Well, to be fair, there are only a handful of model “types” in the first place. Sedan, SUV, Minivan, Pickup, sports car, convertible, and, uh, motorcycles? And yet there are hundreds of manufacturers making thousands of variations, most of which sell profitably based on trim lines, style, and the other unique features from which customers choose. (I acknowledge that in 1910 America, and in 1970 East Germany the choices were fewer).
But it’s true if you don’t want to own the vehicle you won’t care as much - although there will still be plenty of people who do, which is why Hertz rents small, medium, large, and Enterprise rents pickup trucks and box trucks, and certain rental companies rent high end performance cars and some do the rent-a-wreck thing. Consumer choices abound! Very very not “one size fits alll”
Oh, I don’t think you’re arguing for just one model. You’re still wrong by claiming that companies would be better off with only a handful of models.
Again, look at Toyota. Six models will cover the lion’s share of their customers…under the Toyota brand in the U.S.. But European customers have different preferences. The larger part of their sedan market is the A- and B-segment, which is smaller than the Corolla. Which is why the Yaris is a bigger seller there. And luxury buyers have different preferences still - which is why Toyota also makes a luxury model of their sedans and SUV’s under their Lexus mark.
And even though six models might cover the majority of your customers, you still want to have models to cover the substantial number of customers that don’t want one of those six models. Toyota offers the Sequoia, and not just the RAV4 and Highlander, because there are some customers that want/need a bigger SUV than the Highlander; they offer the Corolla Cross because there are some customers that want/need a smaller SUV than the RAV4.
I mean, sure - if every automaker agreed that they would only make six models (and no luxury versions), it would be easier for automakers. But that’s not going to happen. If you only sell a single small and large version of a sedan, then competitors are going to come along and offer a smaller version, an in-between version, a larger version…and then luxury versions of all of them, often under a luxury mark. And they’ll sell slightly different models of those cars in different countries, because the preferences of Japanese car buyers might be different than those of American car buyers. So even though it might be easier for you to just sell six models, your competitors won’t rest on that - and they’ll eat away your marketshare. A multiplicity of models is the result of active competition among automakers to try to lure customers away from other brands - and one tried-and-true method for doing that is to offer them a variety of different products.
In the end, it all depends on the assumptions you make. And then as time progresses we see how well those assumptions held up.
I wouldn’t have believed that people outside of large cities would ever get into random cars for rides hailed by an app. But many do. And, yes, for now it is mostly the young and the old and the drunk, but more and more those services are used by others (people dropping their car off for service, doctor visit in areas of tough parking, food pickup, etc).
Now we can do a thought experiment. Let’s say there are some families in suburbia where it could be possible for two families to share one car. Now that isn’t done today for myriad reasons - someone has to actually own it, insure it, maintain it, drive it, keep it clean and orderly, etc. And let’s say most of that could be overcome somehow, they still need a driver, and a driver could cost $70-80k a year minimum. So those two families could buy one car, let’s say for $40k, but would have to pay $70-80k a year for a driver. Nobody will be doing that. So now for the thought experiment - let’s say the “driver” becomes a $10k/year software license? Would more people do the above? Maybe. How many more? But still not a huge number of people most likely. Now let’s further say that the two families don’t have to buy the car, and instead a third-party owns the car, and pays the $10k license fee, and instead charges a per ride (or an all you can eat) fee? Would more people do it? Probably. How many? Again, all depends upon the assumptions - how much will it cost? How quickly will the car be available to me? What about peak periods? (all kids being brought to school at 8am or so) Will they charge more for peak periods? Will there be a peak period extra charge if I have the all-you-can-eat plan? Will there be different levels of all-you-can-eat plans? Etc. But the base question is - is there a value proposition here that can make this a real business? And the answer to that question is still “maybe”. Now, in some Asian countries, where labor is still relatively cheap, many affluent people have full-time drivers that they use to drive them around, and they do that for a few benefits - one, parking, if you have a driver, you don’t have to deal with parking, ever. Two, they need to show people that they are affluent, and this is one way to do so. Three, convenience, for example, all the expats I knew in Hong Kong with kids, used their driver to bring the kids to school and then come home to bring them to work, and then go home again to bring their spouse to shopping/errands. Reverse in the evening.
40% of all households in London still own a car.
In NYC, it is about 45%.
Tokyo has roughly 41% of households that own a car.
People in Hong Kong (not households) report about 32% ownership.
In all these densely packed cities with really good mass transit and where owning a car is absolutely more expensive, a large percentage of households/people still own a car. Even if TaaS eventually increases that difference in cost, it seems unlikely to change this behavior.*
*Absent regulatory incentives like what London recently did.
I think the challenge for something like this in suburbia is Surge.
In most two parent households, both parents work. The amount of surge demand that would required to fill - every day, 5 days a week, twice a day, seems exceedingly unrealistic.
In my local xburb, the population is 24k. Lets assume 75% of those household are two car households with two working adults ~ 18k people or 9k potential extra cars. Let’s assume a two hour rush hour window for which there is a one hour round trip time (my drive to work is right at 25 minutes). That means that just for my little xburb, a company would need a fleet of roughly 4500 cars to handle full replacement of just those drivers.
There are probably 30 xburbs in and around my local major municipality and mine is likely one of the smaller ones. So now we are talking a fleet of over 100,000 robotaxis for my large midwestern city - just to cover the burbs.
No xburb resident is going to give up their second car if they can’t consistently with near 100% accuracy know that they can get to work on time every day and they are very unlikely to be willing to leave home early to make such a service work - especially when many workplaces would not be open early enough for the employ to enter and wait for their day to start.
Edit: I realized after the fact that my math was off as the 24k number is all residents, including children so if I am generous, we could cut the following numbers in half (i.e. 2350 cars for replacement, over 50,000 robotaxis needed for the surrounding suburbs).
Still a massive amount of metal needed to cover the surge.
While we’re on the subject, Tesla will have to recall slightly less than 3,900 Cybertrucks due to “accelerator pedals that can dislodge and cause the vehicle to unintentionally accelerate, increasing risk of a crash.”
No problem. Pretty sure it can be fixed with an overnight software update.
In other good news, the Cybertruck finger guillotine is still functioning properly. Men, you may not want to drive the Cybertruck naked. Just saying.
I get that you don’t believe it. You may be right. But I think it would be a great thing if it happened. Disposable wealth for the masses would increase substantially with less car ownership costs. The money save on car insurance alone would be significant. Homes built on the same acreage could have more living space. Cities could be built for higher density living with less need for parking. People might be inclined to walk more.
If done correctly TaaS might actually help public transportation by making it easier to get to and from that metro rail station.
Here’s a vision of the future. Tesla partners with BP for their robotaxi service. Robotaxis park at BP stations on wireless charging pads until called, this way they don’t have to cruise around empty or take up public parking. The BP stations have solar panels and Megapack batteries for cheap electricity. The collection of BP-Tesla stations in a city are linked as a Virtual Power Plant to provide peaker power for utilities. These stations can also sell gas to the dwindling number of people still driving hybrids because of range anxiety.
It might even be a good idea for cities to partner with Tesla to put robotaxi parking sites next to major metro rail stations to help public transit users get home.
Not just easier. If simplifying the product line substantially reduces production and supply chain costs one could sell models for much less than the competition. Consumers like to save money. Know lots of younger folks who bought a Corolla even though they really wanted a Range Rover because of costs.
Sure - but as with all things, there’s a trade-off between lower production costs and meeting consumer demand. Car makers could offer their vehicles for a lower price if the only color they offered was black. But every carmaker offers their cars in more than one color. Because they’d lose more sales to competitors from having only a single color than they could regain by the lower production costs.
So sure, if Toyota killed the Corolla Cross and just offered the RAV4 and Highlander, it might allow them to lower the price on the RAV4 and Highlander slightly (not “much less”). But then they wouldn’t have a car to offer to people who are looking for an SUV that’s smaller and cheaper than a RAV4. After all, the base Cross is about 20% cheaper than the base RAV4…and consumers do like to save money. Which is why Toyota goes to the expense of making that additional model - so they can get the customers who aren’t willing to pay for the RAV4.
Robotaxis should mostly be occupied carrying people to destinations. They likely will need little parking until mid/late evening, when most people are not “out and about”. Then they can queue for charging and be ready to start in the early AM (if they are not doing other deliveries at night).
Here is how I read that:
Robotaxis should mostly be occupied carrying people to destinations during morning and evening rush hours and most of the rest of the time partially to highly unused, especially from 10pm to 5am. (special events like a concert might be an exception)
I see lots of trips during the day. People going out to lunch and back. Taking students to/from school, which overlaps rush hour (AM and PM). This gets more interesting with 4-day work weeks AND 4-day school weeks. That leaves three days available for another group of workers who would work 10-12 hours/day on those three available days the offices are not used by the 4/40 personnel. Could be two 10-hour shifts per day, 7 days per week too. Talk about office productivity and efficiency…
Delivery services as needed. IMO, there is far less unused time for a robotaxi than most people realize unless the number of vehicles is massively over-estimated.
I’m pretty sure Uber usage provides a reasonable roadmap. Busiest times: Friday and Saturday evenings. Also high use: afternoon rush hour, and early morning rush hour. Other times slow, but perhaps useful for package deliveries (if you can figure out the last 100 ft problem).
“The Rideshare Guy” gives you tips. (And no, where Teslas have been driving is totally irrelevant.)
These guys are Billionaire VCs who discuss potential investments.
Here, beginning about 41:30, they discuss the POTENTIAL for a Tesla-Uber ride-sharing arrangement.
They give their thoughts on hailing, cleaning, charging, insurance, and more.
Elon Musk Lost Democrats on Tesla When He Needed Them Most
Some potential Tesla buyers couldn’t stomach a purchase amid the CEO’s fall outbursts, data suggest
“For years, the biggest cohort of [Tesla] buyers, politically speaking, has been Democrats. But when [Elon Musk] took a hard turn last fall, they didn’t follow him.
The proportion of Democrats buying Tesla vehicles fell by more than 60%, according to car buyers surveyed in October and November by researcher Strategic Vision.
Tesla has since made up ground with blue buyers, the research shows. But the dramatic drop highlights the risk hanging over Tesla with an increasingly political chief executive, at a time when electric-car makers are already struggling to appeal to many Republican buyers.”
Recently a participant in a conference call said Musk’s antics were causing Tesla to lose customers. Musk called him “an idiot.” What do you do when your CEO goes full nutso? Give him a 55billion dollar pay day, I guess.
About a year ago, still 6 months ago, I believed that Tesla really had the engineering prowess to make ever improving cars and a next Gen 25K ish car for people like me.
The ridiculous claim of freedom of speech for Twitter, I could sorta ignore.
But, it kept getting worse. Oh, nutcase conspiracy ideas were now, really important. Previously, the world typically ignored these.
I can’t remember accurately, wasn’t there a Master Plan laid out 6 months ago about the new super advanced process to make the Holy Grail, affortable EV for the masses. That, Elon’s idea of a no-steering wheel next gen was too much, his sober engineers convinced him that Elon’s dream could be actualized by doing a driving wheel version 1st. I remember, now, the black jeans, black T-shirts on the Tesla executives at the CC.
Ridiculous, come clean, own up, explain how you screwed up, and what you’re now going to do.
…and I saw my 1st CyberTruck, finished all black at Univ. ST. Thomas, Houston, TX, today.
When accused of being inconsistent, John Maynard Keynes replied,
When events change, I change my mind. What do you do? When the facts change, I change my mind.
