GRA
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Re: TSLA corporate outlook

Fri Dec 01, 2017 3:59 pm

edatoakrun wrote:
GRA wrote:...Whether or not Tesla itself survives as a company and manages to introduce mass market cars, mass market BEVs undoubtedly will arrive, largely thanks to them demonstrating what could be done.

TSLA has never built any "mass market BEVs", as defined by relatively high production levels and low price, and may never build any.

I am one of millions of drivers world-wide who actually do drive "mass-market BEVs", in my case since early 2011.

I doubt the large majority of those who drive BEVS were significantly influenced by TSLA, even if they, like many misguided ICEV drivers, see some achievement in TSLA's failures.

I don't see how it is possible find any plausible rational counterfactual argument that the billions of dollars flushed down TSLA these many years could not have been far more productively invested in BEV production, under more competent management.

Which management would that be, since no one else has managed to produce a compelling BEV salable outside the limited market of BEV enthusiasts (without subsidies, that is)? As I said, whether or not Tesla will build the first mass market BEV remains unclear, but someone will because Tesla has

1. Eliminated for all time the canard about BEVs being "nothing more than glorified golf carts"

2. Taken significant business from the likes of BMW, Mercedes, Audi, Porsche etc., so they can't dismiss them as being niche cars, and have to compete.

3. Showed how and then built a charging infrastructure that makes BEVs usable for shorter trips (if still well short of what's needed to fully compete with liquid fuels on longer ones).

None of this assures or even requires that Tesla be the company which achieves the first mass market car, or even that they survive, but it does ensure, along with the move to ban non-ZEVs from many cities or countries past a certain date, that mass market BEVs will arrive. Neither the LEAF or Volt has had as much impact on the non-enthusiast public, and I suspect looking back the Model S will be judged to be the most significant car of the first quarter of this century if not longer (I'd say the Prius was the most significant one for the first decade). Next to that, a few billion down the tubes, if it comes to that, just isn't that important (except to the investors).
Last edited by GRA on Fri Dec 01, 2017 4:42 pm, edited 1 time in total.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

GRA
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Re: TSLA corporate outlook

Fri Dec 01, 2017 4:31 pm

Via ABG:
Germany removes Tesla from EV subsidies list as too pricey
Tesla insists Germans can buy a stripped Model S for less than the price cap.
https://www.autoblog.com/2017/12/01/germany-tesla-ev-subsidies-too-pricey/

. . . Tesla customers cannot order the Model S base version without extra features that pushed the car above the 60,000 euro ($71,500) price limit, a spokesman for the German Federal Office for Economic Affairs and Export Controls (BAFA) said on Friday.

Germany last year launched the incentive scheme worth about 1 billion euros, partly financed by the German car industry, to boost electric car usage. The price cap was included to exempt premium models.

"This is a completely false accusation. Anyone in Germany can order a Tesla Model S base version without the comfort package, and we have delivered such cars to customers," Tesla said in a statement. . . .

To which I say, good! It's high time that max. price limits were put on subsidies, if they aren't eliminated. We could use them here (Washington state has had one for a couple of years now, $35k IIRR), but maybe Congress will just toss subsidies altogether. Taxpayers have no business subsidizing the purchase of luxury goods by people who can easily afford to buy them without same. And mass market cars need to be priced so that people can afford them without subsidies, or at least the subsidies should be minimized. If the intent of subsidies is to grow the PEV market, there's far more value in giving $1.5k to five middle-class LEAF buyers than giving $7.5k (essentially pocket change) to a single wealthy Tesla buyer. While we're at it, there also needs to be max. income limits, and a tightening of them where they already exist. California's $150k limit for a single filer, while lower than originally, is still ridiculous and needs further reduction.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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abasile
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Re: TSLA corporate outlook

Fri Dec 01, 2017 9:44 pm

GRA wrote:It's high time that max. price limits were put on subsidies, if they aren't eliminated. We could use them here (Washington state has had one for a couple of years now, $35k IIRR), but maybe Congress will just toss subsidies altogether. Taxpayers have no business subsidizing the purchase of luxury goods by people who can easily afford to buy them without same. And mass market cars need to be priced so that people can afford them without subsidies, or at least the subsidies should be minimized.

