I follow industry news religiously at AutomotiveNews.I used to gobble it up when I’s go to the library, and have been a subscriber since the TTAC days. It’s by far the dominant voice in the car industry, and my son Ed now works there, as their Silicon Valley reporter. I’ve said it repeatedly: if you really want to understand the industry, subscribe to AN and read it every day.
Except of course sometimes it’s a bit painful. Like this story on former Ford CEO Alan Mulally’s keynote address to the National Auto Auction Association’s annual convention. He comes off embarrassingly misinformed about EVs and battery costs, saying that “there are companies that sell you a $120,000 car and it rides along on a $70,000 battery. So it makes no sense”. A $70,000 battery? Maybe Alan needs to keep up on his industry news, as Tesla’s battery prices are closer to one-tenth of that (currently $114 per KWh cell cost and about $140-150 per KWh complete pack cost, and dropping steadily). And the rest of the industry is not far behind.
Maybe it’s just PR, as Ford has been particularly aggressive in trying to knock down Tesla for years. More likely it’s sour grapes, as Tesla’s current market capitalization ($59.68 billion) dwarfs Ford’s, at $36.04 billion. Is it any coincidence that former GM exec Bob Lutz has been predicting Tesla’s imminent death when GM’s market cap ($49.53 billion) is also dwarfed by Tesla’s. And he’s been at it for years now on tv? Can you guys retire already?
Here’s a good one of both Bob and…Bob Nardelli, former Chrysler destroyer CEO, predicting doom and gloom about Tesla, and how it absolutely won’t ever generate profits (it has since then) and will absolutely fail. Tesla stock was $305 at the time; it’s around $350 currently, despite the current high-tech sell-off.
Where were these guys in 2007-2008? They sure as hell weren’t on tv endlessly predicting the inevitable deaths of GM and Chrysler. I find it a sad commentary on the state of the media when these two destroyers of billions of dollars of equity in their companies are invited to give their opinions on something they obviously don’t get.
Hint: Alan, Bob and Bob; do what car execs did back in the 50s: retire to the golf courses in Florida and STFU.
Please note: I am not a “Tesla fan”; I’m a Tesla watcher, but the watching can be mighty painful at times.
Your comments are spot on. These guys are the problem, not the solution, and allowing them a voice, while keeping with First Amendment rights, simply adds to the problem. One would never allow a doctor who butchered your surgery to do another one on you, would you? Yet these former CEOs, who burned through so much capital with no positive results, keep getting press when they pass along their “wisdom”.
My only request, can they stay out of Florida? We’re already full of people with less than stellar IQs who migrated here after retirement, and we really don’t need a couple more.
Mulally can’t be grouped with Nardelli (or Rick Wagoner of GM). He did not “burn through so much capital with no positive results.” He shepherded the Ford Motor Company through a devastating downturn in the market, and played a key role in saving it from extinction (or the need for a government bailout).
Paul, are you citing cost per KW or cost per KWH (power or energy)? I think it’s KWH. Tesla’s costs do seem to undercut industry trends, I don’t know if this reflects subsidies or in fact demonstrates Tesla’s efficiencies and economies of scale? Regardless, cost per KWH is plummeting, and if charge time per KWH decreases similarly, the tipping point to electric will come pretty fast. I do agree that Bob Lutz should STFU though he’s certainly making a successful retirement income as a curmudgeon, though with zero credibility with me.
I forgot the “h”, obviously.
Tesla’s costs are the lowest, but others are not far behind. BMW just signed a long-term contract for batteries at around $115 per KWH.
Obviously Mulally was referring to a Tesla S or X, given the $120k price tag.
Well, every CEO I’ve ever met certainly loved the sound of their own voice, I guess there’s no reason for that to change after retirement.
I promise when I retire you will not hear a peep out of me on CNBC
Unless there’s a hard-hitting investigation on door jig production assemblies and they need a specialist to comment. “Joining us from Ontario, please welcome Geo Metro door assembly jig designer Mr. DougD to give us an analysis of the current state of affairs in regard to attaching vehicle doors to bodies – Two bolts, four bolts, or a couple of strong magnets?. Mr.D, the floor is yours.” 🙂
I’m of the mind set: I don’t want Tesla to fail, but I also don’t care if they succeed. It makes no odds to me, personally. My automotive interests don’t normally go past 1990, and even then that’s only because I like the Malaise era hold outs from that time.
