Why Combustion Engine Carmakers Are On A Collision Course With Destiny

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Editor’s Note: This is an excellent comment we received on CleanTechnica last week that I thought would be nice to share with EV Obsession & CleanTechnica readers. Enjoy! (Slight modifications implemented to fit our style guide and to arrange it more like an article.)

Tesla Model S GreenBy Carl Sparre

They don’t want to sell you an electric car, because they will make less profit from parts, servicing, and sales of their combustion models.

If they sell you an electric car, they have to concede that combustion engine cars are pollution emitters.

They know there’s a tipping point in the market, beyond which sales of combustion cars will drop quickly. Their goal is to reach that tipping point as slowly as possible.

They know that lithium batteries are only expensive because they are not produced in nearly the same volume as gearboxes, fuel injectors, crankshafts, and spark plugs. By delaying market growth, they can maintain the fossil fuel economic advantage a little longer.

They know that lithium batteries are limited in energy density because they have not undergone decades of refinement, as have gearboxes, fuel injectors, crankshafts, and spark plugs. By delaying market growth, they can maintain the distance-between-refuelling advantage a little longer.

They know that once you’ve experienced the joy of driving (in) a silent, vibration-free, rocket-fast, odourless car that never needs petrol, wild horses won’t drag you back to fossil fuels.

The above reasons explain the following:

The Nissan Leaf has no ‘frunk.’ Pull the hood and you see a host of stuff that looks like it needs servicing.

The boot of a Leaf is the oddest shape — it’s not remotely flat. There’s a wall between the hole where the fuel tank would normally be and the rear folding seats. Inside that wall is where they unthinkingly stuffed most of the batteries.

The Leaf has a 150-km range on a full charge. Just low enough to discourage most buyers.

The servicing schedule on the Leaf is the same as a combustion car. At service 1 (10,000 km), they do nothing other than inspect.

I have not seen a single ad on TV (in Sydney) for the Leaf, yet many other Nissan model ads go to air.

But here’s the number one reason they’re dreading the EV revolution: It’s all about brand. Let’s assume that Nissan were to release a “Leaf III,” at the same time as Tesla releases the Model 3 and, let’s also assume that the cars have equivalent range, performance, style, and features. Which car will people buy?

People concerned about Earth’s rising CO2 levels, or city pollution, or oil money destined for the Middle East, who buy the Tesla Model 3 will know they’re supporting a company which is part of the solution, not part of the problem. They know that friends who see the brand on their new car know it’s electric without having to ask. The Tesla will have instantly recognisable status. The traditional motoring brands have no way to put distance between logo and exhaust pipe. Imagine yourself on the road in your Nissan Leaf III and the car ahead is a hulking combustion-engined Nissan, billowing fumes. How do you feel now, supporting the company that produced that monstrosity?

If I were in charge of strategy for one of the incumbent manufacturers, I’d be immediately looking for a way to take what has value from my brand, yet divorce it completely from what will soon have the stigma of smoking cigarettes in a kindergarten. Don’t believe me? Just watch. When you see ads for “Nissan Electric,” an all new company (with a stylish new logo) sponsored by, yet autonomous to, the old “Nissan,” it signals that the new era in motoring has arrived.

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205 thoughts on “Why Combustion Engine Carmakers Are On A Collision Course With Destiny

  • There are basically two theories of history: conspiracy and cock-up. Cock-up usually wins, by Ockham’s Razor. There are conspiracies: VW’s test rigging was one. You can point to the Sicilian Vespers, the Nazi rise to power, and the October Revolution. But they are difficult to pull off. Mr. Sparre invites us o believe that Nissan have designed the Leaf to limit its appeal, in spite of spending hundred of millions of $ on its development; and that other car companies are holding back on ev investment to protect their ICE legacy assets. Is Tesla part of this conspiracy? If not, aren’t the established companies going to lose their markets to it if evs take off?

    It’s far more plausible to see this as a messy power struggle within the established carmakers between EV new brooms and the ICE old guard. (Think of the arguments in the 1930s in armies between the advocates of tanks and mobile mechanised forces – Hobart, Guderian, de Gaulle – and the infantry and artillery generals.) The current balance of forces is different in each company. They have no single view of the future. The result is confused marketing messages and crabwise innovation.

    BTW, the French army in 1940 had more and better tanks than the Germans. But de Gaulle had lost the argument over the vision, and French tanks were deployed piecemeal as mobile artillery support for infantry, as in 1918, not concentrated in special mobile panzer units with their own support infantry. That looks to me like GM and Toyota today. Inside VW, the ICE camp has committed hara-kiri and the ev guys are now on top.

    • I like the hara-kiri part a lot.. let’s hope they die a fast and painless one.

    • Just the Diesel ICE though.
      And it does not effect the Diesel-Hybrid cars at all.

      • There are reports that the emissions may have been rigged for gasoline engines too. The tests were certainly too easy, especially in Europe: this is a testing scandal – regulatory capture -, not just a manufacturing one.

        Diesels may survive, but decline fast once we have serious NOx tests everywhere. I don’t see why the hybrids escape: they pollute when running, even if it’s only 10% of the time.

    • I agree. GM, Ford, Nissan, etc. are getting into affordable mass market EVs but since batteries aren’t cheap enough yet they haven’t broad appeal or much range.

      I see a lot of this – people here really, REALLY want long range EVs to be affordable and are unable to accept that battery prices just aren’t there yet so they blame corporate malfeasance. GM probably has more people working on exterior and interior design than engine blocks. They don’t really care if engines die off – they’ll still sell mobile living rooms. Almost no one looks at engines when they buy a car – they look at cup-holders and electric seat adjustment.

      BTW, In Guderian’s memoir he credited De Gaulle for many of his ideas.

      • GM, Ford, etc. seem to be doing nothing to help bring down battery prices.

        Nissan has tried at some level.

        I don’t agree that traditional car manufacturers don’t care if ICEs die out. They make a lot of money selling parts and service keeps their dealerships in business.

        Plus a lot of the people running car companies are engine lovers.

        • What would you like them to do?

          The Volt is one of the best selling battery cars, Ford has put the Energi line out and is charging no premium whatever for their high end hybrids. Toyota is trying to keep the customer price down but is selling more battery power in it’s hybrids than anyone else.

          You want them to make a Tesla for the price of a Focus? Even Tesla can’t do that.

          • I want them to work on getting battery prices down.

          • GM doesn’t make batteries Bob. Complain to Panasonic, LG, and others if you want battery costs to come down. Or, tell the government that you’d like to see more of your tax dollars put toward research.

          • GM and other traditional car manufacturers could easily form an alliance and approach battery makers and work out an agreement with them to do what Panasonic/Tesla is doing – build in high quantities in order to bring prices down.

            BTW, GM manufacturers their own EV batteries.



          • GM builds their own battery packs (to save money). They don’t manufacture the battery cells. GM has partnered heavily with LG on recent programs (Gen I Volt, Spark EV, Gen II Volt, and the upcoming Bolt). GM was working with A123 until that company went bankrupt.

            GM does a TON of advanced battery work, not just testing cells for durability, but also a lot of work at the R&D level (cell chemistry, etc)…

            I would bet GM has more money invested into battery research than Tesla and GM has greater in-house ability for testing and validation.

            If you want battery prices to come down, people will have to start buying EVs. Musk is taking a HUGE risk by assuming demand for the Model 3. We’ll know in a few years if his bet paid off, but not until then.

          • I would bet Kodak had more money invested into digital research than Canon and Kodak had greater in-house ability for testing and validation.

          • They did. Kodak practically invented the digital camera, then was unwilling to commit to it.

            It’s a *cultural* thing. “Oilmen” can’t change their attitude and become “energy men”. “Engine makers” (which is how the big auto companies think of themselves) can’t change their attitude and become “Motor makers”. A “film company” can’t change its attitude and become a “photography company”.

          • I don’t want to wait a decade or more for GM, Ford and other companies to trickle out enough EVs to build demand for more cells.

            Thankfully Tesla is going to force other companies to step up their game.
            Tesla is taking a huge risk? Have you considered what a battery pack for $150/kWh or less means?

          • This isn’t Field of Dreams, “if you build it they will come”. GM has a long history of over-producing vehicles to keep the assembly lines running and prices down…and where did that get them? There HAS to be pull from the consumer, if EVs are going to become mainstream.

            Yeah, it would be nice if GM sold a variety of EVs in all 50 states, but every manufacturer is currently taking a loss on their EVs. They are figuring out how to remove cost and also figuring out who their potential customers are…but this takes time.

            Tesla is building a single model (soon to be two), with an average cost of about $100K. Making a car that has the same appeal, for $35K, will be an absolutely HUGE challenge. I hope we’re both around in 2020 to discuss further, but until then it’s kinda pointless to debate.

          • Pull from the consumer? Or uptake? We’ve all heard the – If I’d asked my customers what they wanted stories. Nokia and Blackberry catered to the directions that their customers pulled them. Whereas Apple and Samsung were prepared for the huge challenges of moving in a new direction.

          • Well, I think it’s clear that most of the large OEMs are willing to be “close followers” when it comes to EVs. Nobody but Tesla is willing to bet the whole company on it….so yes, we can definitely thank Tesla for putting a stake in the ground, getting good publicity, and creating some desirability where there was very little previously.

            Don’t forget Nissan though, who is the worldwide EV leader in vehicle sales and is the ONLY company producing an EV that is both affordable and available in all 50 states. TBD if Tesla can hit the $35K mark. I say no, unless it is at a financial loss.

          • Much of that I agree with. Although please show me the results of your spread sheets which clarify where Tesla’s analysts got it so wrong.

          • Nobody will know if Tesla got it right or wrong for another 2-5 years. There just isn’t enough factual financial information available right now to know what Tesla’s actual costs are and how much a decrease in battery costs will affect the total cost of the vehicle.

          • You can look at Tesla’s quarterly reports to stockholders. Tesla reports a gross profit margin between 20% to 30% each quarter.

            Tesla is making more money per vehicle produced than GM, Toyota, Ford, ….

            Tesla was paying Panasonic $180/kWh for batteries last October. It is probably costing them another 30% or so to turn them into battery packs. So somewhere in the $230/kWh area.

