I wonder how they will manage the market differences.
For example, in the UK the majority of cars at the level Tesla is going for are business vehicles. In that category, the tax laws make it such that the best thing to do is to lease a car.
Which is why you get business leasing options from every manufacturer:
Basically, company car perks are paid in cash in monthly installments. Everyone with a business vehicle leases the vehicle using the cash they are paid.
Tesla may sell a fair few cars in the UK, but if they want to put a lot of cars on the road they'll need to package the car in a way that will attract this market.
I'm sure similar market differences exist throughout Europe too, where local conditions mean that buying outright isn't usually the best deal.
Tesla already has a leasing program in the US, and in fact I suspect they would prefer all their customers to lease the vehicles (certainly if you go to their website you won't see a sticker price on the front page for the Model S - you'll see a monthly lease price after rebates, etc).
Note that they don't technically offer leasing, but rather a loan with a guaranteed repurchase price after three years. I don't know how much that matters, but there it is.
I get the impression that they like to talk up monthly costs not because they prefer leasing, but because it tends to show the car in a better light. They have a calculator which lets you calculate the "effective" cost of the car, which basically starts with the actual monthly cost and then subtracts off various savings, ranging from reasonable things like paying less for gasoline, all the way down to fairly dumb things like the value of the time you no longer spend filling up at the gas station.
Here in Germany the difference is mostly tax related:
- if you buy a car on a loan, you have to deduce it from tax in one batch (as you now own a car). edit: it's also part of your assets with has a set of ramifications
- if you lease it, you can deduce the montly payments (as you don't own the car). note that in the case of leasing the offering company can request the car back after the leasing ended or if they so whish sell it to you for a small price
That's an interesting decision, I wonder why?
In such a fast-moving industry where they're constantly making their own old models redundant, wouldn't the models they get back after the lease period be basically useless to them?
One thing that to consider is that in UK company cars provided to employees as benefits are taxed heavily based on emissions, which is what drives a large number of customer to small engine diesels (hence the popularity of the BMW 520d amongst company car owners).
In that market assuming that tesla would be in the best emissions category, I'd expect them to do really well.
"In 2013, Tesla delivered 22,477 vehicles to customers worldwide. By the end of 2014, Tesla expects combined sales in Europe and Asia to be almost twice as high as sales in North America. Part of that projected growth will come from the UK, where right hand drive versions of the Model S will soon be introduced. Highly competitive leasing and financing options, similar to a program the company recently launched in Germany with rental company Sixt, are also expected to drive growth on the continent."[0]
People keep saying that "Europeans don't drive much" but there are quite a few models from European manufacturers with very high ranges - over a 1000 miles. And they seem pretty popular with the people I know who have (and need) company cars.
You mean that diesel extends the range, is that the variable you are missing? At 20 mpg you need 50 gallons of fuel. At 50 mpg you need 20g. Cars with 20g fuel usually get 20mpg for a 400 mile range. On the flip side, many more models with diesel have higher ranges because the fuel capacity is set for petrol (20g) and swapping in diesel increases the energy payload per unit volume (40-50mpg).
Possibly - I wouldn't say my driving patterns are that unusual and I live in a small European country and I wouldn't buy a car that didn't have at least a 450 mile range and I know people (particularly in Germany) who make much longer trips very regularly and who have specifically purchased cars with very high ranges.
Well, a weekend for me might involve driving 150-200 miles to the middle of nowhere (literally) walking or skiing and then driving back - with very few filling stations for most of that distance and then most of them being small rural businesses that close early (especially on a Sunday).
[NB I walk to work, my wife walks to work and my son walks to school - we even do a lot of our shopping by walking - I wouldn't pretend our car usage patterns are typical].
One issue might be the price differences for petrol across the countries. As an example, many Italians near the border like to fill their tanks in Switzerland. The bigger the tank, the longer you can run with it.
A push for electric vehicles in Europe is a really good thing, but I'm not sure the market is exactly ready.
On the other hand, Tesla has better getting their supercharger network ready before the sales catch up, the other way around would be bad for the brand. And seeing supercharger on the roadside when going to fill one's tank can get people thinking, given gas price.
> Tesla has better getting their supercharger network ready before the sales catch up..
Given the fact that average distances in Europe tend to be shorter will likely mean the majority of EV owners (e.g. commuters) will simply charge up at home and rarely need to use a supercharger. Having a supercharger nearby sweetens the deal.
