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I think it took a company like Tesla to show that it IS possible to make an alternative fuel vehicle in mass production to spur some of the activists to push for more change via regulation.
That's why I said "all industries NEED early adopters. It gets the ball rolling". And Tesla is leading the way. But in the end, it might not be dominate. Who would have thought in 1930, 40, 50, etc that Toyota and VAG would be the two biggest auto companies in the world? Both from countries that the US went to World War with? Back in a time with the big Three ruled the industry and GM was the biggest company in the world?

Tesla might be tainted with the ideologists, the green advocates. Its not a mistake that author wrote
"Toyota is a company that sells cars, not an ideology.".



 

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I was chatting with a technology CEO a number of years ago and he told me he didn't worry so much about his competition as he did about some new company coming up with a disruptive technology that made his business obsolete (which is exactly what happened to him two years later).

That's what Tesla is currently doing to every auto manufacturer right now. Would any of them be investing in electric vehicles if it weren't for Tesla?
This is not correct. You might not believe me, maybe you will believe the people who invented the buzzword to teach the MBA students at Harvard. I missed the Tesla part in my first read.

"... it is a mistake to assume that the strategies adopted by some high-profile entrants constitute a special kind of disruption. Often these are simply miscategorized. Tesla Motors is a current and salient example. One might be tempted to say the company is disruptive. But its foothold is in the high end of the auto market (with customers willing to spend $70,000 or more on a car), and this segment is not uninteresting to incumbents"

Tesla is in a sustaining market. There is nothing new with cars and they attacked the high end, a market full of luxury vehicles. Disruptive technologies attack the low end ignored by the mainstream and capable of being disrupted because they are ignored.

"Tesla’s entry, not surprisingly, has elicited significant attention and investment from established competitors. If disruption theory is correct, Tesla’s future holds either acquisition by a much larger incumbent or a years-long and hard-fought battle for market significance."

Without the subsidies, they would be a bit player and if EV ever becomes mainstream in the US, one of the giants will absorb them.

The iPhone example is a very good example. The iPhone was NOT disruptive. It was merely a new User Interface. What was disruptive was the change to allow app developers to create software and reach the point where laptops decreased sales because one could now interact with the Internet from anywhere, anytime, a wireless signal was available. That was disruptive to the laptop industry. OTH, electric cars have been around since there has been cars.

Its amusing that the EV industry has co-opted this buzzword and Harvard is pushing back on those who don't use it correctly.

 

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I think the real question is will Tesla survive and how will Porsche prosper.

Also, there are some reality checks which need to be considered with respect to EVs

(1) . The number of EVs on public roads as a percentage of vehicles is very low - there is a critical threshold that will start impacting on infrastructure e.g. charging points, distribution networks, transmission networks and generation capacity
(2) . The green credentials are highly misplaced - for example, like many first world countries the US generates around 65% of its energy through coal and gas, followed by ~ 20% Nuclear - renewables only make up about 15% of the mix (largely hydro followed by wind and tiny amounts of solar ~2%) - where will the electrical capacity come from. Note electricity generation dominates greenhouse gas emissions.
(3) EVs require huge amounts of energy to move them and keep them moving, because they are so heavy ~ 2.2 tonnes e.g. ke = 1/2mv^2 where m = mass.
(4) . The impact of large numbers of EVs will require colossal electrical infrastructure upgrades - who will pay for this
(5) . What happens to the redundant batteries - this is also a significant problem - you can recycles the metals through solvent extraction and electrolysis - however, this uses yet more electrical energy and is currently barely economic to do so
(6) . It should be noted that current F1 engines are ~ 50% efficient

I could keep going, however I would make some observations - the vast majority of Tesla owners I have come across rarely understand the long term reality and technical challenges moving forward. At one stage I had two professionals who owned (P85s I think) working for my company. They wanted to charge up at the underground car park at our leased facility (this was a large facility that housed around 500 staff and contractors) - I investigated this in detail - but in a nut shell, between electricians, building works, lawyers and remediation the cost was very high. Interestingly the two individuals felt I should pay for this. I offered them a 50%:25%:25% split - they declined.

The long and the short of it, there is a real world out there that needs real solutions and, as history has repeatedly shown, attempts at legislating major change that aren't driven by economics usually end very badly. I suspect Mr Musk will find this out the hard way.

Good luck with the Model S - I hope it works out for you.