            It is expected that cell prices will drop to about $130/kWh and packaging will drop to where it is about 30% of that amount, so $170/kWh when the Gigafactory is running.

            Eventually cell prices should drop to $100/kWh or less based on a $70/kWh materials cost. (Today’s prices, material costs might fall some as supply chains develop.)

            The overall “company” loss comes from growing the business.

          • What year are you living in? “Tesla is building a single model with an average cost of $100,000”? You lose all credibility instantly when you straight up ignore easily obtained facts:

            MSRP (base): $69,900.

            You’re only off by about 40%.

          • In the old days, without an EV revolution, I might agree, wait for the consumer.

            Kodak waited for the consumer. They lost. Its a Kodak moment.

          • Kodak was still trying to bundle film technology with digital technology. Most of their customers were also female and marketing was aligned accordingly. When digital tech came about, the consumer mix shifted toward a male demographic. Kodak just didn’t identify the shift correctly or in time to save their market share.

            I’m not saying the same thing couldn’t happen to GM, but I am proposing that GM is out ahead of almost every other OEM when it comes to EVs.

            The technology is understood and ready to go, but it’s still a matter of being able to put it in a car that will sell in high volume (500,000/yr +) for under $30K. GM can’t do that and make money yet, and either can Tesla (or they would be doing it). Selling 60K cars per year to millionaires isn’t really much of a challenge. Let’s see what happens with the Model 3…because that is going to be the make or break moment for Tesla.

          • Do the math for a 200 mile range EV using 50 kWh of $150/kWh batteries. That should give you a good clue as to whether Tesla can pull it out or not.

          • You misunderstand the point. Battery makers make cells.
            Auto companies add expertise and battery pack manufacture, also adding the manufacturing space for cell construction.
            Thats the model of the GigaFactory.

            That investment and commitment is what makes battery makers commit to voume battery manufacture in partnership with auto companies.

            Tesla did that.

            GM did not. No commitment. No battery manufacturer is going to get excited about GMs kind of commitment.

            No commitment, no battery advances, no cost reduction. That simple.

            Its not about the lab anymore. Its about the factory. You can’t bring prices down without volume and manufacturing.

            And you can’t design for manufacturing if there is none.

          • This is a very important observation. It tells us why, had Tesla not come along, the move to EVs would have drug out for years and years.

            Batteries would have stayed too expensive so automakers would have ordered only what they had to in order to meet government regs.

            Battery makers wouldn’t have ‘gone big’ in order to bring prices down because they had no market.

            It would have stayed a game of “You first”, “No, you first”, “No, you go first”.

            Tesla came along with commitment to making a change and hollered back over their shoulder “See if you can catch up with us!”.

          • Thats exactly what did happen prior to Tesla.

            Think waffled. Enerdel died.

            Fiskar waffled. A123 died.

            Musk realized an EV was necessary to stimulate battery demand. He also realized a large high energy capacity battery that gave an EV long range was the only game in town.

            Chicken and egg. Commitment required for both auto and battery.

          • You’re comparing apples and oranges. Tesla is a vertically integrated company and all other OEMs are not. The GF will be making cells and presumably packs. The GM Romulus battery manufacturing plant buys cells and makes packs.

            GM has had a technical partnership with LG since before Tesla was even a car company. To date they’ve collaborated on at least five vehicle programs (Gen I Volt, Spark EV, , ELR, Gen II Volt, and Bolt). That said, GM has also worked with A123 and presumably other battery companies, but the ones you read about are the ones that WIN the business.

            Initial volumes of EV sales are going to remain tiny compared to ICE sales, even at the $35K price point (at least for several more years). Demand will be able to be met and predicted and additional battery capacity can be built out as needed.

            You said, “That investment and commitment is what makes battery makers commit to voume battery manufacture in partnership with auto companies.”

            This statement tells me right away that you have no background in purchasing or supply chain and no experience working in the auto industry. This ISN’T how it works. This is: Battery business is awarded to a supplier that meets the technical requirements for the design, can meet the price target set by the OEM, and has (or is willing to build out) the capacity needed to support the program. If all these requirements are met, the business is awarded (after suppliers battle each other to get to the lowest price..this is how GM and other OEMs keep prices low and keep leverage on their suppliers). This process begins years in advance of the start of production.

          • “You said, “That investment and commitment is what makes battery makers commit to (volume)…. ”

            “Battery business is awarded to a supplier …. has (or is willing to build out) the capacity needed to support the program….”

            Same thing.

            Unless car manufacturers commit to purchasing battery manufacturers are not going to expand production.

            Tesla convinced Panasonic that it could use up expanded production. Panasonic agreed to take the chance that Tesla could follow through and is expanding production.

            There is no sign that any other non-Chinese manufacturer (with the exception of Nissan?) is willing to go there.

          • You have an industry bias. Thats exactly how GM works. And its failing to produce a competitive EV. Maybe the point is that old line companies will fail in EVs with that sort of thing. All that is fine in an evolutionary market, but not in a revolutionary market.

            That model is clearly not what Tesla is doing. They don’t just sub out production to the battery company. They recognized the necessity of a partnership relationship for batteries. And they certainly know that you can’t just hand over a contract for volume batteries and expect any battery company to just put a shovel in the ground to build the factory.
            No battery company has ever done that. Not one. At least not successfully. Certainly not on the necessary scale of a GigaFactory.

            Enerdel might have come close. They were burned.

            No battery supplier is going to fork over the money for a giant battery factory without firm assurances from an auto company with orders.
            GM doesn’t have them. And its not guaranteeing anything.

            DId LG or GM build a GigaFactory? No.

            Did they build a factory big enough for more than 30k Bolts? No.

            They need more than that. They need commitment for that kind of investment. And an equal investment by the auto manufacturer.

            GM has never done that. That is why they are failing. And why they see Bolt production limited to 30k.

            Batteries are as important to EVs as engines are to ICE manufacturers. GM would never sub out engine manufacture completely. They want control of that.

          • Yes, I saw that news a couple days ago.

            LG Chem is apparently building factories that will allow them to build batteries for about 350,000 EVs a year.

            That’s going to be somewhat limited as they are supplying 9+ companies whereas Tesla is going to manufacture for 500,000 EVs for a single company. LG Chem will probably need to find some more places to expand.

            But things are looking up!

          • LGs worldwide capacity under construction and planned is about 240k, and we don’t know what size battery they mean. Hold off on the dancing and champagne. GigaFactory is good for about 500k and we know the size is about 70kwhr or more.

            GMs Holland plant was underutilized, but now uses about one third of their capacity of 40k. Since GM sells about 12k Volts, that sounds like the battery pack size they are referring to is Volt size, not Bolt size. Then the LG capacity comparison looks like Tesla is much larger.

            The Volt uses about a 20kwhr pack. The Bolt must be at least 3x that. It could consume all of Hollands output, just to put out about 13k packs.

            Since the other two LG plants are 100k, about 2.5x, thats 5x total.

            That would put LG actual Bolt sized pack production at about 63k units.

            Here is the GigaFactory.

            ” Its projected capacity for 2020 is 35 GWh/year of cells as well as 50 GWh/year of battery packs.[8] To achieve this the factory would employ approximately 6,500 people and supply 500,000 Tesla cars per year.[5][6][9]”

            We will see just how large LG production capability really is when the release figures in GWhr/year.

            The gating factor has been EV demand. But now its opening up, with utility storage an added factor.

            GM has not been able to supply LG chem with much activity with the Volt.

            Bolt should speed up things considerably.

          • Its precisely because GM has an old school model of development that they are failing in EVs. That “works” for evolutionary products but useless for revolutionary ones.

            The whole model of awarding contracts to a battery supplier and expecting them to take all the risk is precisely why GM cannot supply over 30,000 Volts the first year, while Tesla is planning to produce 500,000 EVs using the GigaFactory.

            Kodak had the same approach and thinking as GM. They thought they could just ride it out doing the same old thing. Look where that got them.

          • Yep. No commitment. How about this, from two hours ago.

            The Detroit-based automaker called its relationship with LG “unprecedented.”

            LG is supplying the GM designed electric drive motor for the Bolt EV, a power inventor module that converts power for the drive unit, an on-board charger, battery cells and pack, battery heater, instrument cluster, infotainment system and many other components.

            Reuss earlier this month said LG Chem is a big partner in its electric vehicle strategy and GM anticipates the cost per kilowatt hour of electric vehicle batteries will be $145 when it launches the Bolt EV. He said that will fall to about $100 in the next few years; early costs on EV batteries were more than $200 per kilowatt hour, Reuss said.

            more here

          • Dont exaggerate. No commitment does not mean zero dollars. I mean they lack commitment as in attitude and behavior.

            GMs commitment was to the Volt, which requires much less battery. Their battery commitment only went that far and was not enough for a BEV.

            I really don’t care what kind of self serving statements GM makes about its battery commitment. Neither does anyone else. They only want to know how many Bolts GM can make. We know the answer. The first year, 30,000.

            GMs commitment to batteries and EVs has risen with the Bolt, but they have found out that they are behind and limited in battery production. Not too long ago GM was talking about “commercial problems” with the Bolt, meaning profits and battery costs. Seems like LG may have responded given the new, lower cost announcements. But there is just so much “shipping data sheets in volume” I can deal with before I want to see some real, hard, evidence. GM’s track record forces one to look carefully at promises vs. reality.

            GMs partnership with LG, and LGs factory expansion worldwide are all good signs. But we have seen some failures before, like with Envia, so I want more detail.

            Its good to be a bit skeptical about battery claims. There have been many that did not pan out.

          • The Volt was a very well thought-out and engineered car. That’s why Volt drivers average almost as many EV miles per year as Leaf and Tesla owners, but at 1/3 the cost of a Tesla and in a much more refined package and without range limitations like the Leaf.

            We won’t have to wait very long to see if GM’s promises pan out. Based on the amount of information already trickling out, test vehicles already spotted in the wild, and manufacturing facility announced, we’ll probably be able to buy one as early as next fall.

