Tesla and Uber Unlikely to Survive...
Discussion
jjwilde said:
So far these new EVs which are apparently Tesla killers are selling in small numbers compared to the 3. How do you explain the Norway sales, why are the big boys not outselling Tesla? Could it be the Tesla is faster, goes further, has better tech and has a reliable charging network?
The etron and ipace are probably double the cost of the 3? And both in the Norwegian top 10.hyphen said:
jjwilde said:
So far these new EVs which are apparently Tesla killers are selling in small numbers compared to the 3. How do you explain the Norway sales, why are the big boys not outselling Tesla? Could it be the Tesla is faster, goes further, has better tech and has a reliable charging network?
The etron and ipace are probably double the cost of the 3? And both in the Norwegian top 10.
It’s hard to make any credible judgements so far this year as Tesla has been fulfilling pent up demand but by Q4 there should be clearer data on the base levels of demand.
The big worry for EVs in general is that in Europe it is Norway leading the charge and it is not a country that is representative of the wider market as it is highly affluent and with enormous tax penalties and subsidies in play to create a whole command economy.
Sambucket said:
jamoor said:
I dont think you quite understood, apple don't do any manufacturing.
Fair enough. But I read they make their own phone chips? And hope to make their own mac chips in future too, in order to more tightly integrate their product range? Not an expert, but find it interesting. But they don’t make them. They’re fabbed elsewhere as there are only really a handful of microchip fab houses big enough to handle the volume.
It’s an extremely expensive setup so you tend to get foundries that will then make stuff for anyone (like intel, AMD, nVidia etc). TSMC spent 10bn on their 300mm wafer plant and expects future plants to cost double that as process sizes shrink (they’re at 7nm now which has taken a long while to get going, intel still fab at 14nm. I’m not even sure if we’ll see below 7nm for some time).
Otispunkmeyer said:
Sambucket said:
jamoor said:
I dont think you quite understood, apple don't do any manufacturing.
Fair enough. But I read they make their own phone chips? And hope to make their own mac chips in future too, in order to more tightly integrate their product range? Not an expert, but find it interesting. But they don’t make them. They’re fabbed elsewhere as there are only really a handful of microchip fab houses big enough to handle the volume.
It’s an extremely expensive setup so you tend to get foundries that will then make stuff for anyone (like intel, AMD, nVidia etc). TSMC spent 10bn on their 300mm wafer plant and expects future plants to cost double that as process sizes shrink (they’re at 7nm now which has taken a long while to get going, intel still fab at 14nm. I’m not even sure if we’ll see below 7nm for some time).
DonkeyApple said:
Could be that Norway is a remarkably small country and not one to build a global automotive business around.
Tesla has to sell EVs as thatbis their sole reason to exist. They sell them even though they lose money in doing so. The mainstream car manufacturers simply have no need to sell products at a loss and more importantly they aren’t allowed to by their shareholders, whereas Tesla shareholders have invested specifically to lose money in order to win market share.
That’s the enormous difference between investment capital wanting dividend income today versus investment capital hoping for enormous capital returns tomorrow. Two completely different worlds that create two completely different types of business. It is almost a coincidence that the two types of business are aiming long term to sell the same product such is the total difference of the short to medium term paths.
A start up looking to just sell one product has no choice but to build its model around the risks of Government taxation policy but conversely an incumbent has no need or interest or mandate to bring on that risk.
So what you have is Tesla fronting all these risks in the here and now and hoping for the massive capital reward for navigating through them but the incumbents have absolutely no need or desire to bafflingly change to a start up, capital burn model nor any permission to do so but instead are delivering in the correct way for that type of business. For most firms the whole EV arena is mostly just about doing enough to benefit from the brand marketing upside and doing enough to keep on top of the learning curve but for them there is no commercially profitable market for EVs (nor is there for Tesla at this moment in time) and so there is absolutely no reason to be churning them out.
I think that a big issue from the Tesla side is that there is a lack of objectivity due to the love of the product. It is this that prevents some from comprehending the simple reality of two absolutely opposing business models both aiming for the same end achievement but having to go about it in completely different ways. At the same time this passion also seemingly blocks the rational understanding that no one actually needs an EV or that they are not the perfect answer but just an answer to a certain group of car users and that this is why ICE will still be a huge seller in twenty years time unless something significantly better and cheaper than LI batteries comes to market.
It may help if people compare the rise of the challenger bank in the traditional banking market place.