The rationale for subsidizing the purchase of a Tesla is not to help a consumer buy a luxury good, it's to shift the overall value proposition in favor of an EV at the expense of ICE competitors. I do agree, however, that there's a law of diminishing returns. Someone purchasing a Model S P100D for $140k is likely not going to be swayed much by $7500, making this a poor use of the subsidy. On the other hand, a family stretching to buy an entry level Model S for $75k will likely be influenced by the tax credit and should, in my opinion, be eligible for it at least until the Model 3 becomes available in large quantities.

I also think that, as long as these subsidies are needed due to the failure to enact a real carbon tax, they should be tied more closely to the capabilities of the vehicle. A Tesla Model 3, with its long range and ability to be charged quite rapidly, should be eligible for larger subsidies than a Nissan LEAF. This is simply because a Model 3 is likely to displace significantly more ICE use than a LEAF.
2011 LEAF at 71K miles, pre-owned 2012 Tesla S 85 at 98K miles
LEAF battery: 9/12 bars and < 49 Ah (-28% vs. new)
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dgpcolorado
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Re: TSLA corporate outlook

Sat Dec 02, 2017 2:51 pm

GRA wrote:To which I say, good! It's high time that max. price limits were put on subsidies, if they aren't eliminated. We could use them here (Washington state has had one for a couple of years now, $35k IIRR), but maybe Congress will just toss subsidies altogether. Taxpayers have no business subsidizing the purchase of luxury goods by people who can easily afford to buy them without same. And mass market cars need to be priced so that people can afford them without subsidies, or at least the subsidies should be minimized. If the intent of subsidies is to grow the PEV market, there's far more value in giving $1.5k to five middle-class LEAF buyers than giving $7.5k (essentially pocket change) to a single wealthy Tesla buyer. While we're at it, there also needs to be max. income limits, and a tightening of them where they already exist. California's $150k limit for a single filer, while lower than originally, is still ridiculous and needs further reduction.
That's all well and good but it should be accompanied by a concurrent reduction in subsidies, both direct and indirect, for fossil fuel use by wealthy ICEV owners. I'm not going to hold my breath waiting for that to happen!

For the federal EV tax credit the question appears to be moot, given the tax change package that seems on its way to being passed by Congress — the primary beneficiaries of which are the uber wealthy, ironically enough.
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GRA
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Re: TSLA corporate outlook

Sat Dec 02, 2017 3:37 pm

abasile wrote:
GRA wrote:It's high time that max. price limits were put on subsidies, if they aren't eliminated. We could use them here (Washington state has had one for a couple of years now, $35k IIRR), but maybe Congress will just toss subsidies altogether. Taxpayers have no business subsidizing the purchase of luxury goods by people who can easily afford to buy them without same. And mass market cars need to be priced so that people can afford them without subsidies, or at least the subsidies should be minimized.

The rationale for subsidizing the purchase of a Tesla is not to help a consumer buy a luxury good, it's to shift the overall value proposition in favor of an EV at the expense of ICE competitors. I do agree, however, that there's a law of diminishing returns. Someone purchasing a Model S P100D for $140k is likely not going to be swayed much by $7500, making this a poor use of the subsidy. On the other hand, a family stretching to buy an entry level Model S for $75k will likely be influenced by the tax credit and should, in my opinion, be eligible for it at least until the Model 3 becomes available in large quantities.

