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Will the Model 3 make Tesla a real car company? (bloomberg.com)
55 points by lackingcaffeine 11 days ago | hide | past | web | favorite | 70 comments

  Tesla is running out of cash at a time when competition
  is heating up—Volkswagen, BMW, Daimler, and others plan
  to release dozens of electric car models.
I wish competition would heat up.

All I want is an all-electric EV with a 200+ mile range. You know what my options are? [1] A Tesla Model S or X, a Bolt EV/Ampera-e which isn't sold in my country [2], or a Tesla Model 3 which is barely shipping at all.

I look forward to the day when more than one company sells an EV with a respectable range.

[1] https://commons.wikimedia.org/wiki/File:BEV_EPA_range_compar... [2] https://fleetworld.co.uk/new-ampera-e-wont-make-uk-confirms-...

As of now, yes. The 2019 Nissan LEAF is projected to have meet your range requirement. I've had the 2013 and the 2015 models, they are good cars in their own right. If they made them slightly larger (but not an SUV), I'd be getting my 3rd one this year.

Really ugly though. Do car companies really think they need an completely new design language for electric cars? One thing Tesla did right was to avoid pushing the style envelope too far from the get-go.

Edit: If they ever get that electric Golf to similar range, I think that will be a pretty good option.

The new Leaf follows the current Nissan aesthetics. It's not like the old Leaf, which was different from the rest of their lineup.

We love our leaf. Yeah, it's not the sexiest car, but the economics and fun to drive factor make it the goto vehicle for running around town.

Do the Leaf batteries have a decent cooling system, or are you going to run into problems fully charging a battery due to heat?

It's amazing how much wasted space is in the Leaf. Headroom for miles but nary any leg room.

I want a car that does that, with a degree of build quality and long term support. I want a BMW electric because I respect BMW. Their cars can be trusted in ways that Teslas cannot. I don't throw cars away when they become uncool. I expect a car bought today to last 15+ years. Any BMW will do that. No Tesla has ever lasted that long. I won't be a tesla customer for at least another decade or two. But I would by a decent BMW electric tomorrow if one were available in my area.

“Wanted: 15 years of deep learning experience”

Probably best to get a plug in hybrid for now. Looks like there is much more choice. In a few years things will be different.


I've been thinking about the trade offs between a high-range EV vs. a PHEV. For me, a pure EV with less than 500 mile range couldn't be my only car, however it could be a secondary car (used for daily commuting, then switch over to something that takes gasoline if I'm away for the weekend).

But even for a daily driver, most days I only need about 50 miles range on most days. So for a Tesla model S or 3, I'd be hauling around the weight and expense of a 250 - 350 mile range battery that I won't be using 95% of the time. So I'd rather have a 60-mile battery (like the Volt), but with a high performance electric motor (like a model S), and a very low HP (small) ICE engine that won't add much weight. For extended-range driving, the electric motor would provide acceleration while the ICE directly powers the rear wheels and provides cruising (and mild charging when the battery gets too low).

I'd buy a BMW 330e over a Tesla any day. I think much more realistic at this stage of the tech curve. (to be clear I'm not going to buy either) (To be clearer I can't afford either)

> I think much more realistic at this stage of the tech curve.

As a native English speaker I have no idea what you're saying. At best you're saying that a Tesla is an unrealistic option for your unspecified context.


I mean there is not much competition in electric cars right now because its still a new product, only for a few early adopters. In time it will become more mainstream with more choice and for me its only then would I look for one.

I would say we are transitioning from early adopter to early majority phase. Electric cars are not new fiddly technology for rich folks who like to dabble. They're not toys that the youth are wasting their money on. They're here and people are buying them en masse.

How many cars does one person need?

PHEV vehicules are great, except you get the complexity of both engines, for the price of both.

Electric cars have an order of magnitude less moving parts, barely any maintenance to do on them (no need to change the brakes, no oil, no filter on the engine...)

I can see why PHEV are appealing right now, but they are not a good long term decision.

First, Tesla is not running out of cash. Tesla has a very attractive margin on every car it sells (and now it produces 7,000 of them weekly). The only reason they are losing money is large spending on R&D, SG&A, and in production capacity to satisfy a huge demand. Those are investments any tech company in their shoes would keep high while scaling up.

Second, most competitors are years away. Tesla is producing and shipping their mid priced car already, while most others are merely announcing, planning and developing theirs. If you want a 200 mile range, Nissan Leaf is already a decent competitor, though.

Most of us would like longer ranges (300 miles or more), and there is literally no other company than Tesla with EVs of that range. The EVs from VW, BMW, Daimler etc. are not on the market until maybe 2020, and with shorter range. Their second attempt will be ready 2-3 years after given the usual production cycle. By mid 2020, Tesla likely has substantially longer range than 300 miles and lower prices than $54,000, and they may very well be close to producing 1,000,000 EVs yearly (they just need to double current production rate once per year to achieve that).