As an after thought I believe BMW produce more EVs than Tesla (cant remember where I heard this) - I don't think Tesla will compete with anything Porsche will produce - the fit and finish are light years apart. From a commercial point of view the marketing will be interesting - differentiation will be the key. From my own perspective I find EVs dull, more a functional appliance than an emotive experience - this is something the marketing will need to address.
All excellent points and many of the same that I always mention when the subject of electric cars come up, a nifty idea that is not completely borne out by it's requirements, especially as you say when you take into account how the electricity is being generated to charge these vehicles. IIRC early adopters from Tesla were 'treated' to free unlimited charging at the supercharger stations, I believe the latest model 3 does NOT come with this advantage!? Locally many municipalities are now charging for the plug-in stations that were initially free at public buildings and various downtown locations. And for those that like to go to the beach and camp, around here I have yet to see a charging station at these popular locations. ;)

Over the past number of years climate change has become a popular battle cry and the internal combustion engine has literally been throw beneath the bus, but lately these highly regulated engines are now very clean, some like the modern Porsche have a ULEV designation (ultra low emission vehicle), these are not the problem but rather largely unregulated small two cycle and industrial engines. If you haven't had a chance to read about this look up the comparisons of how much pollution your average gas powered garden equipment produces or this giant diesel engines in trains and ships, you should be surprised how they contribute to the overall air quality problem!
 

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Tesla can disrupt franchise dealerships, service stations, and gas stations all in one go. Who said anything about cars?


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Tesla can disrupt franchise dealerships, service stations, and gas stations all in one go. Who said anything about cars?
Why do I not find it surprising that you think the people who created the definition of disruptive innovation don't know what they are talking about? Read the article. Read the Original.

"Disruptive innovations are made possible because they get started in two types of markets that incumbents overlook.

Low-end footholds exist because incumbents typically try to provide their most profitable and demanding customers with ever-improving products and services, and they pay less attention to less-demanding customers. ...

In the case of new-market footholds, disrupters create a market where none existed. Put simply, they find a way to turn non consumers into consumers."


There is nothing new about cars. And there is nothing new about the distribution network for distributing the fuel, nor is there anything new about go to a website and click and buy. People do it all the time. To be disruptive they would have had to go after consumers at the very low end, the Hyundai, Kia, Scion end. Supercharging stations and the such are just gas stations for EV. Nothing new there. Admittedly, the incumbents in the dealership franchises don't like car company dealers. But its not like they don't know about it. Of course they know about it. They aren't ignoring it. The laws are entrenched and require new statutes to change at the state level. Even if it changes to direct purchase its just an improvement ON THE EXISTING model. Its incremental sustainment. Nothing more, just like UBER is incremental sustainment of the taxi cab model. Its NOT a new service.

No wonder HBR is irritated by the those that co-opt the meaning of their work. "There’s another troubling concern: In our experience, too many people who speak of “disruption” have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use “disruptive innovation” to describe anysituation in which an industry is shaken up and previously successful incumbents stumble":

The EV industry doesn't get to just use the phrase because its a new buzzword and sounds cool.

The BEST chance for being truly disruptive, is the Toyota model. Charge in a few minutes with solid state batteries. None of this nonsense about plugging in all night or seeking some superchargers. If one could charge in a few minutes plugging in a 220 Line, THAT would be disruptive. Wait time no different than today at gas stations. Convenient for the customer. None of this Tesla stuff is disruptive. It would not only be disruptive but they would bury Tesla, probably buy them out.

If you are going to co-opt a business concept, at least make sure it fits the model. :)

Leave it to someone from Harvard to not understand the definition of disruptive! don't even get me started on Harvard's new fall class make up this year....
There has been quite a bit of controversy about Harvard lately. But this I think HBR is for the MBA program, not the undergraduate and from two decades ago. They might know what they are talking about ;)
 

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Yeah man, I've read the article. I also live this stuff every day for the last decade. Plenty of explosive growth companies come out of the high end, too.

Tesla is a platform company, where platform is described in Platform Revolution by Geoff Parker. It has nothing to do with your specifications on battery charge time, which is a mundane engineering detail that can change at any time within the limits of physics. The tradeoff for holding a charge is it takes longer to charge.

Also, most of the world can't afford wheeled transportation that costs more than $500. Doesn't mean you have to play down there to disrupt.


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Yeah man, I've read the article. I also live this stuff every day for the last decade. Plenty of explosive growth companies come out of the high end, too.
There is nothing in there about "explosive growth". Not a requirement to be disruptive.

