Electric Car Prediction - Whatdayathing???

[BeauV]

A high percentage of US "cars" are trucks: pickups and supersized SUVs. I don't see those buyers going to an EV so quickly.

Part of that is because there’s really no penalty to buying a massive SUV which causes any alteration of behavior. We keep thinking that gasoline taxes and fuel prices will alter behavior, but clearly it won’t do a lot. (It has done some.) Perhaps a total vehicle lifetime carbon tax would help. Carbon footprint for these pickups and massive SUVs is really terrible, mostly because they create carbon during manufacturing that is roughly proportional to their weight.

Of course there are the folks who buy big vehicles to compensate for their sense of insecurity and lack of self-confidence. No economic cost will alter that behavior, just as the price of Heroin doesn’t lower drug use much.

[BeauV]

Larry,

Having spent a lot of time in West Virginia over the years, I understand that it’s damned tough to tell folks who have almost nothing that you’re going to ask them to stop digging coal which has kept them fed for a long long time. I think Australia certainly has parts of the country that are in the same fix.

As to the “transmission lines” vs “gas pipelines” vs “oil pipelines”, as you probably know there is a MASSIVE battle going on between the various types of power sources. It includes lobbies to, fully purchased politicians, PR, and no end of SPIN on what gets said. It is painfully clear to Coal states that Natural Gas is a massive threat. The conversion rate of plants out west is pretty amazing. Similarly, there is a pretty big gearing up going on to attack renewables etc... I can’t lay my hands on it right now, but one of the big studies that claimed massive numbers of bird strikes by windmills was entirely funded by an oil company. (No surprise there)

Sadly, in the midst of all this BS being flung around there is very very little real engineering being done.

I had a real Face-in-Palm moment when Toyota announced the Hydrogen powered car they just came out with. It’s obvious that there will be a massive roll out of local solar power generation, if cars run on electricity you can just stuff the power into the car that’s parked under the solar collectors and not have to either transform it or transmit it anywhere. To turn it into hydrogen you have to waste a tremendous amount of that energy both splitting water and then creating heat when you burn the hydrogen to power the car. It’s just basic physics.

What was Toyota thinking?? Of course BMW and Porsche were talking the same way a decade ago.

[BeauV]

Keith, I agree, there’s more to life than 0-60, but early reports on the Tesla Halo car say it’s no slouch around corners either. I don’t know if you watch The Grand Tour, it’s the gang from the old BBC show Top Gear, but they had an episode which put some exotic electric car up against a Lambo V-12 and the new NSX. In a straight line the electric car destroyed the competition, it was amazing. On the road course the Lambo just beat the electric car. To your point that there’s more than drag racing.

What I learned driving my souped up Turbo Porsche was that it didn’t belong on the street. I had enough close calls that I sold the car and decided to get a real race car for the track if I was going to drive like that. However, I’ll NEVER forget my trip to Jackson Hole from SF!!!

Frankly, going around a race track in the rickety old Morgan turned out to be a lot more pure fun than the Turbo.

[LarryHoward]

Larry,

Having spent a lot of time in West Virginia over the years, I understand that it’s damned tough to tell folks who have almost nothing that you’re going to ask them to stop digging coal which has kept them fed for a long long time. I think Australia certainly has parts of the country that are in the same fix.

As to the “transmission lines” vs “gas pipelines” vs “oil pipelines”, as you probably know there is a MASSIVE battle going on between the various types of power sources. It includes lobbies to, fully purchased politicians, PR, and no end of SPIN on what gets said. It is painfully clear to Coal states that Natural Gas is a massive threat. The conversion rate of plants out west is pretty amazing. Similarly, there is a pretty big gearing up going on to attack renewables etc... I can’t lay my hands on it right now, but one of the big studies that claimed massive numbers of bird strikes by windmills was entirely funded by an oil company. (No surprise there)

Sadly, in the midst of all this BS being flung around there is very very little real engineering being done.