            As for volumes. How many Model 3’s is Tesla likely to sell their first year? It won’t be 500,000K. It probably won’t be 100K. I think GM’s estimate of 30K per year is predicted on consumer demand, not production constraints. The average person still doesn’t consider a BEV when shopping for a new car, so the uptick in demand for them will still be small for several more years (even if they were sold at a very low price point). Maybe the market will be improved by the time the Model 3 comes out, but by then there will be a lot more competition in the sub $35K space and volumes will be split among the competing OEMS.

          • Tesla’s assembly lines are capable of producing about 50,000 ModS and ModS cars per year. (They now have two US lines plus smaller assembly lines in Europe.)

            My guess is that Tesla will have a couple of assembly lines when the Mod3 starts sales. They’ll open with the ability to manufacturer about 100,000 per year. They may start deliveries with tens of thousands of buyers on the waiting list. I expect they will be pre-sold for months.

            We can probably get an idea of how rapidly Tesla intends to scale to 500,000 by watching how rapidly they build the rest of the Gigafactory.

            Demand should be greatly larger for the Mod3 than for the Bolt. Tesla has build an extremely strong EV brand name. There are a lot of people who really want to drive a Tesla but can’t afford a ModS.

            GM’s Spark has received little attention. I keep forgetting they exist. I doubt that GM has built much of a “waiting” base with the Spark.

          • I mostly agree with everything you’ve said. I think the most difficult thing for all manufacturers will be to estimate the sales volumes for these upcoming vehicles. They’re all breaking new ground and there is no precedent that would help indicate what the volumes will be. I think pre-orders are a good gauge of interest, but I’m not sure what percentage of those turn into actual sales. I think to achieve 500K in sales, the price will have to be in the mid-$20K range and 200 miles of range. Nobody is claiming that they can get there in the near term.

            Unlike Tesla, GM has the advantage of being able to produce significant volumes of vehicles from the 1st day production, so no waiting list is needed. Leaking out a few cars per day tells me that there are still serious manufacturing/quality issues that Tesla is fighting with the Model X.

          • The expected cost of the Tesla 3 (no subsidies) is $35k. The average new car price in the US is $32k. I doubt there will be any problem selling a few hundred thousand a year, especially considering that sales will be spread across continents.

            Tesla is now manufacturing at a rate close to 100,000 ModS and ModX per year. More than 250 a day. That’s hardly leaking out a few cars a day.

          • I hope there is competition from the auto manufacturers and OEMs by the time the Model 3 comes out.

            I don’t think the Bolt would have been introduced this early were it not for Tesla.

          • Agreed.

          • Naw, Sam’s out of touch with prices.

            Tesla was paying Panasonic $180/kWh for cells a year ago. The number came from Navigant, the same company whose report Sam links to for his “industry average of $424 per kWh” data.

            The target price for cells out of the Gigafactory is 30% less which would be around $125. Less than GM’s/LG Chem’s cell price of $145.

            And you’ve got it wrong on the LG Chem and Mod3. Tesla is apparently going to use LG Chem cells for its Roadster replacement battery. Might have something to do with limited battery space in the Lotus/Roadster.

          • LG’s announced price is for next year. It will be interesting to see what it will be in 2018+ when the model 3 comes out.

            What LG has done is debunk the notion that the car manufactures will play the role of battery supplier, economies of scales are too limiting. LG Chem is gaining the economies of scale by sourcing multiple vendors. Even Nissan is in trouble with their NEC partnership and could very well give up the race of running their own manufacturing plant.

            And I don’t agree that Panasonic is a shoe-in for Tesla in the long-term. As prices continue to drop Panasonic may fall behind with their their commodity form factor approach. If so, Musk will look elsewhere.

          • You might benefit by learning more about what Panasonic and Tesla are doing. It doesn’t sound like you’re aware of what is happening in Nevada.

          • I understand what is happening in Nevada, my point is that you don’t understand what is happening outside of Nevada.

          • Here’s what I see happening outside Nevada.

            GM is about to bring out a 200 mile range EV. Nissan is moving to a 100+ range EV. Other companies are now taking EVs and PHEVs more seriously.

            LG Chem is building battery factories and should have about the same manufacturing capacity as the Gigafactory when the GF opens.

            China has a major push on EVs and BYD is greatly expanding their battery capacity.

            EVs sales are growing fast than hybrid sales grew in their early years.

            What else am I missing outside of Nevada?

          • I like your assessment although I believe the near term EVs have a ceiling just like hybrids did/do. The additional comment I would add is to look to the battery suppliers, not the auto-manufacturers, to drive battery performance improvements as well as gaining economies of scale to drive down $/kWh.

            Save this comment to feed me as crow if it doesn’t come true:
            – Unfortunately, EV adoption will look much more like a marathon than a sprint. It will be 10+ years before EVs eat into ICE sales in a meaningful way. Sedans will be first EV casualty, trucks will be last.
            – EV adoption will continue to be very petrol price sensitive, regardless of EV’s superior technology and ride quality. Bottom line, we need a carbon tax. High priced oil will never return unless its from tariffs and taxes.
            – Current CAFE 2020 standards is a must. If they are relaxed by a Republican congress and/or president EV development will stall and adoption will crash.
            – Tesla will continue to be a EV brand leader but a small player in the automobile industry.

            If I’m right we lose, if I’m wrong we win.

          • Ten years? Let’s look at what Tesla has done in the luxury market in three years. Yes, this is only part of the market, but it’s the German market where people tend to purchase German built cars. (below)

            The world builds and buys about 90 million cars a year. By 2020 Tesla expects to be producing 500,000. LG Chem should be manufacturing enough batteries to bring that to about 1 million. BYD, IIRC, is aiming for 1 million per year by then.

            That happens and EV sales are more than 2% of annual sales. From there market growth can proceed very rapidly.

            You can safely bet that if the GF gets up to speed with few significant problems and battery prices come down as expected Tesla will start building a second GF and a third GF….. Other companies will be dragged along, if they haven’t decided that they need to get out ahead and lead.

            Reach purchase price parity, install enough rapid charge stations to wipe out range anxiety, and look for EV sales to skyrocket.

            Who will want to pay more for a gasmobile, pay more to fuel it, pay more to keep it operating, and have to put up with the inconvenience of gas stations?

            I don’t think crappy behavior out of a Republican Congress or White House could hurt EVs very much. The US purchases only a small portion of all new cars. China is becoming the big dog. European countries are not likely to turn back to oil.

            Oh, trucks. I expect we’ll see faster uptake of electric trucks than cars. Once we have some good battery powered/PHEV trucks business should start snapping them up. Businesses do bottom line math very well. Save on purchase price, operations and maintenance? Goodbye petroleum.

          • I like your optimism but I don’t see the right pieces on place. After such slow EV/PHEV adoption since the first of 2011 I’d be happy to see 5% in the U.S. somewhere in the near future. Please look me up when that happens, let’s go out for a beer and discuss.

            Lack of pickup truck adoption has nothing to do with technology. The mass of rednecks that I live amongst (there are far more tucks than cars where I live) will not drive an EV .

          • When JimBob’s electric pickup smokes Bubba’s F-150 then Bubba will be dreaming himself some electric lust.

            Then when Bubba finds out that if he drove an electric pickup he’d have a lot more money to spend on beer and twist, there’d likely be an insurance event leading to a totalling out of Bubba’s F-150.

          • Any comments on Jeff Evanson and Jon Bereisa’s comments on battery costs?

          • Received some discussion here –


            Unclear whether ‘now less than $190/kWh’ is right now or the price when the Gigafactory is operating. If it’s right now and the GF will take prices lower then it’s great news.

            $190/kWh – 30% GF prices would move us very close to manufacturing cost parity with ICEVs. At that point the market starts to switch very quickly. The speed should only be limited by how fast new battery manufacturing can be brought online.

            Look where $135/kWh is on this this chart…


          • I think it’s clear that the $190/kWh is today, not GF costs.

            Interesting article that you linked to. I have a little more stock in Jon’s perspective than Kyle does.

            For me the interesting variable will be if all this pent-up demand for Lithium will slow down the decline of battery costs.

          • There’s not that much lithium in an EV battery pack. And lots of lithium mining/production seems to be coming online.

            Mining and processing companies see this new demand coming. And must have been watching it for awhile. I would think that Panasonic and LG Chem would have lined up the supply they will need about the same time they decided to build new plants.

      • The people that sell the vehicles often have service centres attached and they do care about bringing in the car for a expensive annual service where they don’t do very much. With EVs a lot less services & mechanics will be needed.

        • That affects the dealers a lot but the auto manufacturer’s much less – especially since many parts are 3rd party aftermarket parts.

          Having fewer warranty claims would be a boon for the auto cos.

          • Agreed. We get anecdotes here of dealers really trying to divert ev customers back to ICE. This is a considerable advantage for Tesla and BYD, where every single employee and agent is fully committed to evs. Nissan seem to cope with a mixed sales network, but then Nissan ICEs have a small market share.

          • The incident with Kia Soul EV at Kia dealers comes to mind.
            Never heard anything like that with Nissan. Ghosns interest in EVs is genuine.

          • There are literally *all kinds* of issues with Nissan dealerships and Leaf sales. EVerything you can name and then some. Don’t watch “The Revenge of the Electric Car” and come away with Pollyanna optimism about what figurehead Ghosn means at the level of the dealer.

            The reality is that only Tesla has a working business model; the old school dealership is going the way of the Ford Pinto, and good riddance. No one liked dealerships to begin with and 10 years from now they’ll be as common as video stores.

            At the moment, it’s only the truly uninformed or internet-clueless people who get raked at a dealership anymore. There are still enough of those people out there willing to support the ridiculous old business model. It won’t last.

            The Nissan Leaf is a great car, but Nissan has a hell of a lot of work to do on its corporate culture and dealer networks to consistently sell it, despite its clear superiority over anything at a remotely comparable price point.

            It is not for the average customer yet. Most people don’t understand their own driving dynamics and costs enough to know that it’s a clear winner.

          • I do, but the lack of interest in Nissan flogging me a leaf gave me serious concerns regarding after sales service.