Also, petrol prices are so much higher here, so the economic case for owning an EV is even stronger. For example, where I live it's about €1.49/liter of petrol, which is something in the region of $8.20/US Gallon if I'm doing the conversions correctly. So the payback period would be quicker over here (versus regular new car), plus there's likely to be tax incentives to purchase EVs also. Another plus would be strong support instead of the situation with the dealer network in the US.
I hope Tesla can hit their goal of a low cost EV (€30k-40k), they would dominate the budget car market so quickly if they can deliver at that price, and decent build quality. It would force the big european car makers to complete, which would bring great competition in the lower priced EV segment.
The EU manufacturers have an eye on this market; you have the Leaf (made in Sunderland UK, as others have pointed out), the Renault Zoe, Vauxhall Ampera (rebadged Chevy Volt), BMW i3.
Much of the public infrastructure in the UK is paid for based on gasoline(petrol) excise taxes. Before tax you actually pay about the same as Americans per gallon of gas. I wonder how the government will handle people switching to EVs and effectively dodging the tax.
Public infrastructure needs to be financed somehow and it would make most sense to do so based on usage of them. Energy tax, vehicle purchase tax or tolls are the three main options to do that as far as I can see.
Combustion taxes makes sense if it's only used by transportation means, but that is not the case of electric energy. You could tax at the plug/socket level, but that's probably something that will be easy to tamper with.
There could always be something fancy such as remotely tracking the vehicles, but that will open a can of privacy worms.
The only viable option is to do tolls. Not necessarily representative of actual use, but a good enough approximation of use.
EV owners will get an extra road usage charge. It's the model already seen in some US states.
What is funny is that much of the benefit of an EV is effectively they are a rolling tax-avoidance scheme - in many cases you actually get subsidised for the purchase. The cost-to-run figures rely heavily on the lack of taxation to work out better - and this is even more so in highly-taxing regions like most European countries.
This is obviously not sustainable once larger volumes of vehicles start to appear on the road.
Of course it would make me happy if EVs became popular and avoided getting loaded down with all the other taxes that vehicles currently attract. Because then it would raise the question why all transportation is taxed so heavily.
I know I am dreaming, though. EVs will end up just as taxed as every other vehicle on the road.
Eh, it's probably fine for now for EV owners to get a break on infrastructure costs since they are a minority and there are several helpful positive externalities from EV ownership as an offset. If EVs start to make up a lot of the market then taxation can switch to a different model (licensing/mileage based, perhaps, or simply out of the general fund).
The European car makers are already competing in the low cost EV market - e.g. a BMW i3 is available from £25K or so and has been getting pretty good reviews.
[There are other low cost models from Smart, Renault, Peugeot/Citroen etc.]
I would argue Europe is a better market than the US because the distances are shorter (how much of Western Europe can fit in Texas?), so there would be less of a range anxiety discussion.
Shorter distances is a good argument, but there also others differences which aren't advantage.
Most of my observations are from France, since it's where I live, but it should be correct for Germany, Spain, UK at least.
Plus :
* shorter distances
* higher gas price in EU than US
Minus :
* people usually commute by public transportation. In big cities, they don't even own a car. There is no place to park it, and it's kinda useless, since it take longer to go somewhere by car than by public transport.
* For medium distance (100~1000 km), people use both car and train. It's maybe 50/50, depending on the need of car at destination. You are always more independent by car, but by train you arrive quicker, and rested (a good rail network helping).
* On the 'social' side of things, the car ownership is not a thing the way it is in america (or is it a generation thing / Hollywood exaggeration, I don't know). European young adult buy a car when they need one, not as soon as possible to show they can support themselves.
RE: "* On the 'social' side of things, the car ownership is not a thing the way it is in america (or is it a generation thing / Hollywood exaggeration, I don't know). European young adult buy a car when they need one, not as soon as possible to show they can support themselves."
This used to be the case, but both car ownership and young adults obtaining driver's licenses has been on the decline for the last decade.
None of those are EV specific, they are just reasons the car market in Europe would be small. Rather than speculate about all the causes I thought I would just look it up:
In 2013, there were 12 million¹ vehicles registered in the EU out of 733 million people. And in the U.S. there were 15 million² sales out of 315 million people.
So it looks like Europe is buying cars at about a third the rate of Americans.
by that token Europe doesn't necessarily need an electric car with the same range possibilities as the Tesla S. The real issue is, how large is the market for hundred thousand dollar electrics? I would think they need to keep jumping into markets because demand cannot be that great or sustaining at those price points.
Many luxury buyers have no interest whatsoever in electrics. buyers of Rolls are one such type of buyer. When Rolls trotted out an all electric and took it across the world owners of existing Rolls were not interested. Europe does produce quite a few 100k cars but they tend to be performance exotics, last I checked the main market is much further down stream and for much much smaller cars than the S (which is big even in the US)
Didn't hurt? Perhaps, but it didn't do much good to them either. Just look at Nokia who had a touch only phone in 2004 (7710) and a tablet in 2005 (770). Those techs only succeeded years later with iPhone (2007) and iPad (2010).
The biggest constraint in Europe, and a lot of urban areas in the US, is likely having a driveway/garage. Not being able to charge a car overnight is a big deal for EVs.
In the Netherlands an EV will come with a charger at street level if there isn't allready one available within 500 meters or something. Some cars come with two, one at home and one at your office...
I can't afford one of the Model Ss, but I am totally in line for when they make the budget model in a few years. Very excited that they'll be making a proper-hand-drive one for the UK too, now all I need is a house (hah) with a driveway (even worse)...
The driveway requirement is an interesting problem. I live ~7 miles from the center of London. Driveways are very, very scarce, and I can't guarantee being able to park in front of my house due to the number of cars on my road. I also don't know how legal/practical trailing a cable from my house is.
I basically can't own a Tesla (even though I would like to!) as I would never be able to charge it.
I can't speak to the legality of the building codes where you live, but I don't see any technical reason why you couldn't have an outlet installed near the street to charge a car. It's pretty common for electricians to run conduit out to the street and install convenience outlets for things like landscape or sign lighting or powered gates.
This is un-related to the actual problem. If you live in a major city (like SF, London, NY, etc) you cannot park your car in front of your property unless you have a legal claim to the land. That will cost you somewhere around $500K.
Also, there may not be any available even then. Certain areas in europe, in particular, are not architected for vehicle co-habitation with residential real estate in urban centers. So, by all means you can own a Tesla for your country home. But it may be rather impractical for your town-house. Even in NYC, its quite normal for people who own cars to keep them garaged off-stite. Athough, presumably, this is less of an issue as over time professional parking storage businesses could make a nice secondary income stream by charging a "convenience fee" to Tesla owners. Maybe 100 to 200 a month, maybe a whole lot more more. This type of fee is what they charge currently for a Range Rover or other SUV.
Supposing that's possible, he still has no guarantee of getting that parking spot. I have a similar parking situation: when I'm lucky I get the stop in front of my apartment, other times it's taken and I end up parked 50 feet down the road.
What's the solution to this? Maybe municipal EV charging networks or people charging their cars while they're at work during the day? And if you have a charger at work, trying not to drive too far over the weekend until charging stations become more widespread?
Hopefully a combination of superchargers, EVs in public parking spaces in shopping centers (for example, to attract wealthy EV owners to shop there) and arrangements to have EV charging points near work places will serve people in this situation.
This is such a deeply unsustainable practice it would be incredibly foolish to make any long term plans based on it. Special EV charging points (with the dedicated parking that comes with them) will disappear the moment more than a handful of EVs are used. It's just not feasible to install charging points at every parking space, and once the demand for those spaces that exist outstrips supply the resulting politics will almost certainly either kill them completely or result in them becoming expensive quickly.
Perhaps councils will see them as a way to make money and start charging for the electricity they provide. Could be a nice little earner when they become popular.
Councils already have a 'nice little earner' in charging for parking permits for residents. And then there is the fines for people parking in a residential area without a permit. They are already making a ton of money from parking without having to install a single wire.
I'm 38 and have never even had a drivers license. I grew up near Oslo, Norway, and moved to London when I was 25 - it's always been so easy to just use public transport that I've never gotten around to it. Keep thinking about it, as it'd be nice to have a license for the occasional car trip for vacations etc., but it's pretty far down the list of "nice to have"'s. Can spend a lot on taxis for what a car would cost me.
What is wrong with the offerings currently available in the lower price points? I am really trying to understand the desire to wait on a car that is essentially vapor ware at this point.
With batteries being the constraining cost I do not see how they are going to have a low end car with any real range beyond 100 or so. I just don't see the math.
I am seeing Leafs popping up all over, they may have hit their price threshold for that to occur in my area (US). It fits the commute profile of a large number of people, I would suspect that is true for those here.
I currently live in London, I don't need a car. Soon, I'll be moving somewhere else (undetermined as yet), where I probably will. If I don't have a driveway though (which is likely), then an electric car of any type becomes very difficult to charge.