I had a real Face-in-Palm moment when Toyota announced the Hydrogen powered car they just came out with. It’s obvious that there will be a massive roll out of local solar power generation, if cars run on electricity you can just stuff the power into the car that’s parked under the solar collectors and not have to either transform it or transmit it anywhere. To turn it into hydrogen you have to waste a tremendous amount of that energy both splitting water and then creating heat when you burn the hydrogen to power the car. It’s just basic physics.

What was Toyota thinking?? Of course BMW and Porsche were talking the same way a decade ago.

As was Honda. Probably 20 years ago, they were pushing a Honda home power plant that was basically distributed power (Mr. Fusion?) generation from a variety of sources that generated hydrogen for their hydrogen powered car and electricity for the house (and the electrolysis). Then, in 2014, they were talking about a home energy management system with solar, grid ties, a battery bank and associated equipment that looks a lot like a Tesla solar and Powerwall setup.https://www.youtube.com/watch?v=_foCsmE-APA

Some bird strikes are a fact of life and not many folks would call the wind farms out toward Palm Springs or concentrated solar very attractive. Then again, I never felt a refinery would be my preferred use for the empty lot next to my house either.

Fact of life is that electricity is a part of modern society and fairly easy to make in one place and consume in another. A smart grid makes it even more flexible. We are going to have to make some choices over what damage we will accept to generate that power. Lowering consumption isn't bad but isn't going to really solve anything as total demand will likely continue to grow. Places like Manhattan are still going to need to "import" gigawatts from somewhere that generates it through some means. I like where California is going with talk of requiring solar on every roof of new construction. Might not be the best solution for Seattle or Vermont but not a bad one for California. It still isn't likely to "kill oil" for a lot of years. A real question is how we are going to support a growing global population while reducing or mitigating our impact on the environment.

[BeauV]

I think there will be a large list of changes. Some of them are things we haven’t invented yet. LED lighting is a great example. In the ‘60s most of us would have never predicted that we’d cut electrical consumption for light by 95%. It has been amazing.

Sure, there are a lot of things that are just physics, like physical movement. But, I’ve been shocked to see the plummeting number of airplane trips for business travelers. I would have never forecast that folks like Google and Microsoft would see significant decreases is travel expenses. It turned out that once we got rid of the old doggies like me who like to meet face:face the young ones are happy to meet online and it’s saving massive amounts of money and fuel.

I think there is hope.

[Tucky]

Keith, I agree, there’s more to life than 0-60, but early reports on the Tesla Halo car say it’s no slouch around corners either. I don’t know if you watch The Grand Tour, it’s the gang from the old BBC show Top Gear, but they had an episode which put some exotic electric car up against a Lambo V-12 and the new NSX. In a straight line the electric car destroyed the competition, it was amazing. On the road course the Lambo just beat the electric car. To your point that there’s more than drag racing.

I believe a wreck and a fire were involved as well:-)

[TheOffice]

On my 7 miles drive to work I saw 2 Model 3s. It is rare that I go any distance without seeking a Tesla.

Infiniti is coming out with its first electric and Nissan/Infiniti has said that all new models starting in 2021 will be electric. In the meantime, GM sales were down for the 3rd year in a row in 3 of the best sales years ever.

Isn't there still a huge loss in power over long distance transmission lines, or has this been overcome? Solar power can supply much of the power for a home, but for a multi-story building, the roof is too small an area to provide a significant amount of power, and the taller the building the greater the ratio of floor area to roof.

[kdh]

Keith, I agree, there’s more to life than 0-60, but early reports on the Tesla Halo car say it’s no slouch around corners either. I don’t know if you watch The Grand Tour, it’s the gang from the old BBC show Top Gear, but they had an episode which put some exotic electric car up against a Lambo V-12 and the new NSX. In a straight line the electric car destroyed the competition, it was amazing. On the road course the Lambo just beat the electric car. To your point that there’s more than drag racing.

I'd be happy to own a Tesla Roadster as a replacement for my 911. It would suit my mostly commuting use pattern.

But I'll also consider the hybrid 911 when that's introduced.

[BeauV]

Keith, I agree, there’s more to life than 0-60, but early reports on the Tesla Halo car say it’s no slouch around corners either. I don’t know if you watch The Grand Tour, it’s the gang from the old BBC show Top Gear, but they had an episode which put some exotic electric car up against a Lambo V-12 and the new NSX. In a straight line the electric car destroyed the competition, it was amazing. On the road course the Lambo just beat the electric car. To your point that there’s more than drag racing.

