As far as stock prices are concerned it may not matter much how many EV cars are built by incumbents if they are built at little or no profit. Simply replacing profitable gas cars with unprofitable electric ones.
Musk has said that the factory is the key. Building more cars faster at higher profits.
Even at the same production levels Tesla’s factories are more productive. Partly because incumbents have “model years” and introduce improvements less often ,and not while the line is in motion. And must constantly be aware of the effects of change on auto unions.
Sandy Munro says they do, having to join 170 parts adds 170 instances of possible failure. Also, the resultant product is more solid which improves quality (fewer squeaks?).
And Sandy is right. Let’s compare the 4th generation and 5th generation Corvettes. The C4 had a frae with lots of different pieces bolted and welded together. Flex, creak, slight variations, etc. The C5 however used a hydro formed frame rails, a process normally used on only small pieces of metal but GM scaled it to frame-sized pieces. The result was a frame with far fewer pieces, less variation, more stiffness, etc. It was a huge improvement for the car.
The giga casting is the hydro formed process on steroids.
(Read “All Corvettes are Red” to learn more about this, and the development of the C5 Corvette overall. For that matter, for what it takes to develop ANY new car. Very interesting read!)
(yes, all Corvettes are red, the rest are mistakes! Both of mine were red).
It was kind of a consensus that VW and Ford were the two western ICE incumbents likely to survive into the EV era. With VW firing Herbert Diess VW’s changes diminish. Ford made the smart move to split in two, Ford Blue for ICE and Ford E for EVs which reduced the conflict between the two camps.
I appreciate all the replies. I have been eagerly awaiting the Cybertruck. Not because I’m in the market for one, but because I think that electrifying pickup trucks is far more important to U.S. climate policy than electrifying sedans:
If Tesla can do for pick-up trucks what it did to luxury sedans, that would be a really important development for reducing U.S. personal vehicle emissions. But it’s been three years since the reveal, and production isn’t scheduled to start until well into next year.
Since it’s been delayed, letting Ford get some good halo press and a jump on sales with the Lightning, that didn’t strike me as good manufacturing execution. But I can see they’re doing very well with the 3/Y manufacturing, so maybe that’s a problem with start-up of a new model and less executing once the model’s in production?
But I can see they’re doing very well with the 3/Y manufacturing, so maybe that’s a problem with start-up of a new model and less executing once the model’s in production?
No. The entire problem with the Cyber Truck is the styling is so abysmal that nobody wants to buy it. Epic fail.
https://www.france24.com/en/live-news/20220823-lamborghini-h… Italian sports car maker Lamborghini has already pre-sold the entire production run to early 2024, its boss told AFP on Tuesday, with luxury goods seemingly unaffected by global economic uncertainty.
Lamborghini is more of a high priced luxury sports cars than a muscle car. But there still is a demand for such a car amongst the wealthy. While an EV is fast there is no roar of an engine as one goes thru the gears. And the luxury sports car is the last bastion of manual transmissions as they fade into oblivion.
I believe there are 2 types of drivers. The first which are a minority want a connection between their car and the road in which they are in control. The automatic transmission, power steering, & power steering lessens that connection. The rich likely have that need filled by expensive sports cars. Also amongst the rich, restomods are popular. Vehicles that look like classic cars but have modern high hp engines & modern technology-disc brakes-suspension etc & custom interiors. Of course they are pricy as they made individually for the buyer not mass produced.
The vast majority of drivers view their rides as an appliance. An appliance in which reliability & ease of operation are paramount reasons for purchase.
Once the charging speed & availability issue has been resolved & pricing falls, the EV sales will accelerate much higher. The range factor has been solved.
And the luxury sports car is the last bastion of manual transmissions as they fade into oblivion.</I.
Most of the high-end exotic sports cars are automatic only now. Usually of the dual-clutch variety (not the torque converter variety). They just shift too fast and actually make the cars quicker, compared to a human foot-hand combination.
Probably over 90% of the EVs sold to motorhome owners
I think the EV industry can grow a lot before the lack of support for RVers is an issue.
About 500K - 600K RVs sold per year compared to 18M cars.
And only a fraction of those tow a car.
I’m sure at some point someone will make a towable EV.
I think that electrifying pickup trucks is far more important to U.S. climate policy than electrifying sedans: … Since it’s been delayed, letting Ford get some good halo press and a jump on sales with the Lightning, that didn’t strike me as good manufacturing execution. But I can see they’re doing very well with the 3/Y manufacturing, so maybe that’s a problem with start-up of a new model and less executing once the model’s in production?
I agree that addressing the truck market is important in terms of overall fleet efficiency.
It should be noted that the Ford Lightning is about 66 MPGe which is similar to the Rivian (70 MPGe).
The Cybertruck’s official numbers we don’t know yet but is closer to 88 - 90 MPGe based on battery size and range estimates.
I see 3 parties with deep pockets (lawyers, insurance companies, and the auto makers) who will be lobbying Congress and state legislatures to make sure that they are either protected or have access to the courts and thus access to the deep pockets of the insurance and auto companies.
It should be noted that the Ford Lightning is about 66 MPGe which is similar to the Rivian (70 MPGe).
