[spyspy]

> when they seriously start releasing electric vehicles

They've been "serious" for a long time. Chevy has been selling the Volt since 2010. If they were going to muscle out Tesla they would have done it by now. And it's not just about technology. Tesla has the customer reputation that companies like GM will never have again.

[Robotbeat]

I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only advertising they really do for it basically is trying to steal EV customers from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they don't know how to service them and especially 2) they almost never need servicing. If you run almost exclusively on electric, you only need like 4-5 oil changes in the entire life of the car. And the brakes last forever, too.

[vvanders]

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

[timr]

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular.

GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term.

You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke?

(Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].)

[1] https://www.gm.com/investors/sales/us-sales-production.html

[2] https://www.cars.com/articles/top-10-best-selling-cars-febru...

[mikeash]

EVs are unpopular because cheap ones aren't very good yet. You have to choose between almost unusably short range, or a very high price. Something like the LEAF is affordable, but only useful as a city car. A Model S is a great car, but extremely expensive.

The cost is coming down. Chevy is now selling the Bolt, which has pretty good range, for under $40,000. Tesla's Model 3 is coming soon. More will follow. The high cost comes from the batteries, which are getting cheaper all the time.

I'm not sure that "unpopular" is quite the right word. A lot of people really like Teslas. Most of them can't afford them. The desire is there, the means is not (yet).

It's smart to invest in what sells right now... until things change and that's no longer what sells. GM is investing in what sells today. Tesla is investing in what might sell in a decade or two. Tesla's approach isn't certain but if they're right then GM is going to relive their experience of the 1970s where they take way too long to react to a changing market.

[hacktothefuture]

100% agree but they have to be careful with the idea that "It's smart to invest in what sells right now... "!

The story is so reminiscent of Kodak. Huge 'titanic' of a ship that saw the writing on the wall, actually released digital cameras but the bulk of their infrastructure, employees and expenditures were in traditional film cameras. Once the industry fully shifted they still couldn't change course and died a slow agonizing death as taking pictures became a commodity that came 'free' with your cellphone.

[rootusrootus]

Aside from market share, it doesn't seem like much of a risk to go with what works now and save the big EV push for later. GM still came out with the Bolt, which is an excellent competitor for the Model 3. Not too pretty, but the numbers are all very good. So they know how to do it, and when the sales are there they can scale up production of whatever they're marking 10 or 20 years from now. I'd bet on GM in a battle with Tesla, to be honest, though Musk has a lot of chutzpah.

[ghaff]

It's a little different though. Kodak was invested in a huge consumables business and neither they (nor really anyone else) figured out a way to translate that sort of pay per use model to the digital world.

GM doesn't get money from gas (though their dealers do get money from maintenance which is hypothetically(?) lower with electric vehicles. Different anyway.)

[jrockway]

Kodak was a chemical company that was expected to start making semiconductors or consumer electronics. It's all "photography" but the film and digital industries are very different.

[paganel]

I've had the exact same discussion with somebody else today on /r/futurology, more exactly I told him that "under $40,000" it's still pretty damn expensive for a small hatchback. My 1.4l European small hatchback costs around 13,000 euros new, you just can't expect people to not take into consideration the huge difference between the 2 prices.

[yawz]

I'm not sure if this year all figures are the same, but when I was car-shopping in November, Colorado state granted up to $6,000 in tax credits for new EVs. Federal tax credit was $7,500. And on top of that, Nissan was adding their own discount for their new Leafs.

So, nobody pays the full price of an EV at the moment. You can currently buy 1-2 year-old, certified Nissan Leafs for less than $13,000.

[elihu]

> GM is investing in what sells today. Tesla is investing in what might sell in a decade or two.

It seems to me that the Bolt and Model 3 should be pretty similar in terms of cost, range, and price. The main difference is the Tesla brand / visual design and probably more self-driving tech in the Model 3. Am I missing something?

[vvanders]

Superchargers.

I regularly make a ~300mi roundtrip with our Tesla, I wouldn't own one today if that wasn't possible.