If that's the Chademo network (Wikipedia says there were 148 of those in Estonia as of March 2012), then yes, Tesla is releasing a Chademo adapter in a few weeks. It charges at 150 miles/hr, slower than a supercharger and much faster than a standard L2 240v charger.
This is great news. I'm a big fan of Tesla and would love to drive one, but being in the UK, we lack quick chargers. Not too bad if you've got a few hours spare to charge.
A secondary issue for the UK is that we're densely populated and our housing stock is, on average, 75 years old. Lots of dwellings predate the automobile and/or lack a garage or a garden (US: yard) on which to build one. Consequently, home charging is less of an option.
What a horrid article. Fuck history, fuck the environment, house prices are too high. I'm going to have to agree with Jamie Marshall in the comments: "The author of this is clearly an idiot."
Why do you think building new houses is bad for the environment? In the short term you're paying for materials, but that'll be made up pretty quickly by better insulation and, if you get multi-family dwellings, a lower surface area to volume ratio. And shorter commutes also tend to strongly decrease transpiration energy use. Clearly you would be losing historical character if you did what the article suggests, but from what I can see all the environmental arguments are on the other side, unless you think that restricting the housing supply will reduce the number of people.
I don't think his point is very well made, though. First, the issue is not so much planning permission, as in all the externalities that the planning process seeks to capture. In many parts of London at least, the councils and planning offices are falling over themselves to be helpful to developers, but they still have responsibilities to residents they need to be mindful of.
While it is true there are some limitations on building up in central London, for example, vast areas of London is not built up to anywhere near the legal limits. As we see, as there are massive amounts of building projects in Central London aiming to increase density. Over the last ten years, for example, large parts of the Thames have seen buildings of 10+ stories going up next to the river on old industrial sites, with many towers of 20+ stories.
As for the green belt... Croydon, where I live, is out in zone 5, bordering the green belt. It's one of the greenest boroughs in London, and also one of the largest (5th, after Bromley, Hillingdon, Havering and Barnet). Yet it also have large industrial areas, a large business district with substantial space for re-development, and several empty plots cleared for re-development. Space is not the limiting factor for developers here. In fact, there is space on vacant plots immediately adjacent to the main railway station for many thousands of new flats, several of which have planning permission.
We also have massive areas of 1930's terraced houses, on plots of about 100-200 m^2, and total liveable area of about 70-100m^2 over two floors. There's massive room for increasing density there just by building 4-8 story buildings. There, certainly, there's lots of room for streamlining the planning process. But hardly anyone are applying for smaller projects like that.
Typical new developments in Croydon are 20 floors or above, with one 44 floor tower going up, planning applications going in for a combination of a 16 and 31 floor tower next to the station, planning permissions near being granted for a range of buildings from about 10 to 30 floors next to the station, a major mixed project including other towers in the same range have had permission for years. And there are a number of other similar projects.
The thing is, this is not cheap, nor is it fast, and furthermore: It takes a lot of time to fill these buildings in the current economy, which has also slowed various of the building projects that does have permission. Altitude 25 - one of our existing 25 floor buildings, is still not sold out after several years.
There's no reason to go into the green belt when there are such massive amounts of land available to build on that is still under-developed.
More importantly, though: It's easy to fantasise about increasing density, but increased density has massive societal repercussions that someone need to pay for:
- You need more schools. Croydon is already struggling to handle the increase in primary school demands from the new development that is happening. My son goes to a new academy which, when full, will take 750 students. The current classes are full, and all the other nearby schools are near capacity again, though, despite adding classrooms and increasing students per class.
- You need more hospitals. Croydon's biggest hospital is near capacity. Increase density much, and massive investment will need to happen to expand hospital capacity.
- Policing, fire department, higher education, sanitation, etc. etc. - the investments needed costs a lot of money, and much of it needs to happen before significant housing capacity increases unless you want existing residents to go through years of pain while services catch up. Ultimately you may end up paying less per tax payer than before by increasing density, but in the meantime you may be looking at substantial capital investments to prepare.
- Transport. My street is one of the main roads connecting Croydon centre to one of the smaller town centres in the borough, and two of the busier train stations. It is already congested during rush hour, and buses are full. Increase density more, and substantial investments would be needed in improving transport, or you'd cause massive issued for tens of thousands of residents. You won't get more people onto the buses withought buying more buses and adding more drivers. The biggest train station is already being massively overhauled, because it is at capacity and additional highrises nearby will push it way above capacity from additional commuters. It is already one of the busiest stations in England, and a chokepoint for large parts of the train traffic from parts of the South coast to central London. They've set aside space for two extra tracks to terminate, but where would the trains go? The train junctions North of East Croydon are running at capacity most of the day, and large parts of the track is running at near capacity, and the areas next to them are built up almost all the way. The investments required to substantially increase rail capacity will run in the billions - someone needs to pay...
