[BoorishBears]

It's hilarious reading comments like this.

The car companies that have the supply chains, the know-how, and now the motivation to electrify (the key component previously missing), will somehow defer to Tesla to build their platforms.

If Tesla can figure out how to turn their market cap larger than every other automaker into basic spare parts availability, that will be a starting point.

-

Also FYI, 2 out of 3 luxury manufacturers you mentioned already do that with established auto manufacturers

The Maserati Ghibli platform can trace its roots to the Chrysler LX platform like most FCA products and is intermixed with Chrysler/Jeep parts

Lamborghinis share platforms with various Audis

Only Ferrari is really putting out really independent platforms

[mhh__]

I imagine Ferrari customers in particular would enjoy Silicon Valley chic and startup-quality fit and finish of a Tesla.

[stcredzero]

I upvoted you. Tesla did indeed deserve to be called out for this. According to Sandy Munroe, they seem to have learned this lesson, though.

[rasz]

You would think that, yet this is what you get from Tesla in 2020 in NY https://www.youtube.com/watch?v=6Pg7JmKElUw

[OnlineGladiator]

> The car companies that have the supply chains, the know-how, and now the motivation to electrify

The car companies supply chains are set up for ICE, not EV. Likewise, their know-how is also for ICE, not EV. It's like saying Kodak was in a prime position to take advantage of the digital camera (which they invented), but it was actually the opposite - they'd spent decades optimizing around a separate core technology and couldn't change until it was too late.

I'm not a fan of Tesla for a myriad of reasons and I love cars. But the notion that traditional car companies can magically start cranking out profitable EVs (Tesla made most of their money from tax credits which are essentially gone now) is laughable.

[jeeeb]

> But the notion that traditional car companies can magically start cranking out profitable EVs (Tesla made most of their money from tax credits which are essentially gone now) is laughable.

That seems to be exactly what a lot of traditional car makers are doing though. Ford, Audi, BMW, VW, Hyundai, Renault, Nissan, Mazda all have or are adding EVs to their range, and that’s just off the top of my head. They seem to expect profits to reach similar levels to ICEs as well: https://europe.autonews.com/automakers/automakers-finally-se...

Similarly Honda have announced they’re going to phase out ICEs by 2030 (iirc). Toyota just announced around 10 billion dollars of investment to expanding battery production to 33x current levels and 5 billion in battery technology R&D.

Digital cameras destroyed Kodak’s business model of selling film. For car makers though selling EVs is essentially the same business model as selling ICEs. They sell cars not particular types of drive chain.

Tesla is now well established as a luxury car brand but I think smaller EV startups are about to be washed out by competition from traditional makers. Smaller traditional makers will likely struggle to make the investment required to make the transition though. There’s likely to be a period of industry consolidation.

[AnthonyMouse]

> It's like saying Kodak was in a prime position to take advantage of the digital camera (which they invented), but it was actually the opposite - they'd spent decades optimizing around a separate core technology and couldn't change until it was too late.

Their problem is the same one as Kodak, but it's not that they're too optimized for the legacy technology. It's that they don't want to give up the cash cow.

Digital cameras don't need Kodak film. Electric cars don't need oil changes from the Chevy dealership.

GM absolutely can make electric cars. They don't want to, because that's the end of their service business. It's the end of people buying a new car because their old car won't pass emissions. It's the end of people spending $2500 to put a new transmission in their $8000 car.

All they get instead are battery replacements, but the cost of a battery replacement is mostly the cost of the battery, not the labor. And batteries are a fungible commodity, so they have to compete on price with Panasonic and LG and they won't get anything like the margins they currently get for engines and transmissions.

They don't want this so they drag their feet. In the meantime it's an opportunity for competitors to eat their lunch.

Whether they get on the ball in time to not become Kodak remains to be seen.

[bluGill]

> Electric cars don't need oil changes from the Chevy dealership.

The car manufactures have nothing to lose from the loss of oil changes, only the independent dealers.

> It's the end of people buying a new car because their old car won't pass emissions. It's the end of people spending $2500 to put a new transmission in their $8000 car.