I believe a wreck and a fire were involved as well:-)

Yes, two facts I left out:
1) The little short star (Hammond?) of the show crashed the electric car, not sure what caused the wreck they didn't say in the next episode.
2) Unlike the electric car, the Lambo was driven by a professional race car driver because the darned thing is so small that Clarkson can't sit up in it with a helmet on. (how's that for auto design!?)

I do wonder how fast the electric car would have been in the hands of a race car driver.

[kimbottles]

Hamster......

[TheOffice]

Interesting article on the VW electric platform:

https://jalopnik.com/the-fascinating-en ... 1829257860

You engineer types will get more out of it than I did.

Joel

[BeauV]

Joel,

That's an interesting read. Thanks for posting it. As someone who has been driving various Teslas since their first mule through to some of their stuff I'm not allowed to talk about, I have to say that to me it feels like VW is shooting behind the duck. By the time they get cars based on this platform into production, the competition (especially Tesla) will be well on their way to the next thing. That said, VW and Tesla do not currently and probably won't compete with each other at all. While there's an overlap between the midrange and luxury Audis and Teslas, all of these vehicles are priced way above VW. So, the really interesting question is probably: Will this platform allow Audi to catch up with Tesla who is currently clobbering all the luxury car brands for large and small lux-o-boat cars and SUVs.

I have no doubt at all that VW can build great cars once the rate of change in the technology stabilizes. But they are very very slow to change and that will inhibit their ability to keep up if Tesla does continue to innovate. All the mumbo jumbo about immersive Augmented Reality dash boards is a pretty good example of something that VW (and the other German manufacturers) are truly terrible at. It took them a full decade to even become relatively decent at electronics, and I have yet to see a German car that has a user interface to the electronics which is even close to what the Japanese and Tesla do almost trivially. Here's a good example: Tesla doesn't do maps or navigation, they just buy it from Google. BMW, MBZ, Audi etc... they all still do their own navigation, and do it painfully poorly. I could go on and on, but ever since engine control became dominated by computers, the Germans have really lost their lead. If I want reliable and well designed internal combustion engine management, I would only use Japanese, the Germans wouldn't even be invited to bid.

What I predict will happen is that VW will build an inexpensive version of a 2018 Model 3 Tesla in about 2021 or 2022. That's if everything goes well, it could be 2023 or even 2025 if there are supply problems with batteries. Having worked with LG on numerous occasions, there WILL be supply problems and quality problems. You can make book on that. They'll have to sell it cheap because as the article says, it's already behind the curve when compared to currently shipping car's range and way behind in performance. How far behind, well at least 5 to 8 year in my opinion. However, the VW engineers are really good car guys, so it'll be a fine car for those who don't know much about cars. That's basically what a Jetta is now. They will ship a ton of them.

It'll be great for the environment; provided Germany stops digging up insanely dirty coal to burn to make electricity. At the moment, a gasoline powered VW has a MUCH lower carbon foot print than an electrically powered car which uses the Coal fuel electricity in German.

[TheOffice]

Beau,

Happy to share it. I'm sure you got more out of it than I did!

As you probably know, every car manufacturer has 'tear down' labs where they disassemble competitors cars. (Years ago a BMW dealer client saw a Lexus disassembled at the BMW factory in Germany. The engineers scoffed at the quality, saying that the Lexus was built to self destruct at 150,000 miles, while BMW and Benz were built to last 350,000).

Its not surprising that VW is mimicking Tesla. Its much cheaper to copy than invent. Bosch certainly has had its issues, including dieselgate. While the newer VWs are much better than those introduced 5-10 years ago, they aren't matching the Asians in quality. But, a Jetta is a lot more fun to drive than a Camry.

I was not aware of Germany's coal addiction, but then I barely know where my own power comes from. Maybe utilities should have to disclose the percentage of each fuel used to generate power. We aren't far from a nuke plant, so I suspect that is our major source.

