How is that going to happen when the only EV cars being pushed cost $35k and higher?

Red Sage ca us | 25 april 2017

polaris: The elimination of about 25% of Volkswagen's planned ICE production as diesel products, now moving to EV instead, will certainly help in the next decade.

polaris | 25 april 2017

@red sage

I don't need to call it luxury or premium. It ultimately comes down to affordability. I understand the math you guys are applying to the true cost of car ownership - it's the only reason I'm even considering the Model 3. The reality is tho for most consumers - it's about what they can afford. I totally agree owning a car is a luxury but what I am stressing is the notion of moving people into EV vehicles so, really what we are talking about are all consumers that want to buy a car or want to own a car. The vast majority simply do not consider anything above $30k affordable especially when many are borrowing to pay for the vehicle.

88 million new cars sold last year - I wonder how many were sub $30k?

What I fail to see in your posts is anything saying that our transition to EVs is NOT going to require an EV in the lower price segment ($20k-$30k) except for the assumption that ride sharing services are going to eliminate that which I really can't see happening.

Octagondd | 25 april 2017

Not only is the small, cheap car segment's price going up, but people will soon realize they won't have to pay for car insurance soon once autonomous EVs can take them wherever they need to go, in privacy, whenever they want. A taxi with out having to talk to the driver. Cheaper than Uber or lyft and no need for car insurance.

topher | 25 april 2017

"It ultimately comes down to affordability."

I don't disagree, but I can buy an EV for $9,000 today. A lightly used Leaf (or similar) would seem a great deal for anyone in search of an affordable car. This is a limited resource, and will soon be gone, but for now it is the way to go for people who can't afford a longer range EV.

Thank you kindly.

Red Sage ca us | 25 april 2017

polaris: Someone reported that the current cost for raw materials for battery cells alone is around $80 per kWh. All of the processes needed to turn those materials into battery cells, then assemble them into battery packs, will increase that cost to nearly $125 per kWh. When a battery pack can be assembled for $90 per kWh, there will be a strong possibility of having a long range fully electric car for just under $25,000. That is not possible today.

The problem is that those who keep saying Tesla should build a 'cheap' car also make ridiculous demands. They want Tesla to offer a short range, low performance, econobox that is offered for less than $15,000. They refuse to accept the simple fact that almost NO ONE buys those. The best selling vehicle with a base price below $15,000 is the Nissan Versa. It is the only one that sells in excess of 100,000 units per year in the U.S., the only one with a chance of cracking the top 20 in annual sales. Everything else is far, far behind it.

No one buys short range EVs in large quantities. Partly because they are all compliance cars offered by traditional automobile manufacturers, so they are generally overpriced, and built in low quantities, and only available in a few States anyway. But I contend there is not, and never will be, a substantial market for such vehicles, because they were designed to SUCK from the outset.

So, no... Tesla is not going to offer anything with only a 20 kWh to 40 kWh battery pack, just to make a 'cheap' car. And, no... Tesla isn't going to release any 'slow' cars... And, no... Tesla is not going to bring out any sort of ugly penalty box deathmobile on wheels commuter car with substandard safety features and only manual driving capabilities -- just to make it 'cheap' either. You can hang that $#!+ up.

Tesla products are not ugly, they are meant to be desirable. Tesla products are not slow, they are meant to offer a compelling driving experience. Tesla products are not unsafe, they are meant to show that electric vehicles are in fact, SAFER than ICE cars. Tesla products are not short range, they are meant to take full advantage of the Supercharger network to enable convenient travel between major population centers. Tesla products are not 'cheap', they are meant to demonstrate to the traditional automobile industry that it is possible to replace ICE with profitably designed, built, and sold electric vehicles that accelerate the transition to sustainable transportation -- without the compromises and disadvantages that are typically (and purposefully) foisted upon compliance cars.

EVERY car that Tesla builds from now on must meet these parameters, and none will be built or offered until or unless they do. I am sick and [FLOCKING] tired of explaining these points to members of the League of Lowered Expectations. Damn.

akgolf | 25 april 2017

I just did a Google search and eight used Leafs came up for under $6,000.

akgolf | 25 april 2017

Seems pretty straight forward to me Red.

polaris | 25 april 2017

@red sage

Again - I'm not saying Tesla needs to make anything. This isn't about Tesla. It's about worldwide adoption of EVs so we can move away from the ICE. I'm sorry that you are sick of pimping for Tesla but that's on you because you seem to think my desire for a more "affordable" EV is a rant against Tesla which it is not.