Most cars are replaced because the lease was up on the old one. Even way down the line, most places don't have emissions testing for old cars: the car is replaced because the parts wear out. Ever seen a car with 250k miles on it - don't use the door handle to close it, it will just break off more, just ignore the worn spot on the seats, the AC will work for another two weeks if I recharge it - the above is real from my last car - a small number of all the little things (and it still ran great)

Transmissions are generally rebuilt by a third party.

> All they get instead are battery replacements, but the cost of a battery replacement is mostly the cost of the battery, not the labor.

NO, the cost of the battery is they have the ability to replace it. Either you replace all the individual cells (if 18650 a lot of labor - and you need a new chargers for the new chemistry), or more likely the manufacture is keeping everything around to make it even though the car it went in is out of production. Either you are paying for labor, or paying for a battery assembly process for an obsolete car. Third parties might do this for popular cars, but you never know when you buy a car if that battery platform will be used enough for someone else to start production when you need it.

[chipotle_coyote]

> Most cars are replaced because the lease was up on the old one.

From a bit of cursory research just now, only a quarter to a third of new cars in the last few years in the US have been leased rather than purchased, so I'm pretty sure this is not true. (Of the folks I know who've leased cars in the past, about half of them actually bought out their lease at the end, too, although obviously that's anecdotal.)

I think the rest of your comment's on point, I just think you're underestimating how many people treat cars closer to the way you apparently do. :) While this is again an anecdote, when I traded in a Mazda 3 after eight years, I was surprised at how many friends and acquaintances I talked to -- including other folks right here in Silicon Valley, making more money than I am to boot -- reacted to that as "only eight years?"

[hindsightbias]

> quarter to a third of new cars

Someone who has built a company with complicated long logistical tails, deep R&D, high fashion and is looking for a recurring growth industry might think of a way to do that with cars.

$500/month from 10M drivers in the US would add at least another $1T to the APPL valuation.

[stcredzero]

The car manufactures have nothing to lose from the loss of oil changes, only the independent dealers.

The dealers' incentives are going to play some significant role in legacy EV sales. VW dealers were actively steering buyers away from VW's EVs. Also YouTuber "Tesla Economist" has been doing an informal survey by calling legacy auto dealerships and inquiring about EVs. Apparently, legacy auto dealers are now marking up EVs by $2000, $4000, in one case by $13000! (The Ford dealerships are steering callers towards EVs now, so at least Ford has that going for them.)

The loss of oil changes is going to have some not-insignificant effect on the auto servicing industry. Clearly!

[bluGill]

EVs obey supply and demand, they only mark cars up if they can sell them that way.. they will of course steer people to what makes more money for them.

[fomine3]

I don't hear much "Car dealers sucks" argument from outside US. I'd like to see other countries' situation.

[BoorishBears]

> The car manufactures have nothing to lose from the loss of oil changes, only the independent dealers

The dealers and the manufacturers are a symbiotic relationship.

If the service department stops being a cash cow, is the manufacturer supposed to give up more of their margin?

Because the dealers are independent just enough that if they decide to fold, the manufacturer can't just swoop in and keep everything running.

Right now people don't appreciate how happy the manufacturers are to sell the car to the dealer and take their money. If a car sits on the lot for a year it's not their problem (unless all of them do that is and there's no room)

Service departments and Finance departments are the two things that keep that relationship going. Right now part of the resistance to EVs from dealers is also likely the potential buyers.

You can guestimate EVs have a 10k premium over comparable ICE vehicles right now going based on a base Model 3 vs a Camry. The people who have money for that premium likely have better credit scores and can't be hit with extremely lucrative subprime rates.

Someone with an 800 credit score won't let them tack on a 3% finance reserve to their 1% loan, but someone with a 650 score being told their rate is 11% isn't going to question why it's so high...

Honestly this stuff is way more complicated than HN tends to assume. There are so many forces at play here that trying to make statements like "maybe tesla will make cars for all the other brands" is never going to be realistic.

> Transmissions are generally rebuilt by a third party.