[edit]

Before anyone brings up ChaDeMo(I have the adapter), SAE combo neither are nearly as fast(120kW) in real-world use and have nearly as much market penetration.

The super-charger network is also something that's planned and built-out with the intention of being to make the major arterials rather than having a patchwork of various companies providing chargers.

[mikeash]

The Bolt can't really make road trips because the fast charging network it can use is pretty bad. (That's in the US. Supposedly Europe is a lot better in this respect.) Even where the facilities exist, the Bolt's charging rate is about half of what Tesla can do.

The self-driving/driver-assistance tech gulf is pretty big. The Bolt is fairly basic, while the Model 3 will have at least Tesla's Autopilot 2 hardware, which they say will be sufficient for full self-driving once the software is done. Even if that doesn't work out, it'll have excellent traffic-aware cruise control and lane keeping at the least.

I'd say the brand is also fairly important. Not (just) because Tesla is "cool," but because Tesla is committed. Supposedly GM is planning for something like 50,000 Bolts per year, so it seems like yet another car where dealers will try to steer you to a nice pickup truck or something instead, and finding someone willing to service it could be tough.

Putting it all together, and it seems like GM is putting their toe in the water, while Tesla is balls-to-the-wall (forgive the mixed metaphor).

[anchpop]

> probably more self-driving tech

I probably shouldn't be sharing this but I know someone who is working on the Bolt and he told me they've been having a lot of trouble integrating self-driving tech that's close to Tesla's

[beamatronic]

How hot is the market for a used Model S? It seems you can get a decent one for under $50,000. Is this generally regarded as a good deal? I know an "early adopter" who has had a Model S for many years, and I've lost count of the number of times it has left him and his family stranded.

[mikeash]

At that price you're probably looking at a pre-Autopilot car, which I'd probably avoid. Autopilot is great, for one thing, but also because Tesla's build quality got substantially better over time. I don't think it's because of Autopilot, but its introduction makes for a decent dividing line between old and new.

I haven't looked too hard at the used market, but it looks like a decent way to get one for less. This web site lists a bunch that Tesla is selling through their CPO program if you want to see what's out there:

https://ev-cpo.com/hunter/

For what it's worth, I have an early 2015 Model S and it's had a few minor problems, but nothing close to leaving me stranded.

[rootusrootus]

I am very interested to see how this plays out. Gas prices drive interest in electrics, and electrics drive down gas prices. Maybe the future of the consumer car market is going to split largely between gas-powered pickups and electric-powered sedans/crossovers.

This of course completely ignores the potential effect of self-driving cars. I'm still skeptical we'll see large scale automated driving for at least 10-20 years.

[mikeash]

I think gas prices are driving EVs less and less. It's still a factor, for sure, but things like performance, noise, maintenance, and convenience are driving it heavily as well. Of all the reasons I love my Model S, fuel savings are pretty far down the list, although I certainly don't mind!

[Digit-Al]

Here's a couple of questions for those out there with more knowledge of the subject than me. Firstly, how long do you think it will be before there is a thriving second hand market in EVs? Secondly, do EVs currently hold their value better than traditional vehicles?

I think you can only say EVs are a success when a used market is thriving. Many people can't afford new after all.

[mikeash]

There's a pretty decent market for used Model Ss out there. It's not huge, since Model Ss of sufficient age don't exist in great numbers, but it's not too bad.

I've been looking at cheaper used EVs for a second car. There are lots of used LEAFs out there, some Smart EDs, and a couple of Focus Electrics, which look really nice if you don't mind the short range, but aren't very popular at all. These cars seem to drop in value a lot for the used market. I saw several that were not all that old going for under $10,000.

Teslas seem to retain their value better. I'd guess it's partly because the car is more desirable, and partly because Tesla treats their batteries a lot better, so they can be expected to last longer. The LEAF in particular was known for a while for losing quite a bit of range in just a few years.

As far as how they'll retain their value in the long term, it's hard to say. EVs should lose less value due to things like drivetrain wear, since you don't have a bazillion moving parts in an engine and transmission to go wrong. But they'll lose more value to battery degradation. Much will hinge on how well the batteries age and how much they cost to replace in 10+ years.

[Robotbeat]

Well, I bought my '12 Volt used for under $10,000 with 60,000 miles. At the time I bought (last year), they were usually about $12,000 at a dealer, and trade-in about $8000 for the same car. I got mine from a friend who wanted to trade-in (to get a new Volt... the Gen 2 Volts--starting with 2016--are even better than Gen 1), so we both got a good deal. Fantastic car.

Anyway, there are plenty of used electric cars out there if you're happy with the models that have been out for a few years.

[Robotbeat]

The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market.

I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.

[timr]

"The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity."

You can't push on a string. Consumers buy bigger cars when gas prices are low, and more efficient cars when gas prices are high. It's why Toyota (which has built a brand identity around fuel efficiency) does worse when fuel prices go down.

Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics.

"Tesla will be perfectly fine on the demand front."

I'm sure there's a market. After all, Lamborghini is "perfectly fine on the demand front", too. But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.

[kbenson]

> Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics.

Actually, I would say marketing is one of the few things that actually can change economics, since it affects perception. Marketing can make someone think they need a new car when they don't, or that a car is affordable than an alternative when it really isn't (given financing, fuel economy, services, etc which are not always taken into account).

People don't make decisions based on reality, they make decisions based on their perception of reality. If you can change that perception, you may change their decisions.

[prolly_a_moron]

>But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.

Yep. Building cars for the mainstream is a low-margin, capital-intensive business. That doesn't go away because Musk is brilliant.

[elihu]

Most people just need their car to get around and will migrate to whatever is the cheapest option with the capabilities they want. Right now, electric cars cost more. Eventually, they will probably be cheaper than gas. When that happens, the market for electric vehicles will be essentially the same as the market for vehicles. (Gas may still be needed in the medium-near-term for things like pulling a trailer up a long hill.)

[afuchs]

By what definition is the Model S the fastest production sedan? Its top speed is limited to 155 MPH (249 km/h) 155 mph (249 km/h). Compare that to the Aston Martin Rapide S at 203 MPH (326 km/h), or the more affordable Dodge Charger SRT Hellcat, who's top speed as given by the manufacturer is 204 MPH (328 km/h).

[Nadya]

The other common measurement of 0->60 acceleration and not top speed. The proper description would be "quickest production sedan" instead of "fastest production sedan" but I digress.

[chrishacken]

Close to 200,000 Prius's are sold each year. While that's no where near the "best selling" car, their Camry (400,000 cars a year), that's substantial.

[timr]

Ford sold 66,000 F-Series pickups in February 2017, alone. Small car sales are declining, across the board.

https://www.cars.com/articles/top-10-best-selling-cars-febru...

[chrishacken]

You can't really compare the "F-Series" with a single car. A more accurate comparison would probably be all sedan's with the F-Series.

But yes, trucks are on the rise again.

[sremani]

I am an Volt owner and I approve your comments. GM with BoltEV and Volt has demonstrated they are up with the EV tech, did they make miscues? Yes, no doubt. But the market needs to educated and for now Tesla is the Apple of Cars and the only brand Customers are willing to be educated from. Nissan Leaf had a decent start, but they cut too many corners, and I do not recommend Leaf. i3 is too limited.

Even though I whole-heatedly recommend Volt esp. Gen2. The market is not ready yet, and GM is doing what an established Car company does. Tesla's life depends on pushing EVs, so they are who they are.

[vvanders]

You're getting downvoted because you missed the argument that I presented.

It's not about what market segment that sells, it's that dealers have no incentives to sell electric vehicles since there's no margin on services and maintenance.

[caminante]

(Assuming non-material edits by the parent,) IMHO, he didn't miss your argument.

The topic's GM and GM dealerships. You said GM has to fight the GM dealerships due to conflicting interests, whereas, he's saying GM and the GM dealerships don't want "non" mass-markets customers to begin with (i.e. no conflict).