Joel

[BeauV]

Yes, Germany has a real addition, and it’s eating through forests and farms as they open pit mine Lignite (warm soft coal). In the first source you can see they have “hard coal” (14.4% of total energy) and “lignite” (22.6% of total energy) which are both types of coal, but Lignite burns very very dirty and makes a mess when you mine it.

https://www.google.com/search?q=&hl=en-us&tbm=isch&tbs=rimg:CU3X9v6_1xj7MIghN1_1b-v8Y-zCoSCU3X9v6_1xj7MEW_1HMM0uKGul&tbo=u#imgrc=Tdf2_r_GPsw7IM

https://en.m.wikipedia.org/wiki/Lignite

[TheOffice]

and in e car news:

An electric Harley will cost $30,000.

Nissan finally has a Leaf with a range of 226 miles available in the Spring and

The Model 3 was the best selling luxury car in 2018.

Joel

[Jamie]

Yes, Germany has a real addition, and it’s eating through forests and farms as they open pit mine Lignite (warm soft coal). In the first source you can see they have “hard coal” (14.4% of total energy) and “lignite” (22.6% of total energy) which are both types of coal, but Lignite burns very very dirty and makes a mess when you mine it.

https://www.google.com/search?q=&hl=en-us&tbm=isch&tbs=rimg:CU3X9v6_1xj7MIghN1_1b-v8Y-zCoSCU3X9v6_1xj7MEW_1HMM0uKGul&tbo=u#imgrc=Tdf2_r_GPsw7IM

https://en.m.wikipedia.org/wiki/Lignite

Yeah, and when they turned off their nukes after Fukushima they just started buying French nuke power.

[derekb]

The end of this year, when we see a bunch of 2020 models, may well be the tipping point on IC vs Electric cars. The charging stations are out there, the range is out there, it is easy to get a 400HP electric motor (or two 200HP motors), plenty of Teslas to buy and tear apart, likely plenty of engineers that have worked on electric power systems on the market.

I see the technology moving quickly for the next few years. For the last 30 years I have always bought my cars for cash, if I need a new car in the next 2-3 years I will likely lease as the pace of change is so quick I rather someone else take the risk on the residual value.

With the number of advantages the power train can offer we are likely going to see more firms bring stuff out like the Rivian that addresses one of my biggest issues with Trucks, where do you lock your expensive tools? Turns out you lock them in the Frunk... Hell someone could even make an amphibian car again. (Foiling of course)

[JoeP]

A bit off topic but for Morgan fans (Beau) Peter Egan has a nice piece in the latest Road & Track about taking his restored +4 on a road trip. I always have liked his writing. Too bad he is semi retired.

[TheOffice]

VW is making a big push into electrics, but they won't be making them in Chatanooga until 2022. Wait, that's just 3 years away!

[BeauV]

A bit off topic but for Morgan fans (Beau) Peter Egan has a nice piece in the latest Road & Track about taking his restored +4 on a road trip. I always have liked his writing. Too bad he is semi retired.

Thanks for the tip, Joe. I haven’t bought a R&T in years, but for that I’ll buy!

BTW, Morgan makes an electric version of their 3-wheeler.

https://www.morgan-motor.co.uk/ev3/

[TheOffice]

Here is a good write-up on the state of the industry:

https://www.cnbc.com/2019/01/31/automak ... tions.html

Only 20% market share by 2030 in the US for electrics? Sounds low to me.

[kdh]

I think people underestimate the power of an all-electric brand and the Silicon Valley cachet that Tesla enjoys.

Given the choice between a gas-guzzling Jaguar SUV and an earth-friendly electric one I think in general people will choose the gas guzzler. Electric is not about saving the earth for most of us, it's about early-adopter prestige and hipness.

Progressives around here aren't even buying Priuses any more.

Here's Fiat's electric car. Not cool.

[TheOffice]

i wouldn't buy that car if it had a fusion reactor!

The Porsche Taycan is already sold out. Cool cars sell. When the price difference between electric and gas diminishes and when people find out what instant torque feels like I think people will switch, especially next time gas spikes to $4 a gallon.

