Sergio Marchionne Admits EV Revolution Would Crush Automakers

135 thoughts on “Sergio Marchionne Admits EV Revolution Would Crush Automakers”

• I just filled up my Minivan with $1.34/gallon of gas. With China slumping in manufacturing the price of oil is not going to rebound anytime soon. And American red necks and GOP’s having very short term memories, EV’s would be in the back burner. That’s the sad reality.

  • I think the REAL sad reality is that the major car manufacturers have declined to design and produce an EV that consumers want to buy and if Zach is correct, it is by choice. The big thing that Tesla has proven is that consumers WILL purchase a well-designed EV, even at a premium price and in spite of rock-bottom gas prices.

    • And they’ll pass up every other gas car in the segment in mass to get that EV instead: http://cleantechnica.com/2016/01/15/1-large-luxury-car-in-us-tesla-model-s-2015-sales-comparison/

      • The market segment for the rich folksy.

        • Indeed.

        • … For now.

        • Definitely. 2018 should be a fun year.

      • It is to bad that MarTams needs to bring name calling and stereotyping into the argument. I live in the mid-west and am conservative AND I drive an EV. The main reason I follow Zachary Shahan is his ability to ferret out VERY USEFUL and informed information.

        If you think this is a Dem vs. Rep issue only, you are sadly mistaken. It is mostly a market driven issue. If you want the state to dictate policy to the automakers, Google Trabant.

    • You’ll have to dream on. The very wealthy class are buying Teslas and Tesla hasn’t produced a mass affordable cars. There’s no mass affordable long range electric Pick Ups, Minivans, SUV’s. Reality check again dreamers.

      With the current gas prices and the current price of Teslas, even that of the Chevy Bolt, the gas guzzlers sales would still be the top pick if the customers were to exercise their choice.

      Europe’s EV sales are increasing simply because their gas prices are stratospheric compared to the US.

      • “Europe’s EV sales are increasing simply because…” Gas prices may be higher in Europe than US but gas prices still down there, and EVs still selling. Tesla even beating Leaf and Volt in U.S. although 3 times the price. It’s because Tesla has built a very nice car that consumers value, not another weird short-range econobox with high price. We get to test your theory in March when Model 3 starts taking reservations. Sounds like you fault Tesla for not producing lower priced awesome every-man EV on Day One. Everybody knows the answer to that (maybe except you). Real question is why hasn’t any other long-time manufacturer done so? Zach tried to tell you but I don’t think its something you want to hear.

        • Gasoline should be priced to encourage alternatives that have less immediate toxic pollution and long term AGW issues. Tax the externalities appropriately. MarTams probably doesn’t want that.

      • So…changing over a million highway capable vehicles and vast numbers of other electric forms of transport, signals that unless the changeover occurs in one fell swoop, that it’s all meaningless.

      • High taxes on gasoline are sound policy – a partial carbon tax, though cars and trucks should pay double for the health externalities. I think you will find that the majority if the world’s cars are sold in Europe and Asia with high gas taxes. These markets are quite big enough to drive the electric transition with or without the outlier USA. At the moment, it looks like with.

        • Lower oil prices definitely do not help the sales of electric vehicles.
          But at $2.80 US a gallon here in Australia, driving the average car one
          kilometer on gasoline costs 6.8 US cents. Driving one kilometer on
          electricity costs about half that at about 3.5 cents or when using new
          rooftop solar electricity about 0.6 US cents. And Australia has cheap gasoline by world standards. The total cost of electric driving will still have to come down to drive widespread adoption in incentiveless Australia, but costs will continue to decline.

          Saw my first privately owned electric motorbike in Adelaide today. I think it may have been one of the parking meter reader’s old bikes. Meter readers, posties, small service and delivery firms with solar panels on the roof, probably taxis before too long(no taxis are just straight gasoline burneres here anymore), – the number of niches increases. And if health effects were taken into account, which they should be, our city centers would be filling up with electric cars.

        • I feel like you have not amortised your cost of your panels correctly into your ‘cost to drive’ calculation. Panels are not free, unless you’ve had yours for over 25 years??

        • This is Australia. Rootop solar generates more electriciity than households consume and exports the surplus to the grid. For new rooftop solar electricity exported to the grid only receives a few US cents a kilowatt-hour feed-in tariff. So the marginal value of solar electricity to households is low here. Around the 0.6 US cents per kilometer of electric vehicle travel I mentioned. However, there is an expense I have left out and that is the charge controller. But if the electric car car be set to charge at certain times, or you just use a timer from the hardware store, then that can approximate the resullts of using a charge controller.

        • Doesn’t this just mean that you spent too much on panels?

        • No, if the system isn’t exporting electricity to the grid then it means it is so small the owner has wasted money by not getting a larger system. For people who are only motivated by saving money the trick is to get a system large enough to minimize expensive grid electricity use while not being so large that its return it gives is not less than the next best investment option available. And as the cost of PV comes down (and provided grid electricity prices stay the same) the profit maximising size of the system will increase.

          So in other words, normal rooftop solar exports a lot of electricity to the grid and it is to the owner’s benefit to have a system large enough to do so.

        • Interesting. Thanks for your reply.

        • You’re welcome.

        • I guess my follow up question is: What are your local electricity prices like? It feel like in order for what you say to be true, your local prices must be quite high, if it’s worth it to buy enough panels to ensure you’re always feeding back into the grid for almost no money in return.

        • Australian rooftop solar costs are the lowest in the world. With the recent fall in the Australian dollarydoo the average rooftop solar system is now being installed for less than $1 US per watt cost to the household. Without tax or subsidy it comes to about $1.38 US per watt.

          And Australian retail electricity prices are probably the highest pre-tax prices in the world. Australians pay about 20 US cents a kilowatt-hour for electricity. That’s the marginal cost. All up, including supply charges, I pay about 29 US cents a kilowatt-hour at today’s exchange rate and the marginal cost of grid electricity for me is about 23 US cents.

          So rooftop solar is fairly popular here. This is despite the feed-in tariffs for new solar now only being a few US cents a kilowatt-hour.

        • Exactly.
          Have Volt now, wife driving it 12k miles yearly. Nice match. Little gas.
          Planning for a Model 3 next year for my 186-mile daily commute.
          Costing out a PV array for the new house at about $30k (essentially free with incentives and loan replacing monthly elec. bill) –the $30k PV array for house and Volt must leap to over $100,000 to power the long commute. Grid-tie is the only reasonable option, currently.

        • I’ve blogged about this, the cost of “driving on solar” is pretty convincing, at least for a Smart ED:

          http://mysmartelectricdrive.blogspot.ca/2014/06/drive-on-solar-fuel-for-25-per-month.html

      • In my view, the trend in fall of crude prices are changing human perception about world around us. Right now major vehicle driving population is not aware of the benefits of EV, they will see is upfront cost.

        This happens with every new technology. Many little miracles happen with technology, production techniques, marketing, taxation, etc Later when everyone sees it’s benefits then there is deluge of buyers and firms.

        Classic example, touch screen iPhone 1st generation. Everyone thought it was unworkable, today every tom, dick and harry has two SIM, two touch screen mobiles in his / her pocket.

        • This.

        • Another Indian here, I definitely think EVs make a lot of sense for India. Delhi has recently implemented ‘odd/even routine’ to fight smog, Time for govt to think about a concession for EVs. They’d run cleaner plus take away dependence on oil. Another good thing is that top speed and range needed is not much so evs can be made cheaper.

        • I agree as history has shown the cycles of development, distribution and acceptance. THE best car for a teen, for example, is an used Nissan Leaf. No gas, no oil, etc. This is a “secret” that needs to be released. Tesla Motors has the formula: long range + quick charging+ stations everywhere.

      • MarTams, dude….. the glass is really half empty, isn’t it.
        You’ll be pleased (or perhaps not) to hear that Tesla will be introducing the model 3 here in a bit.
        And good luck figuring that $1.42 gas is going to be here forever. I believe the phrase you used was “dream on”.
        Oh, and one last thing. The outlier on gas taxes is the USA, not the rest of the world. Their tax levels are not stratospheric, they are sensible. Not so in the US. Our government wouldn’t dare upset big oil.

  • There is not enough investment in the petroleum sector to sustain itself at this price.

    “The Stone Age didn’t end for lack of stones…” – Saudi oil minister Sheik Ahmed Yamani

    • “It’s simple math: we can emit 565 more gigatons of carbon dioxide and stay below 2°C of warming — anything more than that risks catastrophe for life on earth. The only problem? Burning the fossil fuel that corporations now have in their reserves would result in emitting 2,795 gigatons of carbon dioxide — five times the safe amount.

      “Fossil fuel companies are planning to burn it all — unless we rise up to stop them.”

      http://math.350.org/

      “The Stone Age didn’t end for lack of stones…” – Saudi oil minister Sheik Ahmed Yamani

      Because so many stones yet lay about, might it be a reasonable possibility that many gallons of petroleum too may remain in the earth?

  • The US needs to tax the gasoline the same way Europe is taxing gasoline and diesel. Then EV adoption will again go in the exponential path.

    • Putting a floor on oil prices would be a non-disruptive way to get a rapid infusion of revenue to fix up US roads and bridges.

    • Get elected, write the legislation; simple.

  • So how is it that Tesla sales are doubling every year and they dominate the US luxury market?

    http://cleantechnica.com/2016/01/15/1-large-luxury-car-in-us-tesla-model-s-2015-sales-comparison/

    You attach too much importance to the price of gas. Its about one fourth the cost of ICE cost of ownership.

    Maintenance is another area EVs dominate ICE. And really, nobody cares about any of that. They buy the care because they like it. An EV is just like any other car. If its well made and desirable, it will sell.
    People are just waking up to EV advantages. Not just the lack of pollution.
    The owner experience, quiet, smooth acceleration, and lack of vibration just make a drive calm. The lack of maintenance and simple charging add to the sense of ease. They are simply lower cost to own.

    Go over to Edmunds and compare cost of ownership between a Toyota Corolla and a Nissan Leaf, you may be shocked.

    The cost advantages of ICE are illusory and fast disappearing. Only the initial price remains a barrier, but that is starting to melt away, too, as EV volumes increase.

• If Marchionne doesn’t understand how to properly use the term “disintermediation” I am not sure his opinion matters.

  Tesla buys critical parts from manufacturing partners just as much as the big guys.

  Despite Zach’s spin, the larger point Marchionne is making is that there is increasing little competitive advantage in actual manufacturing. The world knows very well how to make cars, including electric cars.

  Apple and Google are very unlikely to actually make cars. But yet they may design and sell millions.

  • Until someone else earns first right of refusal for green-lighting new models at FCM – then his opinion still matters.

  • Maybe he has the car buyers POV on this?
    Disintermediation in that sense would mean that the old-style car maker is being taken out of the supply chain as the one you can get your car from..
    If anybody can deliver parts for your car and there is no big IP wall around the common stuff it takes the guys out of the chain that milk you for their ‘added value’ (like ICE/transmission design, which by word of mouth seems to be all that’s left for them).

    • Yes. Part of disintermediation means that the new manufacturer/supplier better represents the interests of the buyer…rather than the existing dealers.

  • And yet control of the technology is very important. When Samsung smart phones mimicked Apple, they sued. So something is important. And with EVs, there is hardware importance. Its not like Apple is going to beat Tesla with better software. Autonomous driving is nice and Tesla is in it. But ICE could do that, too. No, EVs will have to compete on performance and range. That depends on battery tech. The world has gone over to software designers that think the world is code. It is to some degree. But not completely. The real, hardware world is still out there. Somewhere.

• Marchionne is against EV’s because they are the final stage of a process that started before EV’s came on the radar? Odd logic. The industry has chosen to outsource manufacturing of components and become design and assembly companies.

  Nissan chose to manufacturer batteries and electric motors in house. They did well with the motors, not so much with the batteries.

  If Marchionne doesn’t want to make EV motors or batteries, fine that his choice. Others are keeping that in house.

• Well, Tesla builds their electric motors and soon the batteries.

  • Have you invested yet?

• “He warned the adoption of electric technology risked continuing the process that he called “disintermediation…””

  Disintermediation…See Silicon Valley, internet icons, Elon Musk and cohorts! Yep, that’s what they do – disintermediation.

• Again at this rate of crude-oil, subsidies can be thrown out of the door. Mr. Obama, Mr. Putin, Mr. Jinping, Mr. Modi, Mr. Trudeau, Mr. Hollande, Madam Merkel, Mr.Abe, so on

• Surely their main assets are their range of models, catering to multiple use cases, and customer income levels. Propulsion is a commodity item.

• Do car manufacturers make their own engines or only design and assemble them?

  I copied this out of a comment on another site, so I have no idea how accurate it might be.

  “I know GM either uses Federal Mogul or TRW / Speedpro to manufacture their pistons.In other words TRW makes it and casts a GM part # into it.”

  Seems like lots of manufacturing today is about farming out the bits and pieces to specialized manufacturers.

  • Both. Engine and transmission are important divisions in an auto manufacturer. But they don’t dominate the minds of the executives to the degree Zach imagines. What dominates the minds of senior executives are sales and margins.

    The success or failure of current major manufacturers will depend on making the correct strategic decisions, and who they put in charge executing those decisions.

    Whether to make or buy an electric or ICE drive train is largely a tactical decision. Both are well within the skill set of manufacturers. Running motors with batteries is not new technology, and considerably simpler than modern engines and transmissions.

    • “But they don’t dominate the minds of the executives to the degree Zach imagines.”
      — Haha, I don’t imagine that at all. 😀 I wasn’t born yesterday.

      But if a 60-year-old CEO spent his/her career focused on ICE cars, you better believe they have some bias toward them — some much more so than others, of course.

    • “Whether to make or buy an electric or ICE drive train is largely a tactical decision. Both are well within the skill set of manufacturers.”

      This is also well within the skill set of appliance manufacturers. However, making it well, at scale, in a timely manner, with a profit in a competitive market environment will be very difficult.

      • True. We increasingly live in a world where software and marketing are the real differentiators. Humans have become extremely efficient at manufacturing well defined physical products.

    • Not sure if that is what Zach is saying. You seem to be saying big auto is about strategic decisions. Thats marketing based, finance, and system design.
      It does seem like motors with batteries is simple. Yet how to explain that GM outsourced all this to LG Chem instead of doing it themselves. Could it be that its harder than it looks?
      IMO, big auto does not have the electrical engineering skill set.
      Its not as easy as you think. Anyone take a battery and hook it up to a motor. Doing it with 200 mile range and at a price point is another matter.

  • Good find, without more specific proof I also believe that the supply chains are already huge (ie mostly outsourced) for major manufacturers of gas vehicles. There is little reason they can’t just start buying batteries and electric motors and other software/electronics needs from different suppliers and still stamping GM (or whoever) onto the parts and resulting vehicle. Brand recognition and overall vehicle quality will remain for many years but hopefully the suppliers and type of vehicles, EV, will continue to change.

    For the Tesla fans, this is still good news because they could some day (if they wanted) stop making vehicles and become the major supplier of batteries or other EV components. My guess is they will do both in tandum, IE ramp up vehicle production as required and if they ever have more batteries then vehicle capabilities they should have no trouble selling components to another manufacturer as well. Bright Tesla future indeed, under various market scenarios.

    • Yes. LG Chem basically built the Chevy Bolt (story coming). Nissan has tried to develop useful expertise in EV components. BMW has been a bit of a leader as well. Volkswagen Group and Mercedes are finally moving in that direction. But Tesla has stood out above all of these so far, and seems to continuously think/plan/do ahead of the curve. Will that continue 5-10 years out? We’ll see. But if it does, I would expect Tesla to be supplying key components to other manufacturers… unless it needs all of them for its own vehicles.

      • I’ve always had pet theory that some of EV vehicles’ most formidable (position of strength/intelligence) future vendor will come from vertically integrated conglomerates ( Samsung and/or LG) being examples. Samsung’s used strategy of being best at popular critical component and then later competing directly with components’ customers after gathering sufficient data. (http://www.bloomberg.com/bw/articles/2013-03-28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker#p1). I think they’ll hold off while trying to amass position as key battery cell / or component provider to car makers and try to leverage that position later unless nobody bites, at which point Samsung’ll try to go in directly or LG may hold off indefinitely if it’s more lucrative to remain in components long term.

        • Yes, I’m curious about this. Would be fun to dig in and try to interview various top people in these companies about the matter.

      • You’d better source that one well Zach, since the Bolt is based almost entirely on the Existing Spark platform, which is pre-LG involvement.

        Now, LG did the a big chunk of drivetrain, and electronics, for sure, but they didn’t build the car from the ground up.

    • Sure they can outsource batteries and motors. From whom, LG Chem?
      So how do they compete with Tesla that has in sourced motor and battery design? Their costs are lower because they own and control it.
      How are any of the outsourced EV companies going to compete against each other and differentiate themselves, when they have the same drive train components from LG?
      A different badge and styling?
      They will have to disguise the fact that their components are all the same.
      Come to think of it, Detroit already does that with existing ICE. 🙂

      • “come to think of it, Detroit already does that with existing ICE” Precisely, and sells orders of magnitude more cars than Tesla, millions of vehicles per year… That is not a slant against Tesla, at all, I hope their success continues indefinitely. It is however one of the reasons in some ways I think we are fortunate that the big manufacturer’s didn’t choose to compete with Tesla sooner. This way I think Tesla has gotten enough of a head start, and awesome brand recognition of its own, that it will last in the long term when they see real competition.

  • Absolutely. I have met several insiders that say GM is just a marketing and systems integration company. The do the marketing to plank a vehicle, plan which manufacturing plant to use, how many they will sell, how much it costs per car based on tooling, labor, and parts. They plan what a bill of materials of various parts put together will do, figure out the finance, and make an estimate of payback to decide if they will do it. They have their suppliers bid on parts and then the whole thing springs into motion.
    Engines are the last area they do design in. They look at combustion and so on. They figure out how all the parts go together to meet the goal. All the other components are designed by others.
    GM made a huge leap by assigning virtually the whole Bolt drive train to LG Chem, not just the batteries. Thats the only way they could do the Bolt in time and produce a vehicle meeting cost and performance goals.

• While parts of this are doubtless true, if you look at the reliability of the Volt against the Tesla, you’ll see that designing reliable cars is still really hard, even if GM retains almost no control over the actual manufacturing.

  Don’t count out the incumbents just quite yet. First-to-market is often not the dominate player in the end (BlackBerry anyone? Boxee? Friendster? Palm? Netscape? WebCrawler? TiVo? BetaMax? ). GM spent 7.2 Billion on R&D in 2014. And when it becomes clear that EVs are where the markets are going in the immediate short term, you can bet your ass that a huge chunk of that budget will get reallocated to EVs. They may even just buy up Tesla employees to do it. And what’s worse, since they can basically just buy off the shelf batteries, controllers, and motors, they’ll be able to put together a compelling, reliable, cheap EV as soon as battery prices hit cheap enough levels. They already have existing battery based platforms on which to build these vehicles. And they’re better at making cheap cars than Tesla is. They have 40 years of experience in knowing exactly how and when to cut corners.

  Like, lets be honest. We’re all waiting for the Model 3, and it’ll probably be awesome. But Tesla will be the third company to release a 200 mile EV for $35k, after Nissan and GM. And fanboi-ism aside, assuming this site is capable of such a thing, that doesn’t look good for the company.

  Tesla definitely won’t be the first to a $20k 200 mile EV, either.

  • “compelling”
    -I like that you used one of Musk’s favorite words. 😀

    We’ll see how things play out. You’re apparently disagreeing with Sergio right now. Ghosn? Maybe not.

    I know you have a lot of respect for conventional automakers. But this is sort of a textbook case of disruptive technology and the innovator’s dilemma.

    Indeed, these companies can produce electric cars. Some are moving forward fast into that arena. Some are and will continue to be seen as leaders in this realm. But none are apparently very eager to push EVs against their core competency, nor get dealers to do so. I think every dealer I’ve gone to, the salespeople have told me that the people who buy EVs know that they want them when they come in. Why aren’t dealers selling customers on EVs at all?

    Tesla isn’t going to end up with 100% of the market, or 33% with Apple & Google taking the rest of the pie. 😀 Many automakers will survive, imho.

    However, to deny that Tesla is producing the most compelling, competitive EVs, plus supplementing them with the best (only decent) EV charging network, plus investing in what will bring the costs down much more, is to basically be a “Tesla denier.”

    When will the big automakers make a shift and catch up to Tesla? (Not a rhetorical question, but I’m curious when you think that will happen.)

    • The Tesla is definitely the most compelling EV in the large luxury car space. And they have the fastest-charging network. But neither of those is as hard as you guys think it is, speaking from a purely engineering perspective.

      But it’s more than a little hard to translate that to a successful small car.

      It’s a lot easier to build a car that costs $100k than it is to build a car that costs $35k, quite simply. In the $100k car, you don’t cut corners. You do ridiculous things like put giant “falcon wing” doors, and biological weapons grade air-filtration. You definitely don’t spare expenses on things like door handles, and wheel bearings. Need one that we think is going to take 5k lbs design load? Just throw one in there that’ll hold 15k. No one is going to miss the extra $400 on this car.

      Translate that over to a car that has to be inexpensive, but still reliable? That’s hard. Did you do a poor job of modelling that bearing? Well, now you’ve got near constant bearing failure. Is your A/C pump slightly undersized? Now you’ve got people complaining that the car won’t stay cool. Oversize it? Now you’re wasting money on too much A/C pump that will never get used.

      That’s what mass market cars are: A never-ending series of engineering tradeoffs between cost, reliability, and feature set, and they’re really hard to get right. You can arrange to buy drive-trains from pretty much any auto-manufacturer you want, and this happens all the time. If that was the only hard part in building cars, we’d see lots of tiny successful automakers all over the place. We don’t. And it’s because cars are hard.

      Just look at Tesla: Despite the luxury price levels in the Model S, and the delays to market, they have reliability issues. They even screwed up simple things like door handles, and greasing the differential on the drive units.

      • Nothing new here for me. But I think you’re still discounting how much better Tesla has done than any other automaker when it comes to EV development.

        And note Deepak’s words about efficiency on the last conference call. The dude knows about auto manufacturing, and he is impressed.

        The majority of the auto world seems to be in awe at what Tesla has done… even if execs of competitors only admit it under their breath.

        Feel free to keep the opinion that Tesla has accomplished a simple task and big automakers simply didn’t choose to go that route, and that Tesla can’t scale up well (similar to how people have been claiming Tesla could produce 1,000 cars, couldn’t produce 5,000, couldn’t produce 20,000, etc).

        If these things are true and Big Auto jumps in a few years down the road and puts Tesla out of business, I’m more than happy to say, Steve told us so. 😀

        • In what way is the Tesla even significantly innovative when it comes to ‘EV Development’? Most of their EV development has been packaging off-the-shelf panasonic battery cells.

          Most of their innovation has been in other areas like: Lets spend money rolling out a big charging network, let’s put a giant touch-screen in the middle of the car, let’s do direct-sales, and let’s do over-the-air updates of software. There’s very little to do with drivetrains there.

          They have a large, off-the-shelf panasonic batteries, combined with standard controllers and electric motors, bolted to aluminum frames.

          TI guess the whole idea to package the car together, as something that would be a compelling product is innovative, but it’s not like they have a patent on the electric car either.

          Yes, they were the first to bring it to market. And yes, it results in a cool car. And they definitely have the apple-esk marketing thing going on. But the basic engineering things that they’ve done are both repeatable, and practical, as someone who has actually read their patents: Not that interesting.

          Now, it’s entirely possible that Tesla has been dumping research and testing into the Model 3. But I don’t think we’ve seen a lot of test mules. GM has had Bolt test mules out en masses for months. And it’s also entirely possible that their dealership-less sales model will give them an advantage.

          They also produce cool cars. That’s undeniable. I have no idea how hard that would be to replicate. It’s entirely possible that Tesla will replace the Big 3, simply because people won’t trust them with technology that’s unfamiliar to the people as well.

          But when the honeymoon is over, and if the door handles on your Model 3 break for the third time this year, and if you’ve got a 6 month backlog for a new drive unit, so you have to put up with that grinding noise and if you’re not rich enough to have a second car to drive, you might prefer the staid reliability of a Ford Electric vs a Tesla. Just perhaps.

          If Tesla can fix up their reliability problems, and deliver on the Model 3, they could very well crush everyone. All i’m saying is, that’s really hard, and not at all a sure thing like some people here suggest.

        • I don’t think anyone here is saying it’s a sure thing. These are still huge hurdles. Getting from 50,000 cars a year to 500,000 presents a huge challenge, and reliability sure as hell better improve.

          I think Tesla’s mistakes and problems in these first 50,000 are part of the equation. If it didn’t have growing pains like these, it would be a fairytale.

          EV isn’t just taking Panasonic’s battery cells. It is modifying chemistry and building the packs in a way that it is using the most cost-competitive packs in the industry (if you believe market research analysts). It builds its own motors. It put everything together in a way that makes loads more sense than any of the other automakers (hence being #1 in its segment). Look at what BMW & Porsche did with its higher-priced plug-ins. They don’t compare. Look at the ELR. It doesn’t compare. Because Tesla has approached EV development in a much more intelligent, holistic way.

          Tesla’s efficiency in manufacturing seems second to none in this industry. Again, listen to Deepak’s comments on the last conference call. (And look at his history in the industry if you aren’t aware of it.)

          If you put it all down to advertising, I think this conversation has reached a dead end.

          Yes, Big Auto could theoretically compete with Tesla. Heck, they have a lot more expertise and capital to do so. But it isn’t. Will it do so in 3-5 years? 10 years? That’s anyone’s guess. Some are convinced it is plagued by the recurring threats explained in The Innovator’s Dilemma. Some are convinced it isn’t nearly as agile as a Silicon Valley startup and will never catch up. Some are convinced it has so much more expertise and history in the industry that it will come in and put Tesla out of business. Some are somewhere between all these things. We’ll keep tracking the story and see where things go from here.

          Btw, on a side note, what’s your plan regarding a future EV? Bolt? Volt? Wait for further development?

        • Big Auto’s biggest impediment is their mindset. Seriously. Its slower than anything else. LOL.

        • So, a couple of things here: Tesla did not modify the chemistry. Panasonic may have tweaked things, but you and I can go and buy the exact same cells, and Tesla didn’t spend significant money on this. At least, I’m not aware of such. If you have a source for that, I’d be interested it read it. Genuinely.

          Yes, they packaged the cells, but, really? That’s what you feel Tesla has done really well? Package someone else’s chemistry? That’s probably true, but I don’t think they’re lightyears ahead in terms of putting cells into a car floor…

          Yes, they make their own motors, but they haven’t really done anything particularly innovative there. They’re just bog standard A/C motors.

          I don’t think anyone expected Tesla to survive. But now that they have, and battery prices have fallen, I expect some real competition. Perhaps not in the Luxury class, but in the mass market, definitely. I expect Nissan and GM to fight tooth and nail for best mid-range EV in terms of features, price, reliability and range, and I think we’ll all win.

          Perhaps it is the Innovators Dilemma. If so, I wish Tesla Godspeed, and I’ll happily buy a Tesla when the time comes. But I think they’re biding their time. Look how fast the Bolt went from Concept to production. That project has been on the books for *years*.

          As for my future plans, I plan on holding onto my Smart Electric for as long as I can. It’s kinda like computers at this point. Every year I wait until I replace my existing EVs will only get better, cheaper, faster, and more interesting, regardless of who makes it.

        • You seem to be unaware of Tesla’s patents. Don’t dismiss the clever ways Tesla has used Panasonic cylindrical cells. The problem was that high energy capacity cells were more susceptible to temperature degradation and fire. All the rest of the industry thought they would use pouch and prismatic cells in series. Those lost out. Tesla added fire protecting goo, and cooling, instead. They figured out that multiple cells in parallel with fuses could work better and did it. Nobody else has even caught on to that approach. There is so much in the system design of EVs, its really hard to present it all.
          All of this adds up to a car that is lighter, faster, cheaper, longer range, and has much more interior volume than any other manufacturer. None are even close. If it was so easy, and Tesla only did minimal effort, they could have all copied it by now. But they haven’t even come close. Explain that.

          The genius is in realizing an approach to design, manufacturing, and marketing that penetrated the status quo and launched EVs as real competitors to ICE.

          Telsa dominates US luxury car sales in 2015 despite being production limited. Thats a big deal. How could a brand new upstart company do that to the major car companies?
          Thats revolutionary.

          http://cleantechnica.com/2016/01/15/1-large-luxury-car-in-us-tesla-model-s-2015-sales-comparison/

        • You have almost everything wrong. Tesla uses the cylindrical cells because they’re cheap, not because they’re better.

          They took risks on a more energy dense chemistry, and other manufacturers will eventually as well, assuming the Volt and Leaf aren’t already there.

          Most of their patents you are referring to deal with the fall out of using their crappy cylindrical cells.

          As cell costs fall, the advantage of using the small cells diminishes rapidly, in favour of the cheaper battery pack engineering of large format cells, and becomes a wash.

          There is a reason why literally every other EV in the world uses large format cells, and its not because every one else is an idiot. It’s because that’s the future of EVs.

        • You are not even admitting that Tesla has a superior product with the cell/packs they have today. But thats denial.

          Cheaper? Better? Which is which? You have a mighty big grudge against cylindrical cells. I will cop to it. I felt exactly the same way. I built EVs with prismatic LiFeP cells. They are wonderful. Relatively cheap, excellent power, and about as safe as you can get. And you could never get the kind of competitive range and performance Tesla has with them. Its a good thing they never listened to me.

          They didn’t measure up to Tesla packs. I couldn’t figure out why that was.

          Tesla said it has to meet all these goals. Range. Performance. Weight. Cost. Space.

          You need to figure out why Tesla packs work so well and you will need to drop the emotion and bias to do that.

          Tesla isn’t committed to cylindrical cells or any particular chemistry at all.

          ” So if anyone has a more cost-efficient cell architecture, we’d be all ears. Right now nobody has proven they have a more cost-effective cell architecture than ours.”

          https://chargedevs.com/features/teslas-batteries-past-present-and-future/

          Rather, they accept bids from the various battery cos and figure out if they work, and how they are going to make packs. They won’t tell, but I bet my bottom dollar they have built many cell/pack prototypes at least on computer.

          “Tesla has one of the largest cell characterization laboratories in the world – we have just about every cell you can imagine on test.”

          I suspect that is the real reason they compete so well. They are laser focused on range, cost, performance. And they don’t care how.

          They just announced they will use LGChem for the Roadster.
          http://www.wsj.com/articles/tesla-gets-boost-from-korean-battery-maker-lg-chem-1446007554

          I am willing to look at all the alternatives to find out how well they work.
          I even think pouch may be the way to go long term. But its still not clear.
          The package is not necessarily the most important thing. It might even be that the package is better dictated by the technology or the chemistry.

          Its a matter of summing up the advantages and disadvantages and seeing where the optimum solution lies. Smaller, multiple, parallel cells have advantages and disadvantages. Pouch could take advantage of them, but prismatic is out.

          It tried to clue you about the real reason Tesla is ahead. I am convinced of it.

          You are right. Its not the technology. They gave away the patents.

          Its the mind.

        • So, I think we actually agree here, potentially anyways.

          So, If you or I was in 2009, and trying to launch Tesla as a thing, the only thing to do was to use cylindrical cells. They were commercially available on a massive scale, they were half the cost because they were a global commodity, where existing large format cells were very much limited production by comparison.

          So, in 2009 going with cylindrical cells was totally the way to go. Right now, if you had to start over, its pretty much a wash. Cylindrical cells are still cheaper to purchase for the time being, but the engineering and build required to use them in large packs is expensive. Since Tesla has already paid that, there’s little incentive to switch. Sunk costs and all that.

          I fully expect at some point for Tesla to switch to large format cells, and the style in which they package their batteries hints at this, with ‘bricks’ being replaceable as a single large format cell of similar or greater capacity.

          We also need to distinguish between format and chemistry. We can pack most chemistries into most formats. That’s not totally true, but it’s mostly true.

          If we take the Tesla chemistry, which is just a bog standard Panasonic chemistry available to anyone, and put that in a Large format cell, and shove it into a Leaf, the Leaf gets substantially more range. There’s no reason they can’t do that, but there’s lots of reasons why they might not have wanted to when the Leaf launched. The chemistry that Tesla uses is more more dangerous than what is currently in the Leaf, the Leaf chemistry is more durable, and quite simply: When you customers aren’t willing to pay for 60 kWh of battery, there’s no reason to switch up to a more dangerous, less durable battery chemistry if you can fit enough safer, more durable, but less energy dense cells in the chassis.

          So, when we have the Bolt, and the Next gen Leaf dropping soon, we can expect them to use more energy dense chemistries, which Tesla neither owns, nor spent any significant money developing.

          If there had of been a significant market for a $70k electric Chevy in 2009, we could have expected the use of a more energy dense chemistry. There wasn’t, so we didn’t.

          But don’t take that, and pin in on Tesla as having an imagined advantage. That chemistry, (Or other similar ones) is available to anyone who wants it from Panasonic, or LG, and we can fully expect other manufacturers to start using it now that the costs have dropped low enough to make it viable in the mass market.

          I fully expect the Bolt, and the Next gen leaf packs to have performance similar to Tesla packs.

          Which just follows. If the Bolt used 1st gen Volt battery packs as it’s base, and it’s got a 60 kWh pack, instead of the 10 kWh in the first gen Volt, the battery pack would end up weighing 2700 lbs by itself! That’s clearly not what they’ve done…

        • Yeah. All said and done, we really do agree. I read one report on the Tesla pack by a guy that seemed to know his stuff and he was leaning towards pouch long term. I kinda see that, but its not cut and dried. I see them moving toward an amalgamation. A lot of it depends on manufacturing. Theoretically, all the cells are similar until they are packaged. They all start out in sheets, but then they are stacked and folded, or not.

          I didn’t see Teslas approach coming. I never thought the more fire prone chemistries with higher energy density could be used, but I was wrong. Didn’t occur to me that those fire characteristics could be overcome outside the cell.

          Their design and my knowledge of batteries has convinced me that cooling is the way to go. Well, that and Nissan Leaf drivers experience in hot climates.

          It makes no sense not to. There are too many performance, safety, and lifetime issues at stake.

          I do see some form of pouch, but with more parallel units possibly. The whole question becomes where do you put the dividing line between the cell contents and the packaging.

          I kind of hate to see so much assembly combining all the parallel units, but darn it, having those little fuses and many parallel cells is so nice. Its hard to kill 70 parallel cells like that. Its easy to have an individual prismatic or pouch go bad or just get weaker than the rest of the cells once in a while. Progress might depend more on improvement in cell reliability.

          I could see having a bunch of single layer pouch cells in parallel with individual fuses. Right now pouches are just collected into a metal box module anyway. They need to be under pressure to prevent them from bulging. They have no inherent mechanical shape forming and are pretty plastic. No reason they couldn’t be individually fused. Then the last problem is the cooling. Thats a bit harder.

