Item — HN Reader

> Outside of the coastal elites or tech junkies, Tesla is practically unknown and is a rounding error to competitors.

Tesla outsells BMW, Audi and Mercedes' flagships in their home market - https://www.cnet.com/roadshow/news/tesla-outsells-bmw-audi-m...

Tesla Model 3 Outsells BMW, Mercedes Equivalents in California - The Model 3 is the best selling mid-size premium sedan sold in California in the first quarter. - https://www.thestreet.com/investing/stocks/tesla-outsold-bmw...

It seems it would be healthy for competitors to take note of this "rounding error"...

1 comments

And, of course, BMW and Mercedes are simply incapable of competing with Tesla on quality engineering and streamlined manufacturing processes, so the only option they have left is sabotage.

It is very hard to connect electric motors to laptop battery packs and to replace the dashboard with an android tablet.

Wouldn’t you say this is a little glib?

Nissan’s LEAF famously struggled with battery degradation over time.

You can shade Tesla’s execution/financial performance/etc., but the battery technology improvements they’ve made are real. They’re going to be the first battery manufacturer to deliver costs of lower than $100/kWh, not to mention effectively doubling global production of lithium ion batteries.

A BMW is my most driven car, and I’ve test driven the i3, but it’s quite glib to suggest that BMW and Mercedes could come out with an electric car at any point in time. Tesla’s batteries have degradation performance like this: https://www.digitaltrends.com/cars/tesla-batteries-last-long.... BMW only offers a warranty on the i3 battery to 80% capacity after 100k miles.

One last thing: clean infotainment software is not a given. BMW iDrive was terrible until 2016. The Mercedes interface is still ugly. Neither maker has touchscreens standard.

I agree that was glib, but some of the statements made by Tesla fans (speaking as a former somewhat Tesla fan myself) are just asking for it. — I don't want to dismiss Tesla, they did achieve a lot. However, it would be a mistake to think that there's some technological breakthrough that they possess that makes them unbeatable or even the most likely winner in the upcoming electric car competition.

Among the reasons why, I would say there are many — engineering culture (and part of that is quality control and standards), haphazard management, brain leak (because of the competition poaching employees, unclear financials, and the management), financials (not making a profit and burning through money like crazy), dismissive approach to the competition and other company's engineering efforts and solutions (stupid robots everywhere, autopilot with the freaking webcams, when everyone said it's a bad idea).

I think the reason why we see that BMW, Mercedes, Audi and others are not building the electric cars with the same favorable characteristics as Tesla, and without similar fanfare, is because they have a bottom line that they'd like to stay in the black.

They have to know that electric car market is a very small niche right now, and they are letting Tesla to be the one who makes customers intrigued and creates some pressure for bringing up at least a little bit of infrastructure for the charging.

Imagine the daily commute in the big city, how many cars are driving through the main city artery? How many cars are pumping gas in any given 30 minutes? How many supercharger stations are needed to accommodate for this? I think you can create a societal collapse right now if 5% of the drives in US would switch to electric cars. People wouldn't find a place to charge their car, electric grid would become unstable and overloaded from all these people who hooked up Tesla to their 200 amp residential fuse box, while having dishwasher, washing maching, drier, TVs, computers and a ton of lights running. For fun, you can also imagine superchargers with enormous lines, with people reserving spots and selling them to those who are in a rush.

I'm sure that the blunt of BMW's and alikes engineering resources are spent right now in different areas, because they just can't afford building this perfect electric car which only 1% of their customers would want to buy. That's how you get bankrupt. Remember Apple Newton?

It could certainly be that the German automakers are more concerned about present profitability. That could easily turn into falling victim to the classic innovator's dilemma. It seems that by year end, both the Model S and Model 3 will have taken significant market share from their European competitors: http://europe.autonews.com/article/20180220/ANE/180219831/te.... The cannibalization is real, and that's why luxury automakers like BMW have announced plans for 12 fully-electric models by 2025 (https://www.theglobeandmail.com/globe-drive/news/industry-ne...).

Your points about electrical infrastructure are definitely thought-provoking ones. I'd agree that the infrastructure as of today doesn't exist for widespread adoption. At the same time, the market that Tesla and the luxury European automakers compete for today doesn't hit that 5% threshold (http://www.wsj.com/mdc/public/page/2_3022-autosales.html#aut...). Add up the market share of car (not truck) sales from BMW, Mercedes, Audi, Porsche, and you're looking at a ~3% market share.

I think this section of the video from Sandy Munro is worth a watch: https://youtu.be/CpCrkO1x-Qo?t=1730. Munro has been a huge critic of the build quality of the Model 3, but that everything "below the skateboard [the floor]" is seriously impressive. The cells in Tesla's battery pack have a maximum of a 0.2 milliamp difference between cells.

Say that I accept your premise that the German automakers today are biding their time, and could spend their R&D money on electric cars if they so chose. Who will they source their battery packs from? Will they try to build their own supply chain for the raw materials? What competence have they demonstrated in creating electric powertrains that deliver the acceleration and speed that we expect from luxury cars?

Lastly, I think your "market size estimation" here is dramatically off. BMW last year delivered 2.4 million total cars. They sold 103k "electric" vehicles last year, with 31k of the i3, and the rest probably being comprised of hybrid versions of their existing 3 and 5 series sedans. (https://www.press.bmwgroup.com/latin-america-caribbean/artic...) This was 65.6% year over year growth. For 2018, they expect "high two-digit growth" to continue. The demand is there, even from their own existing customers.