While Tesla’s fly by me on the highway, I’ll still be dreaming of my 58′ Plymouth.
Sad state of affairs when these two think they know the industry simply because they’re veterans. The whole Tesla experience has embarrassed them. This is kind of misplaced bravado that sent the Big Three into a downward spiral. What happened to the old Saturn corporate model?
Respectfully, Tesla has not embarrassed anyone yet. Mass production is tricky.
Who cares if it’s embarrassed anyone? What it absolutely has done is totally shake up the industry. Every CEO has admitted as much; some quite overtly, others between the lines. The industry will never be the same because of Tesla and automation/autonomy. It’s a double-pronged revolution. And everyone is running scared. Running scared is a lot more important than being embarrassed.
Sorry Paul. You spell it out more accurately. They are running scared. They still are in complete disbelief that a group of outsiders pulled the whole Tesla thing off. As for the Volt, after two days on the road in late 2011 with an unsold first generation unit I was extremely disappointed. In the summer of 2012 I was lucky enough to drive a Tesla Model S for a short hop. It was light years ahead of anything on the road and they still are.
Tom C, your comment reminds me of what the CEO of Palm said when they heard Apple was entering the cell phone market.
“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
Yeahhhhh.
This gives me all the more admiration for John Riccardo. Chrysler during his time in power (1970-78) went from bad to awful. He was not solely responsible for this, of course, but was also not blameless. When he left Chrysler he was never heard from again in reference to his old company or the US auto industry in general. He went home and did volunteer work for his church.
Maybe the problem is the endless hours that cable news networks have to fill. The demand for talking heads must be insatiable if they are interviewing Nardelli.
True, but when you don’t give voices a platform, they are not heard from. The news groups choose to give a platform for these former CEOs when their insights and opinions are no longer valid and have been proven wrong by time and history.
I get that a balance of viewpoints is needed, but they keep going back to the wrong folks because they can. It’s like getting history from your Grandpa. He may or may not be right, but you tend to believe him just because he is your Grandpa. The same goes with these guys. They are known for their failures more than for their unbridled successes. Their viewpoints are skewed towards glorifying their failures. Giving them continued voice does no one any good.
I’m with Maximum Bob, he did encourage the Chevy Volt, which, is a very important milestone in battery technology.
Keeping the Lithium-Ion battery between the 20 to 100 Percent charge, the Chevy Volts research project objective, is important. Correct me if I’m wrong, GM has not had a battery failure yet, by keeping these batteries in their sweet spots. GM has learned how to scale the economics of battery production. They understand these batteries just as much, or better then anyone at Tesla.
Someday, Paul will devote a whole serious of articles titled, “GM’s Greatest Accomplishments”, based on EV vehicles alone.
Bob Lutz deserves credit for this.
You’re rather grossly overstating the importance of the Volt; certainly its battery tech. Tesla was building full-EV Roadsters for three years before the Volt appeared. And Tesla’s battery format (using small consumer-sized units) has turned out to be the most cost effective and highest energy density.
And no; charging li-ion batteries to 100% is bad. That degrades the cells much faster. For longer life, around 90% is the maximum charge.
There was nothing about the Volt’s li-ion battery tech that wasn’t already well known. And no, GM has not learned how to scale battery production. They don’t even build them; LG builds them in Korea and ships them to GM. No, they don’t understand them nearly as well as Tesla yet, which helps explain why GM admitted it loses about $9k on each Bolt, and why its production is quite limited. It’s a compliance-mobile, not a genuine attempt to build and sell EVs at a profit.
I’ve already done a GM’s Greatest Hits, and no, Bob Lutz and the Volt aren’t and won’t be in it.
Sorry, but all I have for you is “no”.
Perhaps GM is being smart by understanding that batteries will become a commodity. (They may even purchase Tesla batteries in the future!) Instead they may be focused on battery evolution, total design, and packaging.
GM controls their proprietary battery configuration by performing battery final assembly operations at the Brownstown, Michigan assembly plant.