This is an aside, but transmissions are often replaced by a dealer. Most places will not sell the average person on rebuilding their transmission lol, that sounds like a relic of yesteryear. Today a used replacement would be the middle ground offered for an out of warranty owner.

[bluGill]

> This is an aside, but transmissions are often replaced by a dealer.

Really? I mean I know dealers do some transmission work, but everything I can tell says that transmissions generally will last far beyond the warranty.

By the time it is time to do something the car is on the 3rd owner. Very little of such work is done by the original dealer. (though in the case of some heavy trucks transmission wear is common enough that the dealer will automatically rebuild every single one they take in - but these are not the original manufacture dealers but an independent used dealer) Most will go to an independent transmission shop, even smaller dealers will take a car needing transmission work to an independent shop because that is specialty requiring training they don't give their mechanic.

Even at that, transmissions have enough non-wear parts that the manufacture will rebuild them in general. There is a reason when you buy a transmission from anyone there is a core charge: they send it back to be rebuilt.

[BoorishBears]

Like most major components in cars these days if it fails early, it's likely a common manufacturer defect.

Nissan CVTs for example, are known to die multiple times before 100k. Nissan even bumped up the warranty to avoid a proper recall.

People are offering rebuilt transmissions, but like you said the average individual is at most going to use their transmission as a core for a rebuilt one that very specific places make.

The dealer isn't going to point them to a transmission shop (or take their car to one)

[AnthonyMouse]

> The car manufactures have nothing to lose from the loss of oil changes, only the independent dealers.

The car manufacturers sell their cars through the dealers. If every time they make an EV, the dealerships don't order them and steer every customer away from buying them, that's just as much a problem for the car manufacturer.

> Most cars are replaced because the lease was up on the old one.

The leased car still goes to someone else who then needs to service it.

And if the old cars start lasting for 40 years instead of 15 then the value of just off lease cars goes down due to increased supply, which makes leasing more expensive to offset the loss of resale value, which makes fewer people buy new cars.

> Even way down the line, most places don't have emissions testing for old cars: the car is replaced because the parts wear out. Ever seen a car with 250k miles on it - don't use the door handle to close it, it will just break off more, just ignore the worn spot on the seats, the AC will work for another two weeks if I recharge it - the above is real from my last car - a small number of all the little things (and it still ran great)

Nobody replaces the door handle on an ICE car with 250,000 miles on it because they know the powertrain will give out in another 10,000 miles and then the car will be scrap.

But batteries don't work like transmissions. As they go bad they have 150 miles of range instead of 300. For many people that's enough and they'll drive the car that way another five years, and then it's worth replacing the door handle.

Meanwhile battery prices are falling like a rock. The lower they get, the older the car is before it has to be scrapped because a new battery is too expensive.

> Transmissions are generally rebuilt by a third party.

Transmissions can be rebuilt by a third party. That doesn't mean nobody goes to the dealer or buys a new transmission from the carmaker.

> NO, the cost of the battery is they have the ability to replace it. Either you replace all the individual cells (if 18650 a lot of labor - and you need a new chargers for the new chemistry), or more likely the manufacture is keeping everything around to make it even though the car it went in is out of production.

Carmakers have the incentive to standardize this. If every GM EV for twenty years has one of two or three different battery packs, people will be making those indefinitely.

Meanwhile the labor of replacing individual cells in old batteries will happen in countries with lower labor costs because it isn't labor that has to happen at the repair site.

The result is that remanufactured batteries could end up being very inexpensive.

[DrJokepu]

> The car manufacturers sell their cars through the dealers. If every time they make an EV, the dealerships don't order them and steer every customer away from buying them, that's just as much a problem for the car manufacturer.

But that's not how cars are sold, at least not in the United States. Manufacturers don't leave it up to the dealers to decide what vehicles they can push and what vehicles they can steer customers away from.

Dealers get a vehicle allocation. Some of the allocated vehicles are cars that are easy to sell. Some of the allocated vehicles are cars that aren't easy to sell, but the manufacturer wants to push them. If the dealer wants to get more of the cars that are in demand allocated, they need to push the models the manufacturer wants them to push.

