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All of that is moot if it's the Saudi government buying in.

Tesla are by far the most advanced of all "green" car manufacturers; over the next 7-12 years there will be countries banning petrol/diesel cars.

If Tesla can scale their battery and car production by that time then you could be looking at a market share of Apple proportions.




> over the next 7-12 years there will be countries banning petrol/diesel cars

I do not think so. At most, in that timeframe we will see countries starting to ban sales of new cars which are not plug-in hybrids or better. And then remember the average lifespan of a car today is ~20 years, you will still see old pure petrol cars on the roads in 2050 is my bet. Just like you still see old cars on the road today without any catalytic converters.

If you look at the electric car market today, you have lots of small cars with reasonable-ish range, one sedan with good range and two pretend-SUVs (Model X and I-pace) with good range.

No manufacturer anywhere makes a pure electric estate car (station wagon); this is the most popular type of car in Europe. Nobody makes an electric pickup; this is the most popular type of car in the US. Nobody makes an actual SUV, Ford Expedition/Toyota LandCruiser/etc. style that can fit four mountain bikes in the trunk and tow a 9000 lbs trailer. Nobody makes an electric commercial vehicles of the type electricians, plumbers etc. drive.

What do all these have in common? Inherently terrible aerodynamics / poor mileage and a relatively frequent need to go long distance trips. If you take current battery tech and do some optimistic extrapolation of future developments, you still end up with battery packs costing $50k+ and weighing several thousand pounds. Which isn't going to work anywhere, nobody is going to buy an $80k+ electric pickup when a diesel F150 starts below $30k.

But I do think we will see reasonable plug-in hybrid versions of these car types. And Tesla will never be building cars with internal combustion engines, so they're effectively locked out of what I believe will be the biggest part of the market.


Sales of new cars it is, so a decade after said countries will be largely free of fossil fuel cars.

The love affair with the SUV and Stations will have to end unless technology improves greatly. It sucks but it's the price we have to pay.

Norway's ban starts in 2025:

https://www.independent.co.uk/environment/climate-change/nor...

The Netherlands in 2030:

https://electrek.co/2017/10/10/netherlands-dutch-ban-petrol-...

France a decade later in 2040:

https://www.theguardian.com/business/2017/jul/06/france-ban-...


I will make you a long bet of $100 that no country bans the sale of new diesel or petrol cars by the end of 2025.


That could be more of a problem for ICE car manufactures than a solution. Regulations are the only thing that will force these people to innovate out of their current existence. With that gone, its basically EV departments have to navigate through powerful political cartels within the company running the existing product cash cows. In short it won't happen.

There is a reason why Microsoft cannot product a good mobile OS to date. It requires sidelining their biggest cash cow, their desktop OS.


Did Norway actually pass a ban with a date of 2025? Your linked article is from 2016 and says, "Yet there is some denial from other right-wing representatives that the move has been confirmed."


No, there is no ban passed, it was only sensationalist reporting. Here is a follow-up official press release from the ruling Conservative party which explicitly denies that there is a ban, and states there is only agreement between the parties that this is the goal. (Google Translate is pretty crappy at Norwegian.)

https://translate.googleusercontent.com/translate_c?depth=1&...


Station wagons have better aerodynamics than sedans. They are worse on weight distribution (more hanging mass, higher center of gravity) and chassis rigidity (which means they can't be as sporty). It's a shame no one makes an electric wagon, but SUVs are in fashion. In addition, SUVs make for easy battery placement: just take a standard chassis, raise it 10-15 cm, and put the batteries on the bottom.

You're right that pickups and commercial vehicles are the hardest markets for electric cars. Conquering those segments means the rest of the mass market would be completely dominated by electric cars. The United States will also be one of the last markets to be dominated by electric cars, because of its characteristics (long commutes, big distances, heavy car usage).


Germany considers to ban diesel cars from cities to meet polution requirenments of EU.

I consider to buy a new car at the moment. My favorites are electirc or petrol. I don't even consider hybrids. I see no benefits. They have no upsides of an electic car (quit, no exhaust, clean, simple). They are basically more expensive/complex petrols with a slightly lower consumption.


Not exactly. What you are describing is correct for things like a Prius, with dual drivetrains. It is certainly not correct for cars like the Chevy Volt (or the BMW i3), with the main engine being the electric one, and a gasoline generator. This combination is less complex than a normal car – for one, you can remove basically the entire transmission and hook up the eletric engine directly (with maybe a reduction gear like a Leaf). The gasoline engine can be much smaller and simpler as it is only driving a generator (and maybe not even running all the time, depending on battery and workload).