Well, there's the thing. Anyone who doesn't want to wait for a Model 3 has the option of a Bolt now, with the LEAF to follow and other longer range BEVs on their heels. To be mass market, BEVs must be affordable basic transportation, and that doesn't describe a car that starts at $75k - anyone 'stretching' to buy such a car should simply wait until more affordable BEVs are here. It's not as if the purchase of the limited number of those expensive cars that are only salable with subsidies will have any significant effect on pollution or the size of the BEV fleet. At this point, IMO subsidies should be designed to drive the cost of mass market vehicles down until they're no longer needed, not prop up sales of more expensive ones. The money will go far further that way.

abasile wrote:I also think that, as long as these subsidies are needed due to the failure to enact a real carbon tax, they should be tied more closely to the capabilities of the vehicle. A Tesla Model 3, with its long range and ability to be charged quite rapidly, should be eligible for larger subsidies than a Nissan LEAF. This is simply because a Model 3 is likely to displace significantly more ICE use than a LEAF.

I somewhat agree that subsidies, if they continue, should be based on range rather than total capacity. Actually, what I prefer is to have a soft max. out-the-door sans govt. taxes and fees price limit (to avoid companies gaming the system with $5k delivery or $1k doc. fees), starting at say $40k and reducing annually or bi-annually, with every dollar over that reducing the subsidy by an equal amount until it reaches zero. I'd rather set the max. limit lower, but anything is better than nothing. If desired, modifying that based on extra range would be acceptable. But, as dgpcolorado notes, it seems increasingly likely that the fed. credit will be gone soon.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

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abasile
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Re: TSLA corporate outlook

Sat Dec 02, 2017 4:43 pm

GRA wrote:
abasile wrote:On the other hand, a family stretching to buy an entry level Model S for $75k will likely be influenced by the tax credit and should, in my opinion, be eligible for it at least until the Model 3 becomes available in large quantities.

Well, there's the thing. Anyone who doesn't want to wait for a Model 3 has the option of a Bolt now, with the LEAF to follow and other longer range BEVs on their heels.

While there's overlap between Model 3 and Bolt customers, the Bolt falls far short of the Model 3 in terms of road trip capabilities. Anyone wanting a BEV that can, for their purposes, fully replace an ICE has good reason to go for a Tesla. Same with anyone who requires AWD, or seating for six or seven.

GRA wrote:To be mass market, BEVs must be affordable basic transportation, and that doesn't describe a car that starts at $75k - anyone 'stretching' to buy such a car should simply wait until more affordable BEVs are here.

Note that this could be a multi-year wait for those looking for a large family vehicle! The Tesla Model S and Model X remain the only BEVs that can truly displace the family ICE minivan or SUV, and the Model 3 won't change that. For those who are willing to make the stretch, why penalize them by taking away the rebate or tax credit? Rather than instituting a low cap on vehicle price, a cap on personal income and/or wealth might be more appropriate in terms of maximizing the efficiency of the subsidies. Indeed, California ties its EV rebates to income.

GRA wrote:It's not as if the purchase of the limited number of those expensive cars that are only salable with subsidies will have any significant effect on pollution or the size of the BEV fleet. At this point, IMO subsidies should be designed to drive the cost of mass market vehicles down until the point where they're no longer needed, not prop up sales of more expensive ones. They will go far further that way.

While I wouldn't agree that Teslas are "only salable with subsidies", it's certainly true that sales have been helped by subsidies. You do make a fair point that subsidy dollars will go further if they're applied to "mass market" vehicles. But that presumes the existence of mass market BEVs that meet consumer needs, and we're not quite there yet. Until we get there, we should be rewarding people who are willing to spend more than usual for the privilege of getting off gasoline while still meeting their transportation needs.

GRA wrote:But, as dgpcolorado notes, it seems increasingly likely that the fed. credit will be gone soon.

Yes, that's the reality we live in. However, these arguments are just as applicable at the state level, etc.
2011 LEAF at 71K miles, pre-owned 2012 Tesla S 85 at 98K miles
LEAF battery: 9/12 bars and < 49 Ah (-28% vs. new)
Tesla battery: 250+ miles of range (-5% vs. new)

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Re: TSLA corporate outlook

Sun Dec 03, 2017 4:22 pm

abasile, I'd written a long reply yesterday but MNL burped and ate it, and I'm pushed for time today (beautiful CAVU day got me out riding, and now I'm off to my local to watch the Warriors), so will try and reply tomorrow. One point of misunderstanding I want to clear up now: I agree that the Model S/X are the only BEVs currently 'salable without subsidies'; my statement about limited numbers applies only to those Model S/X which can only be bought by people 'stretching' to buy them, and who would be dependent on subsidies to do so. I'll get to the rest later.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

GRA
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Re: TSLA corporate outlook

Sun Dec 03, 2017 4:31 pm

GRA wrote:2. Taken significant business from the likes of BMW, Mercedes, Audi, Porsche etc., so they can't dismiss them as being niche cars, and have to compete.