          Look what already is happening. Tesla is moving toward a bigger cell.
          Effectively more internal volume, less external area. The 20700.

          http://cleantechnica.com/2015/03/17/lighter-batteries-may-prove-tipping-point-electric-vehicles/

          It would be nice if the modules were just as mass produced as the cells. I am sure that is an area of intense investigation. Which is better, fuses in cells or fuses in modules? Idk.

          As those two merge, the definition of cell gets blurred. Tesla has taken some of the pressure devices and other stuff out of the cells and put the flame retardant and cooling in the module instead. In the sense of larger cells and putting those functions outside the cell, they are moving more in the direction towards what the pouch is doing.

        • Ya, it’ll all depend on what the battery people do. If large format cells drop in price, you bet your ass that Tesla will be on that like a pig in mud.

      • Yes. Speaking from a purely engineering perspective, a charging network is simple.
        So answer me this.
        Why did Mary Barra say GM had no intention of funding a DC fast charge network for the Bolt , a 200 mile range EV?

        • Do you have a source for that? That’s disappointing if true.

        • From CEO Mary Barra: “We are not actively working on providing infrastructure [for the Bolt EV].”

          From electrification exec Pam Fletcher: “We believe all our customers should benefit from any infrastructure spending.”

          http://www.greencarreports.com/news/1101774_gm-wont-fund-ccs-fast-charging-sites-for-2017-chevy-bolt-ev Note: 500+ user comments O_o *eyes glaze over*

    • “Why aren’t dealers selling customers on EV’s at all?”

      Short answer: They “currently” don’t need to.

      I agree with so many of your points consistently on this website and no doubt things will continue to change and I hope it accelerates a lot faster in the future. For now, although we have a couple announcements worthy of praise and excitement around places like CleanTechnica, in the real world or general populous, EV’s are still barely on the radar. I consistently bore people with EV talk and the vast majority of people’s eye’s glaze over even if their initial reaction was excitement.

      Hopefully once the transition is in full swing the major manufacturer’s will pivot their resources quicker then you expect and start producing several EV’s in real numbers.

      If we have to wait for Tesla to push into truck’s next let’s say before major manufacturer’s switch there as well then we have many many many years to wait for a true EV revolution…. patience people, patience, it will happen, but its going to be a long road. (tired of hearing that from me yet? lol)….

      • That’s one reason. There are other reasons as well. But once automakers and dealers come around enough, what company will have the most trust of consumers looking for an EV?

        • I see what you did there, and yes I agree Tesla would have great consumer awareness and trust in delivering a good EV. =)
          Though You may be under valuing the huge consumer trust and loyalty that the established brands have as well. The good news is once the major manufacturer’s are on board we are likely to see lots of advertising educating the public on the benefits of EV’s, one of which is simplicity and lower maintenance costs. The simplicity will diminish the, at least perceived, need to only buy from an established EV maker.

        • Germans buy a lot more German cars. The French buy a lot more French cars. Americans buy a lot more American cars. The Japanese buy a lot more Japanese cars…. And then I also know Americans with strong allegiances to Honda, Nissan, BMW, etc.

          I’m sure many people will stick to what they are familiar with and have pride in. I am genuinely curious how many do so with EVs when Tesla is the well known EV king.

      • When Tesla breaks into GM/Ford truck sales, THAT is when Detroit will get serious about EVs!

    • When one buys off the shelf components and relies fully on the supply chain, that one can only be as good as the next player, not better. Lenovo, Dell buy laptop motherboards, batteries, cooling, power supplies, and the whole stack from whomever sells them on Alibaba and then they have average, medicore laptops. Apple takes control of engineering the entire stack, making the Macbook Air and iPhone technically possible and economically possible. Far better specs and performance in a much smaller and “more compelling” package. If you look at the Mac batteries, they’re not standard shape at all; they’re weird shapes to integrate into the complete product. Macbooks don’t even have cooling fans because of the holistic integration strategy. That’s hard-to-copy competitive advantage.

      I’ll give GM credit for staying much closer to the battery pack assembly with the Volt. I will be interested to learn more about the Bolt development. Tesla is keeping control of the whole engineering stack, then they farm out manufacturing of components later.

      • Great points.

        And paraphrasing Musk: the people who do hard things deserve the added value that comes from that. Musk and others at Tesla are consistently doing things in a better way when they see opportunities, even very hard things. That, to me, is the essence of what will keep Tesla at the lead.

        We’ll see soon how a similarly priced EV with from Tesla with similar range compares to the Chevy Bolt. My guess is that you’ll have to be pretty tied to GM/conventional automakers to say the Bolt is better (even not taking the Supercharger or OTA software updates into account).

        • Exactly.
          How many of us (even us pleased Volt owners) will wait for Model 3 before purchasing a Bolt?
          If perception eyes GM and Tesla as equals, then the earlier Bolt would have a distinct advantage.
          I’m definitely waiting.

          Could Chevy possibly produce a better $35,000 EV than Tesla? Hard to imagine.

        • The large majority are waiting, according to our surveys.

        • For me, no supper charger network, no sale. i currently have a volt.

    • Ironically I feel that the only automakers that will be capable of competing with Tesla are luxury ones! Because most mass market manufacturers will be busy with half-hearted range extended plugin cars for the reasons this post touches. Only the luxury makers will feel the pinch from tesla in next few years and they will adapt. Others IMO will screw around until its too late.

      • It would take many, many years for Tesla to grow to the point at which it would take over for the major car manufacturers. There’s an incredible difference between 50k cars a year and millions of cars a year.

        The key to cheaper EVs is battery cost. LG Chem and BYD are as much into bringing down prices as are Panasonic and Tesla. P/T might have a somewhat better model than the other battery manufacturers but people imitate success. What Tesla has is a head start. A great head start, but nothing that can’t be eroded over a few years of dedicated work.

        The major manufacturers have a few years to get into the game. They can sit back and wait for battery prices from the non-Panasonic suppliers. And LG Chem seems to be getting prices down rapidly. Car manufacturers have made EVs, somewhat limited ones. Once the time is right (in their opinion) they can launch their longer range EVs and catch up with Tesla.

        The big issue that has to be dealt with is rapid charging. Are the ‘majors’ going to come up with their own system(s) or are they expecting someone else to do it for them? If they can’t produce something attractive then Tesla will likely take a larger market share. But in the long term I expect most of the market that Tesla owns will come at the expense of the car companies outside the ‘big 20’.

        • Yes. LG Chem is serious. Same with BYD, but not just to compete with Tesla and LG, rather to deal with Chinas burgeoning growth and pollution issues.
          Thing is, I am not sure how well LG competes now after seeing LGs home storage offering. Good, but not comparable to PowerWall.

        • As the realization sets in that EVs are in inevitable, the ‘majors’ will lobby govt to build a network of chargers so its likely going to be us taxpayers going to pay for it. The cynic in me tells me that they’ll come up with a charging standard somewhat incompatible with Tesla’s so that there is some additional equipment/inefficiencies in charging tesla with it.

          “But in the long term I expect most of the market that Tesla owns will come at the expense of the car companies outside the ‘big 20’.”

          I disagree somewhat, I think there will be some bankruptcies in the laggard ‘majors’ (for instance Mitsubishi) & these will be acquired & retooled by Tesla to rapidly expand production capacity. So while its true that organic Tesla may not get to that volume but it will gain bigger share in ‘Borg Mode’!

        • The US government won’t build a charging system. Private money is going to fund whatever gets built.

        • I think there is a good case for the government building them along the interstate highways. There’s no way to make enough money on charging from selling the electricity alone. A company like Starbucks might be able to entice people into a highway store with the chargers and then make their profits by selling people their overpriced drinks and food, perhaps providing the electricity for free, but they won’t start building them until the demand is there–the chicken and egg problem.

          The best private sector solution is probably the Tesla model– price the charging system into the cars–but other manufacturers probably will be too short-sighted or too greedy to see this.

        • The price I’ve heard for Tesla Supercharger is $18k per bay.

          $18k at 5%. Pay it off over 10 years. Monthly payments $191. Daily $6.28.

          Charge $5 more than the cost of electricity and you only need to average 2 cars per day and you’ve made a profit. Call it $10 to cover the ~ $4 cost of electricity. Will cost the EV driver $20 to drive a 500 mile day. 500 miles in a 40 MPG gasmobile burning $3/gallon gas would cost $37.50.

      • Porsche Mission e!

        “Porsche Thinks It Can Do Electric Cars Better Than Tesla”

        http://fortune.com/2016/01/15/porsche-electric-tesla/

        • Porsche claims that it will build a better car than the 2015 Tesla S by 2020.

          Wonder what the 2020 Tesla S will be like?

        • Didn’t you hear? Tesla will be bankrupt by then. 😉 /s

      • Seems like you have it reversed. The luxury manufacturers are trying half hearted attempts to compete with Tesla Model S by using PHEVs. GM, Cadillac ELR, BMW i8, Nissan, Mercedes, and on. None of them have adequate EV tech to compete. So they do PHEV. And lose.

        Telsa has clobbered the US luxury market.

        http://evobsession.com/wp-content/uploads/2016/01/US-Luxury-Car-Sales-Tesla.png

        http://evobsession.com/wp-content/uploads/2016/01/US-luxury-car-sales-2015.png

        http://cleantechnica.com/2016/01/15/1-large-luxury-car-in-us-tesla-model-s-2015-sales-comparison/

        • Looks like they are starting to feel the pain. What they have done so far is only to get the best of both worlds, startup response of EV with convenience of gas as semi decent pure EV range is [was?] still hard to come by due to battery costs. IMO as the sales drop they will be forced to respond by making beefier plugins & pure EVs. It takes a certain amount of time to evolve a pure EV drivetrain which cannot be done via incremental updates to hybrids. my point was that (with exception of nissan for some reason) only luxury automakers will have a forcing function to spend dollars on EV development. Also, expensive batteries are not helping budget automakers either.

        • Yep. That list is jaw dropping. Every single ICE has registered a drop in sales while Tesla has increased. Clearly Tesla has gained market share at the expense of those other companies.
          Who would have predicted it. I will. Next years US ICE luxury SUV sales will be minus about 50k vehicles due to Model X. And it will get even worse over the next 5 years. Once the Model 3 is introduced…. thats when the real battle starts.

        • Thats just it. Battery prices are no longer expensive as they were and are dropping fast. The situation you are describing is the past, when high battery costs would have described the reason for building a Model S. Thats transitioning to lower costs and entry into the mid priced market.
          And GMs Bolt drivetrain is largely designed by LGChem. That means any manufacturer can do it. The drivetrain is gratis. They don’t have to design a drivetrain. Its provided with the battery. I know. Its incredible. Not what I would have predicted. But it does make sense. LG is much more into electronics and batteries at its core than GM. Way more. GM is more distracted with other matters. Thats not its focus.
          Tesla is now a force in power electronics, batteries, and motors. Tesla is clearly focused on them.

  • First to market not dominant? Sure. EV-1. GM.

    • Except if you’re going to be that obtuse, you mind as well count the Baker Electric from the turn of the last century.

• It’s not Tesla with its high-cost, proprietary technology that worries the big automakers.

  It’s the inevitability of ultra-low-cost, open source EVs assembled from generic components using industry-standard form factors and interfaces — ie. the emergence of the EV “clone” industry, analogous to the PC “clone” industry that quickly drove the cost of personal computers through the floor in the 1980s.

  It’s not Tesla’s $100,000 luxury EVs that worry them — it’s the coming of the $10,000 “clone” EV that meets 90 percent of the driving needs of 90 percent of drivers.

  • Interesting comparison to the computer industry. In the computer industry even after these low cost competitors only a handful of major suppliers exist today… I suspect the auto industry will be similar and we will not see many complete bankruptcies/disappearances. Some manufacturers will take longer then others but I suspect they will all transition as the market demands, which for now, is slow demand for EV’s.

    • That is basically the same theory that assumed Kodak would remain king of photos, Nokia would remain a cell phone leader, etc.

      Maybe. Some tech transitions occur without the legacy companies going bankrupt.

      But the stage is set for yet another S-curve transition that punishes companies that try to prevent it.

      • Sure, but it’s not like the Tesla is the only EV around. There are lots of EVs that are selling in the 10’s of thousands from established brands.

        Would Kodak have gone under if they’d had an extensive multi-billion dollar digital camera program, and were already selling entry level, inexpensive digital cameras, while waiting for the development of cheaper higher end components to become available? Because I think that’s where we are with GM and Nissan…

        • Kodak invented the digital camera, iirc, and was the leader in the field for a while….

          But I’m not saying GM & Nissan will go the route of Kodak. I think GM, BMW, Nissan, Mercedes, and Volkswagen will survive. But I also think some other established automakers will go out of business, and that some of the ones above may need bailouts and suffer big reductions in market share in the next two decades.

        • I hate to see Fiat Chrysler get a bail out, i.e. a reward for resisting the transition to EVs. Ugh.

• EVs are about 0.1% of cars on the road after 5 years.
  I would not worry about a “revolution”.

  • Complacency is one of the best ingredients for one. 😀

  • thanks for sharing that. I sincerely hope traditional automakers hold that belief strongly & stay complacent.

  • To some, revolutions are a shock.
    To others, revolutions are the obvious extension of volatile forces.

    • To Big Business, revolutions are a real threat to their bottom line.

      • Revolutions do not usually take 30 years.

        • Took us about 30 years to finally get rid of the Brits.

        • Bob — Well said.
          Hopefully this election will allow US to get rid of the Ultra’s control of the USA.

        • Sjc_1 How long did it take for the Icebox to be replaced with the refrigerator or the gas mantle light be replaced with the electric bulb or the horse with the automobile or wind powered sailing vessels with steam engines vessels?

        • I would not call those revolutions.

        • Sic_1 Good Luck to you.

• 3 thoughts:
  First:
  Lol, I really enjoy seeing remarks that EVs are expensive toys for rich folks who like to flaunt their money and power. Must be remarks by 12 year old kids, or people with no memory. A mere 10 years ago, before Tesla came along, EVs were small, slow, and under-powered and were derided as cheap toys for people with who had no appreciation of wealth and power. That’s a significant shift in attitude, one created almost entirely be Musk and his Tesla Motors. Oddly, no one derides $40k pickups, or $100k Porsches, except maybe my mom, she sees cars as the same way she sees buses, just another way to get around.

  Second:
  But getting back to the main point of the article: ICE companies have more to sell than engines and powertrains. They have huge skill sets in the design and assembly of highly reliable vehicles at prices a large percentage of the population can afford. Tesla has yet to prove they can do that. If EVs start dominating tomorrow, it’s no guarantee that Tesla will be able to ramp up to that level of production faster than F-C can move over to EVs.

  Third:
  Yeah gas is cheap again (thanks Prius owners for driving down consumption while increasing miles driven!). But it won’t be cheap forever, someday, someday, oil will be scarce. And when it is, the price will increase. And it will increase a lot, and quickly. We better already have a working alternative infrastructure, EVs, Hydrogen, something, or we’ll see a hugely disruptive economic repercussions.

  • “The Stone Age didn’t end for lack of stones…” – Saudi oil minister Sheik Ahmed Yamani

  • Steve:O Some thoughts:

    1) People will shift to eVehicles of all types (eBikes, eMotorcycles, eScooters, eSkateboards etc) in ever increasing numbers, and all those that install Solar will lead the “shift.”

    2) I believe that people are sick and tired of being raped at the pump, so being able to NOT go to the pump will become a very cool thing to do.

    3) Highway road taxes are added to the price at the pump (in states like CA) so you can be sure that the Big Auto manufactures are lobbying as hard as possible to put similar taxes on eVehicles, to slow their “growth.”

    4) Tesla’s Powerball will speed up the rate at which people shift to eVehicles, which is why many Utilities were the first to place orders (take advantage of the tech AND keep their ratepayers from buying/installing them

    http://www.utilitydive.com/news/tesla-collaborator-solaredge-rolls-out-inverter-to-work-with-powerwall-batt/412182/

    5) All other “new” vehicle tech (like hydrogen) still keeps owners tied to going to the “pump” which is nothing less than Energy Slavery, since they are dependent upon the whims of Big Fuel to set the prices, (the same way that Utilities keep rising their prices (because they can).

    6) When people learn that they can drive a eMotorcycle for about a penny a mile or larger eVehicles for a bit more (or free if they have Solar panels) they and especially the youth of America will lead the shift in eVehicle Ownership/Leasing.

    7) I expect to see “lines” waiting to get for eVehicles very soon.

    • Agreeing with what you say. One thought for hydrogen though: while your solar is pumping out electrons, and you and your car are at work, those electrons could be creating hydrogen from water via electrolysis. When you get home at night, and your solar is sleeping, you can transfer that hydrogen to the car’s tank. Maybe.

      • Been waiting for this! –the energy-autonomous residence.

        It’s essential that this EV revolution becomes Part of a move away from centralized power utilities.

        Home/Neighborhood Fuel Cells seem a possibility. But battery technology, or cost of PV panels must come down to make home-charging reasonable for those with longer commutes. (Or, perhaps a new way to conceptualize powering longer commutes will present itself.)

      • Plan on putting 2x to 3x as many panels on the roof.

        Hope the total cost, including panels electrolyser, compressor and pressure tanks are affordable. Fewer panels and batteries are likely to be a lot cheaper.

        Buying your electricity from late night wind is likely to be much, much cheaper. Likely the best solution would be to sell your surplus solar to the grid for a fair price and buy back inexpensive off peak electricity while you’re parked. Storage is lossy and increases costs.

        • Bob — Sage Advice

          I’d add that a good friend that has been living off the grid in HI for a long time has found that using a small quiet generator to top off his batteries (as needed) is far less expensive than paying for a monthly connection to the Grid. That cost is far more important to him than the potential benefits of being connected to the Grid.

          I think we will see hyper-efficient generators (gas, diesel, propane and NG) become available very soon that will be less expensive than buying battery storage, although they will not be as “clean.”

        • Hawaii is a unique place. Far more sunny days that most places. And extremely expensive electricity.

          I’ve been off the grid for about 25 years. Because it was much too expensive to hook to the grid. But if one has access to the grid in most places hooking to the grid makes sense, IMO.

      • Steve:O My gut tells me that It is probably better to use excess electricity to produce potable H2O from the air, especially in areas that are in need of water, since that tech would be far less expensive that what is required to produce hydrogen (and O2).

        I’d be interested in hearing your thoughts on what uses of excess solar are the most cost efficient. I think your Solar experience would be perfect to point people toward making the most out of their Solar investment. Perhaps you could develop an App that would allow users to input their Solar generation and their location so the the App could then calculate what the most cost effective use is of “excess” Solar. I could see people using it to “size” the number of their panels to maximize their return on their investment.

• If the Big Auto’s are very smart they would be now partnering with Tesla in order to “dampen” Tesla’s effect on their own Market Share.

  At the same time they should start investing heavily in other industries, in order to shift their focus to other profitable income streams, since it is clear to me and others that the traditional Big Auto is going the way of the traditional Big Utility as Solar and eVehicles create a pole reversal “shift” in the marketplace.

  Honda and Toyota are pulling a Sony, by trying to convince owners that it is better to stay connected to the pump instead of “filling it up yourself” from your own Solar panels, the same tactic we are now seeing from Big Utilities…

• Dinosaur. Adapt or die
  I guess Chrysler will go in the “die” column ans the shakeout unfolds

• I salute FCA’s Sergio Marchionne because he was able to speak out frankly about what is happening, The indicates to me that FCA has real hope for a bright future, since most the Big Auto CEO’s have a mindset that is still back in the 1950’s.

  I’d like to see FCA partner with Tesla ASAP since FCA has the financial clout and European marketshare to help Tesla deliver their lower cost peoples car (think eBug) Bug of eVehicles. The partnership would change the eVehicle marketplace, since a much smaller eVehicle with Tesla quality could be easily produced (y FCA) in mass quantities while at the same time making use of the Tesla Giga factory to supply the all important state of the art battery pack along with direct access to Tesla’s ever expanding Supercharger global network.

  FCA should now also start to deliver new brands of boutique or custom cars where buyers can pick the options they want so that FCA can build them. This would allow FCA to transition themselves and their workers to a more automated future. Ordering vehicles will soon be no different than buying a computers, as automated factories become capable of building whatever is ordered. That is the future of automating and FCA is perfectly positioned to be at the forefront of that future, at least for the European and American marketplace, since Chinese and Indian manufactures will probably stay in control of those markets.

• Haha, enter EVs industry and start building your own expertise and competitive character which you have in ICE domain now! if you dont do some body else will do and you go for negotiation for bankruptcy with government.

• Interesting concept. Ironic that the GM Bolt’s drive train/energy storage is LG components.

• The premise that electric drivetrains will take away some of what makes FCA (and other automakers) special seems true. The same is true of driver aids and automation. The same is true for the 2.0-liter turbo gasoline engine that is quickly becoming the go-to engine in almost every premium vehicle sold in volume, and many mainstream cars as the step-up option. Tesla is a company with a great product, but I am not seeing the big difference between its supplier reliance and that of the other automakers. Does Tesla make its batteries, or does it have a manufacturing source/partner? Other green publications call Panasonic “…Tesla’s battery-cell supplier…”

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