[BoorishBears]

Do people realize how little of a modern car's complexity is the powertrain?

The eTron was built on a rework of the Audi platform that's in twelve ICEs before hosting it's first EV.

I mean, there's a reason the manufacturers will give you a 100k mile powertrain warranty, but won't cover a broken cup holder past 40k.

ICEs have been iterated to the point of boredom. Most engines today are 3rd or 4th generations of their original designs with emissions improvements and moderate power gains.

Making flexible platforms, having a supply chain that isn't so starved they're actually able to provide parts post-sale (current global woes notwithstanding), things like that's...

That's what make the notion that car manufacturers suddenly can't make cars just because the powertrain changed is what I find laughable.

-

Actually, funnily enough people don't realize this has actually happened before.

1970 Clean Air act and the 1970 oil crises might as well have been a "reset" in powertrain development.

Many cars could no longer exist as they did, and manufacturers had to adjust to a completely new market, with new competition from efficient overseas competitors (who's efficient-focused powertrains previously had no place)

Sound familiar?

Some companies that were already floundering did fold. American Motors died off and Chrysler picked up the pieces.

But for the most part the industry adjusted and moved on. Because at the end of the day the powertrain is just that, the powertrain. It's supposed to be boring for the manufacturers because people will put up with a infotainment system that can't play video games when you're parked, but they won't put up with an engine that works when it wants to.

[Matthias247]

I've worked at a major automative company in a R&D org of 5k people. Nothing in our org was "set up for ICE", and none of the suppliers would have been specialized for that. Keep in mind that a motor is only one part of a car, and even if you add other drivetrain related parts (exhaust, transmission, etc) it might barely end up as 33% of a car.

Infotainment is pretty much independent of the engine (apart from some icons/visualizations/settings here and there), as are most driver assistance systems, safety systems, anti-theft, chassis, mirrors, lights, wheels, brakes, doors, trunks, etc.

[stcredzero]

...Nothing in our org was "set up for ICE",...

Infotainment is pretty much independent of the engine (apart from some icons/visualizations/settings here and there), as are most driver assistance systems, safety systems, anti-theft, chassis, mirrors, lights, wheels, brakes, doors, trunks, etc.

From what little bit I know about testing of automotive systems, there is a vast warren of disconnected, diverse microcontrollers and separate communications busses in the typical ICE vehicle from several years back.

Tesla turned this all on its head. Just about every system with software in a Tesla vehicle can be upgraded by a car's central computer through an over the air update.

Exactly the situation you describe above is what some would naively term, "set up for ICE." It's set up for the legacy ICE world, where there were no over the air updates, and the car wasn't a computerized robot on wheels. This legacy can be seen in the failed updates coming out of GM and Ford. There have been reports of legacy auto updates requiring buyers to go back to the dealership, but then the dealers are afraid to apply the update, because they experienced "bricking" the vehicle.

[detaro]

naively, yes.

Those developments are basically unrelated to ICE vs EV, at least from what I've seen. Car companies are working on that in ICE models too (and tried before they announced EVs). Car companies make EVs that don't have this kind of integration, and will continue to do so. Some probably have decided to align it and develop it in parallel for EV models only, or at least pretend to do so for marketing reasons, but it's not a fundamental property of either/or.

"Having" to do both now of course doesn't make life easier for car companies, many of them still struggle very much with this "software" thing, and it shows.

[vineyardmike]

> Tesla turned this all on its head. Just about every system with software in a Tesla vehicle can be upgraded by a car's central computer through an over the air update.

They could do this with ICE couldn't they? What does that have to do with EV specifically? It seems it just adds to the lore of Tesla - The Tech Car

[stcredzero]

They could do this with ICE couldn't they? What does that have to do with EV specifically? It seems it just adds to the lore of Tesla - The Tech Car

Actually, ICE is quite significant in the degree of computerization Tesla can achieve. Since engine compartments can get very hot, ICE manufacturers have to use slower, specially hardened chips in such spaces. The Tesla cars, being EVs, don't need to do this. This results in more computing resources and less expensive components.