[Jamie]

So Tesla Model 3 sold 2.5x BMW 3 series. This guy is kind of annoying, but mostly gets it right.

Some interesting things on the technology deployed on the Tesla and the build quality.

https://www.youtube.com/watch?v=XzspO4-T7t4

[BeauV]

So Tesla Model 3 sold 2.5x BMW 3 series. This guy is kind of annoying, but mostly gets it right.

Some interesting things on the technology deployed on the Tesla and the build quality.

https://www.youtube.com/watch?v=XzspO4-T7t4

Jamie, to be fair, I think we'd have to combine BMW 3 and 4 series to get the real comparison. For some Totally Idiotic reason BMW decided to make one car (clearly the most well known performance model that they build) two "numbers" for what sure seems to be the 2-door and 4-door version of the same car. Jamie, I don't know if Tesla 3 outsold the combination of M-3 and M-4. Do you have that number? I'm guessing Tesla still won.

As to the video, the reviewer really does seem like he's reaching for something to complain about with the Tesla 3 mid-range. Yes, I know he wants to say why the mid-range is different from the M-3, but his "complaints" are pretty darn weak for 99% of the buyers.

Having driven my daughters Tesla 3 mid-range a lot, I have to say it's not going to keep up with our Tesla S with the performance package. But, that's really an apple-2-oranges sort of discussion.


Keith, around here in technoland folks have stopped buying Prius and never did buy BMW i3 because both cars are butt ugly. When Prius was the only option for a "clean car", they put up with it. But now that there is a cleaner car, they are moving on to something that looks nice. This really applies to the interior where the Tesla 3 is simply decades ahead of any other car in its class.

The Toyota Mirai (burns hydrogen) is not only about the ugliest car I've seen in decades, but also has ALL the fuel supply problems with no gain to the customer. I think it represents a total misunderstanding of what customer's want.

[BeauV]

Here is a good write-up on the state of the industry:

https://www.cnbc.com/2019/01/31/automak ... tions.html

Only 20% market share by 2030 in the US for electrics? Sounds low to me.

I find it flipping hysterical when someone claims a market isn't changing fast by asking the CEO of one of the companies who is loosing market share at a massive rate. Also, with all due respect to car folks, they have underestimated Tesla for a decade, and continue to do so. Radical change in markets is what the tech industry is all about. It always starts with early-adopters, then once the tech is proven shifts to the early majority buyers. Tesla is well into the early majority buyer while the other folks haven't even shipped a credible competeing car yet. All they can do is spread FUD (Fear Uncertainty and Doubt).

The assumption that all the executives in the market are idiots for spending $200 billion on catch-up R&D isn't a sign that folks are over spending, it's a sign that the established competitors got caught flat footed by a technology change and they realize they have to spend-or-die. The big car makers are right were IBM was when Apple introduced the Mac, right were Motorola/Nokia/Blackberry were when Apple introduced the iPhone, and right where Sony was when Apple introduced the iPod. Remember the IBM-PC? Well, IBM doesn't make PCs anymore for a good reason while Apple has continued to gain share for the Mac. There are similar examples throughout markets that get upended by basic tech change. Try looking at the value of a Taxi medallion in NY City for another example, or the value of a book store after Amazon got done with them.... Anyone want to guess what happens when Amazon debugs food delivery? Then there are the eye-glass frame makers, the shoe sellers, the razor sales guys, the list is really long. Remember travel agents selling airline tickets??

I know it's a tech-guy sort of attitude, but guys like the Toyota person quoted just made a truly massive error bringing out a hydrogen powered car. Sure, it only emits water which is lovely, but you talk about range anxiety!! How far apart are the hydrogen re-filling stations?? There are literally only 11 fueling stations in the SF Bay area with over 3 million people and the nearest one to us is about 40 miles away. "Honey, I'll be gone for four hours while I go get fuel." The Tesla is busy refueling itself right now in my driveway, hooked to our old electric dryer circuit. All the car guys missed the simple fact that no one cares how long it takes to re-charge a car which is busy charing while I'm supposedly sleeping. Is it perfect? Nope. Is it good enough? Obviously, look at the numbers take off.