On the surface these challenger banks look like something amazing that will kill off the stagnant old incumbents and why aren’t these incumbents fighting back?
The reality is that the challenger banks are not doing anything new, they are simply taking the loss making element of global banking (basic retail cash deposits) and wrapping it up in a pseudo slick interface (easy to do when all you offer is the most basic element of the global banking industry) and cutting a few corners, or at least running zero buffer zone in the regulatory and legal framework. All of which is completely loss making and needs to be financed by venture capital.
And what are they hoping to achieve? Well the single objective is to take enough market share before the venture capital runs out so that they can then start bogging themselves down with all the cumbersome but actually profitable side of retail banking.
They are burning risk capital in order to become big enough to become an identical operator to the cumbersome incumbents.
And once you realise that is how it all works you can then suddenly appreciate why there is nothing in it for the incumbents for doing likewise as they are already there! There is nothing to win at the end of losing all that money, no reward. All they can do is slightly tinker around the edges of their existing offering to keep apace with the evolving client side.
And that is the key to understanding Tesla v Incumbents.
The Tesla killer won’t be a product. That’s your overly simplistic penny share gambler’s perspective that is caused by newco being based around one product, the assumption that the risk comes from someone else appearing with the same product via the same business model. It’s not about product. It’s in reality about process.
All firms are targeting holding a key level market share at X date in the future and are travelling to that point via differing paths. The product is almost irrelevant as they are all making the same product. It’s the path that is critical. It’s who has the most robust and most potentially profitable path and often, the lowest risk.
VW has forced themselves into the game well in advance of what they ever wanted but the threat to VW’s venture isn’t Tesla but China. China is the biggest entity in EVs by magnitudes and it has been on its path for longer than anyone else, has total State backing including global material control and already has the dominant market share.
VW is standing in the massive shadow of the Chinese EV machine and looking up. It’s not got any time, nor is there any potential reward, to look down at a low volume, premium EV manufacturer that is only able to sell product where governments incentivise sales and those products are currently loss making.
From VW’s and the other incumbents’ perspectives their long term and potentially life threatening problem is China, China is the absolutely enormous storm front that is heading towards them. Tesla is just the puddle next to them and they’ve already got wellies on.
Tesla sell some premium products to rich folk in rich countries and can only do that because those countries give away taxpayer funds. The incumbents sell millions of cheaper products to the middle and poor demographics and their premium products are mostly to assist in marketing and selling those normal products to the normal market. And the big threat to their future and business is that the Chinese state controls the global market for the key raw materials, the Chinese state has been bankrolling the new EV manufacturers and the Chinese state has created the largest consumer market for EVs via heavy tax subsidies. And why has China done this? Because they want to export more than just plastic tat at Christmas to the West. They want to totally dominate the global
Car market and have specifically opted to control and dominate the global EV market.
The existence of China and its now twenty year old strategy for global dominance of the automotive industry is why Tesla in the grand scheme of things is an irrelevance to the Western incumbents. It’s a wasp flying a bit too close to your ballbag but while an enormous tiger is about to pounce on you.
Great post! Hope some of the fanboys read it with an open mind...Tesla has to sell EVs as thatbis their sole reason to exist. They sell them even though they lose money in doing so. The mainstream car manufacturers simply have no need to sell products at a loss and more importantly they aren’t allowed to by their shareholders, whereas Tesla shareholders have invested specifically to lose money in order to win market share.
That’s the enormous difference between investment capital wanting dividend income today versus investment capital hoping for enormous capital returns tomorrow. Two completely different worlds that create two completely different types of business. It is almost a coincidence that the two types of business are aiming long term to sell the same product such is the total difference of the short to medium term paths.
A start up looking to just sell one product has no choice but to build its model around the risks of Government taxation policy but conversely an incumbent has no need or interest or mandate to bring on that risk.
So what you have is Tesla fronting all these risks in the here and now and hoping for the massive capital reward for navigating through them but the incumbents have absolutely no need or desire to bafflingly change to a start up, capital burn model nor any permission to do so but instead are delivering in the correct way for that type of business. For most firms the whole EV arena is mostly just about doing enough to benefit from the brand marketing upside and doing enough to keep on top of the learning curve but for them there is no commercially profitable market for EVs (nor is there for Tesla at this moment in time) and so there is absolutely no reason to be churning them out.