A lot of this is part of the planning process. You can not just massively increase density without addressing these issues, and how these things are going to be paid for.
you do need your own driveway to charge, its true, totally illegal/unsafe to run cables over the pavement (US: sidewalk).
Or you just need to live very close to one of the few charging points that do exist. There's one about 30 yards from my front door in London, quite cool if you actually need a car here...
London is obviously first, interesting that the second most prolific place for charging points is around Sunderland in the North East ... where Nissan make their Leaf electric car.
The North East in general has quite a few (I live in Middlesbrough), I assume as a side effect of the Sunderland plant. Unfortunately I don't think I've seen an electric car here, but if Tesla release I imagine that could change.
I've seen many Model S' driving around Amsterdam. Mainly because I filter through the traffic jams on my commute.
Yesterday I was at a company which had two parked in front (connected to a charger on an EV-only parking spot next to a Plug in Prius).
One of the main reasons Tesla S' are this popular is that as a business owner you can get tax breaks for electric vehicles which can change the actual price you pay from €80.000 to ~€35.000...(Curious when that gets shut down by the government...)
On the one hand, the much higher population density of Western Europe means that range and charger density issues are much easier to solve. On the other hand, for precisely that reason many people don't have drive-ways to home-charge their cars.
About 1 in 5 Model S cars coming off the Tesla assembly line headed to Europe last year. They're not starting from nothing; the Model S was the best-selling car of any make in Norway, and has sold at least hundreds of units into 6 European countries. Small numbers compared to the incumbents, but certainly high enough to matter to Tesla which only sells some thousands of cars each quarter.
I was just curious about whether Tesla have achieved something that has failed other US manufacturers - create a car that appeals in the US home market and in Europe.
"traditional" US cars - so massive SUVs and trucks with 7.0L V8 engines are not popular because of their sheer size(a car which is "normal" by US standards, like Dodge Ram, can barely fit on an average UK street), fuel economy and insurance - people buy cars with tiny engines like 1.2/1.6L partially because they are more efficient,but also because owning a car with a >2.0L engine would make your insurance and road tax huge(and I am saying that as a person who used to own a 4.4L V8 car in the UK).
C'mon. Tesla was the "best selling car" due to delivering years worth of orders all in the 2nd half of last year, and topped the sales figures only if you aggregate them by model rather than make. Even in the months where the S was the top selling model, Ford sold more cars in Norway than Tesla.
I remember how on my first visit to the US one of the things that surprised me most was how different car models were from the ones in Europe, I couldn't recognize a single one (not to mention the monster sized SUV and trucks that I never saw before).
I believe the difference in distances, city planning and fuel price play quite a role in consumer preference on the two sides of the ocean.
Jeep was actually my own guess as to the only US manufacturer to sell cars in any volume and they don't exactly sell very many... (e.g. in the UK in 2012 there were three times as many Porsche's sold as Jeeps).
Where does this strange meme arise that US car companies don't sell cars in Europe. Jeep the "only US manufacturer to sell cars in any volume" what? Ford and GM collectively control about 15% of the European car market.
For perspective, Kia sells TWENTY TIMES more cars in Europe than does Jeep. Kia's market share is ~2%.
Think you can already buy the left hand drive version in the UK, they have a showroom at Westfield. Haven't seen anyone drive one in London but I think they will do well, personally I'll wait for one after Model X once battery tech is better
For example, in the UK the majority of cars at the level Tesla is going for are business vehicles. In that category, the tax laws make it such that the best thing to do is to lease a car.
Which is why you get business leasing options from every manufacturer:
BMW: http://www.bmwbusinesspartnership.co.uk/
Mercedes: http://www2.mercedes-benz.co.uk/content/unitedkingdom/mpc/mp...
Lexus: http://www.lexus.co.uk/company-cars/company-car-driver/2013/...
Basically, company car perks are paid in cash in monthly installments. Everyone with a business vehicle leases the vehicle using the cash they are paid.
Tesla may sell a fair few cars in the UK, but if they want to put a lot of cars on the road they'll need to package the car in a way that will attract this market.
I'm sure similar market differences exist throughout Europe too, where local conditions mean that buying outright isn't usually the best deal.