Published on September 24th, 2017 | by Matthew Klippenstein0
Tesla Model 3 & Nissan LEAF 2.0 Reflections — Cleantech Talk Returns! Again!
September 24th, 2017 by Matthew Klippenstein
Hello again, listeners and readers. After a longer than expected off-season, Cleantech Talk is back! Season 3’s contributions should be a bit more regular than Season 2 was, given that I’ve moved — “pivoted” in Silicon Valley lingo — from my full-time engineering job to communications consulting, specifically to be able to dedicate more time to the podcast and related activities.
Some pre-emptive apologies are in order for this week’s audio — I didn’t set my levels correctly, so there could be some hissing. I’ve also clearly forgotten the old Toastmasters rule about not using filler words like “um” and “uh.” Always room to improve, eh?
Our two big stories in this comeback episode related to summer’s big Tesla Model 3 announcement and September’s new Nissan LEAF unveiling.
You can listen to this episode and subscribe to Cleantech Talk on iTunes or Soundcloud. You can also listen via the embedded player below or download this episode. Jump into the show notes below for more goodies.
Tesla Model 3
There’s been no shortage of Tesla Model 3 coverage on CleanTechnica — here’s proof, and our run-down of the specs is here. That’s a credit to Elon Musk’s ability to get his electric vehicles to cross over into the public imagination. (Incidentally, the city of Prince George in British Columbia, referenced on the podcast as having three 3 reservations, has a population of about 70,000.)
But as we said, there’s always room to improve.
Elon’s expectation about Tesla production climbing an S-curve is troublesome, because experienced automakers don’t go through S-curves: they go through step functions. When Ford decided to make the latest F-150 out of aluminum, they had to change over pretty much their entire production line, because all prior F-150’s had been made of steel.
They planned to change the entire factory over in 8 weeks (!) with a logistics effort worthy of D-Day. Production was up at 100% within 11 weeks of the shutdown, which means that it took a maximum of 3 weeks to get to the top of the “S” curve. And Ford’s sales numbers show no drop-off in the months around the time they switched over. When we consider that some equipment probably needed a bit of post-installation tweaking and re-work, Ford probably didn’t even need 3 weeks to go from 0% to 100%. (As careful as you are in shipping, bumpy roads can wreak havoc on equipment, which is why companies almost always require a factory acceptance test at the vendor’s facility, in addition to a site acceptance test at their own facility, before making payment.)
I noted in the podcast that something like a quarter of the cost of a vehicle relates to the plant — that being the factory, equipment, manufacturing process work, and utilities. (Basically, everything except raw materials and labour.) Well, I was wrong. According to Toyota VP Atsuhi Niimi, labour is about 20%, materials another 20%, and “investment in the plant” (being everything from the factory cost to redesigning the vehicles every 5 years, R&D and so forth) is the other 60%.
With that context, we can see how Tesla really, really lucked out in getting the Fremont factory for a song — and that Tesla lucked out again when Elon was convinced to build the Model Y on the same platform as the Model 3. (It would be great for Tesla to spend $5 billion or more on a new factory, but even better for their financials to at least approach the break-even point before going on a spending binge. For context, Matthew’s old fuel cell company is almost at break-even! If a fuel cell company can do it, surely an electric car / solar / energy company can!)
Tesla’s quarterly production numbers will soon be upon us (this is being written on Sept 18), so we won’t have long to wait for an update on the progress of that S-curve.
Nissan LEAF 2.0
Compared to the Model 3, Nissan’s second-generation LEAF has generated a lot less attention (though, as usual, CleanTechnica has been at the fore with numerous stories). I think Jose Pontes hit a bullseye with his recent article. Nissan may well be planning a staggered rollout of LEAF variants over the next few years, focusing more on price than range. If it can make the LEAF the “VW Beetle” of electric vehicles — the entry-level, affordable electric option everyone knows, even if the cheaper versions lack range — there could be huge advantages. Alliance partner Renault’s Zoe already does this in Europe. Not everyone has to compete with each other on range — having some people compete on price and practicality will help us broaden the market faster.
The Nissan-Renault-Mitsubishi alliance has designs on being the world’s biggest carmaker by far in the next few years. It’s aiming to go from 10 million to 14 million cars per year by 2020 or so, with growth coming from developing markets like India (where it’s very strong). And wouldn’t it be a symbolic passing of the baton if the title of world’s biggest carmaker went from the hybrid leader (Toyota) to the plug-in electric vehicle leader? Now, if we could just find a good acronym! The Nissan-Renault-Alliance abbreviates to NRA, a politically charged trio of letters. Wedging Mitsubishi in there (NRMA?) gets cumbersome. RNA? Science nabbed that one.
Setting corporate nicknames aside, with the Zoe sedan in Europe, the LEAF sedan everywhere else, and the second-generation Mitsubishi Outlander PHEV SUV finally launching worldwide next year (we hope), the Alliance is in good shape to compete with BYD and Tesla (whenever it is that the latter ramps up) as potentially the world’s top-selling plug-in electric vehicle manufacturer in the coming years. Carlos Ghosn seems to have taken it personally that Tesla gets all the electric-car attention even though the Alliance has sold far more vehicles. Hopefully that bodes well for dealer willingness to sell them. When CEOs have a personal/egoistic stake in a project, they usually see to it that problems and challenges get addressed.
That’s all for now. Next episode’s target date is before the end of September, by which point we’ll know whether Cleantech Talk’s own S-curve is coming into place smoothly!
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