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“Brownstown Battery Assembly Plant assembles lithium-ion batteries for General Motors’ Chevrolet Volt, Malibu Hybrid, Silverado eAssist, GMC Sierra eAssist, Buick LaCrosse Hybrid, and Cadillac CT6 Plug-In vehicles. It is the first high-volume battery assembly plant in the U.S. operated by a major automaker, and is a new business enterprise for GM.”
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Link here: https://media.gm.com/media/us/en/gm/company_info/facilities/battery-assembly/brownstown.html
No question these three oldtimers are angry by the success of Tesla. But since market capitalization hasn´t much to do with real economy, such numbers have no meaning for me anymore. At the moment there is a hype about Tesla, but makes this the company more valuable than bigger Ford or GM? Which does not mean that these have done their homework. Same goes for our german car makers too. In my opinion Tesla is a little overrated.
But this EV thing has it´s impact. Last week Volkswagen announct to switch two plants to the production of EV´s. One of them is here in my hometown Hannover. That means also we will loose the production of the VW (Euro)Van, which was made here since 1956.
Personally I hold it with pioneer_fox
The market valuation of Tesla is debatable, obviously. I don’t pretend to know or say what it should be. But the problem is that almost all the talk about Tesla is divided in the two extreme camps: Tesla will be a mammoth success, or it will fail. Most likely it will fall somewhere in between. But the gray area in between is not interesting to the media or almost anyone else. Humans are mostly binary; it’s either love or hate. “Understanding/nuance” takes too much effort, and doesn’t juice our brain chemistry in the same way.
Exactly, but I like to think that after all those years in various universities, some of us realise that the world is not black and white. It is shades of grey.
Whatever happens, Tesla has been an industry changer. It’s been an amazing achievement to create a car company with new technology from nothing.
Pretty cool!
While I won’t go out on a limb, in his defense, I will suggest the world might not have the Boeing 777, proven to be one of the best planes, if it wasn’t for Mulally…
It’s the 787 that is REALLY shaking up the commercial air transport. Also started under Mulally.
It’s too bad Alan Mulally is saying such dumb things in public. He’s a very smart manager (graduate of MIT’s Sloan school of management) who went against ‘common wisdom’ by lining up a huge line of credit that saved Ford from bankruptcy in the 2008 crash.
Tesla has already had a huge effect on the world by inverting EV’s golf-cart image into high performance and high tech. Its effect on the smarter automakers such as Audi and BMW has been profound. I’m confident Tesla will survive and succeed, its products and brand equity are strong enough to overcome the bumps.
Whenever a disruption like the 21st-century EV gets traction in a mature industry, the old guard always sputters and dismisses it. Then the new guard embraces it, those who survive anyway.
Here in trendy Vancouver, EV’s are flying out if the stores. I wanted to get an e-Golf, but the wait was two years. There is a huge demand for EV’s here as we have the highest fuel prices in North America.
Old guys can gripe and moan, as they are wont to do, but it won’t stop EV sales. Good thing, too. For a city car, an EV is ideal.
They’re ideal island cars, too. I visited Kauai, Hawaii a few month ago and rented an Airbnb in a small apartment building in Kapa’a. Someone had installed an EV charger in the parking lot, and every night there was a Nissan Leaf charging there, presumably belonging to someone who lived in the building. Seeing it made me realize that’s really the ideal sort of car for a smallish island like that — there’s really nowhere you can drive to there that’s not within its range.
Mike, that wasn’t Mulally’s plan. Don Leclair and Anne Petach are the ones who developed that course of action. Alan obviously deserves credit for his work, but that idea wasn’t one of them.
I am not exactly an young man, but I do see how engineering improves with time.
Men naturally hearken back to their glory years when they were 20-35 years old. Anything that somehow seemingly invalidates their youth is automatically bad.
I have driven EV’s and they are definitely the future. They are much simpler and less complex and will cost less to build in the long run. For example, an EV doesn’t need a ten speed transmission.
I recently bought a new car, a rather cheap one. It is a 2018 model, and the engineering in it is way better than the 15+ year old stuff I was driving before.
EVs’ don’t mean you can’t fantasize about your 427 Camaro, or even go get one. An EV might not work for you, but it sure will for someone else.