The news media is merrily going along comparing cars they haven't driven, most of which haven't been built even in prototype form, with a current shipping competitor who has over 80% market share. That is pretty dumb. The weak assumption is that Tesla will be shipping the car it has today in two years when market laggards like Jag and MBZ finally show up with a car. Obviously, the question is: what will Tesla be shipping in 2021, not what is it shipping today. As a thought exercise, consider what Tesla was shipping two years ago and assume their rate of innovation stays the same. Sure many things are limited by physics, like batteries; but a lot of things are not, like the UI of the car. I won't even get started on the simple fact that Tesla has a supply of batteries and none of these guys have secured what is clearly going to be a scarce item very soon.

In my opinion, every human who hasn't lived through multiple massive market dislocations will badly over-estimate the effect in the short term and under-estimate it in the long term. We humans do this all the time. When the "new thing" arrives expectations for adoption are over-blown. The press writes about how a company like Apple hasn't sold enough Watches. Then three years and four versions worth of improvement later the press wakes up and says: "Wow, Apple now sells more units than the entire high-end watch and fitness tracker markets combined. What happened?" Amazon is doing it to Apple right now with the echo speakers that listen to you, I think they are at around 70% market share. Apple and Google are left in the dust and where the hell is Microsoft? Oh ya, they bought WebTV for a massive amount of money just in time for the entire market to be crushed by Netflix.

To most humans a log-curve representing change looks like a vertical wall coming at them; if they see it at all. They simply won't believe it, even when they start getting vertigo as they go into the steep part of the curve. BMW is now realizing that they are way back at zero while Tesla is on the 45° slope part of the log curve. Remember companies who built disk drives, they missed flash memory entirely. Remember flip phones, they never understood it was a personal pocket sized computer. Once the consumers are buying on the vertical side of the log curve, it is WAY too late to play catch up.

My final comment, and then I'll stop - I promise, is that this is an "S" curve (see diagram below). Keith will probably have a name for that sort of curve. There's the long slow growth followed by rapid growth and market domination by a few winners, then the growth goes away and the market is boring. From the big inflection point upward in the curve below to the inflection point downward may only be 4 or 5 years for electric cars. So, there will be massive disappointment at places like Kia, Subaru, BMW, Hyundai, Fiat (who is at least trying to keep up), as they will have simply missed the shift in the market. This market maturation process only takes a few years in tech land. In cars it's longer as folks don't replace cars as often as they do phones and computers, but I'm guessing we'll get to the slow growth phase of this market by 2025 and the profits will evaporate for anyone who hasn't already built a customer base.

[kdh]

Beau, for fun I'm going to present a bit of a counter argument.

I think Apple and the personal computer is your best example of tech innovation--in particular, the insight to use the graphical user interface work done by Xerox's Palo Alto Research Center.

The iPhone wouldn't have happened without Steve Jobs's charisma and its ability to get the phone companies to release their stranglehold on cell phone hardware. The idea of a hand held computer had been around since the Palm Pilot.

To me Uber's success isn't about technology, it's about a willingness to flout the law. Arguably the technology was disruptive because it, at best, represented an unanticipated loophole in the regulation of taxis. It was a legal innovation.

What makes electric cars different from a disruption standpoint is they're not essentially about technological innovation but about providing an alternative to gasoline engines. Yeah, Tesla is based in Silicon Valley and run by a crazy dude or tech visionary, take your pick, but unlike personal computers, the market for cars is quite mature.

Not that what I do matters to anyone, but I never had a smart phone until the iPhone 5, and I haven't made it past the SE, my second phone. The killer app for me was getting live traffic. I imagine I'll have an electric car for commuting at some point, but I'm less sensitive to price and utility than the average car buyer.

Lest you think I'm just a Luddite, I was doing it when people were literally laughing at the small number of us using scientific models to pick stocks. I've been at the flat part of the S-curve anticipating seeing a wall in front of me.

Your S-curve is called a "logistic function," sometimes a "sigmoid." It's probably best known as the "soft threshold" function used in a neural net, which is everywhere in machine learning these days, as it was in the 1980s.

[TheOffice]

Thanks for the perspectives!

