How did a tiny start-up beat Detroit, Germany & Japan to a usable EV?

How did a tiny start-up beat Detroit, Germany & Japan to a usable EV?

It is amazing how far Tesla has moved the yardstick on electric vehicles. What I find curious is how the world's existing manufacturers couldn't generate anywhere near the range that Tesla gets out of it's battery packs. Especially since they are using laptop batteries that are already mass produced. As I understand it, all Tesla did was find the most efficient way to configure them and then manage the temperature and environment of the batteries within the pack. I'm sure there are a few other aspects that differentiate Tesla's battery pack but it's not like they created some new type of battery. They just figured out how to get the most out of them. And they had a fraction of the r/d staff and $ to figure it out compared to the existing manufacturers.

That being said, will the other manufacturers be able to replicate the Tesla's range within a few years? I hope not, I'd like to see Tesla stay on the cutting edge.

Brian H | 2012年12月27日

What makes you think Detroit, Germany and Japan wanted to, or tried?

JZ13 | 2012年12月27日

The fact that all 3 are producing hybrids shows the desire and effort to incorporate battery power into their vehicles. They are all publicly traded so they are driven to build profits. An important way to beat your competitors is to develop technolgy quicker and better than the next guy.

GM has spent hundreds of millions of dollars pursuing electric cars. But they had given up on the effort until they saw what Tesla was doing. That led them back to the drawing board just a few years ago and they came up with the Volt which pales in comparison to the range of a Tesla.

Joshua Burstyn | 2012年12月27日

What Brian says is true. The existing automakers are pleasing their stockholders by making safe (in the sense of the level of investment and risk) vehicles for the masses.

Remember that the path to automotive progress is littered with the remains of companies who tried and failed.

Sudre_ | 2012年12月27日

Although I get Brian's point I think Nissan really put it all out there to get an affordable BEV to market (the Leaf) with the most range they could come up with for their target price. Neither my wife or I like how it looks.

Remember Tesla has patents that other car companies might not want to buy into.

Mel. | 2012年12月27日

I was all set to say how big auto is tied to big oil.

Sudre, your post on Nissan and the Leaf, has me reconsidering.

paulehardy | 2012年12月29日

Nissan's venture with the Leaf was a gamble which might still come back to bite them. The reason I considered and rejected purchasing a Leaf was the limited range. It might work well as a second family car in a big city, but that limitation was enough to turn me off. I wish Nissan success but I am a reservation holder for a model S (85). Hopefully Tesla's, Nissan's and others' efforts are enough to obtain critical mass in EV purchasers, otherwise Tesla will remain a company producing a niche product. And as a future warranty holder, I wouldn't want that!

jk2014 | 2012年12月29日

paulehardy -- totally agree. The one thing that made me a convert from gas to electric was the range of Tesla's vehicles.

Joshua Burstyn | 2012年12月29日

The Nissan Leaf was built to a price. The lack of sufficient battery environment mgmt is coming back to bite them. I wouldn't want to be in Nissan's shoes a year or two from now.

ir | 2012年12月29日

Seasoned entrepreneurs will admit that most startups fail. The successful ones owe much to luck and timing (as well as hard work, etc...).

Fail Club

Strapping a bunch of laptop batteries together might sound obvious in hindsight. But don't forget all the failures that came before:
- perpetual motion machines
- cold fusion
- super capacitors
- hydrogen fuel cells
- arrays of NiCd laptop batteries

Ballard Power was convinced that their fuel cell technology would be the key to EVs. Maybe hydrogen will unseat Tesla next year or next decade. Maybe we will all have Mr. Fusions by 2040. But today, it is an array of L-Ion laptop batteries in our Teslas and RAV4s.

Timing is Everything

Right idea at the wrong time is just as bad as the wrong idea at the wrong time. Every big car company has tinkered with EVs in the last decade or two. While they had some limited success, they were "ahead of their time". Had the laptop battery experiments used NiCd or NiMh a few years earlier, we wouldn't be having this discussion today.

A Little Luck

But instead they got lucky, L-Ion batteries just crossed into the practical energy density range.

At the same time all the major automakers were distracted from EV research during this window. They were:
- burned by failed EV projects
- milking gas guzzler "cash cows" (SUVs, Humvees)
- got in bed with big oil (hybrids still burn gas)
- bankrupt (GM, Crysler)
- fighting the hybrid wars (Toyota, Honda, Ford, just about every big car maker now)

In essence, big auto "blinked" and overlooked this breakthrough while Tesla hit it dead on.