    • But nobody at that time ( in general) envisaged the nuclear bomb, times are a changing 😉 rapidly, and I have some sympathy for the fence sitters;) what happens if you go with the current battery tech and in a few years someone comes along with a complete game changer? Ditto RE? What happens if someone comes up with affordable fusion or thorium?
      Spare a thought for those having to predict the future;)
      However don’t bother with those who are trying to protect the zombified remains of the FF industry.
      Cremate them, (using CSP of course)

  • i think that Americans never landed on Moon :). What a bad publication.

  • I recently watched a presentation of Mark Tarpening, one of the Tesla founders, also about his experience in ICE car company. He is absolutely specific why established car makers lags in EV adoption/production – they outsourced everything except ICE engine making and marketing. So, they have no expertise on electric propulsion and it scares them because it makes half of their staff obsolete and useless.

    • Super interesting video! Thanks for sharing.

    • Totally what I am saying. And the ICE makers reluctance to invest in a battery manufacturing plant and lack of battery acumen is the reason Tesla is way ahead in every way. Think about it.

      Even if you gave GM the rights to manufacture the Model S today they would still be behind. They lack.

      1. a GigaFactory
      2. a SuperCharger network.

      The world is jabbering on about Tesla beater nonsense. All the while ignoring that Tesla doesn’t own the rights to a battery chemistry. Panasonic does.
      And imagining that some new chemistry will beat Tesla. The batter companies are all vying to sell their chemistry to Tesla. Why?
      Its the largest market in the world for batteries, so it potentially represents the largest and most lucrative money. They all would like to get the order from Tesla. If a new contender came up today, they would go to Tesla first. Why? They have the volume and they have a GigaFactory to build the batteries.
      To date, neither the other car manufacturers or the battery companies have had the stomach or will power to build a multibillion dollar battery company.
      One company could do that though, because they have tons of cash and already have a vested interest and expertise in batteries, but not automotive ones.

      • They lack

        1. a GigaFactory
        2. a SuperCharger network.
        3. commitment

        • They are unwilling to cannibalize their old market. Same reason Kodak wasn’t willing to commit to digital cameras.

        • Well, they also lack a 200 mile EV, but I guess that’s a given.

    • Historically, automakers only made the engines and transmissions — they hired other companies, so-called “coachbuilders”, to build the bodies. So the outsourcing here is *old*.

      They’ve actually insourced the bodies since then, but they still think of themselves as “engine makers”, which is why they can’t change their attitude.

    • GM also insources:
      Electric motor design
      Electric motor manufacturing (not 100%)
      Battery pack design
      E-transmission design
      Pack development
      Power electronics development
      Battery pack testing/validation
      Vehicle testing/validation

      What you’ll notice historically is that GM has kept, in-house, engineering support for what it feels are critical, core technologies and strategic intellectual property.

      My question to the haters is: What would you like GM to do? Stop ALL development for ICE vehicles and move all resources to EVs, even with no pull from the consumer? Really? Let’s think about it and discuss the viability of that.

      • No pull from the consumer? GM makes pull from the consumer. It’s called advertising. GM is nothing if not a marketing and finance company. So the quarterly report is king. They have a huge financial interest in status quo. That’s what the article is all about how hard it is for an entrenched ICE company to switch without to EVs without financial loss. Your comment reinforces that idea.

        Consider the Volt and Bolt. GM bet conservatively on the Volt, thinking range would matter. But they didn’t foresee battery tech improving so rapidly. Now they face cannibalizing Volt sales to Bolt sales. And still they have very limited investment in battery pack manufacturing. It’s a Kodak moment. GM is content to wait for someone else to do it, and thinks they have the might to catch up afterwords. But they don’t. No more than Kodak did. This is revolution, not evolution.

        What is GM going to do to attract battery makers? Anyone can see their commitment to battery pack manufacturing and battery expertise is meager.

        At GM, insiders have been reluctant or even negative towards EVs. You hear public comments from execs from time to time.
        Same with VW. They preferred diesel.

        • I’m not disagreeing that it will be hard for traditional OEMs to move to BEVs when the time comes…but they are what they are. They don’t have the benefit of starting fresh with EVs like Tesla is going. Certainly, advantage Tesla.

          Not sure what you mean by GM was “thinking range would matter”. It does matter and when they asked Gen I Volt owners how to improve for Gen II, one of the things they wanted more of was EV range. Volt owners love that they can do anything an ICE car can do, but drive EV 85%+ of the time…with NO compromises to lifestyle.

          As for battery pack manufacturing experience…GM has built as many packs as Tesla. If you think about it, they’ve designed more variants of packs than Tesla as they packs are significantly different between the Volt/Ampera/ELR (T-shaped), Spark EV (rear subframe), and Bolt (TBD).

          I guess what I hear you saying is that for Tesla and EVs to succeed, the traditional OEMs must fail.

          • GM has not produced anywhere near as much kwhrs as Tesla, because their batteries are low energy density.

            What I mean is both GM and Tesla thought correctly that range matters to the consumer. Tesla decided the way to market EVs was from the top (luxury) down and with a long range EV, and solved battery and marketing simultaneously. The approach succeeded. GM decided to make a series plug in hybrid, forego battery development, and enter the market in the mid range. When they found Tesla beat them in the high end luxury market, they introduced the stopgap ELR. In typical GM fashion, they failed. The Volt is a modest success, but will lose sales to GMs BEV entrant, the Bolt, belatedly introduced as a stopgap to the model 3. A clear admission of GMs realization that it missed the boat and had to finally introduce an EV, but once again short. It’s not a purpose built platform, instead sharing an ICE version with the Sonic.

      • GM has also dumped parts divisions. Delco Remy. And others.



        And Remy has made an outstanding magnet free EV motor. And Remy contributed greatly to the EV-1 success.

        But while GM trumpets Volt accomplishments, including the motor from Remy,

        Remy is no longer a part of GM.


        • I guess i don’t understand your point. GM builds cars, not car parts and having a lot of historical parts divisions within GM just added more cost (think unions). Getting rid of these parts divisions was just as important as getting rid of unneeded brands like Oldsmobile and Pontiac.

          GM is building their own electric motors here (in-house) for some vehicles and is able to design their own motors in-house.

          Again, GM has the flexibility to design and produce key components of a vehicle in-house, but they also leave open the option to outsource. That ensures that they are always getting the best prices and the newest technology. This is the opposite of vertical integration, which we were discussing earlier.

          • Tarpenning said,

            ” they outsourced everything except ICE engine making and marketing. So, they have no expertise on electric propulsion and it scares them because it makes half of their staff obsolete and useless.”

            You replied,

            “GM also insources:Electric motor design”

            I replied,

            “GM has also dumped parts divisions. Delco Remy…..

            And Remy has made an outstanding magnet free EV motor. And Remy contributed greatly to the EV-1 success.

            But while GM trumpets Volt accomplishments, including the motor from Remy,

            Remy is no longer a part of GM.”

            If GM inhouses motor design, they also lost a lot of electric motor expertise when they dumped Remy.”

            Remy made the Volt motor as of 2011.

            Read the list of outsources. There is a lot of expertise outside GM, and it supports Tarpennings remarks.


      • Maybe it would be a good idea to make its own pure electric brand and make it half independent within the group. Make something with no vested interests and hire there some seasoned electronics professionals. And watch what will happen.
        A consumer pull may be created they just unleash their marketing power. They have been able to mass sell Hummers, overpriced and gas-guzzling unpractical monsters. EVs will be piece of cake.

      • GM is notorious for not advertising or poorly advertising its electric offerings. The Chevy Spark EV, which got good reviews, was just available in a few states. I think people would be happier if GM were willing to sell its EVs in more places, really *tried* to sell them, and made sure it had the battery supply to not run into problems meeting supply (as happened with the Volt for a long time and is likely to happen with the Bolt).

        • Maybe it’s been too long, but I don’t remember any news regarding Volt production constraints related to battery availability. As for the Spark, yes it’s very annoying that it’s not available in all 50 states (I drove one at the GM Tech Center and it was great), BUT we don’t know what each vehicle costs to GM. I think it’s safe to assume that GM is losing money on every Spark EV. Last I heard, the battery enclosure was hand-laid composite material. That is not a high volume processes and it’s things like that they would need to be addressed before you could produce that vehicle in significant volumes. With the Bolt, they’ll have more time to get cost out of each component and come up with a better mass-market strategy. At least that’s what I expect to see.

    • Yes, that is one of my favorite videos of all time. Wrote about it a long time back, but share often.

  • I disagree with these statements in the article:

    “The boot of a Leaf is the oddest shape — it’s not remotely flat. There’s a wall between the hole where the fuel tank would normally be and the rear folding seats. Inside that wall is where they unthinkingly stuffed most of the batteries.”

    Wrong. The batteries are underneath the seats just like other electric cars, not “unthinkingly stuffed inside a wall”. Just google ‘leaf battery location’ and look at the pictures. What wall are you talking about? Also, what the is a car’s “boot” ?

    “The Leaf has a 150-km range on a full charge. Just low enough to discourage most buyers.”

    Umm, the 2016 just added 25% more range and everyone expects 200 miles in the 2017/18 model.

    “The servicing schedule on the Leaf is the same as a combustion car. At service 1 (10,000 km), they do nothing other than inspect.”

    Wrong. I own an Altima and a LEAF and the service book for the Leaf is a lot thinner because there is a lot less service.

    • Right. I’m not sure why the Leaf is so disparaged in this article. Nissan took a 6 billion dollar gamble in getting a modern and affordable electric car to a world-wide market when nobody else was prepared to do so. There are almost a quarter million of them out there. I’ve talked to scores of owners of these cars and the vast majority are extremely happy with them.

      Of course Nissan still makes stupid and outsized gasoline cars. There are still plenty of stupid and outsized people willing to buy them. But scolding Nissan for making more electrics than any other manufacturer on the entire planet is pointless. Why not save that disdain for the vast majority of other established manufacturers who have either made only limited edition compliance EVs or none at all? Why not save that disdain for manufacturers who have cheated in saying their cars are environmentally responsible when they clearly weren’t (do I even need to name names at this point)?

      Also . . . more opiated Model 3 happy talk here. No one has seen one. No one will probably own one until 2019. 200 mile range “affordable” EVs will be here from a variety of manufacturers long before the first Model 3 is sold. All these vehicles should be evaluated fairly. Ones that aren’t here yet shouldn’t be evaluated at all until they’re actually available. It’s also irresponsible of the writer to essentially tell everybody to wait until the Model 3 is here before considering an electric. You only help sell more ICE cars in the mean time.