Granted, the other manufacturers could do this as well. But this should cause us to ask, why haven't they? Even GM and Ford haven't been able to achieve the kind of integration Tesla has. That warren of diverse microcontrollers and systems is associated with a warren of supplier relationships.

So, maybe it does have more to do with being "The Tech Car" -- but isn't that even more powerful and tied to the principle of disruption than just being electric?

[fomine3]

Some ICE car receives update for ECU and of course for infortaiment system, so it's not EV specific feature.

[bluGill]

Most of the car supply chains are the same for EV and ICE. Still the same radio, windows, seats, tires... Yes ICEs are complex but they are not the only complex part.

All Kodak shows is that it is possible to not use your prime position. Sometimes companies fail to transition, sometimes they don't. Only time will tell.

[andechs]

A EV is a much simpler device than a ICE - it's a battery and an electric motor, it's much simpler than mechanical power. Gone are oil pumps, transmissions, etc.

On top of all this, you can now route power through electrical wires, rather than needing an accessory belt to distribute mechanical power to the A/C, oil pump, power steering etc.

The electric car's tech advances are mostly in the battery technology (and vapourware "Level 5 automation in 2019"). Tesla will have a unique differentiator in battery tech and production, but it's not crazy to retool an existing ICE manufacturer to EVs.

[stcredzero]

Gone are oil pumps, transmissions

Sandy Munroe did a disassembly of an EV motor oil pump just a few days ago. (In fairness, he also notes that one manufacturer has done away with this oil pump, and uses the heat pump instead.) Also, some EVs also have transmissions.

[matthewdgreen]

I don’t know what supply chains the legacy automakers have, but it sure feels like they’re having trouble sourcing efficient batteries.

[BoorishBears]

Are they? Or are they making cars that are less efficient, regardless of battery tech?

The Taycan for example, is clearly not focused on being as efficient as possible. It's an opulent car with all the heavy soundproofing and insulation people buying these types of cars expect.

The Mach E is probably the most normal looking EV suv, and it's Cd ends up being the highest of the bunch despite not even having door handles.

I don't think efficiency is the big win people are acting like it is. Just like there are gas guzzlers and econoboxes that get miles and miles per gallon, there will be more or less efficient EVs.

Efficiency by itself is not going to be a differentiator forever because past a certain range figure, most people's needs are met. From there "splurging" an extra 5 cents per mile to have their preferred car is not a problem

[matthewdgreen]

I'm referring more to the poor production numbers and long delays. Efficiency is relevant insofar as manufacturers with less-efficient technology may need more [and more expensive] battery cells to build competitive cars with comparable range (which the market does demand), and this exacerbates the supply shortages and lowers the profitability of the resulting vehicles. Of course I'm assuming that batteries are a major part of the blocker here -- if not, something sure is.

ETA: What I'm trying to say is that existing automotive supply chains may not be a massive advantage, if the relevant supply chains are battery/motor tech and Tesla has developed the best supply chains for those specific technologies.

[BoorishBears]

That's definitely never been what battery efficiency meant in the EV space, but ignoring that...

>something sure is [the blocker]

Yeah, they didn't want to lol. It's exactly what I said above, they didn't want to go all-in on EVs so they didn't. I know people don't want to accept it's that simple, but that's good old organizational inertia.

Like a rolling boulder, once it slowly picks a new direction, it's not going to lose that momentum either

> if the relevant supply chains are battery/motor tech and Tesla has developed the best supply chains for those specific technologies

So Tesla theoretically has the "best" supply chain for the powertrain (that's questionable)... and the rest of the car?

Batteries and motors are the easiest place to be behind. The raw capacity using "behind" tech can be smoothed over with eating some margin.

But the rest? Even simple body panel availability had eluded Tesla before COVID gave an excuse for it. And that was after 7 years of production! It's unheard of in the industry.

Tesla's supply chain is not anyone's envy in the automotive industry. The only force that can stop major manufacturers from staying competitive just because we changed the engine cars use is their own reluctance, and all signs (and money) point to that no longer being the case.

