Monthly Archives: May 2016

Cult of Tesla (Motors)

In my last post I asked if Detroit should be worried about Tesla and the Tesla 3. I said that it would mostly effect the Germans and the BMW 3 series in particular.

Since I wrote that I have personally met 2 people that have put their money down to reserve a spot for a Tesla 3.

Oddly they are very much like me. They are not luxury car buyers. They don’t spend big bucks on status. They are Toyota and Honda buyers. They drive cars till they fall apart.

What else they have in common is they make 6 figure incomes. They would strongly fit in the category of the millionaire next door. They don’t show wealth, they have it.

Another thing they have in common is they embrace technology. They are the customers that Apple loves.

These are the same people that bought the second generation iPhone and iPad. The one that had shown some usefulness although not as much as today.

Why is this important? Quite frankly, the car doesn’t have to be perfect. The biggest complaint about the iPhone is that as a phone it sucks. Reliability is actually not all that great. Mostly because the network carriers that place the calls but there are bug fixes and software updates all the time.

Well, just like we have learned to tolerate less than perfect reliability from our phones we will allow the same annoyances from our cars. That is if the car is “special”. And the Tesla if anything is special.

Just look at Consumer Reports. In their initial tests the car broke the 100 point barrier. Yet when looking at long term reliability they can no longer recommend the car. Seriously?

You can’t really expect Tesla to compete with a Honda Civic or Toyota Camry. They are basically reliable transportation, but not much fun to drive. They are not as dull as driving a Prius or Yaris but there is no joy in flooring the accelerator on an entry ramp and reaching 60 MPH in 8-10 seconds.

The Tesla can have a few bugs and even need a trip or two to the Tesla version of the Genius Bar every now and then and people will still love it. As Consumer Reports bares out with there less than stellar reliability rating after the initial wow of 100 plus.

As long as the car performs the cool things fairly well people will tolerate a few bugs.

Driving an EV that can do 0-30 faster than almost any ICE car is pretty cool but having an EV that can do 0-60 in six seconds will make that trip to work just that much more fun. Then when you get on the highway having the car do most of the driving for you, how great is that.

Tesla is attacking 3 markets here, Luxury German small sedans, Japanese midsize sedans and Apple. Yes, Apple. This is where all your customers who buy the next upgrade are about to spend their dollars very soon. If Apple wants people to buy their watch they might want to start working on apps that interface with Tesla right away.

I predict that Tesla will follow the trajectory of Apple all the way to where Apple is today.

Apple like Microsoft will write software that runs in most brands of car. Tesla will produce the cars and the software that people who just want a solution that works, most of the time.

I used to build my own computers and spend hours experimenting with the latest modems and graphics cards. Then about 2006 I gave all that up and since I went Mac I never looked back.

My next car will probably be a Bolt or eGolf. My next car after that. A Tesla S when the price hits around $40k, maybe a second generation 3 when it hits $35k with all the bells and whistles.

Just this last year I stopped doing most of my own car repairs. With any luck brakes will be off my list of repairs as well.

I am looking forward to the day that auto mechanics wear lab coats and not overalls.

Coming form a guy who sells Synthetic Motor Oils that says a lot! Amsoil, the next best thing to being oil free.

 

Tesla 3, Should Detroit be scared?

It’s been a little over a month since the Tesla 3 was unveiled and I haven’t posted anything about it till today. Odd for a blog about electric vehicles. After all, Tesla is the EV by which all other EV’s are measured.

Well, for one thing the Tesla 3 is little more than a prototype, just like the Chevy Bolt. Neither car is in production or it’s final form. All we have seen of both is a body and and some basic interior shots. Neither of these cars floats my boat, yet.

But what I find interesting about both these cars is, that while neither is in production both are setting standards for what an EV has to be to appeal to a mass market. Or at least what people think they need to be able to appeal to a mass market.

Let’s look at the supposed needs to make this car appeal to more than just a few early adopters who run out and buy the latest product Apple has to offer.

A car with a range of 200 miles. Why 200 miles. Because that’s about the average range of a gas powered vehicle. The reality though is people don’t drive 200 miles a day. They drive 200 miles between fill ups. That could be 6 hours or 6 days. For most people that’s once or twice a week. Not daily.