[erikpukinskis]

> GM is investing in what sells, and right now (i.e. for the last decade or two)

Yup. They haven't adopted the Andy Grove/Bill Gates/Larry Ellison philosophy of "Only The Paranoid Survive," yet. They are banking on the expectation that if/when consumer interest spikes they'll be able to use their influence to jump to the front of the line, like they did with past ICE competitors.

The question is... will the electric car market be more like the ICE market where paranoia is (apparently) unnecessary, or the semiconductor/software markets where it is (apparently) quite important.

[greglindahl]

I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?

[timr]

"I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?"

GM already has a crossover line. In fact, it has a bunch, and they sell really well:

http://www.gmfleet.com/vehicle-search/by-body-style/suvs-cro...

Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.

[chc]

> Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.

Whoa — you have to realize what you just did there, right? This is a massive shifting of the goalposts from what you said Tesla's problem was earlier, which is that SUVs and light trucks are what sells.

Anyway, I don't think most people with SUVs actually go through a full tank of gas a day, so having completely equal range doesn't seem like that big an issue. So now it sounds like Tesla's major problem is that they're competing with the Range Rover rather than the Equinox.

[astrange]

How large are those cars? No wonder traffic is so bad.

[hockley]

This kind of proves the thesis. EV is a hobby for the legacy guys that competes with much more powerful (by revenue) business units in the company. It's like expecting Kodak to compete and win with their own digital camera.

[sremani]

Every one does not start with a blank slate, that is a luxury Tesla has as an upstart. GM is "saved" to save jobs by US government. GM has paid back, but its operational reality depends on selling "profit-making" vehicles, which are SUVs and Trucks, pair it with cheap gas prices, there is a strategy for GM to be profitable.

Tesla on the other hand, lives and dies by its EV performance, and their approach to the market at higher end kept them alive along with loans from US with few strings attached (for various reasons).

Tesla did not "break through" any thing. If any thing, existence of BoltEV and Volt does demonstrate couple of things, a legacy car company when there are profits are going to turn on dime and make shit ton of EVs, if that is what market wants.

Tesla has brand recognition behind it, but again as some one pointed out when the market for EVs in high demand and profitable, from BMW to GM, you will have them roll EVs in millions.

[cmrdporcupine]

I'm about to buy a Volt as soon as VW buys my dieselgate car back from me. I have had to go through a few different dealers to find someone who is serious about selling the thing.

The platform looks amazing. It boggles my mind in all the years this vehicle has existed that they haven't made more vehicles based on it.

[Robotbeat]

Agreed. A pickup based on the Volt technology would be fantastic. Electric can allow crazy good torque. And you have a nice big battery, backed by a quiet and efficient built-in generator that only needs to run occasionally, to run power tools off of.

[cmrdporcupine]

I'm a small minority market, but I'd love an electric replacement for my 30hp diesel small compact utility tractor.

It's a natural fit. The extra weight is a positive not a negative. The tractor is already a hydrostatic transmission in order to get continuous torque across RPMs and some in this market already use an electric motor for hydraulics (powered from a generator via the engine). It's only used for short bursts of activity so doesn't need a particularly huge battery even.

But such a product doesn't exist yet :-(

[radix07]

It is coming soon! Here is a Hybrid ZTR prototype my company has been working on. https://www.youtube.com/watch?v=J34KU9OG9M8

[cmrdporcupine]

That's nice and I would even consider buying one, but it's not a tractor.

Need three point hitch, loader, PTO, and industrial tires.

When you (or someone else) makes one with equivalence to about 30 or 40hp for under $30k and, I will instantly buy it.

[michel-slm]

I'm on a work visa here in the US, and I couldn't get financing on a Volt because GM Financial insisted on doing > 30 months lease on their hybrid cars (and my work visa expires before then, though it's likely to be renewed anyway).

Go figure. It's not like I can't afford the monthly payments.

[chiph]

Did you talk to an independent leasing company? You don't have to lease via the automaker.

http://www.marketwatch.com/story/the-greatest-auto-lease-dea...

[michel-slm]

Will bear that in mind for next time, thanks! My other consideration is I am still trying to build a credit history, and don't really want more hard hits on my file than necessary...