[_ea1k]

I don't know why he used the term "efficient batteries". I don't really know what that means and basically agree with you. Ford doesn't have great driving efficiency, but it doesn't matter as they've solved for that by using a really big battery.

However, they seem to be severely limited in production capacity due to the limited number of cells available. Right now, everyone other than Tesla seems to be hitting that issue, and Tesla is at least a year ahead. More if they can actually get the 4680 lines running on schedule, but that's a big if.

[fomine3]

So using too much battery for car (or shortage of gigafactories) is current primary problem because EV production is constrained by battery supply, isn't it?

[_ea1k]

Yes, but "too much battery for car" is subjective. The Mach-E has more range than its closest competitors, so they could have used fewer cells and remained competitive.

[matthewdgreen]

There is enough battery capacity to build plenty of Ford Mach-E's. But Ford can't afford to spend $100,000 to manufacture a $50K car, nor can they use recycled laptop batteries that make the car 1000lbs heavier. The problem here is sourcing batteries that are weight- and cost-efficient, and Tesla has been investing heavily in the production of such batteries.

[while1fork]

Koenigsegg does almost everything and has a lot of unique features like all carbon wheels.

[stcredzero]

The car companies that have the supply chains, the know-how, and now the motivation to electrify (the key component previously missing), will somehow defer to Tesla to build their platforms.

That takes some doing, as GM is finding out with the Bolt EV catch-fire recall, costing them many 100's of millions. Even if they can source the batteries, and get to a minimum level of quality and dependability, they will probably still be far behind in terms of margins, power density, and efficiency -- for several years at least.

Also FYI, 2 out of 3 luxury manufacturers you mentioned already do that with established auto manufacturers

Indeed. And at this point, Tesla is the most established EV manufacturer.

[BoorishBears]

Lol those brands didn't randomly go to those manufacturers, Maserati is owned by FCA/"Stellantis" and Lamborghini is owned by VAG.

I can't believe people are seriously entertaining the idea that a major auto manufacturer would need Tesla to make cars for them.

At that point what is the manufacturer bringing? Tesla's totally-not-marketing has brought them more cachet than anyone "boring" like Ford or Toyota

[stcredzero]

I can't believe people are seriously entertaining the idea that a major auto manufacturer would need Tesla to make cars for them.

The trend I see, is that the more people know about what it takes to mass-manufacture an EV, the more they expect that legacy auto companies are going to turn to another manufacturer for the battery pack and the drivetrain.

At that point what is the manufacturer bringing?

The strength of the brand. It's hard to deny the brand strength of Ferrari, Rolls-Royce, Maserati, and Lamborghini. People will pay ridiculous markups to own brands like that. This opens up the margins such companies would need to survive.

Tesla's totally-not-marketing has brought them more cachet than anyone "boring" like Ford or Toyota

Does Tesla have the equivalent cachet of Lamborghini? It's debatable, I think.

[BoorishBears]

Luxury car brands are not major auto manufacturers by themselves, they're owned by them.

A Rolls-Royce is a BMW. My M4 had RR chimes in it's hidden configuration settings.

A Lamborghini is (usually these days) an Audi. The Urus is a Q8 and the Huracan is an R8 (or the other way around, hard to keep track at this point)

A Maseratis has an infotainment system out of a Jeep Cherokee and shares transmission bugs with a Chrysler 300

Their brand cachet doesn't matter to this conversation because they're not the ones who control its application. The "boring" parent company will.

And why will the parent company do that for their ultra-luxury brand that's all about image and not their normal cars? They won't.

So the parent company needs to have a reason to go to Tesla.

-

A skateboard is not just a drivetrain, it's the entire platform.

Manufacturers have just spent millions and billions in R&D to develop modular platforms that can do things like transition from ICE to BEV without feeling like an electrified ICE.

They're going to throw that away? Because their margins on batteries aren't quite as good as Tesla?

Lol if that's the case I think the last thing that helps margins is having someone else provide the whole platform.