      • Everyone loves to dis the Leaf. But its a very successful EV, and the first one. It deserves nothing but admiration.

        • Not everyone. Nissan deserve accolades for bringing out the Leaf.

          But Nissan does need to push harder/faster if they want a place in my Hall of Current Heros. Hopefully they do something impressive (current) with the 2017 Leaf.

          Steal Tesla’s thinking. Get the batteries in the bottom. Free up a lot of interior space. Build the perfect commute and close to home EV.

          And find a designer/stylist who hasn’t burned their brains out on bad acid.

          • They’re pushing harder and faster and making a much bigger difference than their peers, the batteries are in the bottom, and it must have been some pretty good acid to get them thinking that was a “cute” design.

          • Bad acid stylist. Ouch.

          • Gawd, your so hard to please, look at some of the truly orrible ICEVs on the market, the leaf is aesthetically pleasing compared to most ( Dodge ram FBS)

      • Wish I could “like/up vote that reply a lot more than once, well said;)

  • The bottom line of this article seems spot on. It’s not that much trouble at all for a car company to spin off a new “brand”. Just look at the GM Saturn. The mystery is why this hasn’t happened yet, but perhaps it just shows that all these pure EVs, as contrasted with hybrids, and including the LEAF, are essentially just compliance cars. If you spin off a new brand, I don’t suppose you get compliance credit for your existing brand. As the author writes, the appearance of entirely new EV brands should signal the end of compliance car sales and the beginning of EV competition in earnest.

    • So, by agreeing with the tenant of the article, you’re basically saying we should not buy an EV today – however imperfect the current iterations are – and wait for this perfect and more affordable Tesla, which we hope will be on sale before 2020? You’re stalling further adoption of EVs in the short term by signing off on this idea.

      Also . . . I don’t know what your definition of a “compliance” car is. Sales approaching a quarter million, available in all 50 states and on every continent (ie: the Leaf) isn’t what I call a compliance car.

      Generation II Leaf, Chevy Bolt . . . there may be a million of these on the road before Model 3s start shipping.

      • The Leaf isn’t a compliance car. The Ford Focus Electric is.

        There are only a few legitimate purpose built production EVs. Leaf, Model S, i-Miev, i3. Of those, only Model S, Leaf, i3 have any real production volume.

        The pretenders are the converted Focus, the Mini, Golf, more.

        • The Mini was not a pretender, it was an early science project tossed together to gauge reactions by BMW. BMW is now committed to investing in electrics, and offering plug-ins for each model they offer. Unless there is a new electrified Mini?

          • Not a pretender but a science project? I was being a teensy kind.

          • LOL, perhaps I mis-wrote that, maybe not a science project in the car business sense of never being on the road. A small project to test the wind, get their early engineering into customer hands, and determine the direction of their nascent EV program. Yeah, but science project was a lot shorter 🙂

      • I certainly did not suggest that no one should buy a car without an independent brand. But I think we’ll know when EVs have really made it; and that’s when they are no longer being built mainly to comply with CAFE standards, but as independent profit centers. LEAF may be almost there, but should be spun off like Infiniti so that when we go to shop for a LEAF, we don’t get sales people trying to sell us ICE cars in their showroom, instead. In Annapolis where I live, the local Nissan dealer does not even sell LEAFs and has no charging gear for them if visitors should need a charge. We need a LEAF dealer.

        • What got my goat about this article, Tom, was I don’t think the author has even seen a current production Leaf or talked to someone who drives one. It compares a 2011 Leaf (you can tell by the comments regarding the battery bump in the luggage area. which has been flattened on more recent model years) with a fantasy EV that doesn’t even exist yet (Tesla Model 3.) The uniformed will read an article like this and possibly pass on getting an EV until this so-called ideal one is available, which would be a shame.

          Articles belittling Nissan after all they have done with EVs while there continues to be so many other OEMs out there doing so little is something that continues to baffle me.
          Sorry to hear you can’t find a Leaf in Annapolis. We’ve got two rather enthusiastic dealers here in Tucson.

          • Can you persuade one of them to relocate to Northumberland ( UK) 😉

      • central *tenet*, or rent-paying tenant?

        • Yes. Noted. Typing in a hurry this morning
          and now corrected. Thanks.

    • Saturn EV1

    • “It’s not that much trouble at all for a car company to spin off a new “brand””

      Sure you’re right. Just ignore that launching a vehicle is one of the most difficult, and complex activities in industrial history, that a new platform requires a minimum one billion dollar investment, that car makers are consolidating and eliminating brands not adding them, that no boards are going to greenlight a slew of new brands into a hyper competitive market that just emerged from a crippling credit squeeze resulting in bankruptcies. Wait, let me change that, it is a hell of a lot of trouble, “for a car company to spin off a new “brand”. Just look at the GM Saturn.”

      • I would feel more charitable towards GMs efforts on Saturn if they didn’t ignore it for years, then kill it. The other GM divisions hated the competition. So we wound up with more inferior cars from GM as a result, IMO. Saturn wanted excellence. They wanted profits.

    • Funny you mentioned Saturn. GM killed it. And the EV. They have a credibility problem. Don’t think an ignition scandal helped.

  • They’re probably beavering away like mad as we speak, devising frailties and complexities to incorporate into the upcoming EVs, to provide continuing and lucrative work for the trade, before foisting them onto an eager and unsuspecting public. They’ve been rehearsing this for some time already which explains why so many irritating failures are related to non-engine components these days.

    • I have a new battery polishing device that can save you millions in battery slippage. And its only 12.95 a month to keep your battery in top condition so you never lose a drag race to a 290ZX. Get yours today. But hurry. This offer ends the fifth Tuesday of the month.

  • People don’t give a shit about the planet. People will drive EV’s because the economic mobility is the best. That’s what drives global economies, economic mobility.

    Forget politics, forget anything else, pure capitalism will work from here on out.

    EV leases are better right now, today, GO!

    If your company cannot make a compelling EV, I HOPE you go bankrupt. Free market economics are a bitch.

    • Some care . . . they are the ones buying EVs now. But, yeah, most people don’t care. Thus, we need to build EV cars that people want.

      • Who wouldn’t want a Volt, a Bolt, an i3, a Leaf or a more affordable Tesla?

    • It has to be a great car, no matter what. It can’t just be a bad car with an electric motor.

      • And it has to be affordable.
        What if your car runs on cheap propane, gets almost 50 mpg and costs half as much as the cheapest EV or plug-in hybrid?

        • Then people will buy it a screw the climate.

          Thankfully that won’t happen, propane cars costing half as much as the cheapest electric.

          • It’s still better to drive a 50 mpg car on propane than a 18 mpg pick-up truck on gasoline (which appears to be the norm in the US).

            Given the frontal area, the drag coefficient and the curb weight of the 3 most popular cars in the US, it appears as it would need at least a 250 kWh battery pack in order to match the range of a Tesla S.
            1. Ford Series
            2. Chevrolet Silverado
            3. Dodge Ram

            Many Americans apparently find big, heavy cars with hefty, draggy snouts appealing, how is this issue going to be solved?

          • What Americans drive changes from time to time.

            Bring a better ride for a better price and a “new modern” look sold by the ad people and folks will move to the latest thing.

        • We run cars off propane in Australia. The cars cost as much as cars, the propane isn’t cheap, and they don’t get 50 miles to the gallon. They get less than 70% of the miles to the gallon as gasoline due to its lower energy content.

          • In Europe it’s different (I meant 50 mpg gasoline equivalent and one gets about 80% of the miles), since taxes on propane are much lower than on gasoline and EVs are still prohibitively expensive in most countries.

        • Isn’t “cheap propane” a contradiction in terms? Propane is so expensive that people are ripping out propane heating and replacing it with electric heating.

          • High taxes on gasoline as opposed to propane.

            (Propane may be expensive in small bottles, but it isn’t in large quantities.)

        • Still needs a more expensive fuel than an EV, plus maintenance and servicing are going to be comparable to an ICEV
          But, still a step in the right direction, but I could never understand why there wasn’t a bigger adoption of propane powered cars before the new wave of EVs?

          • Most people just don’t pay a few thousand for something that is not emotional and doesn’t amortize within less than a year.

    • If everyone was a rational, economic actor, plug-ins would be flying off the lots. The cost of recharging one is equivalent to paying 60 cents to a dollar a gallon for gasoline depending what one pays for electricity, not to mention the maintenance savings.

      Of course most people, except for the few people who read sites like this, don’t know that because it isn’t advertised.

      Pure, unregulated capitalism doesn’t exist but if it did, it would be on the way out thanks to VW and that obnoxious kid who bought a small drug company and jacked up the price of much need medicine 4000% (perfectly legal of course).

      • The operation and maintenance could be a bigger factor than the fuel cost.

        • Operation and maintenance are less on the plug-ins. For example, no or much fewer oil changes.

          • Yes. Its hard to even remember all the replaceable ICE parts. Walk into a dealership. You will find them. LOL. Oil changes are nothing.

            Plug in hybrids keep all the ICE downside.

            If you own an EV say goodbye to dealing with or replacing:

            catalytic converter
            Intake Manifold Isolator Grommet Set
            Torque strut bushing.
            Engine mounts.
            PCV valve.
            Exhaust Flex pipe
            Coolant flush.
            Lead Acid Battery
            Automatic Transmission Fluid
            Accessory Belt
            Timing Belt
            Fuel Filter
            Fuel Pump
            Spark Plugs
            Spark Plug Wires
            Fuel Pressure Regulator
            Gas cap.
            Radiator cap.
            Ignition Switch
            Crankshaft Position Sensor
            Ignition Coil
            Clutch safety switch
            Fuel gauge
            Valve cover gaskets
            Oil pan gaskets.
            Oil leaks.
            Coolant hoses
            Cooling fans
            Cooling fan switches
            Water Pumps
            Exhaust hangers
            Exhaust system
            Oil pressure sensor
            Evap canister
            Evap Canister purge valve
            EGR valve
            Oxygen sensor
            Powertrain control model (engine computer)
            Idle air control valve
            Coolant temp sensor
            Air temp sensor
            MAP sensor
            Fuel injectors
            Throttle position sensor
            Crankshaft position sensor
            Vehicle speed sensor
            Knock sensor
            Automatic Transmission

            Anyone with a vehicle over 100,000 miles or 10 years starts to get familiar with these and has no doubted replaced or repaired many of these.

      • Exactly, the EV advantages aren’t advertised, in the UK the only advertising for EVs is Nissans occasional lukewarm advertisement on Classic FM and one brief TV advert that came and went so quickly I can’t remember it.
        And ( I know I’ve covered this before ) if you chase up on the leaf advert you hit a wall of disinterest from the dealers which is incomprehensible, even the direct intervention of Nissans LEAF CEO (UK) didn’t make a happerthworth of difference, if someone as genuinely interested as I was gives up, what hope in getting Joe average interested?

  • Tesla is really in a good position. It isn’t conflicted. The incumbents are.

    For the R&D for new models, I bet the largest share goes to the ICE. The constant fight for emissions. The costs/struggles of certification.

    Tesla is immune to the largest grief automakers have, constantly reinventing the ICE and the every growing complexity of it’s support systems.

    VW really hammered this home with it’s cheating scandle. It will almost certainly cost VW over 10 Billion dollars, because it couldn’t fairly meet emissions.

    What if they had spent 10 BIllion on EVs and gave up diesel?

    Somewhere Elon Musk must have had an enormous laugh about all the ICE woes his competitors are having.

    • “Tesla is immune to the largest grief automakers have, constantly reinventing the ICE and the every growing complexity of it’s support systems.”

      Good point. I read Green Car Congress every day and there’s a constant flow of articles about how someone has figured out how to add another complication to the ICE in order to tease out a bit more efficiency.

      Perhaps we should think of ICEs like a piece of software that has been tweaked and patched and tweaked and patched in order to keep it working. At some point it makes more sense to just to a fresh write and abandon the mess.

      Tesla’s just written a fresh, new program.

      Someone else made the point that traditional car manufacturers need to create new car companies within their corporate structure. Start Ford Electric or Fiat Electric. Make them free-standing companies/divisions which have no goal other than to produce the most successful EV they can produce. Allow them to do their job without having to give a single thought to how the ICE company is doing.

  • Excellent Idea.

  • Lets clear up some misunderstandings.

    Tesla doesn’t build battery cells or own rights to them, Panasonic does.

    Tesla assembles battery packs. They have a GigaFactory to do that.
    Its the biggest in the world by far.

    GM doesn’t build battery cells or own rights to them. LG does.
    The GM assembles battery packs. They have a small factory to do that.
    Its not very big.

    Get the picture?


    • Tesla is, however, planning to have Panasonic build the battery cells ON SITE at the factory, using raw materials which Tesla will have contracts to buy.

      • Yes. Partnership. Thats key. Battery manufacturers are reluctant without auto commitment. Auto manufacturers are reluctant without consumers.

        Meanwhile, Musk has no reluctance. Cojones. Cojones.

        • Titanium cojones.

  • On the other hand, a BMW executive has said BMW will have a plug-in version across it’s entire product line. In three years or so, the BMW brand will be synonymous with the plug-in hybrid.

    • A plug in hybrid can work fine with a smaller battery. That isn’t going to push battery development. Thats exactly why BMW is talking that way. They find battery development tough sledding. Its the same with GM and most the other traditional manufacturers. One exception. Nissan.
      Cojones again.
      When you see a conventional car company invest billions in a battery manufacturing facility, then you know they are serious about EVs.

      Until then, its hype.

      Two things separate the men from the boys in EVs.

      1. A GigaFactory
      2. A SuperCharger network.

      Well really more. A real EV company makes purpose built EVs, not quota cars.

      It all boils down to commitment. In real dollars and dirt shoveling for factories.

      Right now GM couldn’t make 100,000 EVs no matter what they did. They don’t have the factories to produce the batteries.

      And if they hit the road trying to travel 200 miles, ..
      they would find they couldn’t recharge fast enough to matter.

      • True. I think most companies are “boys.” They will go the plug-in hybrid route as the easiest and cheapest transition. That’s okay with me since typically 80-85% of the miles will be all electric miles. Imagine the demand for oil declining 80-85%. That’s enough.

        • That will happen for a while. At some point the buyers will notice that a battery-electric has a lot less maintenance (due to *way* fewer moving parts) than a plug-in hybrid… it may already have happened.

          I’m an early adopter here, but others will follow the same curve. Ispent 5 years saying “I’m not going to buy another car unless it has a plug.” Then the Roadster came out and I decided I would only buy a pure electric (and waited 5 more years for the Model S to come out).

          • I think people in the progressive states which are building out fast charge networks will go straight to all electrics mostly, but people in backwards states like TX–everywhere between the coasts really–will opt for the plug-in hybrids until their idiot legislators finally catch up.

        • “Imagine the demand for oil declining 80-85%. That’s enough.”

          Yes, enough to drive a lot of gas stations out of business. As fuel availability declines, the tank looks less like a range extender and more like an inconvenient part that needs frequent maintenance. (Will a Volt run on an empty tank if the battery is charged?)

          • In a few years, when the BEV range is 300-400 miles and prices are competitive, plug-in hybrids will gradually be driven from the market.

          • I doubt that range will ever get that high. There’s a limit to the volume and weight of batteries that can be packed into the car. Most people don’t need that much range. I’d be fine with 150 miles and would be reluctant to pay for much more than that.

          • Musk has stated that he sees a clear route to 400 Wh/kg. That happens and today’s Tesla would be a “400” mile EV. There might be a market.

            There’s a market for dump trucks and school buses.

          • I stand corrected.

          • Well, I’m not convinced that there will be a market for EVs with much more than 300 mile ranges. Just saying building them looks possible.

            300 miles with a meal break followed by another 240 miles would be about all anyone would want, I would think.

            Even if we had totally self-driving cars where one could sleep as they rode stopping every four hours or so would likely not be a lot of aggravation.

            After all, by then your car would likely drive itself into the parking bay, charge and get back on the road.

            I can see the story now about the guy who gets out to eat, takes too long, and finds his car has charged and gone on without him….

          • “…stopping every four hours or so would likely not be a lot of aggravation.”

            I’d say not stopping would be a lot of aggravation — I’d want to at least use the restroom!

            “I can see the story now about the guy who gets out to eat, takes too long, and finds his car has charged and gone on without him…. “

            Yeah, that would be a big “oops”. A car so automatic it steals itself!

          • I think build out of a nationwide fast charging network is much more important to the rapid adoption of EVs than a cheap 300-400 mile battery. As you said, 150 miles is enough (well, maybe 200).

          • I wonder if a careful driver might get closer to 150 miles from the new Leaf than the EPA rating of 107 miles. Something to keep an eye on.

          • Possibly (probably). But not at highway speeds.

            That’s where we need range, for covering long distances with as few recharge stops as possible.

          • What’s the reason for the disparity between the Euro estimates and the EPA estimates of EV ranges?

          • The short answer is testing protocol.

            If you’d like to get into the weeds –


            I just took at look at the page and found this bit really interesting –

            “The major loopholes in the current EU tests allow car manufacturers a number of ‘cheats’ to improve results. Car manufacturers can:

            Disconnect the alternator, thus no energy is used to recharge the battery;

            Use special lubricants that are not used in production cars, in order to reduce friction;

            Turn off all electrical gadgets i.e. Air Con/Radio;

            Adjust brakes or even disconnect them to reduce friction;

            Tape up cracks between body panels and windows to reduce air resistance;

            Remove Wing mirrors.[44]”

            Wowzer!!! If that’s right then European mileage ratings are batshit crazy.

          • If the driver stuck to going 40 MPH or less, maybe. The car has to go slow to limit wind resistance.

          • “(Will a Volt run on an empty tank if the battery is charged?)”

            yes, a few months ago I did a test drive of a 2015 Volt (as part of my decision to get a 2016) and when I got in, the gas gauge was empty, it still ran fine on only electric.

          • Thank you for that helpful information.

      • Charging at work or overnight in my garage works pretty great for me, and I’ve only got a lowly 2011 Volt. A 200 mile EV is way more than I need for 95% of my driving. I have no problem burning gas in my wife’s CUV for long trips that would make up the other 5%.

        GF may guarantee the lowest battery pack cost, but it does not guarantee lowest vehicle manufacturing cost. Pack and cells are only going to get Tesla so far with respect to their price target for the Model 3.

        • Is not the Volt ICE not needed for 95% of your driving? Aren’t you hauling around an engine you rarely need?

          Let’s do some battery math.

          $35k sedan with all the quality/features one would expect in a new $35k car.

          Start with a $35k ICEV. Leave out the engine, transmission, fuel/cooling/exhaust systems. About 40% of the $35k.

          Now you’ve got the same car with no propulsion system for $21k.

          So add in 50 kWh of batteries at $150/kWh. $7,500. A couple thousand for electric motor and electronics. $9,500 total.

          Now the $35k ICEV is a $30.5k EV. (Or a $35k EV if I’ve underestimated the motor/electronics cost.)

  • Interesting point about the brand being linked to the tailpipe. GM could resolve this with a “Saturn” type brand that is uniquely electric. They will need to do this in the next 5 years or so to stay relevant though.

    • Yes, I think all these companies need to create sub-brands, or even spinoff EV companies.

  • The author may be under appreciating the range problem. Many consumers see the range limitation on something like the Leaf and immediately think of the times that wont work for them. Those sorts of electric cars are only going to satisfy a niche of the market, and its hard to see the major car companies advertising heavily to chase after that niche.

    When the majors are actually producing an electric car with better range we can expect them to heavily advertise to get that larger slice of the market.

    With any luck the tesla will accelerate the development of a wider variety of real choices in the electric field. The sooner the better!

    Atm its more that they dont want to sell you an electric car because they really dont have much to show….yet.

    • Nobody stopped GM from making a long range EV but GM. They still could. Instead they came out with the ELR as a response to the Model S. It failed. That’s a summary of what’s wrong with GM in a nutshell.

      • GM has had the government and their unions sitting on the board, deciding what and where the company is going. Neither of those two groups has any interest in new, cutting edge, and (lets admit it) risky ideas. The convulsions GM has gone through has hurt innovation badly.

        • And yet it never stopped them from making hybrids like the ELR and Volt, not to mention the Bolt, a pure EV. Just not investing enough money to make BEVs work. Just like they did Saturn. It’s not innovation that is stopping GM. It’s their own thinking. Unions don’t dictate investment decisions. That’s management and the board.

          • Uhm…the union has been on the board since the restructuring of GM, so yes the union has a lot to say with investments. Retention of jobs is going to be a primary concern there, not new tech.

            Hybrids are a known quantity, nothing too risky about them. A Pure EV with real range however would have taken a major investment and more risk than a very risk averse organism like GM wants to see.

            GM has had some VERY rough times, its not surprising that they are slow to take risks now.

            I would expect one of the other majors to make a play before GM at this point.

          • So why did they announce the Bolt, then? Isn’t that the same very risky EV technology they are averse to?

  • No, Jeremy, Kodak made an active decision to stick with film and they ceased to compete in the emerging digital industry.

    Trust me, I read everything available on digital cameras every day. I was an early adopter and a frequent camera upgrader.

    Consumers didn’t buy Kodak digital cameras because Kodak wasn’t keeping up with digital camera development.

    For a while Kodak (and Polaroid) sold some digitals based on name recognition but people who were keeping up with camera tech didn’t even mention Kodak, they offered nothing interesting or innovative.

    • I’m not disagreeing with you Bob. Just stating what one article suggested was the cause (did you read it?). The second link I posted offered “several” reasons why Kodak went bankrupt and my final comments were with regard to that article.

      I agree. I can see the risk of GM, or any of the large OEMS, heading down that path. I would hope somebody at the top is smart enough to see the similarities with Kodak so that the past does not repeat itself unnecessarily.

  • I know ICE stands for internal combustion engine. It’s motors vs engines, except people call motors engines and vice versa. But ICE cars sound so good, so serene. ICE is a novelty to some readers, too. Why not describe them as OIL burning cars or OIL burners instead? A novice would recognize that he/she drives an OIL car vs. an Electric car, eh?

    • Gasmobiles.

    • Good call. I’ve used the term “gasmobiles” for years, but have been using ICE cars more and more. Think I’ll watch that. 😀

  • I’m not sold on the accuracy of the cynical view of auto manufacturers. They’re happy to build whatever kind of car the public will buy from which they can make a target profit.

    No doubt that Musk is about saving the environment, not making money off of cars.

    • I agree that traditional car makers are likely to switch to EVs. But I think most will be significantly unhappy about doing so. Along the way we may see current ‘car guy’ CEOs replaced with executives from other industries.

      And I’m not convinced all current manufacturers will survive the transition. Some may start too late and find it impossible to catch up. The companies that move first and bring a quality product at a good price are going to capture market and, if they keep offering good cars, should hold those customers.

      • Chief engineer Andrew Farah has stated on multiple occasions that the public will dictate how far/fast GM moves to PHEV/EV technology. Noting that they have been researching sorts of designs capable of rapidly moving propulsion from ICE to electric. The limiting factor is revenue, or more specifically building cars that the public will buy in mass.

        It’s clear from the customer satisfaction awards that the Volt was/is a top notch car, but not enough people was/is willing to buy one. I have a hunch that petrol prices will be suppressing Bolt sales as well. Not to mention the new 2016 Malibu, which uses Volt drive train technology.

        Continued dismal sales will only dampen GM’s EV investment while profitability will inspire it. While I agree that Ford and Fiat Chrysler fit your characterization of their view of EVs, GM has invested quite a bit into it. If you remember Bob Lutz first proposed an EV to the board in 2003 and finally got approval in 2006. Later Jonathan Lauckner convinced Lutz to go with a series hybrid with the approach, which as you know evolved under certain conditions to function like a parallel hybrid.

        I remain convinced that if petrol was $5/gallon we would be seeing broad adoption in the U.S.

        • If that is GM’s attitude then it’s one of damn the planet.
          Profits first.

          There will be no widespread adoption of EVs until the price drops. The price of batteries is simply too high.

          The price will only come down if someone puts themselves out enough to build batteries in the scale it will take to bring down the price.

          Panasonic and Tesla are doing that. Hopefully other companies will decide to join them.

          And, taking it a step further, if other companies wait too long to get on board they are going to have a much smaller piece of the pie to divide among themselves. The early movers will take business and, due to their headstart, likely hold that business.

          • Nissan’s Ghosn also understands the need for a sustainable and clean solution for cars.

            And, companies require profit. Without profits investors vote in new management.

            The obvious challenge is that companies with few products, one for example, and small customer base have a vastly easier job moving into new markets. This is true with most any product or service.

            “The price will only come down if someone puts themselves out enough to
            build batteries in the scale it will take to bring down the price,” yep, GM and Nissan have both stated this.

            To a large degree, I agree with your first movers comments, although so far the market is moving so slow it continues to remove first mover’s advantage.

            To be clear, so far Musk has done an exceptional job keeping the EV market from stalling completely, but that market is transitioning far, far too slowly. Tesla still needs to conquer the job of succeeding in selling cars to the mass market, a task that is more difficult than what Tesla has done so far.

          • How about giving Tesla an opportunity to finish the Gigafactory before you pronounce the death sentence?

          • Death sentence? It’s more like let’s wait and see. How about waiting to see Tesla’s impact on the market before declaring victory?

          • Tesla laid out a path for a brand new car manufacturer to establish itself and work its way to producing very affordable EVs. They’re moving right along that path and I applaud their progress.

            Tesla did not have the capital that would have allowed them to build multiple Gigafactories in succession and start at the economy level. The very large car companies could have taken that route, but none did.

          • I too applaud Tesla’s progress but reality is that they’re in the early stages of a marathon.

          • A marathon is not a bad way to look at it. Better a bike race run in stages?

            At this point Tesla and Nissan have run the ‘entry model’ stage.

            (I’m collapsing the Roadster, S and X into a single model in an attempt to avoid being called and extreme fanboy.)

            Some other companies have their shoes on and are underway. I’m not intending to make a full accounting here.

            But while running the first stage, Tesla is well down the rapid charger stage.

            And they’re off and running on the ‘very large battery factory which will make running the next stages possible’ stage.

            NIssan and the other serious contenders are going to have to start on the rapid charging and cheap battery stages if they intend to arrive around the same time as Tesla.

          • I agree that Tesla’s delivery of its rapid charger network is a competitive advantage.

            LG Chem supplies batteries for EVs sold by Audi, Chevrolet, Ford, Hyundai, Renault, Smart, Volkswagen, Volvo, and others. It is widely rumored that Nissan will switch to LG Chem for their gen II Leaf. At least a few of these vendors have stated that they work with LG Chem to create their own proprietary recipe for the batteries used in their cars. I view the competition of building the most advanced EV batteries between Tesla/Panasonic and LG Chem. To state that each car manufacture needs to build a mega battery plant to be competitive ignores the economies of scale achieved by supplying multiple car companies.

          • “To state that each car manufactur e needs to build a mega battery plant to be competitive ignores the economies of scale achieved by supplying multiple car companies”

            Dropping prices of manufactured goods generally requires large scale manufacturing. Panasonic and Tesla are going big.

            LG Chem may be providing batteries for a lot of different companies but they show no signs of going large scale as quickly as P/T which means they may not be able to become as cheap. Panasonic was reportedly selling Tesla cells a year ago for $180/kWh. When the Gigafactory opens that price is expected to drop to $130/kWh and then work its way on down to $100/kWh, potentially lower.

            According to the people who analyze the battery industry the other manufacturers will catch up with Panasonic, but it will be at least 2-3 years. Years is a wide gap. So a few years later LG Chem may drop to the price level Panasonic has already hit.

            Then consider volume. You gave a long list of manufacturers who are looking to LG Chem for their EV battery supply. One LG Chem gigafactory would supply only one-ninth or fewer cells to each company. Tesla will have “9+” times more cells available than any other manufacturer. They can manufacture cars in larger numbers. Probably price their cars lower due to scale. Lower price plus more cars to sell equals Tesla grabbing a much larger market share than other car manufacturers.

            If Tesla drivers are happy with their car they are very likely to buy the same brand again. It would be hard for ” Audi, Chevrolet, Ford, Hyundai, Renault, Smart, Volkswagen,….” to pull those customers back. Tesla may squeeze one or more car companies out of business unless they catch up quickly.

          • Bob, follow through on your logic. Who is more likely able to match demand to it’s new supply, LG Chem who supplies multiple manufactures or a single auo manufacturer like Nissan? The problem has never been expanding production to gain a greater economies of scale, as several vendors have noted limited sales have prevent them from gaining the economies of scale they need. EVs sales have never been close to early forecasts.

            “Years is a wide gaps” sorry, but it doesn’t matter in a stagnant market where consumer penetration isn’t fluid. It means nothing. Even if it did, traditional manufacturers would just drop the price of their EVs in the near term. Unlike Tesla, the traditional manufactures can use the sales of their ICE cars to subsidies their EVs.

            Near term, I just don’t see a significant market shift. Long term (really long term), I think EVs are better served by a direct sales model over dealers. This and Tesla’s charging network, not involving dealers, are its greatest long term advantages.

          • “Who is more likely able to match demand to it’s new supply, LG Chem who supplies multiple manufactures or a single auo manufacturer like Nissan?”

            Who is likely to get serious about ramping up production first? “Likely able” is irrelevant (assuming roughly equal battery quality/technology). It’s who gets in the game and builds large capacity.

            If Tesla can find the money to build a Gigafactory then Nissan can pull enough together.

            I’m not sure you understand the problem of one manufacturer building for 9+ companies. With that happening LG either has to build nine gigafactories at once or not supply each of its customers enough batteries to build EVs at Tesla scale.

            Tesla is on route to not being supply limited. As soon as they see that they’re going to be short of batteries in two years they just start another factory.

