
Mercedes Has the Horsepower for Tesla Battle - Vannatter
https://www.bloomberg.com/gadfly/articles/2017-09-12/mercedes-has-the-horsepower-for-tesla-battle
======
LeifCarrotson
The problem isn't that Mercedes, VW, and other big automakers don't have more
horsepower in terms of dollars to spend on R&D than Tesla. To abuse the car
analogy, it's a problem of momentum and power-to-weight ratios.

Mercedes needs to do a complete 180 to become an electric car manufacturer.
Employees with education and years of experience in internal combustion
engines will fight their obsolescence. Plants and production lines that are
specialized for ICE manufacturing will buck against the change. Their supply
chain, dealerships, and repair shops will have the same problems and will also
provide resistance.

It's one thing to pivot a little start-up company that's maybe a few dozen
people who have just been applying generic engineering and sales techniques to
a domain that they've only just invented in the past year or two. A behemoth
like Mercedes does not pivot. It trundles along and slowly, almost
imperceptibly, shifts course over a long period of time.

Mercedes needs a lot more horsepower for the battle than Tesla does.

~~~
ams6110
I would not call it a 180. Maybe more like a right turn, if even that much.
All their sheet metal stamping (or carbon fiber fabrication), chassis-making,
interior manufacturing, paint, as well as parts suppliers for all that, glass,
brakes, tires, wheels, etc. can be directly used. They just need to change the
drivetrain.

Their distribution, dealer network, marketing, etc. is in place world-wide and
very well established.

~~~
njarboe
The problem is that the drive-train is what car companies see as their "core
competency" and have focused their energy and talents on doing that and out-
sourcing the rest. Maybe they can make switch to "car making factories" as the
core competency (Elon Musk says Tesla is focusing on "making the machine that
makes the machine"). Not a huge switch, but those top engineers, passionate
car guys at Mercedes, might not be as interested or as capable as factory
automation engineers.

~~~
hacknat
This is false, there are probably something like 500 engineers within Mercedes
that specialize in engineering the internal combustion and drive train, and
most of them work in at Mercedes AMG, which will never go away for the sheer
marketing it brings.

I think the grand-parent comment is vastly overestimating how much of the car
business these days is based on tuning the internal combustion engine, which
for the most part has seen about all of the advances it is going to see. The
rock stars of the car world are now the process and manufacturing guys (and
possibly the software guys, though not as much as you'd hope or expect), who
still have the power to squeeze the margins tighter than any other engineering
division does, and provide more competitive advantage than any other
engineering division does.

 _rant_ Electric motors are commodity items that can easily be thrown onto
most chassis. Why does Elon Musk always make such a big deal about not having
patents? Mostly because he doesn't have any sexy patents to trot out anyways
so its good PR fluff. _end rant_

I think Tesla can survive and thrive, and break the 100 year drought in new
car companies, but I think it's a mistake to think that's because they are
going to out maneuver car companies at the car game, it's because they are
becoming battery experts that they'll win. Tesla is a battery company with a
car division.

------
drewg123
TL;DR "Its the charging, stupid"

Until they have a fast charging option like Tesla's, then all the other auto
makers will be "also rans" in my opinion. Case in point: The Chevy Bolt is, on
paper, a Tesla Model 3 killer. It is cheaper, has better range, and it is
available now. However, there is no way to charge it on a road trip (unless
you're a masochist, and want to depend on flaky 3rd party charging networks
where the chargers might not work, or might charge slowly). So, because of
this, Chevy can't unload the cars, and have so much inventory built up that
they've idled the Bolt production line.

And don't say "fast charging is only important for road trips." One of the
barriers holding back EV adoption in cities is the lack of charging options
for apartment and condo dwellers. At home charging mostly depends on having a
garage that you own, and that you can have a charger or 40A outlet installed
in. Good luck getting a landlord to do that, and if you have street parking,
you're totally hosed. Tesla recognized this, and is now opening Superchargers
in urban areas in advance of the model 3 being generally available.

~~~
petra
So what's the end game for Tesla ? owning the best charging network with large
network effects, and getting high margins?

~~~
drewg123
I expect that it is evolving.

Right now, there are a lot of people who will only get a Tesla for the above
reasons. That gives them better market share, and allows them to command a bit
of a premium for their cars.

Medium term, I'd be willing to bet that they start to make deals to let other
auto manufacturers use their superchargers. This would cement their lead in
charging, and they might be able to make some revenue from this.

Longer term, there will have to be a fast charging network from somebody,
especially if Tesla does not open up their supercharging network. I'm really
shocked that one or more of the big gasoline companies has not gotten on board
with this. They make a lot of their money from the various stuff they sell in
addition to gas (food, trinkets, etc). EV "fast" charging is still an order of
magnitude slower than gas/diesel refueling, so people will be spending a lot
more time in their stores. This should drive up their profit.

------
S_A_P
I said this statement in the MB electrification article
[https://news.ycombinator.com/item?id=15219469](https://news.ycombinator.com/item?id=15219469)

Electric cars need a battery tech that offers a "refuel experience" if they
want to change the game. Ive seen things like solid battery tech that may
offer something close to this. Im not anywhere near an expert on battery tech,
but I can say as a car guy that mainstream adoption hinges on this. Once this
battery tech exists, then there is the infrastructure problem of charging
stations. Musk has started the process, but there is a very long way to go. We
also should start thinking about standardizing or at least categorizing
charging levels in an ELI5 way to the average user. Maybe this already exists,
but I dont think so. It seems like you need to have something like: Level 1
charge(cheaper, lower power throughput, longer wait time). Level 2
charge(quicker charge more expensive). Level 3 charge(fastest, most expensive,
if your car supports it, etc)

that would roughly equate to the 3 options you have at a gas station and ease
the adjustment to the differences. Maybe Im saying things that people already
know, but I just see this as the barrier to adoption right now.