Vawlkus | 2012年12月30日

You could also look at it as a perspective thing.

The big boys built a car then adapted it to be electric. Tesla built the battery & power train, then molded the car around them.

Who had the better vision? My money is, literally, on Tesla

paulehardy | 2012年12月30日

Will it be possible to build an EV in the near future at the Nissan Leaf price point with the range of a Model S?
That might be a challenge.

JZ13 | 2012年12月30日

@ir Great Answer! I think this story will be studied and analyzed by MBA students for generations to come.

So what happens next? Are the big guys going to be able to replicate what Tesla has done? Or will they just pay a VERY BIG premium to buy Tesla?

djp | 2012年12月30日

paulehardy - GEN III

jat | 2012年12月30日

@Mel - watch "Revenge of the Electric Car" and you will see Nissan's committment to BEVs to get the LEAF out. I am quite happy with mine (though if Tesla didn't take so long to finish the Model S I wouldn't have bought it), and I think the range is a great compromise -- 90% of people don't need more than it provides, and you aren't paying for a large battery (and hauling the weight around) that you only rarely use. My Model S has an 85kWh battery so I can drive it on out-of-town trips, but I considered getting a smaller battery and just renting a car a few times a year which would be a lot cheaper.

@JZ13 - back to the original question, the big guys have lots of money and can hire smart people too. If they can't recreate it, they could easily just buy Tesla (being publicly traded that can't easily be stopped) if they decide they can't beat them -- Tesla has a total market cap of under $4B, while GM has $48B ($15B cash) and Ford has $49B ($8B cash). They also have advantages with supplier relationships and economies of scale, so if the technology ever gets equal then Tesla will have a hard time competing.

paulehardy | 2012年12月31日 - yes, Gen III - but if it does not have the range close to a Model S, then it is just another Leaf. I hope you are correct.

djp | 2012年12月31日

@paulehardy - My guess is that Gen III will match MS 40KW battery range as a minimum. I think they are after the current LEAF/Volt market space.

Mel. | 2012年12月31日

@jat, I did see the movie, and I love Nissan for bringing out the Leaf.. I just feel that Big Auto would prefer to destroy Tesla.. I do not believe they will compete. Hopefully I am proven wrong... Anyway, my Tesla is the best car I have ever seen. Even when I am not going anywhere I have go look at , and then I have to sit in it... Interior, and the radio especially ------superior

lolachampcar | 2013年1月2日

I was selling a start up a few years back and our competition came in to take a look. The major notebook guys were spinning their designs every six months. I believe they had three engineering teams each filling a revolving six month release window. We turned our design once a year using five engineers.

One of our competitors brought in their VP of Engineering to evaluate the costs of finishing out current design spin. I was floored at the costs he was throwing around. My comment to them was "no wonder you guys have old technology and are not price competitive..... Everyone goes about building their own kingdom and efficiency suffers.

The big guys are stocked with entrenched groups that defend their turf. These groups are bloated, lethargic and lack any meaningful ability to react. Tesla, on the other hand, exists to make that battery pack work with that set of body work in a single facility that serves only one purpose. Everyone was brought on to follow a singular vision.

Vision => Personnel => Execution I've found that this is how thing get done.

lolachampcar | 2013年1月2日

man I wish there was an edit button.....

FLsportscarenth... | 2013年1月4日

Well most startups fail but even the failed ones change the game if they had something worth pursuing...

Tucker failed but was safer and more advanced than anything else on the market, most of the features of the the Tucker made it into the cars of the big three later on.

Tesla will make it... and change the game... Will Elon sellout? I do not know - he did sell Paypal once it took off... but even if he does, Tesla will already have changed the game and we consumers will be better off for it.

Neech | 2013年1月5日

The big 3 didn't learn their lesson back in the late 70's when there were gas shortages. Efforts to improve mileage was thwarted by Bush Sr. when he removed goals for higher mileage cars. Then the SUV and Hummer boom took over. In the 2000's they got hit again by soaring gas prices and now unwanted gas guzzlers. Thanks to bankrupting themselves because of their ignorance and greed they were forced to finally make efficient cars that are also dependable. Tesla has been at the forefront of EV and now they are playing catch-up.

Mel. | 2013年1月5日

Neech, your comment" Tesla has been at the forefront of EV and now they are playing catch up"

If you think they are playing " catch up" it might be a long long long time. Do you really think they are building electric's?

jk2014 | 2013年1月5日

Djp -- Leaf market space will never be profitable at its current range. Tesla knows this. Gen III will have to be 60 at minimum, most likely 85 or above to make the breakthrough. I think the BMW 3 Series and Prius markets will be their primary focus to achieve mass adoption.

Timo | 2013年1月8日

I think GenIII affordable car success depends of SC network, and because SC network pretty much requires at least 60kWh Model S range that's the minimum for it. It should not be city car like Leaf to create large customer base.

Brian H | 2013年1月8日

The Model S will outsell the Leaf, starting this year.

ikutoisahobo | 2013年1月10日

Takes a lot of money to get something like this started. Tesla was dedicated to the EV biz, while all the other companies found their bread and butter in gasoline and diesel vehicles.

Superliner | 2013年1月14日

The leaf is a reasonable offering "but it is BUTT UGLY" part of the reason they don't sell better IMHO is because of this.

Brian H | 2013年1月14日

Oriental and Occidental tastes differ. Obviously.

shop | 2013年1月18日

How did Tesla beat out the established players? They were the first to use L-ion as a battery technology which gave them huge advantages for range. But to use that new (for a car) battery technology meant they had to invent some pretty advanced new technology to cool or heat and manage every cell in the pack. Their proprietary battery pack is a very big deal and is no doubt protected by a bunch of patents. Why did no one else do L-ion first? The established car companies saw the challenges of L-ion and said "we don't have to overcome those hurdles, NiMH or whatever will be "good enough" ". And they were right as long as no one else solved L-ion.

Second, Tesla made the bold in hindsight decision to not worry about range anxiety, or at least mitigate it differently than everyone else. The established players all made ICE engines, so from their point of view, it just made strategic sense to leverage their know-how and servicing centers, and cost efficiency building internal combustion (IC) engines and build a hybrid. They completely solved the range problem by having a hybrid (just fill up at a gas station). Please note that the established players ARE NOT in bed with the oil companies, it's just that they are good at making IC engines.

Tesla said, well if we make a 240 mile range car, that will be good enough for a pretty big segment of the market. And that answer certainly worked well for a 2 seater sports car (people will take SUVs filled with camping gear on long car trips, but rarely would they take their 2 seater sports car to do so).

For model S, they upped the ante and came out with their Supercharger network. What a cool idea. For a $25M investment for a reasonable Supercharger roll-out, they will have mitigated the big knock (actually the only knock other than price) against electric cars.

So in a nutshell, they gambled and won on L-ion, and they didn't come from a IC engine background, and thus solved the range anxiety problem by first not worrying about it with a 240 mile range, and then inventing their Supercharger network.

Alex K | 2013年1月18日

@shop | JANUARY 18, 2013: They were the first to use L-ion as a battery technology which gave them huge advantages for range

Actually the Nissan Altra was the first EV production car to use Li-Ion batteries in 1997:

shop | 2013年1月18日

Oops, my bad. Actually there are other reasons why the model S is taking off - the 17" touchscreen, great styling, cabin and cargo space, etc.

Superliner | 2013年1月18日

@Alex K

Hahaha!! I had forgotten about those. Remember the NIMH EV-1's? they were pushing the 140 mile per charge envelope as well in the late 90's ... Fast forward to 2011 and we have a 75 mile plus or minus per charge Ford Focus and a Leaf that is about the same. ho hum :-(

To Teslas credit they are trying to mass market BEV's It should be mentioned that they are not the first to try, but they have the best mousetrap to date in the S

The failure will be if Gen III Tesla Model ? is affordable but offers no more range performance than the 75-100 mile Leafs and Focuses of today that seem to be about all you can achieve as a manufacturer if keeping with a price point that is attainable to the people working on the assembly line to build it.

BEV's will not really take off until there is a no compromise 300 - 400+ mile range BEV that costs approx $25k that does not require you to install an eleventy thousand dollar charging station "that only works with that brand car" at home to make the car useful. The charging hardware MUST be on board the car enabling folks to use their existing electric sources 240V outlets etc. at home to charge the thing.

I know ... Dream on lol!!

Brian H | 2013年1月18日

Interesting; the Altra had permanent magnet motor, and choice of CVT or 4-speed automatic, and a range about the same as the 40 kWh MS. Only 200 were ever made, though.