By 2022-2023, when the competitors are finally ready with cars that can compete with the 2018 Tesla model 3, I bet Tesla is already down in the upper end of the low priced segment or the lower end of the mid priced segment and that they produce several millions of EVs yearly.

Like you, I would love for the others to catch up. Competition is good. But I increasingly doubt it will happen.

Tesla can literally just copy their current production lines a number of times at different places in the world, wait for the battery efficiency to improve as it has done every year, wait for battery price to drop, as it has done every year, while expanding their charging networks. Not that I think they won't keep innovating. It's just that they are so far ahead already.

The renault zoe has a range of 200 real miles, if only car dealers knew how to sell them...

> a Tesla Model 3 which is barely shipping at all.

Sorry, but no. One can be had in just a couple months at this point, and that lead time will dwindle quickly now that they've really ramped production.

Perhaps I wasn't clear; what I mean to say is "barely shipping at all to my country" [1]

[1] http://www.carbuyer.co.uk/news/150839/new-tesla-model-3-pric...

Isn't production 20k a month and pre-orders >400k right now?

Doesn't seem like a couple a month right now and at all. Of course it could dwindle fast from here on out, but even if production doubles you'd still be looking at more than just a couple months. And you'd likely see pre-orders go up accordingly as well, I'm sure there's people who haven't pre-ordered because it makes no sense paying $1k to be on a 3 year waiting list, I wouldn't be surprised if waiting lists didn't budge nearly as much as production rates increase. And besides, doubling production isn't exactly trivial despite Tesla's erroneous claims in the past.

Depends on your country and configuration.

A large chunk of the 400k are probably outside of the US, and another chunk are waiting for cheaper configurations.

If you are in the US and order a 'First Production' model (Long Range battery + premium interior) you will definitely not be at the back of a 400k long line.

Not if you want the $35K version, which was supposed to be available in mass quantities last year.

> a Bolt EV/Ampera-e which isn't sold in my country

Going off of this I would assume the parent poster isn't in the USA. In other countries, the Tesla Model 3 isn't expected to start deliveries until 2019.

That's an improvement from when I last checked. Though that's for the 310-mile model with premium interior, costing $49,000. That's the same price as a Lexus GS 350.

Jaguar i-Pace

Volkswagen e-Golf

Renault ZOE

  Jaguar i-Pace
...which hasn't been released yet.

  Volkswagen e-Golf
...which has an EPA range of "89 to 125 mi" [1]

  Renault ZOE
...which has a "likely EPA rating of perhaps 150 miles" [2] and "mandatory battery hire"

[1] https://en.wikipedia.org/wiki/Volkswagen_Golf#Volkswagen_e-G... [2] https://www.greencarreports.com/news/1111560_renault-zoe-sti...

The Zoe (the new 41 kWh) goes around 250 km and the battery hire is not mandatory, but pretty smart in IMO, Renault replaces the battery if its breaks or goes below 75% charge, when you sell the car the status of the battery is a non-issue, there is a road assistance insurance baked into it as well.

The fact that you do not own the battery is also reflected in the price of the vehicle, it would take us 8 years to reach a break even, I have not yet owned a car for 8 years.

A nice bonus is that the Zoe got the highest possible score on a corrosion test, a big thing where I live since roads are frequently sprayed with salt winter time.

> The Zoe (the new 41 kWh) goes around 250 km

250km is 155 miles, which is close enough to the 150 miles claimed in the parent comment.

It's also still below the 200 miles requested in the original comment.

The Jaguar i-Pace is available right now in the showrooms.

What's wrong with S and X? They're great cars.

The model S costs ninety thousand dollars. That's what's wrong with it.

If you don't do your own maintenance, the 7-year TCO figure (which in the United States is the average length of ownership https://www.cnbc.com/2015/07/28/americans-holding-onto-their...) can reach or surpass that, especially with some of the premium brands.

> especially with some of the premium brands

I'd venture to guess it's only with the premium brands, and only when buying new (or maybe used-certified) and only with a model with terrible fuel economy.

7 years would be, for the average American, 100k miles. (Assuming that $90k Tesla costs nothing at all to operate...) Even at a generous 35 cents a mile for fuel and maintenance, that leaves $55k for purchase cost, and that may not be exclusively premium-only "make" territory, but at a make like Honda, that's going to be a fancier model.

Take that per mile cost difference down to a more realistic 20 cents ($3.60/G, 30mpg, independent shop for maintenance, no tires or suspension since electric cars need those, too), and now it's $70k, well within premium brand territory.

Residual value of the Tesla is likely to be better, but if it was financed, that cost would be higher, too. I'm not sure how to estimate that.

$76K base

Model S starts at 75k (before tax incentives) not ninety thousand dollars, though options can easily push it past 90k.