~~~
WorldMaker
Chargers are already described by Levels: Level 1 is wall-outlet 120, Level 2
is "dryer outlet" 240, Level 3+ is "super-charger"/CHaDeMO. Most car displays
show estimated charging times for each level in one way or another.

"Refuel experience" is a red herring at best. Partly because the ubiquity of
the electric grid means that you can charge anywhere: that's the subtle game
changer that doesn't always come across when someone new to electric vehicles
thinks about them. A Level 1 trickle charge while I'm asleep at home is plenty
for my daily work commute. My car is parked nearly the same amount of time in
my work parking lot: if the office park added a Level 1 or Level 2 charger
next to the street lamp I park by I'd almost never need to charge at home.

Road trips are definitely the exception to the daily grind, and are the place
where you really want a good "refuel experience". I think Tesla's
superchargers fit that fine, but obviously there's a range currently to
people's road trip experience. (90% of 300+ miles in 30 minutes; that's about
my bladder range and 30 minutes is a light snack, a good stretch, and a brief
glance at Twitter or a chapter of a good book.) It might get better than that
as battery tech changes, but let's face it that we're at a _good enough_ start
now that we should stop dismissing electric cars because you don't think they
have a "refuel experience".

~~~
S_A_P
Thanks for clarifying the charge levels.

I do, however disagree on the refuel experience mainly because while it is
true, that you can constantly refuel your car while it is parked at home, the
long distance driving use case is exactly where electric recharging is least
developed. I think that there is a certain level of comfort knowing that, in
the US at least there are only a handful of places in the country where a
stretch > 20 miles exists without the ability to refuel. For the most part I
think most people active on HN are many times more willing to switch to
electric cars. The average person on the street may not be so willing.

------
xutopia
I don't think people realize just how much Musk is laughing at all this. He
gave away many electric car patents because he knew he would profit from it so
long as he has the best battery factory in the world. As it stands Tesla owns
the building, the factory and rents some of it out to Panasonic.

Unless Mercedes finds a cheaper battery elsewhere they're going to be paying
Tesla for these.

~~~
madisfun
> they're going to be paying Tesla for these

Consumers are going to be paying for these, no matter the supplier. I don't
see why Daimler wouldn't be buying components from Tesla, _if Tesla can supply
them_. So far the "Gigafactory" is just not big enough for Mercedes (2,200,000
vehicles/year).

[https://www.daimler.com/company/business-units/mercedes-
benz...](https://www.daimler.com/company/business-units/mercedes-benz-cars/)

------
arcanus
This does not bother me. Competition is good for the consumer.

~~~
jgalt212
True, in a age of reduced competition, it's refreshing to still see a ton of
consumer choice in the auto market.

------
amai
"The start of that collaboration was during the 2008-2009 financial crisis and
Tesla, like most other US automakers at the time, needed money. Musk, along
with several other investors, reinvested in the company but Daimler’s cash
infusion made the difference. Musk later said that “Tesla wouldn’t exist today
without it.”"

Mercedes is like Microsoft, when they helped Apple to survive.

[https://electrek.co/2017/03/24/tesla-electric-car-granola-
im...](https://electrek.co/2017/03/24/tesla-electric-car-granola-image-
daimler-ceo/)

------
ckastner
Previous discussion of Mercedes' announcement:

[https://news.ycombinator.com/item?id=15219469](https://news.ycombinator.com/item?id=15219469)

However, what surprised me in this article is the following:

> VW has earmarked 50 billion euros for batteries for its electric cars

That's more than Tesla's current market cap.

Edit: Seems I missed the article on the front page, as the latter is also
being discussed:

[https://news.ycombinator.com/item?id=15224578](https://news.ycombinator.com/item?id=15224578)

~~~
adventured
> VW has earmarked 50 billion euros for batteries for its electric cars

That's a meaningless number without the context of how many years it's spread
across - which is of course the vaporware point of the statement from VW, it's
about grabbing a headline (hey look, we're doing X thing too, we're not the
next Nokia, really!). Tesla might as well issue a press release that says they
plan to spend $200 billion on batteries (over 20-30 years, but you know, leave
that part out).

------
georgeecollins
Tesla has captured the brand of electric car, in the way that the Prius has
the best brand for hybrid. The Prius wasn't even the first hybrid car, but it
was first very popular one. Anyone that drove it was making a statement about
the environment and it has remained a strong brand despite a plethora of
hybrid models

Mercedes will probably make great electric cars. But there will be people for
a long time forward who will buy a Tesla to make a statement.

------
Derbasti
> That’s wonderful for the planet, but a bit of a worry for profit.

I can't even begin to express my utter disgust at this statement.

------
mkhalil
How long should I hold by breath for an electric G-Wagon.

