18 ms·

Will the Model 3 make Tesla a real car company?

stephengillie 8y ago
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.
- Retric 8y ago
  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.
baybal2 8y ago
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.
- dsfyu404ed 8y ago
  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.
  - adventured 8y ago
    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.
- jeffreyrogers 8y ago
  They can't pass US (and I would imagine European) crash test requirements.
  - gcb0 8y ago
    like japanese cars couldn't pass US crash tests in the 80s? How well that worked out for US automakers?
    - jeffreyrogers 8y ago
      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.
    - cptskippy 8y ago
      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.
      - gcb0 8y ago
        the ONLY reason they don't pass today is because they are not exporting to the US today. that argument is pedantic.
        pwinnski 8y ago
        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.
- pjc50 8y ago
  Do you have some example make/model for sale we can check out on the Internet?
d0lph 8y ago
Correct me if I'm wrong, but I feel like the fact they sell cars makes Tesla a real car company already.
- jghjg 8y ago
  who really buy teslas but soyboys?
  - sctb 8y ago
    If you won't post according to the guidelines we'll ban the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- SurrealSoul 8y ago
  But if they sell more cars can we still make these articles?
- paidleaf 8y ago
  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.
michaelt 8y ago
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_comparison_2016-2017_MY_US.png https://commons.wikimedia.org/wiki/File:BEV_EPA_range_compar... [2] https://fleetworld.co.uk/new-ampera-e-wont-make-uk-confirms-vauxhall/ https://fleetworld.co.uk/new-ampera-e-wont-make-uk-confirms-...
- baggachipz 8y ago
  > 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.
  - athenot 8y ago
    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.
  - skykooler 8y ago
    > 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.
  - michaelt 8y ago
    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-prices-specs-and-release-date http://www.carbuyer.co.uk/news/150839/new-tesla-model-3-pric...
  - IkmoIkmo 8y ago
startupfounder 8y ago
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-aa1b342e9469 http://ir.tesla.com/static-files/0fbefe56-326c-412e-a33c-aa1... [1] https://www.bloomberg.com/news/features/2018-07-12/how-tesla-s-model-3-became-elon-musk-s-version-of-hell https://www.bloomberg.com/news/features/2018-07-12/how-tesla...
- bryanlarsen 8y ago
  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.
- jcranmer 8y ago
  > 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.
  - cptskippy 8y ago
rb808 8y ago
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.
- vntok 8y ago
  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.

Retric 8y ago
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.

baybal2 8y ago

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.

dsfyu404ed 8y ago
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.
- adventured 8y ago
  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.
jeffreyrogers 8y ago
They can't pass US (and I would imagine European) crash test requirements.
- gcb0 8y ago
  like japanese cars couldn't pass US crash tests in the 80s? How well that worked out for US automakers?
  - jeffreyrogers 8y ago
    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.
  - cptskippy 8y ago
    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.
    - gcb0 8y ago
      the ONLY reason they don't pass today is because they are not exporting to the US today. that argument is pedantic.
      - pwinnski 8y ago
        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.
pjc50 8y ago
Do you have some example make/model for sale we can check out on the Internet?

d0lph 8y ago

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

jghjg 8y ago
who really buy teslas but soyboys?
- sctb 8y ago
  If you won't post according to the guidelines we'll ban the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
SurrealSoul 8y ago
But if they sell more cars can we still make these articles?
paidleaf 8y ago
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.

michaelt 8y ago

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_comparison_2016-2017_MY_US.png https://commons.wikimedia.org/wiki/File:BEV_EPA_range_compar... [2] https://fleetworld.co.uk/new-ampera-e-wont-make-uk-confirms-vauxhall/ https://fleetworld.co.uk/new-ampera-e-wont-make-uk-confirms-...

baggachipz 8y ago
> 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.
- athenot 8y ago
  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.
- skykooler 8y ago
  > 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.
- michaelt 8y ago
  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-prices-specs-and-release-date http://www.carbuyer.co.uk/news/150839/new-tesla-model-3-pric...
- IkmoIkmo 8y ago

startupfounder 8y ago

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-aa1b342e9469 http://ir.tesla.com/static-files/0fbefe56-326c-412e-a33c-aa1... [1] https://www.bloomberg.com/news/features/2018-07-12/how-tesla-s-model-3-became-elon-musk-s-version-of-hell https://www.bloomberg.com/news/features/2018-07-12/how-tesla...

bryanlarsen 8y ago
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.
jcranmer 8y ago
> 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.
- cptskippy 8y ago

rb808 8y ago

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.

vntok 8y ago
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?