As for Tesla, well, he’s pulled off what Preston Tucker could not-he’s created a completely new market with a completely new vehicle, and made money on it. And that is not even touching on his Space-X wonder-a rocket that can land itself.
One could have both the 427 Camaro AND an electric for the commute to work. No noise, no hassle, no getting gas. And the Camaro for the weekends since it’s probably being “preserved” anyway.
Precisely. A few classics driving around burning a bit of gas on the weekend have no effect on the climate. They are a wonderful part of our history and culture, and I’m grateful to those who keep them out and about.
In the meantime 99% of the miles being driven are going electric over the next twenty years, which is its own kind of wonderful.
Exactly, but we have to remember this: the vast majority of drivers and not car nuts like we are. The actual number of people who will actually fork out for an old muscle car is tiny.
Just because a sixty year old male doesn’t like something doesn’t mean someone else won’t.
I see absolutely no reason for moving to electric cars, no matter how much the fanbois fawn over them. They’re overpriced and limited. Lithium-ion batteries are just not a suitable power source. I certainly will not be buying an electric or hybrid car.
I’m just not interested in so-called, self-styled “visionaries” like Elon Musk (who is actually a rent-seeker and carnival huckster). Their “visions” for the future are rarely if ever places I care to go.
No worries; you weren’t invited anyway. 🙂
Hear, hear, hear. Couldn’t agree more.
Edit: since there was a few more comments afterwards, this one is for Canucknucklehead.)
Tesla has shown us a good alternative to gas cars, but as far as profitability is concerned, do not forget the massive tax-funded subsidies that have been granted the company, as well as the tax-funded incentives for consumers to buy the cars. There’s a lot of fog to cut through to truly characterize the business.
Seems to me that Tesla should consider dropping the Model X, a very impractical and poorly conceived vehicle to my mind, and keep the focus on the Model 3. Musk stepping away from the CEO job is a good move. His antics have distracted from the business, though it wouldn’t be there at all if not for his vision.
The streets in Vancouver are crawling with the Model X. It is considered the cool SUV for the rich Asian set.
It’s not going anywhere.
There are plenty of tax-funded subsidies as well as moral issues being compromised toward the oil industry as well. Just look at today’s headlines.
If they are making any money building each incremental Model X they should keep it. Otherwise one could make the same argument vis-a-vis a Dodge Journey or a Camaro or any number of “regular” cars.
do not forget the massive tax-funded subsidies that have been granted the company,
What massive tax-funded subsidies have been granted the company? Yes, there are tax credits, for those buyers that can use them, but they are expiring this year for Tesla. And those same tax credits are of course also available to buyers of all other EVs.
Would you like to elaborate on these “tax-funded subsidies”?
Frankly, it gets old and tedious having this thrown up all the time. Elon Musk, the crony capitalist. Maybe you need to do your homework too before you comment.
And the Model X is doing just fine; it has a healthy gross profit margin just like the Model S and Model 3.
I can assure you that if Musk were to leave, Tesla stock would take a massive hit. Despite his personality warts, he is what has made Tesla what it is. Investors are betting on Musk’s abilities, not his warts.
How about $1.3 billion from Nevada, signed by Governor Sandoval a few years ago?
“Over the next 20 years, Tesla could take in nearly $1.3 billion in tax benefits for building its Gigafactory in Nevada, according to projections from the state, as hires are made for the factory locally and from around the country. Assuming Tesla meets its obligations under the deal, it will spend 20 years free from sales tax, and 10 years free from property tax, while it receives millions of dollars more in tax credits.”
I was wondering when someone would bring that up. These stupid give-aways by states and cities to lure a company to build a plant happen constantly all over the country. But these are tax breaks, not direct subsidies, meaning revenue that the state wouldn’t otherwise have seen. It’s still stupid, but it goes on constantly.
A “subsidy” is a grant of money. A break on future taxes is not the same thing. And it’s localized. And Tesla would have built the plant somewhere regardless. And GM would have gotten the tax break too if they had a new plant they were wanting to build.
Meaning: it doesn’t benefit Tesla anymore than other companies.
“And GM would have gotten the tax break too if they had a new plant they were wanting to build.
