There is certainly a relutance from car companies to start making electric cars and the proof of that is Tesla. They have been fighting hard for years to secure supply chains for their battery packs, what's stopping the current car companies of doing the same with their infinite cash reserves? Why are they only starting now when Tesla has been planning it for years?
Also, you are giving those numbers without any source in them, so I will call this a very deceiving comment. Electric cars are marginally less complex than a regular ICE car, which it makes them simpler and cheaper to manufacture.
Way I see it Tesla proves that a mass market EV is still not possible. Either you take it from the fact that they failed to come up with anything revolutionary in terms of the Model 3; price/range still on par with other offerings. Or you take their lowest cost estimates for their battery packs and then you try to build the rest of the car with the remaining $12k (for the total price of a people's car that everyone can afford), and you realise that it is not possible.
The German Post approached VW to have them develop electric cars for deliveries in cities. VW refused, so they just hired a couple of students and started/bought their own company. They get requests from all kinds of businesses now.
If making delivery vans for one of the biggest users of delivery vehicles in Germany (that uses tons of VW vans currently) is "a small project outside their core competency", VW really is in trouble.
Most van companies offer a "chassis cab" option [1] - basically a van with the cab present, but most of the back missing.
There's then an ecosystem of companies that will work with end users to design, build and fit custom van bodies. If you want a mobile broadcast van, or an ambulance or a mobile command centre? That's where they come from.
If you see delivery vans that aren't standard models, they've almost certainly come through the same ecosystem; companies like VW generally aren't in the business of working with end users on custom products.
Deutsche Post uses a fair amount of the standard "van-type" vans by VW, and even if someone else is making a custom body electrifying the chassis is clearly a job for VW.
Given that VW's CEO has been whining to the press about how annoying it is that VW is now not their customer but a competitor, they clearly now think that they should have wanted the job more. My guess is that they did not expect the Post (which as a massive, formerly state-owned company you'd expect to be fairly conservative) to risk going their own way and succeed with it, and thus misjudged the risk involved with letting them pass.
Their core competency, beside ICE engines, it's furnishing out vehicles with all the expensive, heavy cruft customers have come to expect from big brands vehicle makers, even in supposedly utilitarian delivery vans.
The streetscooter, on the other hand, is really just the most barebone thing you could build around a battery. This saves a lot of money for a startup, but at a big brand with all the processes for sophistication, deviating from the established path would eat much of the savings.
But that's not the only problem: many of the same people who are enthusiastic about the pragmatic minimalism of the streetscooter due to the underdog image would punish the same car if it was made by VW or any other of the big ones. And that's not just interior finishing and amenities, the same applies to more serious things like safety and reliability. People will cut streetscooter a lot of slack where they would be unforgiving towards a big brand.
Does VW already know how to make electric vehicles? How many would they sell relative to their total sales of existing ICE vans? Is it worth starting up an entire new business for one customer?
I think this can be explained by VW just deciding its not worth it rather than saying VW is trying to suppress electric vehicle development.
Don't they have an e-Golf? They know how to build an electric car. It's building one that's actually profitable without heavy tax subsidies and at VW's build quality that's a problem. Tesla hasn't figured that out either.
If you want to get serious about developing EV technology, why not start with a big customer that has a use case that makes the problem a lot easier?
Also, small vans for use inside cities is a big market. All delivery services need them, all kinds of workmen need them. With bans for Diesel cars in German cities on the horizon all kinds of businesses are complaining because Diesels are the only offering in that category.
Sure, but can we at least admit that maybe VW did the math and decided it wasn't worth it to them? And that they could have arrived at this conclusion without deciding to sabotage EV development?
Sure, maybe they did the math, maybe they just couldn't be arsed. But whatever the real reason why they didn't take the job - someone else (DHL itself) actually did the correct math and is now actually a viable competitor for VW in this area. So yeah, again, maybe but they failed at it.
Yeah, I know about these. But these are intracity delivery vehicles. The restrictions in their domain of use make the problem simpler. My university has a couple and all they do is transport stuff between the two campuses. I think, although the average commute is probably way lower than a 80km, people would still be reluctant to buy it. For example the Mitsubishi i-MiEV has been around since 2009, is the least expensive amongst EVs (besides Chinese EVs probably) and has a range of 100km to 160km (depending on different metrics) and that didn't sell very well. Only 38.000 units sold.