I think that a big issue from the Tesla side is that there is a lack of objectivity due to the love of the product. It is this that prevents some from comprehending the simple reality of two absolutely opposing business models both aiming for the same end achievement but having to go about it in completely different ways. At the same time this passion also seemingly blocks the rational understanding that no one actually needs an EV or that they are not the perfect answer but just an answer to a certain group of car users and that this is why ICE will still be a huge seller in twenty years time unless something significantly better and cheaper than LI batteries comes to market.
It may help if people compare the rise of the challenger bank in the traditional banking market place.
On the surface these challenger banks look like something amazing that will kill off the stagnant old incumbents and why aren’t these incumbents fighting back?
The reality is that the challenger banks are not doing anything new, they are simply taking the loss making element of global banking (basic retail cash deposits) and wrapping it up in a pseudo slick interface (easy to do when all you offer is the most basic element of the global banking industry) and cutting a few corners, or at least running zero buffer zone in the regulatory and legal framework. All of which is completely loss making and needs to be financed by venture capital.
And what are they hoping to achieve? Well the single objective is to take enough market share before the venture capital runs out so that they can then start bogging themselves down with all the cumbersome but actually profitable side of retail banking.
They are burning risk capital in order to become big enough to become an identical operator to the cumbersome incumbents.
And once you realise that is how it all works you can then suddenly appreciate why there is nothing in it for the incumbents for doing likewise as they are already there! There is nothing to win at the end of losing all that money, no reward. All they can do is slightly tinker around the edges of their existing offering to keep apace with the evolving client side.
And that is the key to understanding Tesla v Incumbents.
The Tesla killer won’t be a product. That’s your overly simplistic penny share gambler’s perspective that is caused by newco being based around one product, the assumption that the risk comes from someone else appearing with the same product via the same business model. It’s not about product. It’s in reality about process.
All firms are targeting holding a key level market share at X date in the future and are travelling to that point via differing paths. The product is almost irrelevant as they are all making the same product. It’s the path that is critical. It’s who has the most robust and most potentially profitable path and often, the lowest risk.
VW has forced themselves into the game well in advance of what they ever wanted but the threat to VW’s venture isn’t Tesla but China. China is the biggest entity in EVs by magnitudes and it has been on its path for longer than anyone else, has total State backing including global material control and already has the dominant market share.
VW is standing in the massive shadow of the Chinese EV machine and looking up. It’s not got any time, nor is there any potential reward, to look down at a low volume, premium EV manufacturer that is only able to sell product where governments incentivise sales and those products are currently loss making.
From VW’s and the other incumbents’ perspectives their long term and potentially life threatening problem is China, China is the absolutely enormous storm front that is heading towards them. Tesla is just the puddle next to them and they’ve already got wellies on.
Tesla sell some premium products to rich folk in rich countries and can only do that because those countries give away taxpayer funds. The incumbents sell millions of cheaper products to the middle and poor demographics and their premium products are mostly to assist in marketing and selling those normal products to the normal market. And the big threat to their future and business is that the Chinese state controls the global market for the key raw materials, the Chinese state has been bankrolling the new EV manufacturers and the Chinese state has created the largest consumer market for EVs via heavy tax subsidies. And why has China done this? Because they want to export more than just plastic tat at Christmas to the West. They want to totally dominate the global
Car market and have specifically opted to control and dominate the global EV market.
The existence of China and its now twenty year old strategy for global dominance of the automotive industry is why Tesla in the grand scheme of things is an irrelevance to the Western incumbents. It’s a wasp flying a bit too close to your ballbag but while an enormous tiger is about to pounce on you.
Dave Hedgehog said:
hyphen said:
Great post! Hope some of the fanboys read it with an open mind...
an interesting post indeed, but the threat from china is to all car makers and not just tesla Dave Hedgehog said:
an interesting post indeed, but the threat from china is to all car makers and not just tesla
Indeed the threat of chinese is already here, look at polestar and MG.The problem for the current makers is that they already are tied up in ICE for them to begin launching electric alternatives will mean killing themselves.
I saw BMW have a new i4 coming out, this should in theory kill 3 series sales which is only in year 2 of its 9 year cycle meaning they should lose all that money invested in the 3 series. This won't make their investors happy either.
Dave Hedgehog said:
hyphen said:
Great post! Hope some of the fanboys read it with an open mind...
an interesting post indeed, but the threat from china is to all car makers and not just tesla Tesla would only become a threat to incumbent auto if one of two things happened, they either crack full, genuine, workable autonomy years before anyone else or if China buys into them. The latter is the real credible scenario and would manifestly change what Tesla is overnight from a high cost Western manufacturer with no real state support to overnight being part of China’s massive plan to dominate the global auto industry.