Meaning: it doesn’t benefit Tesla anymore than other companies.”
GM built the Volt at Detroit/Hamtramck. I can find no evidence that the facility there was the beneficiary of any government largesse. GM built a competing car with the electric technology but their manufacturing facility got no benefit.
I did find that the US DOE funded half of the cost of the supplier LG Chem facility at Holland, Michigan for Volt battery systems.
So GM seems to have gotten no government incentives to build the Volt but Tesla did receive financial incentives.
I agree that any government financial encouragement to one capitalist corporation is offensive and “stupid”. I find it offensive and stupid for governments to give politically correct financial incentives for production of electric vehicles – likely to the exclusion of the same for production of internal combustion engines or vehicles using them.
The idea is the encourage new technology, and boy, did America get new technology. It got a complete new car industry, right in America, making American cars with American workers using American technology.
ICE is a dead technology. We have reached its limits. Where you live might not be swamped in air pollution, but a fair bit of the world is.
So America is on top of EV technology. Do you want that to be China? France? Germany?
Do you think the US military isn’t a huge R&D subsidy? The roads you drive on? The schools you went to?
So GM seems to have gotten no government incentives to build the Volt but Tesla did receive financial incentives.
There’s that minor little detail of GM’s bailout by the government that you have very conveniently forgotten, and without which the Volt would never have been built. In fact, the Volt was a key item in that, as the feds used that as one element of their rationale for bailing GM out, as part of their green car initiative. And it was absolutely understood that GM would have to bring the Volt to market, regardless of how big the losses were on it.
Since the GM bailout cost net $11 billion to the government, the Volt got a massive subsidy from the government. It would not have survived a normal bankruptcy without that, as it was clearly a money loser.
Compared to Tesla, GM is the poster boy of crony capitalism and govt. subsidies.
Don’t get me wrong; I was pro bailout, but the facts are what they are.
As someone who’s lived in the Reno & Truckee area since 2005 I think that the Tesla package was worth it. Before Tesla much more of our job base was Casinos/Tourism, 3PL Warehousing and low(er) end manufacturing.
Tax Credits for the GF were tied to employment headcount. Last I read they are somewhere in the area of 3000 employees and $4.5B invested between Tesla, Panasonic and the other contractors in the building.
Another less publicized part of the GF1 incentive package is the discount on already low electricity rates;Tesla is getting 20% off already cheap power.
State and Local Govs always kiss the rear or major employers. Look at the contest Amazon just ran, Foxxcon in Wisconson or GM in Poletown Detroit.
The fact is Tesla is benefiting from an indirect subsidy as a direct result of govt emissions regulations that allows Tesla to profit from credits they generate from the sale of EVs. Of course they aren’t the only ones to benefit from those policies, at least one legacy automaker, Nissan has sold a lot of credits too.
Bob Lutz had a pretty decent career before he came to GM USA in the late 1990’s. Opel, BMW, Ford of Europe and Chrysler (pre-Daimler) got the best of his career. Now, it seems like he spends his time attempting to burnish his career. Why? I would be very happy to retire to my estate and play with my aircraft…
Bob Nardelli did a lot of damage to Chrysler post-Daimler. Maybe his talents were spent after Home Depot. Of the three mentioned here, he had the least reason/resume to have been an automobile company CEO. Between Eaton, Daimler and Cerberus, I don’t know who fscked Chrysler the most…
Mulally did his best, but lessons learned from the aircraft industry didn’t necessarily translate to the automotive industry. Again, I’d be happy to retire to my estate and play with my aircraft. As with Nardelli, the fantasy that someone from outside of the automobile industry would do a better job remains just that, a fantasy. With Mulally, One Ford damned near became the product plan.
Musk is a fascinating character. I liken him to the inventors of a century ago. What is particularly endearing to me is naming the car company after Nikola Tesla. All of the stuff he’s gotten into such as Tesla, SpaceX and the Boring Company give me hope that the United States is STILL a place for folks to come to and make great things happen.
I don’t understand the Tesla (and/or electric car) hate you see on car enthusiast websites. The electrification of cars seems like a logical next step. In many parts of the first world cars have become a necessary evil. With some of the technology proposed by Tesla and others, we can possibly reel in some of the disadvantages inherent in our current method of operation.