I think Hyundai, Kia and VW will come out of this fine, as they are leading the market in the under $40,000 electrics. Mazda will be toast absent a dramatic shift or a sale of the company. Toyota, Nissan BMW and Mercedes were obviously caught flat-footed by Tesla, as were the Big 3. Hydrogen was never a good idea.
It will be interesting to see what happens to pricing as the tax incentives disappear. Will other follow Tesla's lead and cut prices? If battery prices drop as expected, they will be able to do so while maintaining profit margins. Could Congress have passed a tax law that works?

Tesla has its own issues. The S still looks great but could use a re-fresh. It needs the Model Y to be on time. It needs to get the 3 under $40k. It needs a stable trade policy.

BTW, the VW electric dune buggy looks awesome!

Joel

[LarryHoward]

Thanks for the perspectives!

I think Hyundai, Kia and VW will come out of this fine, as they are leading the market in the under $40,000 electrics. Mazda will be toast absent a dramatic shift or a sale of the company. Toyota, Nissan BMW and Mercedes were obviously caught flat-footed by Tesla, as were the Big 3. Hydrogen was never a good idea.
It will be interesting to see what happens to pricing as the tax incentives disappear. Will other follow Tesla's lead and cut prices? If battery prices drop as expected, they will be able to do so while maintaining profit margins. Could Congress have passed a tax law that works?

Tesla has its own issues. The S still looks great but could use a re-fresh. It needs the Model Y to be on time. It needs to get the 3 under $40k. It needs a stable trade policy.

BTW, the VW electric dune buggy looks awesome!

Joel

Don't forget that VW group is 12 brands that sold a total of approximately 11M vehicles in 2018. All brands "car" sales totaled roughly 82M last year so VW Group accounted for as much as 1 of every 7 cars sold worldwide. Tesla sold 245,000. With their Modular Electric Platform, they can share the engineering and technology across the group. IF and I acknowledge that its a big if, they get the market right so that consumers buy them, they can flood the market with "affordable" electrics.

Cars are a lot like watches. You don't need a $30,000 Rolex Daytona to know what time it is. The vast majority of people get by with consumer watches. Around here, I see a lot of folks commuting to DC for 1.5-2 hours each way and about 70 miles. Basic requirement for them is an efficient compact with automatic, good AC (This is the mid Atlantic. Summers are hot and humid), a decent radio and some place to plug in a smart phone so they can use Waze. A significantly smaller subset want something more luxurious. Give them an honest (in traffic, SC or heater on) 300 mile, 35K electric and they would consider it. As they currently get 35-40 MPG on cheap regular gas for less than 30,000 capital cost and there are serious discussion s about taxing annual miles since electrics don't pay for highway maintenance, I suspect they won't rush to the electric but it would be on their test drive list for their next car.

Should major US metropolitan areas decide to adopt more European or Asian style restrictions on business district access and ban or tax Internal combustion engine driven cars, the demand for electrics would climb Beau's curve quickly.

With the cost to build and electric (Marchionne used to joke that he hoped people would not buy the Fiat Electric as he lost $10K per car), Tesla is right to focus on the luxury market where price point isn't quite so important. Remains to be seen what happens when somebody like VW sets their mind on building an affordable electric and offers an upgrade to a luxury sub brand with an existing and proven dealer network and spares pipeline. Of interest, Porsche has already taken preorders for more than their initial planned annual production and have a bespoke production facility that can expand for future growth. The number 1 brand those depositors are currently driving is Tesla so it's possible the early adopters are looking beyond Tesla for the next thing.

[kdh]

I think you make some good points, Larry. Elon Musk during the earnings release said that demand explodes at $35k. This seems to be widely appreciated.

I imagine many in a boring but perfectly practical $30k Toyota would spring for a cool $35k Model 3, at least until the "luxury" and "cool" has worn off of the brand. Basic issue: Is the demand for electric for green propulsion or for all of the other reasons that people buy other than the efficient compact you describe.

Let's be real. It's the latter. It's no surprise that the Mission E created so much interest. The exclusivity and image that transfers to the owner of a Porsche is a great fit for electric propulsion.