Such a design is not as clean as a pure EV, but it is definitely better than what we currently have.


The Chevy Volt is not a serial hybrid like the I3. It has a very complex transmission system to blend the gasoline engine and electric motor power. A nice car, but not at all simple.


That's kind of a glass-half-empty way to look at it, which is true for conventional hybrids. But real range-extended EVs also have the upsides of both cars:

- Quiet, no exhaust, clean, and simple when driving on electric (which is most of the time)

- Most (but not all) of the reliability of a real EV. (You can go almost a whole year on a single oil change, since you aren't using the gas engine much. You can go forever on a single break pad set, since you regen most of the time)

- The full range + refill speed of any gas vehicle (for roadtrips or other instances you needed it)

There's also some fun minor efficiencies in there too. Batteries in EREVs are smaller and weigh a lot less when they only have to carry you 50 miles instead of 250. Gas is a lot more convenient when you really do want to roadtrip across the whole USA as quickly as possible, (no hunting for charging ports, which might be broken or offline. No waiting for recharge)

I don't have the figures right here, but I believe it worked out that you could eliminate ~75% of all personal automobile tailpipe emissions in the entire USA today, if you put a Chevy Volt drivetrain into every single vehicle, and convinced just the people who park a car at a single family residence, to plug in their car at night. (even ignoring all apartment/condo/street-parking folks who cant charge)


I did the math on this a while ago and calculated I could travel my normal commute back and forth on the battery of a plug-in hybrid. I would only need the petrol engine on longer trips. I'd probably spend 80% of the driving in electric mode and 20% in gas mode. I wouldn't really say that's just a slightly lower consumption.


Keep in mind, the EU pushed heavily for Diesel in 1998 to meet the requirements of Kyoto. It is very ironic that now their most powerful member, Germany, is going against them.

It was supposed to be cleaner...but it generates nitrogen oxide (instead of CO2). Maybe nitrogen oxide is safer than, but I doubt at 40x the levels that most of the diesel manufacturers actually made their cars run at.


You've got it backwards. Germany pushed heavily for Diesel. The EU is pushing back by insisting on clean air in cities which Diesels have a hard time with. German politics is trying absolutely everything to avoid having to introduce driving bans.


> Nobody makes an electric commercial vehicles of the type electricians, plumbers etc. drive.

Maybe not exactly a copy of that type of car, but because none of the big car companies wanted to build one DHL started their own electric car for this use case: https://www.streetscooter.eu/


> Nobody makes an electric commercial vehicles of the type electricians, plumbers etc. drive.

How about Nissan e-nv200?

https://www.nissan.co.uk/vehicles/new-vehicles/e-nv200.html


It's the closest one gets to an electric work van, for sure, but it's pretty small. It's more comparable to e.g. a Fiat Doblo (sold as the strangely named Dodge Ram ProMaster City in the US).

Next to a proper work van like a VW Transporter or Toyota ProAce, you're looking at less than half the load volume (~4.2 m^3 versus ~9.5m^3).


The Model X isn’t an estate car? Actually the S has more storage than the estate car I used to own.


I once sold a four seater IKEA sleeper sofa to a lady who came to pick it up in an Audi A6 estate. We managed to fit the entire thing inside her car (with the rear seats down) and close the trunk. That is an estate car.

The volume in liters may be comparable between a Model X and (say) the Audi A6, but most large objects one needs to transport (furniture etc.) tend to be relatively cubic in shape.

If there wasn't a need for having big boxy trunks, surely we would all have transitioned to the (undeniably cooler) fastback-esque shape of a Model X / Mercedes CLS / BMW GT-series long before electric cars became a thing.


Volvo Estate owner here. Not only can I confirm that it carries things that there is NO way would fit in a large sedan, there are even some things (like sofas!!!) that fit in the estate but won't fit in an SUV with comparable storage volume.

I'm sure the reverse may be true for some SUVs, perhaps there's some large wardrobe box that firs in an SUV that won't fit in the estate.

But wow, estates are sooooooo convenient.


Audi A6 estate has 60 cubic feet of space with the seats down

Model X has 88 cubic feet with the seats down (if you have the bench-seat option)

Its a very big car.

https://electrek.co/2016/12/03/tesla-model-x-5-seat-configur...