I think a lot of the negativity towards Tesla has more to do with Mr. Musk than anything else. He’s a polarizing figure. The fact that the cars are on the expensive end of the spectrum also brings out a bias, not really much different than some of the vitriol spewed towards drivers of other traditionally expensive cars.
The negativity towards electric cars in general is mostly driven by ignorance. The vast majority of negative comments or beliefs are almost entirely false, i.e. the hater is working with an incorrect or outdated set of facts. Just like the people that still believe you have to change the battery in a Prius every couple of years. It is extremely rare for anyone that has actually driven one or more of them to be negative about them. Sure, there are currently drawbacks – for some use cases, range can be an issue. For plenty of people, it works. For others, it doesn’t sound and look like a Challenger Hellcat. Then again, a Challenger Hellcat isn’t quiet and economical so that works either way. Some people don’t like the tax credit, but choose to willfully ignore that cheap oil isn’t without a societal cost as well as direct (through taxes) costs.
Something I wanted to mention yesterday…
If I were to hit the lottery, I’d run right out and buy a Chevy Volt (or Chrysler Pacifica Hybrid) and a Challenger Hellcat. One is a great daily driver, the other my “fun” car…
Agree with all Jim Klein says here, adding only that the lifecycle environmental cost of an EV is also (wilfully or otherwise) overlooked by the fervent in the same way the societal oil cost is by others: current estimates about 80% of the ICE footprint using current generation methods.
(Oh, and “Musk is a polarising figure”, I see what you did there).
Everyone wanted to gripe about Sergio, but the 3 predecessors you mention at Chrysler did an awful lot to make him look brilliant.
JP, if I’m honest, I would have loved to have seen Lutz take over Chrysler instead of Eaton. I think that Bob Lutz would have continued on with the independent spirit that Chrysler had in the 1990’s.
But, what happened, happened. Now in retrospect, Sergio *was* a genius, leveraging Chrysler’s strengths and turning FCA into a player on the global market. Let’s hope his successors have the same cunning to turn a deficit into a positive.
“Bob Nardelli did a lot of damage to Chrysler post-Daimler. Maybe his talents were spent after Home Depot.”
He did damage to Home Depot as well. The HD Board paid him to go away before he could do more.
Wow…just wow. I can understand Lutz and Nardelli coming off like idiots, but it really surprises me that Alan would make himself look so stupid. The man has to understand that proper investment in technologies leads to cheaper costs down the road, no? The man was responsible for EcoBoost proliferation and the aluminum F-150. This reads like pure EV hate. I wonder if it also has to do with the fact that Tesla has basically taken over as the most visible and coveted American luxury car manufacturer.
Good article on Tesla “subsidies” here.
https://cleantechnica.com/2018/02/18/tesla-subsidized-whats-truth-claims-tesla-spacex-elon-musk-wealth-exist-subsidies/
Bottom line: yes, Tesla has received subsidies and tax benefits, but no more than most large coroporations that build factories and bring economic benefits to communities, and has in fact paid back more subsidies than other auto companies. Not to mention that Tesla hasn’t been bailed out like GM and Chrysler or many banks.
I’m going to chalk this up to rooting for the old home team . . . All I know is when the Tesla Model S came out it became very popular very quick in upstate SC which is an interesting blend of old South / new South. I see them every day as well as the Model X. The Model 3 is exploding in popularity. These type of buyers aren’t buying anything by GM or FCA and very little by Ford. It’s not tree hugging, it’s jumping on the next big thing before the masses do because that’s what the professional upper middle class tends to do.
I’m looking forward to the day when Toyota will sell me a silky smooth and quiet electric tall car or SUV for what the Highlander I just bought costs. There won’t be any status in it at that point but the electric power train is the way forward for a large portion of vehicles. Didn’t old Henry say something about people wanting a faster horse?
I’m with you on the Toyota thing. If we were buying our Highlander now instead of three years ago it would for sure be the Hybrid version. The 20mpg I got going to the airport last night is pathetic but at the time the hybrid was only available in the top of the line model, now it has proliferated through the range for relatively minimal extra cost. A full electric at a similar price with similar capability in a few years? Sign us up, it’s not like a regular ICE Highlander provides a particularly unique driving experience that would be missed.