            “”Years is a wide gaps” sorry, but it doesn’t matter”

            So if you had a choice between two basically identical EVs (range, room, comfort, looks, etc.) with one being thousands of dollars cheaper to purchase and also having access to a nation-, soon world-, wide network of rapid charging stations which one would you chose?

            “Unlike Tesla, the traditional manufactures can use the sales of their ICE cars to subsidies their EVs.”

            Yes, but not for that many units and for very long.

            The ‘actual big three’, Toyota, GM and VW, produce about 10 million cars a year each. They could probably afford to sell a few tens of thousands of EV at a few thousands of dollars loss per year. But move down the list to the big name car companies that manufacture 2 million or less (BMW, Daimler, Mitsubishi, Mazda) and they probably can’t afford very much in the way of large per unit losses.

            ” I think EVs are better served by a direct sales model over dealers. This and Tesla’s charging network, not involving dealers, are its greatest long term advantages.”

            Don’t overlook brand name. If Tesla delivers the Mod3 not long after GM delivers the Bolt and the Mod3 is less expensive, and possibly better is some significant ways, Tesla stands to become a ‘very important name’.

            If Tesla is prepared to move quickly to 500,000 cars per year while GM and others are handicapped by battery shortages then Tesla is likely to become very important.

            And we circle back to Panasonic/Tesla are building a very large capacity battery plant. LG Chem is starting from behind (only 13% as many EV batteries manufactured in 1st Qtr, 2015 as Panasonic) and may be spreading their output over 9+ customers.

          • Your full is speculation that just isn’t credible.

          • Thank you.

            Your sentence means so much to me….

    • It’s pretty simple. Their investments are in ICE cars — their patents, machinery, sunk costs, knowledge expertise, etc. To move away from that is to strand all of that investment and expertise. They don’t want to do it.

      Tesla is an extremely high-growth company. It is investing everything it has in order to grow at a break-neck pace. It could make a profit on the Model S, but then it would just remain a very niche automaker forever.

      • ” It could make a profit on the Model S”

        Let me clean that up a bit. Tesla makes a very sweet profit on the Model S. Tesla’s gross profit margin (GPM) is higher than Ford’s, GM’s, Nissan’s, Toyota’s, …

        Tesla Motors’ balance sheet shows a loss. Tesla is spending more growing their company (2nd assembly line, Lathorpe factory, Gigafactory, etc.) than they earn by building cars.

        Tesla’s “loss” is money invested.

        Here’s some data –

        1)Tesla 2nd Q 2015 GPM.
        2) Tesla quarterly GPM history.
        3) Toyota 2nd Q 2015 GPM.

        • From the November 2012 report to stockholders…

          “The third quarter was a fundamental turning point for Tesla as we successfully transitioned to a mass production car company, growing from manufacturing 5 cars per week at the beginning of the quarter to 100 cars per week by the end.”

          “In Q3, we produced almost 350 and delivered over 250 Model S sedans to our customers”

          I think that’s saying that Tesla built a lot more cars than the sold in Q3 2012 because they quickly ramped and had large number manufactured but not delivered at the end of the quarter.

        • “Tesla’s “loss” is money invested” so you’re asserting that Tesla lied in their SEC 10Q filing?

      • No doubt that your perception of ICE vendors has broad applicability, more so for their dealers, but your blanket assertion isn’t accurate. Ghosn has stated on multiple occasions that ICE vehicles are not sustainable and that we need to move away from them. And if you read Lutz’s account of GMs internal EV discussions the headwinds that he faced were around the technology limitations, not about protecting their pace ICE investments. BTW, it’s not by chance that Bush’s security act provided $7,500 for batteries 16kWh and larger. As such the assertion that all ICE vendors are strategizing against EVs is simply wrong:

        “By delaying market growth, they can maintain the distance-between-refuelling advantage a little longer.

        They know that once you’ve experienced the joy of driving (in) a silent, vibration-free, rocket-fast, odourless car that never needs petrol, wild horses won’t drag you back to fossil fuels.”

        The brick walls that Nissan and GM have run into is that most people would never buy a +$80k from either one of them and today their install base drives ICE vehicles. Tesla has the advantage of coming in at the luxury brand with their roadster with a EV only install base. Without the price tag to support it, neither vendor has the ability to offer the combination of range and price point that their market will buy.

        Nissan has announced plans to build 4 additional plug-in vehicles and GM’s head engineer Andrew Farrah has stated that GM has multiple PHEV designs across their product line but that adoption remains the challenge. They even have the 2016 Malibu Hybrid coming out using the Volt’s drive train technology but with a smaller battery. The question is how many people in GM’s market is willing to pay that additional costs of such a drive train (which is an enormous issue for GM’s market but not to Tesla’s EV market). In my many conversations with people about EVs the dominant discussion item is price.

        • Your argument sounds good but it is couched in lack of context. Let’s remember a few things:

          1) These automakers actively fought EVs and EV mandates in California for decades.

          2) GM and most other automakers have had very limited and horrid advertising for their EVs. Spend some time in the Chevy Volt forum and you see joke after joke about this, as well as story after story of how misinformed people are about the Volt. Ford just released its first Focus Electric ad after 4 years on the market, and it sucks.

          3) The EV buying experience is horrid, because dealers don’t want to sell EVs and automakers have done very little to persuade them to do so or to improve their ability to do so.

          4) All of these large automakers have *huge* sunk costs related to ICE engines that they don’t want to toss in the trash. They have few competitive advantages not related to the ICE engine.

          Yes, I think Ghosn and Lutz are some of the people from the industry who are more serious about EVs, and look at the result: Nissan & GM have sold many times more EVs than competitors. But they still aren’t anywhere close to 100% behind them. Even these companies have been horrid at the points I noted above.

          • I have to agree that the EV buying experience is horrid. With the dealer model this is an extremely hard nut to crack and long term probably the hardest problem to solve. It’s not clear to me that it’s even possible to solve. Nissan and GM might have to do something to akin to GM’s Saturn sales model it rolled out in the early 90s.

            Have you seen the current Volt commercials on Chevrolet’s website? Which commercials, past or present, are horrid? Because of it’s unique driver experience, conveying the value of the Volt is elusive. Most people don’t get it even after explaining it to them for 10 minutes, let alone 30 seconds. By the way, most dealers don’t get it themselves so they can’t explain it. If you remember, GM started with a wide net of Volt advertising and overtime limited their expenditures to what they feel are addressable markets. It’s clear that their current approach is targeted marketing.

            I see clear indications that at least Nissan and GM are committed to looking forward while remaining true to their shareholders. Don’t ignore their enormous sunk costs in EV technology. It’s very different for a manufacturer to figure out how to make a profit in the EV market vs strategizing against EV technology. I see no credible indication of the latter, at least from Nissan and GM.

            Post the 90’s has GM been fighting CARB?

        • “The brick walls that Nissan and GM have run into is that most people would never buy a $80k+ from either one of them and today their install base drives ICE vehicles.”

          GM and Nissan are not offering $80k+ EVs. GM should be offering a 200+ mile range EV for $37,500 within the next year. $30k after the federal subsidy. Nissan should be offering a “solid” 100 mile range EV. Nissan is going to have to get their MSRP down well below $30k in order to sell any produce with both GM and Tesla offering 200 miles in the mid $30k range.

          Ignore what is happening to the price of EV batteries at your own perl. Not that many years ago $1000/kWh was the assumed range. Only a year or so ago it was $400/kWh. GM has just said their price will be $145/kWh, Tesla’s price should be a few dollars less.

          What’s happening here is that EV prices are on route to plunge below that of same-model ICEVs. That may be two, five or ten years away, but it does look like that is where we are heading. A $20k “Toyota Camry” ICEV and an $18k “Toyota Camry” EV.

          Well, maybe not Toyota. They seem to have wandered off track….

  • An informative and useful discussion, once again, thank you CT and all contributors.

  • VFanRJ – somewhere in this long thread you posted –

    “”Tesla’s “loss” is money invested” so you’re asserting that Tesla lied in their SEC 10Q filing?”

    I’m not up to speed re: Tesla’s SEC 10Q filing. How about telling me what, in particular, bothers you.

    In the meantime I’ll post some gross profit margin data. And, just for comparison, some Toyota data. You can see a couple of other 2Q 2015 GPMs for other car companies in the upper right of the two pages with graphs.

  • Looks like GM is has been really doing a lot of work with LG behind the scenes. Their partnership with LG is a lot deeper than has previously been suggested by many in the comments section of this article.

    Mark Reuss, GM’s head of global product development, purchasing and supply chain, said in a statement. “By taking the best of our in-house engineering prowess established with the Chevrolet Volt and Spark EV, and combining the experience of the LG Group, we’re able to transform the concept of the industry’s first long range, affordable EV into reality.”

    “We are leading the industry in battery cell cost per kilowatt hour,” Reuss said at the company’s Global Business Conference for investors and analysts. “We’ve done this because of our prior strategic investment in battery cell development, our own chemistry, electric motors and our strategic partnership with LG.”



  • I wondered why GM, Nissan and the other traditional car manufacturers make no effort to sell their plug-in products–no television or print ads (plug-ins not even mentioned in their group ads for several models), no promotional signs at the dealerships, and no dealership salesmen who will even mention a plug-in and who in fact, with rare exceptions, actively steer potential customers away from them.

    You can’t sell an electric car without mentioning all the advantages they have over gas burners–in other words, without bad mouthing gas burners. They just don’t want to do it because most of their profits come from the old technology.

    • At this point Tesla isn’t taking enough market away from the other car companies to give them concern. (Perhaps a bit of concern among luxury car manufacturers.)

      The companies other than Nissan don’t have a serious EV. They’re just selling a compliance car and likely losing money on those sales. I do see the occasional Nissan Leaf ad.

      I suspect most dealers view EVs as poison. Their parts and service businesses would be fatally impacted were their ICEV sales to disappear.

      Twenty years from now we may see a lot more direct car sales as dealerships go under and there’s no one left in the area to deal. Perhaps we’ll see used car sales lots combined with EV showrooms. A new dealership model. A lot of people are going to be drawn to Tesla simply because there’s no need to deal with commission sales people.

      • No Leaf or Volt ads in N. Texas even though the air is terrible.

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