Try as I might, I simply can't get worked up about Tesla.
They make excellent toys for rich people, but are irrelevant to everyone who is not some sort of millionaire entrepreneur or high-paid executive.
Electric vehicles are incredibly attractive and massively beneficial to society if they are adopted at scale. Unfortunately, Tesla seems content to cultivate an image as an ultra-luxury brand, and hasn't attempted to lower the barrier to entry for electric vehicles.
I have no problem with companies that only want to sell expensive things to very wealthy people, but we can't possible pretend that companies like these will matter in the grand scheme of things.
Wake me up when we can buy an electric car for $12,000.
However, you don't get there without Tesla. Why not?
Because you can't compete with low-margin products in a low-margin industry, and still innovate in a sector where you need lots of R&D, where component costs are currently expensive but are expected to drop over time, etc.
Even the much-celebrated entry, at scale, of other manufacturers into the electric-car market is due to Tesla.
Tesla is kinda like Apple in this. They built a very adventurous, dangerously new, premium product, and really committed to it (think mac/iphone; like Tesla, it's not like there weren't other similar products/concepts, but a good consumer product hadn't existed). Upon market validation of the concept, other people jumped in (windowed PCs with initially non-clipping windows; initially crappy android phones).
The reason this is exciting? Because: 'electric cars for everyone! woohoo!'
IT'S VALIDATED THE MARKET! They've waded into a real, big industry, taken on incredibly ambitious problems ('start a car company', 'make an electric car'), and in the process created demand for a new premium product, something the market 'didn't know it wanted'.
Without Tesla demonstrating that there's a premium market segment here to be targeted -- essentially doing market research for larger companies -- we don't get there as fast.
Other people invented (windowed desktops|electric cars). But without (Mac|Tesla) productizing it successfully, how many years would it be before the consumer enjoyed (windowed OS'|electric cars)?
"Try as I might, I simply can't get worked up about cellphones.
They make excellent toys for rich people, but are irrelevant to everyone who is not some sort of millionaire entrepreneur or high-paid executive.
Mobile communication is incredibly attractive and massively beneficial to society if they are adopted at scale. Unfortunately, cellphone manufacturers seem content to cultivate an image as an ultra-luxury brand, and hasn't attempted to lower the barrier to entry for mobile.
I have no problem with companies that only want to sell expensive things to very wealthy people, but we can't possible pretend that companies like these will matter in the grand scheme of things.
Wake me up when we can buy an cellphone for $120."
Elon Musk's stated goal with Tesla is to bring electric cars to the masses. To do this, the price has to come down, and the price only comes down with volume, and you can't build the volume for a mass car from scratch without a low price.
This is a classic Catch 22, and Tesla's strategy for this is to start at the higher end with performance and luxury cars, where the costs are more acceptable, refine the technology, learn the lessons, wait for battery prices to come down, build the brand and product volume and release cars closer and closer to mass market.
Look at the history: we started with an sports car (the Roadster), which could get away with high price and average range by being quick, then a luxury sedan at a lower price point (Model S), now more of a family car (Model X). Affordable cars are in the pipeline, this is just the route we have to go through to get there.
Personally, I think the strategy is masterful. Every other car manufacturer went straight to mass market, without taking into account that the economics didn't work.
>Affordable cars are in the pipeline, this is just the route we have to go through to get there.
Having recently bought a new Lancer, I find this very exciting. By the time I'm ready for a new car, it's quite possible there will be numerous EVs in my price range. This in contrast to when I was car shopping ~8 months ago and didn't even consider Mitsubishi's EV because it cost as much as a mid-range Lancer and looked like a glorified golf cart.
One thing to remember is that Tesla is a battery company. Cars help them to fund their R&D, but Elon knows that if he can develop the batteries that will drive every single EV made, it doesn't matter whether it costs the consumer $12,000 or $200,000.
What is going to make more money, make more impact, and make Musk iconic? Building luxury cars that go fast, look nice, and run on electricity? Or creating the entire mechanism, infrastructure, and possibility of moving humans via battery?
