The Term 'Tesla Killers' Is Dead: OEM Struggles Prove Tesla's Worth
01-29-20, 10:33 AM
#1
Lexus Test Driver
Thread Starter
The Term 'Tesla Killers' Is Dead: OEM Struggles Prove Tesla's Worth
This forum certainly remembers the arguments that Tesla is dead once Toyota decides to build an EV....pretty laughable now given all the other OEMs have been decimated by Tesla. Lets hope more competitive EVs are introduced soon.
By: Carlo Ombello
It was a favorite term by skeptics and detractors for years: the “Tesla killer”. The theory was that, as soon as premium car makers would start producing their own full electric models, that would be the end for the fragile California startup. After all, how could Musk’s company even dream of competing with the century-old, giant automakers’ well-oiled machine?
Year after year, we have witnessed major manufacturers showing off beautiful electric concepts, and – eventually – their production versions with much fanfare and cheers by a growing community of EV enthusiasts (and Tesla skeptics), promising to heat up the game.
2018 was the breakthrough year, with the introduction of the Jaguar I-Pace, followed by the Audi e-tron Quattro and the first glimpses of the Mercedes EQC, while BMW tried to get its share of the attention with the iX3 concept and Porsche kept teasing its Mission-e electric dream (now the Taycan) ahead of its 2019 debut. Last year then saw Volvo’s own foray into the market, with its EV-focused Polestar brand and the launch of the Recharge badge for electric versions of Volvo models (such as the interesting XC40). Plenty of tantalizing competition piling up in an industrial blink of an eye.
Fast forward to today. In a now thriving EV market, the first luxury sports cars, sedans and SUVs from these premium brands are out for sale, while more exciting models are on their way in the coming months (think of Audi Q4 e-tron or Mercedes EQA crossovers to counter the imminent Tesla Model Y), greatly expanding the battleground of what used to be Musk’s domain.
Is any of these a Tesla killer, then? Obviously not, and we might consider this term officially dead. Despite a growing number of competitors, the presence – or anticipation – of attractive premium EVs from legacy brands is not making a dent in Musk’s business. In fact, Tesla’s sales are enjoying unprecedented growth, while its competition struggles to execute, and the market shows a tepid response.
Ironically, it looks as though the Tesla killers are actually being killed by Tesla in the cradle, in a twist of events that wasn’t actually impossible to foresee. The California automaker’s advantage in terms of infrastructure and technology is starting to show clearly, as years of painstaking research and development are now bearing fruit, with the compounding effect of ever better planning and execution.
Meanwhile, teething problems and obvious shortcomings of legacy carmakers’ first electric models show that a decades-old mastery of the car business won’t automatically transfer into electric mobility. Several are the reasons and none of them insurmountable, but some will be a lot harder than others to overcome. For each of these, time is of the essence.
Most evident, capital-intensive issues have to do with the infrastructural gap with Tesla. Premium carmakers have started to re-tool their factories for EV production, and are now also coming to grips with the bottlenecks of battery supply. These two factors alone are among the clearest hurdles for any brand on the way to mass-produce electric models.
A third obvious one is the fast-charging infrastructure, perhaps the most striking example of Musk’s farsighted approach to enabling the EV market. But while this triple gap looks daunting, it is not something that can’t be solved with a heavy infusion of cash. Luxury brands are already investing billions, from car to battery factories, all the while signing alliances to spread out the costs. Same goes for fast-charging networks, at an even higher pace.
The Ionity network is a prime example of this: inexistent less than two years ago, it now boasts over 200 stations throughout Europe, with a plan to double capacity to 400 this year alone. This is not to say that all premium brands will successfully emerge on the other side of the tunnel, as laggards could bite the dust at this very stage.
It is, however, the technology issue that should worry all incumbents. Eventually, once infrastructure gaps are broadly equalized, automakers have to sell. And this is where a product’s specs, more than its looks, will tip the balance in one’s favor over the other. All these new and upcoming premium EVs sport good looks, innovative interiors and seemingly adequate battery capacity. Nonetheless, what is becoming apparent is their struggle in solving the most crucial aspect of electric mobility: range anxiety.
At the price point of premium offerings, customers would expect to be able to replace their main car without sacrificing the ability to make long journeys. Tesla has all but solved this issue with models comfortably exceeding 300-mile range, thanks to its unparalleled focus on battery development and energy efficiency, which promises further progress in the near future.