Right now most EV’s have a range of 70 miles. 95% of the time that’s really enough. Most people with EV’s plug in every night. Ask your average EV’r and they will tell you they love never having to stop for gas and that the 70 miles they get is more than they need most of the time. While they have a second vehicle in the family the EV gets driven the most and the second car rarely gets used. The person who drives the least drives the ICE car. Maybe once a month it goes for that drive to the long weekend vacation. Maybe.

Currently there are several EV’s like the Ford Focus, Kia Soul and VW eGolf that can do this no problem and for less than $35k. And that brings us to the next holy grail number.

Priced less than $35k. Really, that’s the number that it takes to get people to run out in masse and buy an EV? I think not. That might kill sales of the BMW 3 Series or other German Cars in it’s class but it’s not going to kill sales of the average family sedan.

The average midsize sedan sells more cars in 2 months than BMW sells 3’s in a year. And they sell on average for a lot less than $35k. The top end is $35k. Not everyone buys the most expensive trim level. Most don’t.

The Tesla 3 and the Bolt and all the rest of the EV’s out there with the only exceptions being the Tesla S and X are all compact cars. Tesla 3 will most likely have an edge here as the 3 is on a compact frame but since it was built from the ground up as an EV it will make far better use of the space available.

And now lets talk about the real elephant in the room. Tesla can’t use sales of their big SUV’s and Pick Up Trucks to subsidize the sales of the 3. They will be selling a lot of CAFE credits to the other automakers but they can’t charge $80k for an Escalade and sell a Volt for $10k less than it costs to build. And since we know that very few 3’s are going to roll of the assembly line with zero options just like very few BMW’s roll of the assembly line with zero options just like a BMW 3 the average price of a Tesla 3 will likely top $50k.

Who want’s to drive a compact car cross country? Not me. I really don’t think that many people drive their Tesla’s across the country now. A few just to prove they could and get their video on youtube but really? The Tesla 3 and the rest of the EV’s out there are only going more than 100 miles in day when the person moves from one city to another. Or like my Ford Focus that needed to get from L.A. to Phoenix because it was cheaper and readily available in California.

There is another problem that all automakers are going to have with their EV’s. I don’t care if it’s Tesla, Honda, Nissan or Apple. Not everyone like the way a car looks. To me the Leaf isn’t cute or futuristic, it’s plain ugly. I like the Mazda 6 but I don’t like the way the Mazda 3 looks. Or should I say the Tesla 3 since the same guy designed the Mazda and the Tesla.

I do like the way the Ford Focus and the VW eGolf look. I’ll wait till they have t drop their price to sell their compliance cars that starting next year will get about 110 miles of range. More than enough for 99.9% of what I need.

Will they have autopilot? Probably not. If I want all the killer new tech I might just have to wait and see if Chevy really produces the Bolt in a configuration they have said they will launch with Lyft, the other car service. Maybe the Bolt will save Lyft, or the Lyft will produce a bigger market for the Bolt. I’m not sure how that will work or who it will help.

What I do know for sure is that EV’s are here to stay this time around. Tesla has forced Detroit to take them seriously this time around. People want cars that run on electricity and they want cars that can pretty much drive themselves while we text and read email or Facebook.

While Tesla has close to 400k people on an interest list that have ponied up $1k a piece for the privilege of standing in line hoping to get one they have lit a fire under GM and probably BMW and Mercedes to get their own versions out ASAP.

I have not put $1k on the line to hold my place. I’m counting on one of the other companies to get out there and compete against Tesla that has a dealer network and service centers near my house to get the job done first.

I’m actually betting Audi or VW might beat them to the punch.

I’m not counting Tesla out though. Tesla is going to sell a lot of cars. They are going to be the Apple of the auto industry. They are going to produce a specialty product that lots of people want and can be special for quite a while. They are going to disrupt the usual way of doing business selling cars over the next 20 years. Apple might even catch up to them or buy them one day.

But right now my purchase dollars are not with Tesla. But it took me till 2006 to dump my Windows computers. Now I’m all Apple. Maybe by 2026 I’ll be all in on Tesla. Just not today.