The Cybertruck’s official numbers we don’t know yet but is closer to 88 - 90 MPGe based on battery size and range estimates.
I’m not sure how important the relative electric fuel economies of these vehicles are, relative to the reduction in carbon emissions achieved by switching from the ICE to the EV version of pickups. Especially if we make any progress at all towards reducing the carbon emissions of the grid. That’s not to say that efficiency isn’t important. No doubt a more efficient car vehicle can achieve the same range with a smaller, and therefore cheaper, battery. But in terms of climate impacts, there’s not a whole lot of marginal gains once you’ve swapped out the electricity for gas.
I see 3 parties with deep pockets (lawyers, insurance companies, and the auto makers) who will be lobbying Congress and state legislatures to make sure that they are either protected or have access to the courts and thus access to the deep pockets of the insurance and auto companies.
No doubt. But that’s not going to be much of an obstacle to the ready adoption of AV’s as a technology. No one’s going to delay the roll-out and adoption of AV’s based on uncertainty (if any) about who has liability in the event of crashes. Especially since AV’s are probably not going to be allowed until they can be shown to be safer than the typical sober adult driving in good weather during the daytime (which is why none of the regulators are much impressed with Tesla’s safety claims just yet).
It will certainly pale in comparison to the vastly more direct obstacle of actual government regulation - you know, whether (and under what conditions) the government allows AV’s to operate on the roads once the pilot tests are over.
I’m not sure how important the relative electric fuel economies of these vehicles are, relative to the reduction in carbon emissions achieved by switching from the ICE to the EV version of pickups.
It matters a lot IMO. It means Tesla can sell a pickup with the same range with ~2/3rds the battery, thus making them cheaper or having higher margins, etc. This is important while batteries are a major cost of EVs and ~USA mined battery materials are in short supply. It also matters for how much made in USA battery materials are used to get the full federal tax rebate.
Or they can put in a similar sized battery and get ~50% more range and/or more towing capacity.
It matters a lot IMO. It means Tesla can sell a pickup with the same range with ~2/3rds the battery, thus making them cheaper or having higher margins, etc. This is important while batteries are a major cost of EVs and ~USA mined battery materials are in short supply. It also matters for how much made in USA battery materials are used to get the full federal tax rebate.
Well, that depends on whether there’s a production cost to the efficiency (and if so, how much). If batteries are more efficient, but are more expensive to produce, then you can end up with a pickup with the same range and ~2/3rd the battery and not necessarily make them any more cheaply or have higher margins.
But again, I’m more interested in the public policy impacts than whether Tesla or Ford or Rivian capture more domestic light truck market share - and from that perspective, the delta in CO2 emissions between the vehicles is relatively unimportant. Plus, I fully expect that Tesla will find itself output-constrained on its vehicles anyway - making the price or margins rather irrelevant to how many light trucks end up on the road for the near future anyway.
Thanks - but do those things actually translate into better manufacturing?
The better question from an investor perspective is do those things translate into higher profits?
After watching the videos the captain linked to, it’s certainly an interesting difference in the manufacturing process. And it would appear that Sandy Munro is a bit of a Tesla fan. Of course, the company listening to and implementing some of his ideas isn’t going to influence his opinion of the company in the least. [/sarcasm]
As a non-engineer, I don’t see anything there that other auto companies couldn’t copy pretty easily. I’m sure there would be a bit of a learning curve putting large, comprehensive castings into production. But that’s certainly not an insurmountable moat around the business.
When I get to the bottom line, it’s all very interesting. My questions mainly revolve around how this interesting stuff translates into the bottom line for shareholders. If I were considering investing in Tesla shares (which to be clear, I’m not), I’d want to know how these different manufacturing processes produce profits.
As a non-engineer, I don’t see anything there that other auto companies couldn’t copy pretty easily. I’m sure there would be a bit of a learning curve putting large, comprehensive castings into production. But that’s certainly not an insurmountable moat around the business.
There is only one fallacy in the above “pretty easily.” It fails to take into account the sunk costs that people and organizations anchor on and the tendency of people not to like change. In The Gorilla Game the technical term used is “switching costs.”
VW fired Herbert Diess because he was advocation too much or too fast change. That’s what keeps most incumbents from switching gears. Labor unions are also a factor, they don’t like people being fired.
It’s more than just engineering, it’s the human factor.
After watching the videos the captain linked to, it’s certainly an interesting difference in the manufacturing process. And it would appear that Sandy Munro is a bit of a Tesla fan. Of course, the company listening to and implementing some of his ideas isn’t going to influence his opinion of the company in the least. [/sarcasm]
In the hugely overlooked movie, “Ford vs. Ferrari” Carrol Shelby (played by Matt Damon) explains bureaucracy in the auto industry to Henry “The Deuce” Ford II (played by Tracy Letts).
My BIL was an airbag engineer, and he has numerous stories about how it is nearly impossible to work with the American auto industry. I have no direct knowledge, but it could well be that Tesla is circumventing cultural sclerosis in American car companies. We’ll see.
Bonus: Tracy Letts puts on a performance for the ages. How this man did not win an Oscar is beyond my understanding: