To start of this clean transport drop, I want to highlight a not-so-insightful Harvard Business Review article that argued that Tesla is actually “not as disruptive as you might think.” Not eager to give the article a ton of Google juice, I’ll link to the Tesla Motors Club forum post about it, where I found it.
There’s a comment on the article that is many times better than the article, imho. Actually, there are a handful of good comments. But this one from a Dr. Dean Dauger is superb, and is one of the best I’ve seen at explaining one key macro reason why Tesla has so much potential:
Bartman’s argument falls flat on the notion that “competition will be fierce”.
Since 2008 Tesla produced BEVs with more than 200 miles of range, starting with the Roadster. In those _seven years_ the “Competitive Response” from incumbent automakers is pathetic, offering less than 100 miles of EPA-rated electric range. (The Mercedes B-class and Toyota RAV4 are not competitive responses because they use licensed Tesla technology.) EV sales are slow because most people don’t want short-range EVs like those; those are demand-constrained. They want EVs like Tesla’s, which today are supply-constrained. Bartman seems blind to this vital difference.
Perhaps Bartman is confused too by vaporware, aspirations that do not yet exist from incumbent automakers, like Chevy and Audi, who are all talk right now about long-range BEVs. Their actual response to the Model S today is to increase the horsepower in their gas engines. Tesla responds with a 691-hp dual-motor P85D and autopilot, showing Tesla will keep making their product better than any comparable gas car.
The reason why gas car makers can’t respond is that the attempt exposes themselves to fiscal jeopardy. Bartman’s team needs to understand the Innovator’s Dilemma.
GM, Ford, MB, Toyota, etc., have billions of $ of assets invested in gas car tech in the form of intellectual property, tooling, manufacturing assets, ongoing R&D, and human resources. To fully engage in BEVs, these gas car automakers would have to write off these billions in assets immediately, which is _fiscal suicide_. They’d be killed in the stock market and that CEO would be kicked out that quarter. Add that no one gas car maker will go first. It’s the Prisoner’s Dilemma.
Instead these automakers must amortize these gas car assets over 20 years, moving only gradually away from gas car tech. Unable to “shift … quickly”, the incumbents’ “competitive response” will be lackluster at best and inadequate to close Tesla’s 7-year lead.
Therefore, for the current foreseeable investment timeframe, Tesla Motors, with no assets in gas car tech, can fully engage in BEVs facing very weak BEV competition, giving this young carmaker a very unique advantage and unique opportunity to disrupt.
Bartman also fails to recognize the advantage of Tesla’s 2.5-year-old Supercharger network, a major part of what makes Tesla cars practical. Except for Nissan with CHAdeMO, the competition gives no response to that infrastructure advantage. And CHAdeMO, only half the charging speed a Supercharger, is years behind both in deployment and effectiveness.
Look for these critical pieces of a sensible BEV business plan, which incumbent automakers are missing:
1. A compelling, production 200-mile BEV – Anything less than offering one to buy today is a distraction from their embarrassment.
2. A high-speed EV charging infrastructure – The offerings from Nissan and BMW are a half step. Where are the other makers?
3. An inexpensive battery supply requiring the economy of scale of a Gigafactory – The incumbents have nothing to show.
Tesla’s 1 & 2 are growing unimpeded and building of Tesla’s 3 is well underway. The incumbents might sandbag their 1, but 2 & 3 are far too big to keep secret and take years to design and build; if they exist we would have seen them. With incumbents’ inability to mount a “fierce” response to Tesla so abundantly clear, the opportunity for disruption is Tesla’s.
Couldn’t have said it better (which is why I quoted him). Full disclosure: I’m long TSLA.
On to the other clean transport stories from the week that I think are worth a view or two (other than our own):
More Tesla Stuff
- I Drove The Tesla P85D, And Now Nothing I Drive Will Feel The Same Way Again
- Bosch Automates The Tesla Model S
- Latest Morgan Stanley Prediction
- GM, Tesla Compromise in Maryland
- Bidness Etc. Gaffe Rivals 60 Minutes
Other Electric Vehicle Stuff
- China EV Sales In March 2015 (note that there are a number of estimates/guesses that go into this)
- Multi-Gear EVs Are Probably The Future
- Hanergy & AMR To Further Solar Car Development
- More Plug In Hybrids Than Electric Cars In Europe Soon
- Scotland’s Largest Electric Car Club Charges into St Andrews
- NASA Showcases Incredible Electric Modular Robotic Vehicle
- Porsche 918 Spyder Tops 200 MPH In The Australian Outback
- With Better Charging Network, Nissan LEAF Could Sell 50,000 Units Per Year
Bicycles & Transit
- #BikeChat: Roads Were Not Built for Cars
- Planning Better Bike Infrastructure with Wikimaps
- 10 Tips for Cities Ready to Replace Car Parking With Safe Space for Biking
- Getting More Out of Transit By Making It Easy to Walk or Bike to Stations
- FHWA Will Help Cities Get Serious About Measuring Biking and Walking
- San Francisco: A World-Class Transit Map Unveiled
- New Seattle Streetcars Begin Tests
- Dallas Streetcar Opens Today
- NRDC Action Fund Launches Ad Marking Mitch McConnell’s First 100 Days, Unveils Website Showing Congressional Villains and Heroes on Climate & Clean Air
- Congress Has Made Undermining Energy And Environmental Laws The Focus Of Its First 100 Days
- This Was The Hottest 3-Month Start Of Any Year On Record
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