However, there are also significant savings from being electric. So, it's possible to afford one on a developer's 100k/year salary especially if you keep it for ~10 years.

The price maybe? They're very expensive cars.

Nothing whatsoever. I simply dispute the claim that Tesla's competitors are hot on its heels.

Tesla isn't a car company, it's an energy company that is building the Model E on their energy platform. Reading their SEC 10-K[0] will show this.

Solar is 55% of all new installations in the USA and Tesla is the leader in solar installations with SolarCity. $/watt installed is only going down with scale.

Batteries are becoming the platform for transportation and Tesla owns 50% of the global manufacturing capacity. $/watt is also trending down with scale.

Charging stations will replace gas stations and Tesla owns a major percentage of the stock.

The question is over what timescale is Tesla over/undervalued? The genius is that there is always going to be friction between long and short term values. This shortsightedness is the weak link of Wall Street. But if it's overvalued then short the stock!

The Model E has already made Tesla an energy comany with a very successful product, "the Model 3 is selling more units in the U.S. than any comparably priced midsize sedan, including those offered by Mercedes-Benz, BMW, and Audi."[1]

I don't own a Tesla or Tesla stock.

[0] http://ir.tesla.com/static-files/0fbefe56-326c-412e-a33c-aa1... [1] https://www.bloomberg.com/news/features/2018-07-12/how-tesla...

> Solar is 55% of all new installations in the USA and Tesla is the leader in solar installations with SolarCity. $/watt installed is only going down with scale.

Uh... from all the reporting I've seen, SolarCity isn't a major factor in solar installation, and certainly not the leader.

From the 10-K, Tesla installed 523MW of solar capacity in 2017. The US alone installed 10,608MW of solar capacity in 2017. Assuming that Tesla is exclusively looking at the US market, Tesla is responsible for 5% market share... that is nowhere near the leader.

> Tesla is responsible for 5% market share... that is nowhere near the leader.

My understanding is that a market leader has the largest share among competitors, not a majority. If the next largest company only has 4.5% of the market, then Tesla/SolarCity is the leader.

That being said, if Tesla is the leader then competition is fierce and the market is ripe for consolidation.

The solar installations market is broken down into residential (where SolarCity might be the leader), commercial (office parks) and utility scale.

Residential is the largest by quantity of installations, but when you look at the total production numbers, utility-scale easily blows everyone away https://en.wikipedia.org/wiki/List_of_photovoltaic_power_sta...

First Solar sold 6GW of solar in 2017 in the US alone. Admittedly, that's not installed (current production capacity is around 3GW per annum), but their largest individual installation is 280MW, about half of Tesla's total production.

First Solar is merely the largest US-based solar company; some Chinese companies are even larger in terms of volume.

SolarCity was, until fairly recently, the leading residential solar provider (it's a crowded market, so leading doesn't mean a huge market share like it does in, say, the mobile OS market). For cash position reasons they pivoted away from leases, which cost them the lead to Sunrun, because leases are still a big part of the market.

> But if it's overvalued then short the stock!

To put the disclaimer up front: I have.

I think Tesla's going to run out of cash and be forced to raise on disadvantageous terms.

As a car company, they would be unbelievably overvalued. As an energy company, they would be wildly overvalued. As a solar company, they would be wildly overvalued. As a battery tech company, it's unclear, but probably still overvalued or wildly overvalued. I don't see how even that combination, along with the current and projected cash burn rate, lets them catch up to their current valuation let alone exceed it before needing to raise capital.

I love the tech, daily drive (a non-Tesla) electric, and hope EVs continue to grow in market share; I just don't see the company as being nearly worth the current market cap.

Here's the mental gymnastics I go through, and as it sounds like you have done some thinking on this, perhaps you have insight... if Tesla eventually reaches a point of desperation, isn't it reasonable to think they would sell to some better-capitalized party, at which point the stock would have value (in conversion to stock of the other party, if nothing else)? So, while it might currently be overvalued at ~ $300/share, if they succeed in their goals that will seem cheap, and if they fail you'll still more than get your money back out of it. Is that just misguided optimism on my part?

It's possible to see it as not wildly overvalued if you think that they will hold significant market share in all of those different markets.

That said, it's still hard to see how they can get there, considering that at present, they are the smallest mass-market car company by volume (if you want to call them mass market), a non-entity in the energy business, and a small player in an oversaturated solar market--and the synergy between solar and car manufacturing doesn't really exist.

2 words. Last one is Musk.

Tesla owns 50% of the current global manufacturing capacity.

By 2021, that'll be a single digit percent due to new Chinese plants coming online.

solar depends on cheap energy storage to ease out delivery spikes. batteries are NOT the right solution. things like compressed air, and even more dangerous alternatives are insanely cheaper than batteries in big volume.

tesla is making all the money they can now, when solar is a novelty for homes.

the second gov enters the game, chemical batteries will not be used. at all.

Correct me if I'm wrong, but I feel like the fact they sell cars makes Tesla a real car company already.

But if they sell more cars can we still make these articles?

You are not wrong. It's just that Bloomberg requires their journalists to push out fluff everyday.

Whenever you see a headline posed as a question, it's certain to be nonsense. News should be factual, not rhetorical or philosophical.

Will an asteroid strike the earth? Are aliens hiding from us?

I really hope the news business model changes in the near future because it's getting so clickbaity and useless. Today's news is to real news what junk food is to real food. For joyous few years, the internet and social media was a refuge from news. Now, we are inundated with news.

Would be nice if the news stuck to facts, events or data.


If you won't post according to the guidelines we'll ban the account.


I dont think it will be a real car company until you see.

* Crappy ads on local tv with Incentives to get excess inventory off the lot

* Old models in the scrap yard

* Disappointing resale values

* Unions on strike

* Mechanics who making blowing noises when you drive onto the lot and ask how much to fix

* Management out for themselves

* Factories in some run down city in the midwest

Until then its still a novelty company.

Hmm they do #2 already, and #4 (ish, no unions yet but threats of unionizing), elon musk is pretty much a guaranteed check on #6 and as for #7... can you be more run down than in the middle of the desert?

Given current fuel efficiency requirements, a midsize sedan is hell for every automaker.

Ford largely abandoned the sedan market. Every other automaker has been forced to either hybridize or reduce car size. SUVs and trucks are effectively the new sedan, as they have different efficiency requirements, so can support the mobile energy requirements of an early 21st century family. Most of the plug-in hybrids and all-electric cars - the Bolt/Volt, i3, etc - are part of limited runs that are likely sold at a loss to offset the company's more gas-hungry vehicles.

On the other side, cheap cars leave slim margins. In Lee Iacocca's autobiography, he relates Henry Ford Jr telling him that they'd never make money on small cars, in the 1970s gas crisis.

It's eye opening to consider 3-5 year ownership costs in light of what people buying a 3-5 year old used vehicle want.

The problem with cars is they undercut the used SUV market. Which increases depreciation on more profitable SUV's which effectively increases their price.

I'm surprised. Chinese EV makers have aced the "nothing special" EV sedan niche under $30k and are popping them out non-stop.

I guess, a part of "Apple disease" of around mid-20xx. Teslas are so distinct from mainline cars under the bonnet, that they can't source much components on open market, big part of manufacturing equipment have to be custom made, and they can't outsource anything.

Chinese makers on other hands just gut existing economy sedans, and put batteries in place of motor, and PMDCs on rear axle, without any extra magic involved.

They can't pass US (and I would imagine European) crash test requirements.

like japanese cars couldn't pass US crash tests in the 80s? How well that worked out for US automakers?

You're confusing tenses I think, can't not couldn't.

Chinese cars today CAN'T pass safety standards today. That doesn't preclude them form passing in the future. It just means if you bought a Chinese car today and tested it against US safety standards today, it would fail.

the ONLY reason they don't pass today is because they are not exporting to the US today. that argument is pedantic.

Possibly true. Then again, when the Mini was imported to the US as the Mini Cooper, it had to be bulked up so that the American version is much less-mini than the UK, removing some of its appeal.

I'm sure Chinese companies can produce EV sedans that pass US crash tests, obviously, but can they do so while they remain cheap? We won't know unless and until they try.

those are different things now. there is a joke that a car model will always get bigger. and a different model will show up to re-fill the market that wanted the small car.

Sure, I'm not saying they can't catch up, but meeting US crash test requirements will probably cause prices to go up. Plus labor is significantly cheaper in China. There are certainly things China can do much more efficiently in the US, but many of those efficencies shrink when you have to pay US labor costs and comply with US regulations. Of course, you could deregulate and allow more immigration to the US to compensate, but both of these are hard sells politically.

I'm no Tesla fanboy but I'd wager that those 30k sedans don't include the cost of complying with US and European regulation and customer expectations.

You're stretching the premise too far.

It's pretty clear the big auto makers will eventually be able to mass produce cheap EVs. There's nothing particularly special about them, and battery prices will continue to fall for some time yet.

A 2018 Toyota Camry in the US has a base price of $23,645.

Others: Toyota Carolla $18,700; Nissan Altima $23,260; Nissan Sentra $16,990; Honda Accord $23,570; Honda Civic $18,940; Ford Fusion $22,215; Chevy Cruze $16,975; Chevy Malibu $21,680; Chevy Impala $27,895; Hyundai Elantra $14,450; Hyundai Sonata $18,550.

If we can build all of those at such low prices, EVs will commonly get down there globally given 15-20 years.

Do you have some example make/model for sale we can check out on the Internet?

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