Dave Hedgehog said:
hyphen said:
Great post! Hope some of the fanboys read it with an open mind...
an interesting post indeed, but the threat from china is to all car makers and not just tesla China will bring far cheaper EVs to the market, they can't exactly do that with ICE cars.
DonkeyApple said:
The latter is the real credible scenario and would manifestly change what Tesla is overnight from a high cost Western manufacturer with no real state support to overnight being part of China’s massive plan to dominate the global auto industry.
Ive read that the size of Tesla's chinese factory is significantly bigger than other chinese ev factories. Suggesting that they may be planning to export a sizeable amount of the production.With the US and others wary of the 'Made in China 2025' plan, you are right that using Tesla could be in the interests of China.
hyphen said:
Ive read that the size of Tesla's chinese factory is significantly bigger than other chinese ev factories. Suggesting that they may be planning to export a sizeable amount of the production.
With the US and others wary of the 'Made in China 2025' plan, you are right that using Tesla could be in the interests of China.
That could well be because their batteries will be built on site, rather than brought in by another manufacturer. With the US and others wary of the 'Made in China 2025' plan, you are right that using Tesla could be in the interests of China.
That said, it makes sense that all sales that get pushed in to that region will be serviced by the Chinese factory.
hyphen said:
DonkeyApple said:
The latter is the real credible scenario and would manifestly change what Tesla is overnight from a high cost Western manufacturer with no real state support to overnight being part of China’s massive plan to dominate the global auto industry.
Ive read that the size of Tesla's chinese factory is significantly bigger than other chinese ev factories. Suggesting that they may be planning to export a sizeable amount of the production.With the US and others wary of the 'Made in China 2025' plan, you are right that using Tesla could be in the interests of China.
That’s not likely to be the EU as the local auto manufacturers are well in bed with the government so Tesla will probably have to build a factory in the EU down the line as it’s an important market and they can never compete there if they are having to ship from the US and there little liklihood of EU automotive tafiffs on Chinese cars being competitive.
Britain might get Chinese built cars in the next few years depending on how all the trade deals pan out.
skwdenyer said:
Burwood said:
Sell to? Everyone else is spending many many times what Tesla is and making a decent fist of it. And to comment on same 1m cars. That's a very long way off. It's 4-5 years away. The growth rate is tailing off and we may even see a dip very soon. Not to mention we are seeing recessionary signals. The whole car industry is holding its breath. Tesla needs more capital and they need a Golf id type offering. 20-25k cars.
In fairness, it isn’t obvious that anybody is managing to get close to Tesla’s system efficiency right now - they just seem to get more miles out of a joule than anyone else right now.But why would Tesla wish to sell to anyone else? Cooperation is the last roll of the dice for existing companies who’ve commoditised their offerings, somewhere Tesla isn’t.
jamoor said:
Dave Hedgehog said:
an interesting post indeed, but the threat from china is to all car makers and not just tesla
Indeed the threat of chinese is already here, look at polestar and MG.The problem for the current makers is that they already are tied up in ICE for them to begin launching electric alternatives will mean killing themselves.
I saw BMW have a new i4 coming out, this should in theory kill 3 series sales which is only in year 2 of its 9 year cycle meaning they should lose all that money invested in the 3 series. This won't make their investors happy either.
The likely scenario is that as the real penetration figures become clearer and how we use private vehicles evolves the global governments will switch from penalising ICE and favouring EVs to an acceptance that both are needed to achieve a blended and best solution and that taxation focus will shift away from direct tailpipe emissions to size/weight where much smaller cars receive the incentives over much larger vehicles, regardless of whether they are powered by super light, highly efficient 3 pot petrols or electric motors. Smaller vehicles using far fewer resources to make, infinitely more efficient to run and taking up much less road space and make much lower environmental impact.
The likes of Ford, Toyota, Renault sell all over the world and the solution to global car pollution isn’t for everyone to drive 2 tonne EVs but to drive small, very light vehicles that use as little of any type of fuel as possible.
Thesprucegoose said:
Dyson's new car will be a massive contender, not much noise but they are very serious, and being built in singapore offers free trade with China.
Contender for what? Tesla is aiming for mass market, Dyson will likely stick to being a premium priced product.Dyson also needs to crack solid state batteries before others do.
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