Case in point, via IEVS:
Despite Struggles, Tesla Steals Market Share From Rivals
https://insideevs.com/despite-struggles-tesla-steals-rivals-market-share/

Regular visitors to this space already know that Model S has dominated the large luxury segment for some time now. However, a new infographic from the UK firm Select Car Leasing (via ValueWalk) adds some details to that picture.

This infographic compares the sales of Model S to those of “competing” sedans from Audi, BMW, Mercedes and Jaguar. The electric trendsetter’s share of this segment has grown rapidly, from almost nothing in 2013 to 35% in 2016.

Upstart Tesla is stealing a lot of sales from these venerable European brands. Of the seven fossil models compared here, only one – the BMW 7 Series – saw its sales grow in the period 2014-2016. The rest posted substantial losses, while Model S sales soared by 43%.

A chart of year-on-year sales for 2013-2016 also makes for some interesting reading (see below). Other than the BMW 7 Series and the Mercedes S Class, the legacy models show clear downward trends, while Tesla’s numbers are spiking ever upwards. . . .

Chart included.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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Re: TSLA corporate outlook

Mon Dec 04, 2017 4:34 pm

abasile wrote:
GRA wrote:
abasile wrote:On the other hand, a family stretching to buy an entry level Model S for $75k will likely be influenced by the tax credit and should, in my opinion, be eligible for it at least until the Model 3 becomes available in large quantities.

Well, there's the thing. Anyone who doesn't want to wait for a Model 3 has the option of a Bolt now, with the LEAF to follow and other longer range BEVs on their heels.

While there's overlap between Model 3 and Bolt customers, the Bolt falls far short of the Model 3 in terms of road trip capabilities. Anyone wanting a BEV that can, for their purposes, fully replace an ICE has good reason to go for a Tesla. Same with anyone who requires AWD, or seating for six or seven.

In which case, they should opt for a much less expensive PHEV, HEV or stick with the ICE they have for now and await events, or consider just replacing their local car with a BEV if they have more than one.

abasile wrote:
GRA wrote:To be mass market, BEVs must be affordable basic transportation, and that doesn't describe a car that starts at $75k - anyone 'stretching' to buy such a car should simply wait until more affordable BEVs are here.

Note that this could be a multi-year wait for those looking for a large family vehicle! The Tesla Model S and Model X remain the only BEVs that can truly displace the family ICE minivan or SUV, and the Model 3 won't change that. For those who are willing to make the stretch, why penalize them by taking away the rebate or tax credit? Rather than instituting a low cap on vehicle price, a cap on personal income and/or wealth might be more appropriate in terms of maximizing the efficiency of the subsidies. Indeed, California ties its EV rebates to income.

I don't believe we should be encouraging anyone to stretch to afford a luxury vehicle that's simply too expensive for them if things go sour; we had enough of that sort of thing with the mortgage meltdown. See below

abasile wrote:
GRA wrote:It's not as if the purchase of the limited number of those expensive cars that are only salable with subsidies will have any significant effect on pollution or the size of the BEV fleet. At this point, IMO subsidies should be designed to drive the cost of mass market vehicles down until the point where they're no longer needed, not prop up sales of more expensive ones. They will go far further that way.

While I wouldn't agree that Teslas are "only salable with subsidies", it's certainly true that sales have been helped by subsidies. You do make a fair point that subsidy dollars will go further if they're applied to "mass market" vehicles. But that presumes the existence of mass market BEVs that meet consumer needs, and we're not quite there yet. Until we get there, we should be rewarding people who are willing to spend more than usual for the privilege of getting off gasoline while still meeting their transportation needs.