Its competitors, meanwhile, struggle to reach the 200-mile threshold with similar hardware, as they try to divert their marketing focus to brand and design. This – even before any thought on Tesla’s lead in car software and autonomy – is the real technological problem, a gap they won’t be able to mask for long.
As 2020 sees a decisive shift by premium manufacturers towards electric mobility, under pressure from new EU emissions legislation and increased public awareness, we might witness an unintended effect this wave of luxury EVs could bring: promoting the very brand they were designed to beat. From wannabe Tesla killers to unwitting Tesla ads.
The Term 'Tesla Killers' Is Dead: OEM Struggles Prove Tesla's Worth
By: Carlo Ombello
The fact that legacy automakers are struggling to solve range anxiety and mass-produce EVs highlights Tesla's value.
Editor's Note: This article was originally published on opportunity:energy.It was a favorite term by skeptics and detractors for years: the “Tesla killer”. The theory was that, as soon as premium car makers would start producing their own full electric models, that would be the end for the fragile California startup. After all, how could Musk’s company even dream of competing with the century-old, giant automakers’ well-oiled machine?
Year after year, we have witnessed major manufacturers showing off beautiful electric concepts, and – eventually – their production versions with much fanfare and cheers by a growing community of EV enthusiasts (and Tesla skeptics), promising to heat up the game.
2018 was the breakthrough year, with the introduction of the Jaguar I-Pace, followed by the Audi e-tron Quattro and the first glimpses of the Mercedes EQC, while BMW tried to get its share of the attention with the iX3 concept and Porsche kept teasing its Mission-e electric dream (now the Taycan) ahead of its 2019 debut. Last year then saw Volvo’s own foray into the market, with its EV-focused Polestar brand and the launch of the Recharge badge for electric versions of Volvo models (such as the interesting XC40). Plenty of tantalizing competition piling up in an industrial blink of an eye.
Fast forward to today. In a now thriving EV market, the first luxury sports cars, sedans and SUVs from these premium brands are out for sale, while more exciting models are on their way in the coming months (think of Audi Q4 e-tron or Mercedes EQA crossovers to counter the imminent Tesla Model Y), greatly expanding the battleground of what used to be Musk’s domain.
Is any of these a Tesla killer, then? Obviously not, and we might consider this term officially dead. Despite a growing number of competitors, the presence – or anticipation – of attractive premium EVs from legacy brands is not making a dent in Musk’s business. In fact, Tesla’s sales are enjoying unprecedented growth, while its competition struggles to execute, and the market shows a tepid response.
Ironically, it looks as though the Tesla killers are actually being killed by Tesla in the cradle, in a twist of events that wasn’t actually impossible to foresee. The California automaker’s advantage in terms of infrastructure and technology is starting to show clearly, as years of painstaking research and development are now bearing fruit, with the compounding effect of ever better planning and execution.
Meanwhile, teething problems and obvious shortcomings of legacy carmakers’ first electric models show that a decades-old mastery of the car business won’t automatically transfer into electric mobility. Several are the reasons and none of them insurmountable, but some will be a lot harder than others to overcome. For each of these, time is of the essence.
Most evident, capital-intensive issues have to do with the infrastructural gap with Tesla. Premium carmakers have started to re-tool their factories for EV production, and are now also coming to grips with the bottlenecks of battery supply. These two factors alone are among the clearest hurdles for any brand on the way to mass-produce electric models.
A third obvious one is the fast-charging infrastructure, perhaps the most striking example of Musk’s farsighted approach to enabling the EV market. But while this triple gap looks daunting, it is not something that can’t be solved with a heavy infusion of cash. Luxury brands are already investing billions, from car to battery factories, all the while signing alliances to spread out the costs. Same goes for fast-charging networks, at an even higher pace.
The Ionity network is a prime example of this: inexistent less than two years ago, it now boasts over 200 stations throughout Europe, with a plan to double capacity to 400 this year alone. This is not to say that all premium brands will successfully emerge on the other side of the tunnel, as laggards could bite the dust at this very stage.
It is, however, the technology issue that should worry all incumbents. Eventually, once infrastructure gaps are broadly equalized, automakers have to sell. And this is where a product’s specs, more than its looks, will tip the balance in one’s favor over the other. All these new and upcoming premium EVs sport good looks, innovative interiors and seemingly adequate battery capacity. Nonetheless, what is becoming apparent is their struggle in solving the most crucial aspect of electric mobility: range anxiety.
At the price point of premium offerings, customers would expect to be able to replace their main car without sacrificing the ability to make long journeys. Tesla has all but solved this issue with models comfortably exceeding 300-mile range, thanks to its unparalleled focus on battery development and energy efficiency, which promises further progress in the near future.
Its competitors, meanwhile, struggle to reach the 200-mile threshold with similar hardware, as they try to divert their marketing focus to brand and design. This – even before any thought on Tesla’s lead in car software and autonomy – is the real technological problem, a gap they won’t be able to mask for long.
As 2020 sees a decisive shift by premium manufacturers towards electric mobility, under pressure from new EU emissions legislation and increased public awareness, we might witness an unintended effect this wave of luxury EVs could bring: promoting the very brand they were designed to beat. From wannabe Tesla killers to unwitting Tesla ads.
01-29-20, 11:24 AM
#2
I don't know if I agree with this article 100%. Yes Tesla has its competitive advantage of a Supercharger network. And as really the first mover, they've laid down the metrics that they are good at, acceleration and large EV range. And it's largely media like the link that try to label anything as a Tesla "killer." I don't think anyone is trying to kill Tesla, every brand is doing electrification in their own way.
That said, do people really NEED a 300 mile range on their electric vehicle? What % of the population is really regularly embarking on driving treks of at least 100 miles in a single direction (so 200 round trip) without the ability to charge in between? Do people NEED to accelerate to 60 in under 4 seconds? Absolutely not.
For what it's worth, if I were shopping for an electric luxury EV today, I'd go with the e-Tron over Model X just for the better execution and build quality and after sales support of the brand. I know the range is "only" 200-ish miles and it's less electrically efficient, it's not ludicrously fast, etc. etc etc. So no the e-tron isn't a Model X "killer", but I don't care about that.
Kudos to Tesla for bringing electric into the fold, I for one think it's fairly impressive how quickly the stalwart OEMs have been able to launch BEVs when they put an ounce of effort towards it. And the large OEMs don't seem to have cut corners and make other product compromises in order to do so.
That said, do people really NEED a 300 mile range on their electric vehicle? What % of the population is really regularly embarking on driving treks of at least 100 miles in a single direction (so 200 round trip) without the ability to charge in between? Do people NEED to accelerate to 60 in under 4 seconds? Absolutely not.
For what it's worth, if I were shopping for an electric luxury EV today, I'd go with the e-Tron over Model X just for the better execution and build quality and after sales support of the brand. I know the range is "only" 200-ish miles and it's less electrically efficient, it's not ludicrously fast, etc. etc etc. So no the e-tron isn't a Model X "killer", but I don't care about that.
Kudos to Tesla for bringing electric into the fold, I for one think it's fairly impressive how quickly the stalwart OEMs have been able to launch BEVs when they put an ounce of effort towards it. And the large OEMs don't seem to have cut corners and make other product compromises in order to do so.
01-29-20, 11:50 AM
#3
Lexus Fanatic
There's truth on both sides here. Tesla definitely has a big success with the Model 3...there is no question about that. But, as pbm317 points out (and I agree with him), unless one needs the advantages of the long-range Tesla batteries and the blinding acceleration from the torque in their electric motors, there are indeed better options and better build-quality available elsewhere (and, of course, a more widespread dealer network that is available in all states)
01-29-20, 12:35 PM
#4
Pole Position
There are things Tesla could do better, interiors being perhaps one, but the lead they have now, from a technology, infrastructure and customer loyalty perspective, is potentially unassailable.
Q4 results drop in 30 mins. Could be an interesting earnings release.
But it's hard to credibly claim other than Tesla right now is in a league of its own.
Q4 results drop in 30 mins. Could be an interesting earnings release.
But it's hard to credibly claim other than Tesla right now is in a league of its own.
01-29-20, 12:38 PM
#5
Lexus Test Driver
Thread Starter
There's truth on both sides here. Tesla definitely has a big success with the Model 3...there is no question about that. But, as pbm317 points out (and I agree with him), unless one needs the advantages of the long-range Tesla batteries and the blinding acceleration from the torque in their electric motors, there are indeed better options and better build-quality available elsewhere (and, of course, a more widespread dealer network that is available in all states)
01-29-20, 01:30 PM
#6
Pole Position
There are things Tesla could do better, interiors being perhaps one, but the lead they have now, from a technology, infrastructure and customer loyalty perspective, is potentially unassailable.