>>nobody is going to buy an $80k+ electric pickup when a diesel F150 starts below $30k.

This is the same as saying nobody will buy a $600 iPhone. Only to realize in months that component prices have fallen by 50% and its not that expensive after all.


I think oil-to-electric conversions may be a thing once electric is mainstream


That's not exactly cheap or feasible for most cars.


What makes you say that? I've seen plenty of conversion kits that are adaptable to most cars. I've priced it out to build a fun project car and the only reason not to do it is the currently high price of batteries. So I expect volume to solve that and make electric conversions just easy. "Electric classics" are already a thing and look fun:

https://youtu.be/AJLdzRJdKrs


> over the next 7-12 years there will be countries banning petrol/diesel cars.

Even today you cannot go to downtown Lisbon with a car built in the early 2000s, and last week the city of Turin announced that they'll basically forbid vehicles with Euro3 engines or less from the city's streets (Turin being the birthplace of FIAT and also hosting a most wonderful car museum). The writing is on the wall.


>Tesla are by far the most advanced of all "green" car manufacturers

Are they? I don't follow these things closely and I didn't realize that it was the case, I always thought that Musk's great idea was not so much technical superiority but rather aiming for the super high end and market an electric "luxury" car niche. How far ahead are they compared to, say, Toyota who's been making hybrid vehicles for a while now?

I also think your timeframe might be slightly optimistic, I can't really imagine a large western country banning internal combustion cars within the next 12 years, much less developping countries. I hope you're right though, I want to live in a world where ICEs are in museums.


It really depends on what you consider the "hard" part about making electric cars to be. Do you think that the design and engineering of an electric car is the difficulty? Or is it manufacturing millions of them at scale? If the former is the real difficulty, then you might be able to make sense of the Tesla stock price; if it's the latter, then the traditional auto-manufacturers should be able to easily come into the EV market transfer their brands crush Tesla on greater manufacturing quality and efficiency.


They already have come in. The Chevy Bolt has a 230 mile range, compared to 220 for the Model 3. You can go out and buy one today for $36,000.

The 3 and other models are also plagued by quality control problems. The Bolt is both more reliable and has a better interior. And a speedometer!


Dude, the Bolt is a compliance vehicle that loses a massive amount of cash every-time it is sold.

Secondly, the sales of the Bolt have already collapsed and all the Tesla car outsell it. The model 3 outsells it 7 to one and this month probably 10 to 1.

Just comparing range and not looking at the economy or the sales number is basically spreading FUD.

> The 3 and other models are also plagued by quality control problems. The Bolt is both more reliable and has a better interior. And a speedometer!

I'm sorry but that is ridiculous. The Model 3 has some quality control issues on the frame and GM does that a bit better. However if you go into the electronic, the software, the drive-train, the charging network, the suspension and so on its not even comparable in terms of quality.

See for some info on an independent evaluation of the Bolt:

> https://www.youtube.com/watch?v=Sl3cUMIX9Uo


>I'm sorry but that is ridiculous. The Model 3 has some quality control issues on the frame and GM does that a bit better. However if you go into the electronic, the software, the drive-train, the charging network, the suspension and so on its not even comparable in terms of quality.

The software in the Model 3 is famously buggy. Did you see the Edmonds review?

https://www.edmunds.com/tesla/model-3/2017/long-term-road-te...

Some highlights:

> Nav screen going haywire: zooming, scrolling, pinching, pixelating all at once.

> Audio system turning on by itself at full volume.

> Audio system came on and went to full volume all by itself while the car was off, locked and unoccupied. I heard it from 100 yards away. "Who is that joker playing his stereo so loud I can hear it from here?" Oh, it's Elon. I turned it down, but it kept wavering up and down as I started driving, working against my repeated attempts to dial it down. Then it blasted all the way to maximum. My ears are still ringing two hours later. Fixed after reboot. Not sure about hearing damage.

> Audio page leaping up and down rapidly like the up-caret button to expand the source menu was being played with by a kid who ate too much candy. Concurrent with the volume problem above. Same reboot.

> The passenger vanity mirror fell off completely. Installed and held on only by double-sided tape. Reinstalled by pressing really hard on the mirror.

> The screen went completely dark on startup, no music or operation. Restarted the car. The screen worked; the backup camera did not.

> The car will not shift into Drive or Reverse upon startup. "Vehicle Systems Are Powering Up. Shift Into D or R After Message Clears." Have to wait for it to power up. A loud click comes from the rear of the car as if a drive shaft is engaging and the message on the screen goes away.

> The car displays a new message: "Cannot Maintain Vehicle Power. Car May Stop Driving or Shut Down." No shutdowns yet, but keeping an eye out.


> The software in the Model 3 is famously buggy. Did you see the Edmonds review?

The Tesla software also way more better feature then most other cars. Compare Tesla software experience and the interaction of the car and the app is not even comparable to anybody else and most reviews reflect that.

Also, Tesla can update over the air and they are consistently fixing these bugs.

Clearly it has not hurt Tesla sales or the consumer rating they are getting.

Comparing that problem to the Bolt complete lack of integration of the different system and losing money on every car, are not even comparable in terms of how problematic it is.


Bolt is to Tesla as BlackBerry is to iPhone.

They are both products of the same class, but one of them just obliterates the other both in terms of technological sophistication and cool factor. Turns out that has an impact on market success.


The "hard" party is actually nothing you have mentioned. The hard party is to make it PROFITABLE. The simple fact of the matter is that no other car manufacture has a clear plan of how they will do that.

All of them are building up the technology base, at least in terms of the drivetrain, but they have failed to vertically integrate the electronic to the same extent and the do not have a reliable low cost battery access.

Lets do an example. The battery is a huge part of the cost of a car. If you have to buy this you have to pay a profit on that, not to mention that because all non-Tesla car buyers compete for the same batteries the margins will be huge.

Independent evaluation of the Bolt for example are showing that GM is losing money on every single Bolt that is produced. They have competently bought the battery and and the electronics part. Its a integrated mess in a GM box. That gone cost you a lot and GM will never built 300'000 Bolts. The Bolt is built for compliance and to be able to build more SUVs (because the strange fuel economy regulation system).

So the game that the other manufactures are basically waiting until they can build profitable electric cars while Tesla is hellbent on producing as much battery capability as they and that allows them already to have a cheapish car on the market and to make billions of $ selling it.


> Lets do an example. The battery is a huge part of the cost of a car. If you have to buy this you have to pay a profit on that, not to mention that because all non-Tesla car buyers compete for the same batteries the margins will be huge.

Panasonic is the one who manufacturers Tesla's batteries, that's not a operational advantage for them. Many other car companies have similar deals with other battery manufacturers, like Toyota/Mastushita. Also, I don't get why you think battery margins will be huge? What is the major reason that prevents significant supplier competition?

> Independent evaluation of the Bolt for example are showing that GM is losing money on every single Bolt that is produced.

Yes, it was mainly built for compliance reasons as a compromise vehicle, but it isn't that Tesla has been able to construct a vehicle for less price than Chevy constructs the Bolt.

> So the game that the other manufactures are basically waiting until they can build profitable electric cars while Tesla is hellbent on producing as much battery capability as they and that allows them already to have a cheapish car on the market and to make billions of $ selling it.

What cheapish car? The Model 3 is $49,000 as you can configure it currently?


> Panasonic is the one who manufacturers Tesla's batteries, that's not a operational advantage for them. Many other car companies have similar deals with other battery manufacturers, like Toyota/Mastushita. Also, I don't get why you think battery margins will be huge? What is the major reason that prevents significant supplier competition?

There is a shortage of battery production. As I have already said, the reason EV are not sold is because the large manufactures can not make a profit on it.

Tesla has massive internal work on everything from the pack to the chemistry on the cell and that is licences technology by Tesla that Panasonic can not sell to anybody else. Tesla is simply ramping up production because they know demand will exists.

As with many industries, EV are not profitable and the car manufacturers or not gone order millions of battery packs, so there is not quite the large scale investment there yet. What you say is simply not true, the integration battery tech and production into Tesla is far deeper then for the other manufacturers.

And the video I provide is by a company that is reputable for cost analysis and that is the conclusion they come to.

> Yes, it was mainly built for compliance reasons as a compromise vehicle, but it isn't that Tesla has been able to construct a vehicle for less price than Chevy constructs the Bolt.

It is not relevant to compare direct production cost. The question is how much does it cost to product to how much you sell. Tesla can make 20-30% margin on the avg Model 3. While the Bold loses GM 5-10k per car sold.