Hopefully I've already cleared up the confusion over "only salable with subsidies", so moving on. At this time, I don't believe any BEV is capable of being a true mass market vehicle, as they remain too expensive or too limited - average MSRP of cars (not pickups of SUVs) sold in the U.S. this year was about $31.7k, and that's before incentives. Even adding in the others only moves the average MSRP up to $35,870 IIRR, and again that's before the increased incentives that are being offered. For the moment, I believe only PHEVs with fairly small packs priced like the Prime
can be mass market, with cars like the Model 3 more entry-level luxury, a substantial market but not mass. I think we'll probably have to wait until the next decade to see true mass-market BEVs.

abasile wrote:
GRA wrote:But, as dgpcolorado notes, it seems increasingly likely that the fed. credit will be gone soon.

Yes, that's the reality we live in. However, these arguments are just as applicable at the state level, etc.

I'm very glad to see that California is now preventing the well off who don't need the rebates from double-dipping,i.e. getting both the state rebate and the SO HOV stickers; now it's one or the other. Now we need to cut the max. income limit in half, from $150k single/$204k HoH/$300k joint, as the median family income in the state (2015) is only $64,500. And I still want a max. price limit that excludes luxury models.
Last edited by GRA on Tue Dec 05, 2017 6:14 pm, edited 1 time in total.
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The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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abasile
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Re: TSLA corporate outlook

Tue Dec 05, 2017 11:13 am

GRA wrote:I don't believe we should be encouraging anyone to stretch to afford a luxury vehicle that's simply too expensive for them if things go sour; we had enough of that sort of thing with the mortgage meltdown.

Nor do I have any interest in encouraging people to purchase vehicles that they truly cannot afford.

When I mentioned middle-class people "stretching" to buy expensive EVs, I was thinking of this in a more benign fashion. In the case of my own middle class family, we spent more on both our new LEAF and on our used Tesla than we previously would have spent on similar vehicles. Affordability wasn't really an issue for us, but we just weren't into spending big on vehicles. I'm quite sure we wouldn't have purchased our 2011 LEAF without the incentives. Of course, we didn't receive rebates/credits on our used Tesla, but the existence of those subsidies helped lower the prices on used vehicles to the point where we felt comfortable making a purchase.

With respect to personal finances, it goes without saying that people have to make choices which reflect their values. For some, that might entail forgoing expensive vacations and staying closer to home, eating out less, and making similar choices that enable them to afford "green" technology such as EVs and PV. When people are willing to make such choices, and when EV purchase incentives exist, I think it's wrong to take away those incentives for middle class people who desire to buy relatively expensive yet exceptionally capable BEVs. The incentives truly do make a difference for such people, and they help stimulate technology development.

GRA wrote:I'm very glad to see that California is now preventing the well off who don't need the rebates from double-dipping,i.e. getting both the state rebate and the SO HOV stickers; now it's one or the other. Now we need to cut the max. income limit in half, from $150k single/$204k HoH/$300k joint, as the median family income in the state (2015) is only $64,500. And I still want a max. price limit that excludes luxury models.

Lest any of my prior comments be misconstrued, I'm not at all interested in using EV incentives as a tool to accomplish wealth redistribution. My only concern is that the incentives grow the EV market to the maximum extent possible. For the sake of efficiency, I've come to accept that income caps are a good idea because wealthier individuals are less likely to be swayed by the existence of incentives. However, if the income limits are set too low, then a large pool of prospective buyers will be excluded and the take rate on the incentives will likely be lower than desired. The current California limits probably strike the right balance, in my opinion.

I'm in support of the new HOV sticker policy in California. The carpool lanes get clogged as is, so we do need to be careful about handing out stickers.
2011 LEAF at 71K miles, pre-owned 2012 Tesla S 85 at 98K miles
LEAF battery: 9/12 bars and < 49 Ah (-28% vs. new)
Tesla battery: 250+ miles of range (-5% vs. new)

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