The market is very niche. One of the best values in cars right now is off lease Volts — my neighbor just picked one up for like $16k.
Personally, I’m an ideal EV candidate. But it just costs more, especially when you price in electrical work for home chargers, etc. The TCO of a nicely equipped Accord is far less, and will be for a long time.
On lease EVs are extremely cheap but only because the market is niche. Dealers desperate to get them off their lots stack up incentives on top of existing rebates until people get to lease 40k cars for 100$ a month
EVs have been around for decades, and that's the issue here. They weren't ever cool and it was never particularly cheap to buy one. California used to (still does?) give rebates and an okay to use the carpool lane, and that didn't even cause a significant bump.
All Tesla did is prove you can sell an EV at a high price point to tech people who love all sorts of trendy things that don't sell outside that sphere. This in no way says EV is a mass-market vehicle yet.
Tesla did bring many infrastructure issues to the forefront, and that's no small feat.
I have to disagree, most of the current electric car offerings on the market are more expensive than the base price of the Model 3 (looking at the BMW i3 in Europe, the base price is 45000 dollars).
Tesla is a company that was built from the ground up, without any prior design and manufacturing experience, and they have been mass producing cars for only 5 or 6 years. You can't simply expect them to have the same business agility as BWM, which is a company with over 1 century old.
The lack of "better" product offerings from Tesla is not due to the technology, is due to the infancy of the company.
The base price on the Model 3 today is $49,000 and Tesla's own IR documents state that they don't expect to have a positive gross margin, even at that price point, until some time in the distant future after production is fully ramped up at both Fremont and the Gigafactory. It's not a very good example of the point I think you're trying to make.
They are selling for a loss currently. Any margins from model S and X are being used to subsidise model 3 and overall they are still losing tons of money, profitability not even on the horizon. I wonder how long their current runway is without raising new cash again.
That is mostly right, but I was responding to someone who said that positive gross margins for the vehicle were only planned for the distant future. Their financial statement for last quarter implied that the 3 would have positive gross margins in late 2018.
Their cash position decreased by about 162 million last quarter and they have ~3.3 billion on hand at the end of Q4. There are a lot of risks still out there due to the production bottlenecks that currently exist (and maybe more on the horizon with S and X), but the cashflow situation isn't as horrible as some want to believe.
No the base price is $35,000. They simply haven't started letting anyone buy the $35,000 versions yet. You can say this is a failure on the part of Tesla. But this is not the first time they've had a lower end model that was planned but not immediately available upon production. Case in point when the All Wheel Drive Model S was announced, they didn't make non-performance versions available for several months after.
Tesla is not proof of that. Tesla is an EV company from the ground up. They also do not have the capacity to produce vehicles at the rate of companies like BMW, Mercedes, Honda, etc.
Moreover, car companies do not have "infinite cash reserves". Retooling factories for EV production is an expensive undertaking. Combined with the expense of lithium cells and supply issues, it's not a simple or cheap task.
Tesla had to raise a lot of money from investors to keep the business afloat. In 2017 alone, they had to raise a debt of $2bn to keep their cash reserves alive so that they could continue investing on their products. Volkswagen, on the other hand, had a revenue of $230bn in 2017 alone.
It doesn't seem to me that money is a problem for the already established car manufacturers. And looking at Tesla's finances, starting an electric car business wouldn't make much of a dent on Volkswagen's finances.
So yes, Tesla is proof that there is some relutance in moving to a fully electric business in the car industry.
It does fund a lot of research. Volkswagens investment into electrical cars exceeds Tesla by a factor of five. The article suggests that manufacturing at large scale is not yet profitable, not that they're not actively working on R&D.
To be fair - the S Class is a relatively low volume car. I don't have exact figures, but I'd expect it to be in the range of 2-3% of the cars Mercedes manufactures.
BMW made nearly 2,000,000 cars in 2015[1], and this year, best case, Tesla will make 150,000. That's an order of magnitude difference in scale.
Yes, but in the context of a single production line that I feel like that reasoning doesn't stand. Yes Telsa doesn't make as much in volume, but we're already only talking about cars in the EV segment.
Also, you are giving those numbers without any source in them, so I will call this a very deceiving comment. Electric cars are marginally less complex than a regular ICE car, which it makes them simpler and cheaper to manufacture.