I think it will be awhile until pure EVs become common from Toyota. Now I can see much of the lineup becoming a Hybrid with a plug and 15-25mi electric range.
As always, a great read. The comment section is particularly interesting this time. There are a lot of informed and educated people here. As far as ex-CEOs as TV talking heads go, the programs often have the same people on, as “experts” on a variety of topics. I think they just go with convenience and/or who gives me most entertainment bang for the buck. Whether or not they have a track record of being correct in their predictions is largely irrelevant. For years after the financial meltdown in ’08, I saw Jim Cramer all over the place being consulted about money matters, after he told everyone to hang on to their Goldman-Sachs shares right up to it’s crash and burn.
Oops, I meant Lehman Brothers. Silly me!
So, what does a replacement battery for Tesla Model 3 cost and would there be a reason to need one?
It’s guaranteed for 8 years. So there’s no price (as far as I know), and won’t need to be be for 7 more years, as no one will need to buy one.
8 years is correct, however there is a mileage limitation though as opposed to S and X:
Vehicles with Standard or Mid-Range Battery – 8 years or 100,000 miles (160,000 km), whichever comes first, with minimum 70% retention of Battery capacity over the warranty period.
Vehicles with Long Range Battery – 8 years or 120,000 miles (192,000 km), whichever comes first, with minimum 70% retention of Battery capacity over the warranty period.
This does not mean that the battery is only good for that length of time/mileage, merely that it is only covered under warranty subject to those parameters.
Yes there is a need for a price for the insurance companies. It is entirely possible that there could be damage caused to the pack that would be covered by insurance. Of course that number could be high enough that along with the associated damage to the car would cause it to be totaled.
It is also important to note that the 8/100k battery warranty is pretty much industry standard with the only significant difference if there is a stated retained percentage of rated capacity with many at that same 70% level.
Over two months now of owning a Tesla Model 3, and it’s been a ride of awe and wonder. Awe how the car is both fun and efficient and wonder at when the rest of the auto industry will catch up to what’s now in my driveway.
Is the car perfect? No car is, and this one is no exception. Yet, for a still-fledgling automaker, I was pleased to learn how well screwed together my car is. It’s also the most confidence inspiring vehicle in foul weather I’ve owned, and I’ve owned many.
I haven’t pulled up to a gas pump in over two months. Each morning when I leave for work, I have more energy in the car than when I pulled up to the house the evening before. I also don’t have quite the same car now I did when I took delivery. Back then it had a different feel to the accelerator; now it’s more punchy. It didn’t have a web browser on delivery day; now it does. The user interface on the center screen is more evolved now than just two months ago. The HVAC controls have improved. At one point I even caught myself marveling that as a teenager I would drive my first car, a Pontiac Star Chief, to the local arcade to play the Asteroids video game. Now, I can sit in my Tesla and play the game for free. Not something I was expecting, but a fun bonus to the ownership experience.
I’ve made three road trips in the Tesla to date. Never worried about range. Always had plenty of juice, even to tool around at our destinations. Total cost to Supercharge over two months of driving; $40. I used to spend close to that for one tank of gas in my prior vehicle. Home charging averages about $1.50 a day.
Therefore, Bob Lutz and the rest, I can’t help but wonder why you guys are sour on electrc cars, with Tesla being the most salient target for your ire. I’d like to think as we age, we get more optimistic about possibilities vs. hunkering down with the tried and true, yet obsoleting ways. I find no creativity in being negative; on the other hand being realistically optimistic is far from ivory tower; it requires tremendous work to pull off, but pull it off Tesla is doing, and I would really like the other automakers to come alongside.
To be fair a Dorman battery for a Ford Escape costs over $4,000 with a $1000 core charge. Installation and programming by a technician could cost another $500-1000 dollars. These Dorman batteries are refurbished packs, not brand new ones and there is mention of a warranty. If rebuilt battery packs with no warranty run over $5,000 what would a new one with a warranty cost? $6,000, $7,000?