The new super advanced process is called the unboxed method and both the affordable EV for the masses and the no-steering wheel next gen Robo-taxi can be built in the same unboxed plant, now being built in Texas instead of in Mexico. The change in location also has a logical reason. Elon wants the engineers to work at the plant where the cars are made and it is unlikely they want to move to Mexico. Old Arab proverb, “If the mountain won’t come to Muhammad, Muhammad must go to the mountain” .
### [Tesla’s $25,000 car means tossing out the 100-year-old assembly line]
The automaker is moving to what it calls an “unboxed” approach, which is more like building Legos than a traditional production line.
It turns out that it is not “new.” Ford used it at the Willow Run Bomber Plant
I confess to not understanding what the hoopla is, having tried to digest both written stories and videos about this “revolutionary” approach. That’s because assembling sub-assemblies has been part of the production process since forever; heck, the wooden wheels on the first Model T weren’t put together on “the assembly line”, they were made in a separate shop and delivered for final assembly. Likewise, Boeing aircraft are made in parts and are bolted together at the end, and I’m pretty sure the dashboard in a conventional car is “unboxed” somewhere else and then the entire assembly put in place as the car comes down the “final” assembly line.
I’m sure there’s more to it than I am understanding, otherwise why all the hoopla? But I confess to being lost at the party.
Speaking of, I saw mine, too. As I posted before I was at “Cars & Coffee” in Knoxville, an annual event where people come to the big mall with their cars - of any flavor - and park and kibbitz. Some roar their muscle car engines. There was a half a row dedicated to tiny Japanese work trucks like the Dihatsu’s and similar. Adorb, they were. Some bring Formula One cars. A couple brought restored antiques from the 1920s.
Anyway, my row was EV’s: I had my Ionic 6, next to me a Kia 6, a couple of Chevy Bolts, two Porsche electrics, two Jaguar electrics (gorgeous interiors) and at least a half dozen Teslas in all three configurations. We were supposed to be there by 6:30, with the event starting at 8 am. Around 9:30 the Tesla truck came in, late of course, followed by an enormous gaggle of people (and I mean, like the Pied Piper enormous) walking along behind it. He tried to back into a single slot in our row but that was a non-starter (too big, even with rear wheels that turn to shrink the turning radius), and we found him a double which he backed into to the approval of the crowd.
That gaggle lasted about 15 minutes and then the crowd thinned again, back to normal, and one of the folks who had been at many of these events said “a year or two that’s won’t happen. It was like that when the first Tesla came on display.”
I will tell you this. The guy had owned the truck for 3 weeks (still had temporary plates), and there were already a few tiny rust pits. Fingerprints on the steel abounded, and he told us he had decided he was going to have it “wrapped” for another $4-5000 to get rid of those issues. The size was truly monstrous, more hulking than any pickup I have seen before.
The dashboard? Non existent. Not a single dial or button, just the screen, off to the side of the steering wheel. Very clean. Also not what I would like, but that’s me; I want a few physical buttons rather than having to drill down on a screen, an issue I’ve already run into in my Hyundai even though it has nearly a dozen analog dials and switches.
Rolling the back shield off was slick, like a roll-up desk, except automated. But one of the things I saw - and that others noticed - wa the enormity of the single windshield wiper on the driver’s side windshield. Jeebus that thing must have been 4 - 5 feet long. I would not want to have to replace that blade, like ever.
Anyway, fun time. And saw my first Truck, or whatever it’s called. Terrible for a pickup, I would think. Terrific if you’re a Kardashian and want to be first on your block.
In this pic the Tesla “showroom” (they don’t have “dealerships” Ha!) is the flat building in the upper right. The Cars & Coffee is on the near side of the mall, the far side is relatively empty except for employees of mall stores arriving for work on a Sunday morning. As you can see the event is packed; it’s like Christmas Eve, except only on one side of the mall. And then we all cleared out at 11:00.