Ford isn't famous for making a car, and there's good reason behind comparing Musk to Ford.
Tesla makes cars and they're funded by car sales, but the fundamental game changer they bring to the table is their battery tech and the infrastructure they're building in order to make it viable. When every car is driven by batteries, Tesla will have an unbelievably huge head start in finding, moving, selling, then using the power inside of them - whether it be made by Ford, Toyota, Nissan, or anyone else.
Pardon me for being overly pedantic (although that's perhaps ok on HN), but they are not making their own batteries, are they? They probably purchase Li-Ion elements from some other entity.
But I see your point, I think. They are building the entire infrastructure that goes with the electric car, not just the car itself. I agree that's very smart.
Tesla purchases 18650 battery cells from Panasonic (the same cells I use in my e-cigarette, in fact). What they have developed, however, is a battery management system that surpasses just about everything else on the current market, and that is what other car companies (or airplane manufacturers, etc) will be licensing from them in the future.
They have a proprietary wiring solution and a cooling system that works very well at preventing problems with one or a small batch of cells from spreading to the rest of the pack. On top of that is proprietary software that manages charging this system, and allows for things like quick charging without exploding the cells, which is no small feat for 60+ kWh.
Yeah, you're right. I don't believe they're building their own cells, true. But all the wiring for the types of cells they use, and especially the drivetrain, are proprietary, unique, and highly advantageous.
I guess it would be more correct to say "Tesla is a battery tech company." Still, people are too fixated on the fact that Tesla makes luxury cars. Much more important is the fact that they make very efficient, high performance, safe energy systems.
That's not going to happen anytime soon. Batteries themselves are still too expensive, but what's even more expensive is the development time spent on battery management systems. The Tesla S has roughly 7000 individual battery cells, not unlike the single cell powering your phone. If a single cell over drains or over charges, it has the potential to cause a fire. That's easy to do with your phone, there's only one cell to monitor. But thousands of cells, bundled together in various packs of serial and parallel connections? There's a lot that can go wrong. That means these systems have to be bulletproof and I think we can all appreciate how expensive that is in terms of software and hardware development time, let alone testing.
MSRP*1 as low as $19,185
Price after federal tax credit. Net price shown includes the full $7,500 tax
credit*1. $26,685 MSRP* †,† without federal tax savings ranging from $0 up to
$7,500.
So, I can buy a Spark for only $20K and let the rest of America pay the other $7,500 for me. Sweet. I love an overbearing government!
I guess you haven't been following Tesla very closely, but you've got it all wrong. The whole point was to innovate with luxury cars, and then produce affordable consumer vehicles. Elon Musk wants to see the world driving electric cars, because they are better for the environment.
The Model S is definitely in the realm of affordability for more than millionaires and executives.
60,000 is relatively easily affordable to the likes of doctors, dentists, lawyers, software developers, and more.
The estimated monthly payment on their website is 579/month which is actually less than I pay now for my subaru forester. (The loan is twice as long, but if I can afford to pay if for 3 years, I most likely could pay it for 6).
What's exciting to me is that these electric cars are just as good, often times better, than their non-electric counterparts. These cars can be bought by regular (although still quite well off) people. That's a pretty big accomplishment.
I can't wait to see what they do to make a more affordable mass market car.
These things take time. Tesla's goal for their next car, the Model C, is to reduce the price significantly. Now, considering how much their current cars cost, that might still mean $40k or more, but that would still be a significant improvement.
They make excellent toys for rich people, but are irrelevant to everyone who is not some sort of millionaire entrepreneur or high-paid executive.
Electric vehicles are incredibly attractive and massively beneficial to society if they are adopted at scale. Unfortunately, Tesla seems content to cultivate an image as an ultra-luxury brand, and hasn't attempted to lower the barrier to entry for electric vehicles.
I have no problem with companies that only want to sell expensive things to very wealthy people, but we can't possible pretend that companies like these will matter in the grand scheme of things.
Wake me up when we can buy an electric car for $12,000.