JZ13 | 2013年1月19日

@shop great post!

shop | 2013年1月20日

My wife, who is a better business thinker than I am, answered the question from a different tack. The reason the big experienced car companies couldn't come up with something like a Tesla is entirely because they are big and experienced. Over the years they have developed fiefdoms, and any project would have to get buy in and overcome resistance from many entrenched internal interests. Throw in a union shop on top of it, and there is no way the big car companies could design something like a Tesla. There is a reason why big companies often have skunk works which are essentially an internal project completely cut off from the main organization.

Joshua Burstyn | 2013年1月22日


I agree entirely. I work in government and watch both young, ambitious people and their interesting (often valid) projects get shot down due to bureaucracy, cronyism and the insitutionalisation of processes. The gears of large companies move slowly and as such they are often slow to embrace new ideas.

There is also a certain amount of pride that develops in entrenched companies. It is sometimes referred to as "not invented here syndrome". For example companies known for their prowess in designing high performance, finessed ICEs were probably wondering how relevant they were in a BEV world. Some within these same organizations may have chosen the easier path and simply written off BEVs until recently.

For the most part though I'm tempted to say most large car companies probably canvassed their usual focus groups and found many buyers weren't as interested in BEVs as they were high-efficiency ICE vehicles. This is evidenced by the fact that most car companies are currently leveraging their ICE experience to produce higher efficiency ICEs. Such vehicles are affordable to most buyers and therefore the all-important stockholders continue to be pleased and the upper mgmt continue to be employed.

Speaking of which, a relevant quote goes something like this, "No one ever got fired for buying Intel." In other words no one ever got fired for choosing a safe bet. (ICE cars.) Conversely the folks at Nissan (as an example) got tired of Mark Perry's attempts to make the Leaf a viable car... and many suspect he was asked to leave: (to leaf?)

In short there are probably many reasons why Tesla is a pioneer in the BEV market.

TV | 2013年1月23日

The majority stockholders in the largest car companies are banks.
The Rothchilds (one of the owners of the US Federal Reserve) owns 600 Banks.
The hybrid cars are limp-wristed efforts to offer "solutions" to Oil Dependency- which is worth Big Money.

The technique is to show meager gains, while suppressing the truly innovative and remarkable platforms that could ruin the Gas/Oil Model.

Read the book (or watch the movie) "The Formula". pretty revealing.

Keep the peasants happy, show ideas but no follow-through, and keep racking in the chips. The reason Solar Power has not REALLY taken off is because methods have to be created to control the usage of something that is inherintely free: The Sun.

The reason Elon Musk created Solar City is because of his true genius towards his larger vision of "linking" the needs of his three companies together. If he needs "losses" in one company to offset the "gains" in others, the idea works. He needs to build Supercharging Stations. Who is better to supply the componentries of those stations than a sister company? If introductions of technology to Tesal are hindered by "outsiders", he can switch gears towards SpaceX applications to prove their value, etc.

Until someone who is wealthy enough, influential enough, and innovative enough comes along, the methods used to enslave the masses will continue. Banks, Oil, Water, Food, etc. I'm an Elon Musk Fan as long as he doesn't sell out. The day he announces a deal to dilute the value or effectiveness of Tesla, is the day I sell. But if he retains his committments, and doesn't take money from the wrong group, he will survive. Beware of big companies buying big quantities of Tesla Stock.

The reason no one else has done it, is because they didn't want to. Check out Dean Kamen's new introduction of the Stirling Engine for his Water Purification system. My guess? It will never become mainstream. Why? 1) Because Dean flys helicopters, 2) The guy who bought Segway died in an accident where he and his Segway just "accidentally" flew off a cliff. 3) Someone will whisper in his ear something, and one way or another, it will be supressed.
Stan Meyers is another example. I consider Elon Musk to be an All American Hero. And we need more just like him. But I always worry about the bad guys. It appears he has built his businesses well, where he has surrounded himself with individuals as smart, or smarter than himself. This is the key. This is why I think Mr. Musk is changing our world right now, and I am very proud to buy his products. In addition to his Model S, I want to see that pickup truck. The model X somehow is missing the mark between the sketches and the final prototype. Sketches are cool, prototype is uh...well...
But the Model S is going to be a TRUE COLLECTOR CAR. As innovations occur, upgrades will occur. By the 8th year of that battery warranty, there will be new solutions, and at a lower cost. But the Model S is going to be the gateway to the future of individual transportation. No way I'm missing out on buying this car.