Dorman has a large selection of rebuilt batteries so this pricing model must be viable on some level. There are undoubtedly less expensive options depending on your model of car.
I look at the prospect of replacing a battery as similar to rebuilding an engine or transmission in an internal combustion car. If you have a car that needs an engine (or transmission) you have a choice to make. I have to imagine that it’s a similar decision tree; fix it or sell (trade-in) it on another one.
There’s a robust market in used batteries as well as plenty of documented cases of and companies able to just replace specific affected cells for a very minimal outlay vs replacing the whole thing, the Prius is in the lead in those matters at least around here just due to numbers sold and eventually scrapped due to accidents etc. As more and more are sold of each particular vehicle and battery, that market will just get bigger and more accessible.
There’s no reason to think that there couldn’t even be bigger, more powerful aftermarket packs available eventually as the technology shrinks. What used to be a 70mile range Leaf could conceivably be expanded to a much longer range and/or more powerful one with a denser battery pack replacement (as a random example). Conceptually similar to replacing the 4cylinder in a ’91 GTI with a VR6 for example.
That’s one thing that seems to be overlooked when discussing BEVs, is the re-purposing of the batteries after it’s “first life”. As an example, GM has (had?) plans for batteries from the Volt to be re-purposed for use with power distribution or other such applications. I believe other car companies have similar proposals. AFAIK, no companies really offer plans to re-use engines from their ICE cars, with the exception of GM… Usually you can find a re-purpose for LS motors by stuffing them into almost any other kind of car… Haha!
I’d have to agree that it is, at best, lazy journalism to trot out these troglodytes, and very likely “just PR” from Ford. The names of Ford and Chrysler are familiar to folk, and insofar as Tesla is known, it’s for rich folk in cities. In the second instance above, cable news is filling space with identifiers familiar to the average punter. On one view, hey, it’s business (that of TV and ads). On another, one I share with PN, it’s a little despairing, because there’s an outside chance in Mullally’s case that the man is still earning his pension. To explain, in the link below, it seems William Ford himself agrees that the electrification of transport is happening and will be led from China. So long-term chipping at Tesla may be part of a distraction strategy whilst their deals are done, although my oldest brother (who is a 35yr veteran journalist) has always told me to choose the stuff-up over the conspiracy theory in these sort of situations! However, whether it’s strategic or just old men blowing out wind, it’s slackarse reporting either way (pun unintended).
According to the Wired article below, for many reasons including the fact that it is a partly-planned economy and not a free country, it is China who is already ahead of Tesla and who is their biggest challenge. It is suggested they also have better battery capability than Tesla, which has been one of that company’s biggest piece of armoury.
Not too many $70K batteries in the People’s Republic, I think, but there are already 1 million EV’s.
The article is a really intriguing read.
https://www.wired.co.uk/article/electric-car-sales-china-vs-tesla
Nothing new in that article, at least for me. But then I follow this pretty closely.
Yes, the Chinese make more EVs, because of massive government mandates/incentives/subsidies. They have no choice; all auto makers there need to now going forward.
The issue is not (and was never) as to whether Tesla had some huge technological advantage. It’s biggest advantage is that it has a huge brand identity and it’s a premium brand. Most of the Chinese EVs are in the low end of the market, and not really direct competitors. But some are.
The issue is whether Tesla can maintain it’s very large lead in America and Europe (so far). It’s very difficult for Chinese manufacturers to start selling in these markets as we’ve seen for years now by their failure to make any inroads with their IC cars. Zilch, essentially.
A good comparison is with phones: Tesla is the Apple iPhone; the Chinese are the Android handsets. Cheaper, but they can’t match the iPhone’s much higher price due to its market image as well as the elegance of its software and features.
I assumed some years back that Android phones would really put the squeeze in Apple; it hasn’t yet happened.
It’s very similar with Tesla and the other EV competition, whether it’s from the US, Europe or China. Tesla’s brand, its performance and its superb integration of its software is still heads and shoulders above anything else out there yet. And even if someone can match them on performance and features, Tesla’s brand is still magic. It’s the Mercedes of the 60s-70s, and the BMW of the 70s-90s. Or Porsche from the 60s-00s.
In other words, Tesla has massive sex appeal. And that’s #1.