[FireBeyond]

Sheesh. When I bought a Prius (admittedly, 2007), I was here on a fiancee visa. Toyota Financial had no problem okaying a three year lease even though my visa was (technically) three months (but available for extension).

[michel-slm]

Ah, interesting. A colleague had a similar experience to me getting an Audi (his lease doesn't extend beyond the H-1B expiration) so I wonder if the regulation is tightened up by now.

Then again, maybe statistically people on fiancee visas are more likely to end up with permanent residency than people on H1B?

[jcfrei]

Very interesting points. So as the other comment has pointed out, traditional automakers will have difficulties selling through their dealerships. Do any of the established players have any plans for their own dealerships / showrooms?

[voidmain0001]

Yes. https://www.thestar.com/business/2016/04/19/cinespace-sells-... GM Canada purchased land in downtown Toronto and made the announcement for a corporate campus with a dealership/showroom. The challenge will be with the existing franchise dealerships that will balk at GM taking a bite out of their market share. edit - The GM official announcements specifically refers to the sale and service of electric vehicles. http://media.gm.com/media/ca/en/gm/home.detail.html/content/...

[koolba]

They can't as the rights to having local dealerships has already been split out. They'd have to buy out their dealers and probably change a bit of State law to accommodate that.

[zild3d]

Is there something special about the brakes? Less maintenance needed makes sense, but I would have thought the brakes are no different than gasoline cars?

[btian]

When people claim "best X I've used", they should list all models of X that they have used.

[Robotbeat]

Granted. :)

[nwhatt]

GM isn't a threat to tesla unless Cadillac starts selling something to compete with the model S. As a Tesla shareholder what keeps me up at night are Mercedes, BMW, and Lexus.

[SEJeff]

If you get scared easily, or aren't in it for the long term, TSLA might not be the stock for you.

Disclaimer: I'm long TSLA and Solar City Solar Bonds.

[beamatronic]

Have you seen the 2016 Cadillac ELR? [ 1 ]

As it turns out, it's already discontinued?

[1] http://www.cadillac.com/legacy-vehicles.html

[chiph]

People didn't want to pay $65k+ for a rebodied Volt.

[rhino369]

Isn't a large part of Telsa's value that it will eventually move into the Camry/malibu/Taurus field?

[laurent123456]

> Tesla has the customer reputation that companies like GM will never have again.

Tesla is more like a luxury brand so its biggest potential competitors will be the big 3 in Germany and possibly Lexus (which all have a pretty good reputation), and currently none of them propose that many options.

Audi and Lexus have none. BMW has two, but only one of them can sort of compete with Tesla (can't go far with the i5 battery). Mercedes only has one (if I'm not mistaken). It really feels like they're only getting started, and if/when they start releasing really compelling models, it will be something more to deal with for Tesla.

[hangonhn]

Oh there's a very good reason why the German carmakers are only now just getting started:

http://www.spiegel.de/international/business/german-governme...

In short, German carmakers' historical expertise in designing good internal combustion engines are worthless if electric cars take over. The auto industry is ripe for some serious disruption.

[merb]

btw. mercedes buys the batteries from asia and their engine did come from tesla, however they broke up and now they have a new partnership which helps them. german manufacturers have no interest in selling electric vehicles to the masses.

[gutnor]

Before automaker were only focusing on the fully urban, second car. The like of Nissan Leaf, Renault Zoe, even BMW i3.

Tesla has opened up a slice of the market the traditional maker didn't expect would work: primary car. This has a feel of Apple with iPhone in 2007.

Even if Tesla ramp up tremendously and try getting in every car segment simultaneously, they will not have the capacity to provide all the cars that people are looking for, so the rest of the companies will likely continue to provide the bulk of the car market. Which is not a negative for Tesla, the market is simply enormous: it would take Tesla to produce over 2 million cars per quarter to even get over the single digit market share.

The biggest risk now for Tesla is not being able to reach critical mass fast enough. I can understand their valuation and their need for cash. I can understand the shorters too, unlike the smartphone market, car purchase has at least a 4 years cycle and even in the first world, a car purchase is one of the biggest investment.