Q4 results drop in 30 mins. Could be an interesting earnings release.
But it's hard to credibly claim other than Tesla right now is in a league of its own.
Q4 results drop in 30 mins. Could be an interesting earnings release.
But it's hard to credibly claim other than Tesla right now is in a league of its own.
01-29-20, 01:38 PM
#7
Loved this article. It does show Tesla's worth by taking on topics conventional automakers will not touch.
Infrastructure is a big one. Automakers stayed comfortably within their lane of Petrol infrastructure.
Integration of tech/batteries/wireless. Each Tesla has infrastructure charging station awareness. Range anxiety problem solved. Early vehicles had no real infrastructure.
EV power sources and battery supply. Tackling it and automating it meant Tesla can ramp up production produce within their supply capabilities.
Advanced car sensing. What was cutting edge in 2012-14 are now becoming standard in 2018-19. Tesla went above and beyond to the road and navigation.
Integrating it all within a functional vehicle is also HUGE. The vehicle was the end game. It's really everything else that makes it possible, the stuff that any division or unit in a conventional automaker will not touch for this very reason... it was not in the automaker's business interest to redefine the auto-biz in a different market. Everyone was content in their footprint and big foot or market disruptive initiatives were out of scope for the sheer size, scale, and audacity of the idea. Failure meant risk of failing as a company as a whole. Thus the prove me wrong mentality grew like a cancer and legions of executives became stagnant in the old fashioned way of doing auto biz by staying in your freakin Petrol lane and stick to the master 14yr to 21year plan for the brands.
All it takes is one to rise up from the incredible odds against it, with the help of global warming and government incentives. The perfect storm of conditions showed what is possible and only one company has a line up of 8 vehicles (Model X, Y, 3, S, roadster, CyberTruck, Semi) worthy of a lasting impact on 21st century automaking. Inconceivable is the endless lamentation by its competition. They should be the ones doing it instead. They had the manufacturing know how. The very walls within the existing auto business are exactly what prevented them from going big and changing the world. Maybe soon Tesla will be worth all of them combined, because they addressed and solved so many issues current industry cannot do within the 'petrol' way of life.
8 EV vehicles showing what Tesla's worth is and 3 have not fully launched yet. Just wow! How did that happen under my watch? The apple play book for cars is unfolding before our eyes... Tesla is the automotive 'apple', and everyone else becomes the automotive google hybrid mix of EV brands. Fall asleep again at your own risk or be forced out of the game like Microsoft was unable to get back into the cell phone biz. The big players Toyota/MB/Audi-VW/BMW/Honda/GM/Ford/FCA/Volvo have all been served notice. It will be interesting to see where things lay by this time in 2030. What kind of partnerships will arise for battery technologies and production? What kind of standards are set for EV charging? What shared software technologies are mandatory within cars? Everyone doing their own thing is not a recipe for survival.
Infrastructure is a big one. Automakers stayed comfortably within their lane of Petrol infrastructure.
Integration of tech/batteries/wireless. Each Tesla has infrastructure charging station awareness. Range anxiety problem solved. Early vehicles had no real infrastructure.
EV power sources and battery supply. Tackling it and automating it meant Tesla can ramp up production produce within their supply capabilities.
Advanced car sensing. What was cutting edge in 2012-14 are now becoming standard in 2018-19. Tesla went above and beyond to the road and navigation.
Integrating it all within a functional vehicle is also HUGE. The vehicle was the end game. It's really everything else that makes it possible, the stuff that any division or unit in a conventional automaker will not touch for this very reason... it was not in the automaker's business interest to redefine the auto-biz in a different market. Everyone was content in their footprint and big foot or market disruptive initiatives were out of scope for the sheer size, scale, and audacity of the idea. Failure meant risk of failing as a company as a whole. Thus the prove me wrong mentality grew like a cancer and legions of executives became stagnant in the old fashioned way of doing auto biz by staying in your freakin Petrol lane and stick to the master 14yr to 21year plan for the brands.
All it takes is one to rise up from the incredible odds against it, with the help of global warming and government incentives. The perfect storm of conditions showed what is possible and only one company has a line up of 8 vehicles (Model X, Y, 3, S, roadster, CyberTruck, Semi) worthy of a lasting impact on 21st century automaking. Inconceivable is the endless lamentation by its competition. They should be the ones doing it instead. They had the manufacturing know how. The very walls within the existing auto business are exactly what prevented them from going big and changing the world. Maybe soon Tesla will be worth all of them combined, because they addressed and solved so many issues current industry cannot do within the 'petrol' way of life.
8 EV vehicles showing what Tesla's worth is and 3 have not fully launched yet. Just wow! How did that happen under my watch? The apple play book for cars is unfolding before our eyes... Tesla is the automotive 'apple', and everyone else becomes the automotive google hybrid mix of EV brands. Fall asleep again at your own risk or be forced out of the game like Microsoft was unable to get back into the cell phone biz. The big players Toyota/MB/Audi-VW/BMW/Honda/GM/Ford/FCA/Volvo have all been served notice. It will be interesting to see where things lay by this time in 2030. What kind of partnerships will arise for battery technologies and production? What kind of standards are set for EV charging? What shared software technologies are mandatory within cars? Everyone doing their own thing is not a recipe for survival.
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01-29-20, 01:39 PM
#8
Lexus Fanatic
No automaker currently has matched the combination of range/performance/efficiency of a 2013 Model 3 that speaks volumes about Tesla's lead in tech.
01-29-20, 02:17 PM
#11
Oh my gosh, $600 stratosphere cleared. Market makers are trying to get shares to sell and control the buying. The momentum is crazy. Shorts better run or get slaughtered. Larry Ellison's billion dollar buy last summer will make him a serious tour de force in America Cup boat racing forever.
01-29-20, 09:14 PM
#12
No, but they want. I agree. I'm not, but if I were in the market for an EV it needs to be closer to 400 mile range before I'd consider one. On a trip to LA from SF in my friends 70D we had to stop 2 times there and 3 times back. I don't like that personally, but one day it'll get there. Good for Tesla, it's certainly better than the Taycan's range.
01-29-20, 11:27 PM
#13
As usual with Tesla, it is hard to get if someone is a stock holder or just likes the brand or vehicles.
Indeed, just looking at the fourth quarter, vehicle deliveries and energy storage deployments hit records. Yet revenue growth was just 2.2%, year over year, and net income fell 25%. It’s worth noting that the $105 million of earnings was more than accounted for by the $133 million of regulatory credits sold in the quarter. As for the $1 billion of free cash flow Tesla reported, more than half is accounted for by those credits, a big working capital swing and $204 million of “other” cash from operations that await some 10K-filing details.
01-30-20, 07:15 AM
#14
Lexus Test Driver
Thread Starter
Tesla made op profit but the real metric is free cash flow. They were about a $1 billion. They will go back in the red next quarter because they will begin delivering Model 3s to customers in China which means they will begin amortizing their factory expenses on their P&L. Operating profit isn't necessarily the best metric for stock valuation on growth companies like Tesla. As long as deliveries are high and cash flow is good, Tesla is in strong shape financially. Congrats to Tesla.
01-30-20, 07:56 AM
#15
Tesla made op profit but the real metric is free cash flow. They were about a $1 billion. They will go back in the red next quarter because they will begin delivering Model 3s to customers in China which means they will begin amortizing their factory expenses on their P&L. Operating profit isn't necessarily the best metric for stock valuation on growth companies like Tesla. As long as deliveries are high and cash flow is good, Tesla is in strong shape financially. Congrats to Tesla.
It is Gigafactory growth, which makes deliveries ramp up and positions Tesla as a global auto maker.
The Gigafactory 3 was built from ground breaking and operational in 10 MONTHS. Gigafactory 4 in Germany has a site located. It can be up and operational in 2021 sometime.
Tell me of a company in the world can out pace what Tesla is doing in the EV space. 10 MONTHS is a recipe for destroying the competition and such a project for GM/Ford would take 30-36 months. You simply cannot retool an existing factory to scale to what Tesla can do. Their factories were forced optimized to handle 400k+ yearly order volume.
10 MONTHS means potentially close to 1.5 million vehicles produced yearly when 4 Gigafactories are running in 2-3 years at 400k vehicle capacity It is absolutely freaking insane and Cybertruck has not even launched and may need it's own commercial/truck Gigafactory to handle the order queue for the very large EV's. No wonder Gigafactories to serve that purpose will spool up and attract low financing capital to get it done.
10 MONTHS means they have a golden recipe to follow for the gigafactory madness and print money. Find site, build it, source and further optimize supply chain, and repeat. Everyone else's manufacturing capability is rendered obsolete, difficult to upgrade, and continues to demand 3x more parts to make the product.