Red Sage ca us | 25 april 2017

polaris: I'm pointing out that your rant is one against common sense. Almost no one buys 'cheap' new cars. They are not a hot selling segment. People keep acting as if it would be if Tesla entered the segment. They are wrong. Here, take a look at how well the cheapest new cars in America sold last year...

2016 TOTAL U.S. SALES ALL VEHICLES
_#33 __ 132,214 ___ Nissan Versa $11,990
_#69 ___ 79,766 ___ Hyundai Accent $14,745
_#88 ___ 56,630 ___ Honda FIT $16,090
_#90 ___ 55,255 ___ Chevrolet Sonic $15,145
#100 ___ 48,807 ___ Ford Fiesta $13,660
#110 ___ 43,402 ___ Dodge Dart $16,995
#117 ___ 38,855 ___ Toyota Yaris, $15,250
#124 ___ 35,511 ___ Chevrolet Spark $13,000
#137 ___ 28,700 ___ Kia Rio $14,165

See the problem here? None of them in the Top 30 among all vehicles, just two in the top 25 among passenger cars. The Kia Rio, at a $14,165 base price, was outsold by the Tesla Model S, which moved 29,156 units with a $63,000 base price. Seven of the cars listed here were outsold by the BMW 3-Series, which sold 70,458 units, despite seeing a 25.5% drop in sales from the year before, when it moved 94,540 units. Almost all of these 'cheap' cars are regularly outsold by cars with a starting price twice as high or more.

These are all typically 'loss leader' vehicles. The 'independent franchised dealerships' offer 'deals' to get these things off the lot, not because they are profitable, but so it is one more sale that didn't go to their opponent down the street. Tesla cannot afford to engage in such practices.

2016 TOTAL U.S. SALES PASSENGER CARS
#14 __ 132,214 ___ Nissan Versa $11,990
#24 ___ 79,766 ___ Hyundai Accent $14,745
#35 ___ 56,630 ___ Honda FIT $16,090
#36 ___ 55,255 ___ Chevrolet Sonic $15,145
#39 ___ 48,807 ___ Ford Fiesta $13,660
#44 ___ 43,402 ___ Dodge Dart $16,995
#46 ___ 38,855 ___ Toyota Yaris, $15,250
#51 ___ 35,511 ___ Chevrolet Spark $13,000
#58 ___ 28,700 ___ Kia Rio $14,165

These 519,140 vehicles represent 2.9567225% of the 17,557,955 new vehicles sold in the U.S. in 2016. They exist only to offer some balance to the CAFE numbers for their manufacturers. Trust that left to their own devices, they would much rather sell that quantity of units as an addition to their totals for SUVs and pickup trucks instead.

To compete against the $11,990 Nissan Versa, Tesla would have to get their battery pack cost below $2,640 and that would only be enough for a 20 kWh battery pack. No matter how much Tesla Magic were applied, it would never achieve a 200 mile minimum range. It might be nice to own, and fun to drive about town, but not having long range capabilities would make it just another also ran among grocery-getter runabout compliance cars with rapidly dropping residual value. Not worth the effort at all.

No worldwide adoption of EVs can be made attempting to sell 'cheap' cars, because not enough people would buy them if they were offered in the configuration that would still allow them to be profitable.

topher | 25 april 2017

"I'm pointing out that your rant is one against common sense. Almost no one buys 'cheap' new cars."

There is (or rather, will be) a market for short range, small, light, (but pretty, safe and technological) Tesla. Once the market shifts to EVs, and people realize that they don't need 250 miles of range, when there are superchargers every 75 miles. That would cheap at $22k or so. No need to compete on an initial price basis with Versas. Make a EV with a TCO equivalent to the Versa and see what happens.

Thank you kindly.

Red Sage ca us | 25 april 2017

topher: Hmmm... Interesting perspective. Per Edmunds, the five year TCO for a Nissan Versa is $27,808. Of that, the cost for fuel and insurance are each higher than depreciation.

http://edmunds com/nissan/versa/2016/sedan/cost-to-own/

Red Sage ca us | 25 april 2017

On the other hand... If short range EVs are to be used only as runabouts around town, or within tiny 40 mile radius circles anyway... Why sell them at all? They could join the Tesla Autonomous Fleet instead, and the riders wouldn't know the difference.

polaris | 26 april 2017

@red sage

First of all - I said the $20k-$25 segment. Secondly, I'm talking global sales. The Corolla and Golf are like the best selling cars in the world and they are in this segment. The US is a mature auto market already where the number 1 selling car is like a pick-up truck. People elsewhere have different sensibilities.

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