> What cheapish car? The Model 3 is $49,000 as you can configure it currently?

Fair enough, cheapish is not the right word. Lets say a mass market car, meaning a car they can product 300k to 500k off and make a healthy profit on each car sold.

For the class that they are operating in that is competitive price and that is why they have 50% market share already, and that is gone jump up quite a bit more. It simply makes sense for them to focus on high value cars for now, ramping production on higher value cars gives you better cashflow in a time where you need it.

Even at 35k its not really a cheap car, but independent analysis and their own guidance has shown that they can make and expect to make a profit on that and they will have to do this in the next half year or so.


They are essentially unopposed. But they are also solving the problem that the other car manufacturers have already solved: Mass producing cars.

Why would Mercedes or BMW or Audi try to compete with Tesla directly right now? They have combustion engines that are mature, known tech with sunk R&D costs that they want to sell as long as possible. This is of course Teslas chance. The others are just doing R&D while Tesla is selling cars. But it's still hard to see Tesla having a market share in EVs in 15 years time that justifies it's current valuation.


> They are essentially unopposed. But they are also solving the problem that the other car manufacturers have already solved: Mass producing cars.

No. Wrong. Sorry.

Tesla is not just trying to mass produce cars. They are trying to mass produce profitable EVs, something that the others simply can not do.

> Why would Mercedes or BMW or Audi try to compete with Tesla directly right now?

My very argument is that they are not competing at the moment.

> The others are just doing R&D while Tesla is selling cars. But it's still hard to see Tesla having a market share in EVs in 15 years time that justifies it's current valuation.

Why? Unless you believe Tesla makes somehow fundamentally worse cars then everybody else, there is no reason why the other manufactures should have an easy time boxing Tesla out of the market once the have major mass production of their cars set up. They are not magic.

Tesla will have a huge established direct to end user sales force, a massive charging network, a well integrated app and software stack that will help costumers to their brand and a positive public image.


> My very argument is that they are not competing at the moment.

And my argument is that that's by choice rather than by inability.

Also there is a large amount of overlap between mass producing electric cars and mass producing combustion cars.

Finally, there is no question that Tesla has the potential to be a competitive car manufacturer. Let's say they are super successful and gain a market-share comparable to BMW. I'd say that's a top end scenario for Tesla. It has a good Brand but so do its competitors.

But Tesla is valued at the same level as BMW _right now_. I just don't see that. There certainly is downside risk, but I just really fail to see the upside potential. What should enable Tesla to grab a larger market share than BMW? Or Audi? Or Toyota? Nevermind the Chinese battery manufacturers that might want to push into the low end of the EV market.


> What is the major reason that prevents significant supplier competition?

That it's hard. Lithium ion batteries at scale is a difficult manufacturing process. All the R&D is going into battery. Essentially the electric engine is easy, but the battery is hard. It's exactly the other way around than in classic cars. Imagine if all major car companies would be buying engines from a few Asian tech giants.

There is quite some debate on how much of the profits will go to the battery manufacturers eventually, but I've seen 30-70% from serious analysts. I think nobody really believes the top line number, but even the more reasonable 30% would be massive.


> Panasonic is the one who manufacturers Tesla's batteries, that's not a operational advantage for them. Many other car companies have similar deals with other battery manufacturers, like Toyota/Mastushita.

Panasonic = Matsushita

AFAIK, Toyota does not currently have a battery partnership (other than the R&D-based old partnership with... ahem, Tesla), but in December last year they + Panasonic started a feasibility study to see if Panasonic could become their main supplier.


Panasonic and Matsushita are different names for the same company. Panasonic also makes Toyota’s batteries


If its the Saudi government buying in then CFIUS will have something to say about this.

They normally weigh in on takeovers but this is in their jurisdiction as it would be a foreign entity taking on ownership of a US company.

If CFIUS allows this or not is definitively up for debate and probably a 50=50 call at this point.

At best you can say it would require some negotiation with Saudi Arabia at a time when things are great between the two countries.


Relations between the US and Saudi Arabia are good enough right now that this actually might make the deal more likely, rather than less.


(First, I don't see any really legitimate possibility that Saudi investment funds are going to pony up $40 billion to take Tesla private, that being said...) I don't see any possible reason why CFIUS would reject this deal. CFIUS deals with national security implications, of which Tesla is not relevant to.


Apple only has 19% market share.




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