Not every disruptive path leads to a triumph, and not every triumphant newcomer follows a disruptive path.

For example, both Uber and Apple’s iPhone owe their success to a platform-based model: Uber digitally connects riders with drivers; the iPhone connects app developers with phone users. But Uber, true to its nature as a sustaining innovation, has focused on expanding its network and functionality in ways that make it better than traditional taxis. Apple, on the other hand, has followed a disruptive path by building its ecosystem of app developers so as to make the iPhone more like a personal computer.

Show me one thing about Tesla, or EV in general, that is not sustaining.
 

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Chows, I still think you put too much emphasis on charge time without thinking about all the time you spend gassing up your normal ICE car.
Good video. I see a different mindset. I travel a lot, thousands of miles, so that might be an issue I think about. But I also said

"Toyota sells in the $15 - $30K range. An EV with twice the range, charges in minutes, for $25K? The public would jump all over it. Toyota sells more cars than anybody, they have a well earned reputation for reliability.

... Sell an under $30K car with those features and watch out. Where do I sign up?"

When someone sells an EV in the $20s, charges in a few minutes on household 110 or 220, they will be the ones rolling in the money. I could even see buying one as a run about around town, especially if small for going into the cities where parking is terrible. Never would take it on the road. This is where the big boys would play.

---

I was getting on about "disruptive technology" because its getting old hearing that over and over again regarding EVs when even Harvard is telling writers to knock it off.
 

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I think you're focused too much on fitting case study theory to an innovative company that hasn't been adequately studied. The book will be written in 10 years. Look at the results they are getting when bringing new products to market, and remember there are non obvious revenue streams that follow those products.

If you're implying that VW is just going to do the same, you would be wrong. While Tesla works hundred hour weeks all summer, VW is on vacation for a month. They're sitting ducks.


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I think you're focused too much on fitting case study theory to an innovative company that hasn't been adequately studied. The book will be written in 10 years. Look at the results they are getting when bringing new products to market, and remember there are non obvious revenue streams that follow those products.

If you're implying that VW is just going to do the same, you would be wrong. While Tesla works hundred hour weeks all summer, VW is on vacation for a month. They're sitting ducks.
No. not implying that. This is what I believe.

EV is not "disruptive innovation". Its Sustaining innovation. Just another fuel source, like Diesel (or hybrids). Hybrids have been around for while. Nothing new here.

I am tired of hearing "But EV is disruptive". No, its not. Even the people who created the business concept are tired of those who write about it and have no clue what they are saying. Thats marketing mumbo jumbo to sell to the people who are clueless about what it really means.

Tesla only exists because of the subsidies. Some of that gravy train is about to run out. It ran out in Georgia, discussed in another thread, and the sales dropped to about nothing. Federal subsidies end at 200K units. Who will buy them then. Don't count of those 500K deposits. 95% of the people with deposits probably have NO IDEA they won't get the subsidy. Tesla subsidies ran out in Hong Kong. Look it up. Sales dropped to nothing.

Despite advances, its all too inconvenient. What do you do with those in apartments? Common parking? No garages? Thats a HUGE population. Get a hookup. What if I have two cars, or four cars like most people in the neighborhood. Where do four cars charge?

If a tech like Toyotas comes in, they WILL bury Tesla, not VAG. VAG is in trouble. They might never really recover from the scandals. No if they sell a $30K Toyota that charges in a few minutes, then they won't need four charging stations.

Forbes said it well. Tesla is tainted with a "cause". A large part of the populate hates that. He's pushing an agenda. Toyota, OTH, builds cars, not a "cause". They don't care what fuels their cars. They were working hydrogen.

It would not surprise me if Toyota, Honda, even Ford, just buys out Tesla when they prove a product starting to go mainstream WITHOUT subsidies. Read the Forbes article noted above. Once Tesla starts to be a player, they will be swallowed up.

That is what I believe.
 

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Tesla's market cap is a big "not for sale sign" to the world. If anything, it would them swallowing a traditional automaker. But that isn't going to happen because the old companies are saddled with legacy costs. It's the same reason Amazon will never buy Walmart.

I live in an apartment building with crazy stacked parking and they still have chargers. It isn't hard to retrofit buildings with electricity because they have electricity. In fact it adds another sanctioned revenue stream for the building. I don't expect my apartment will start selling me gasoline any time soon for obvious reasons.

The subsidies are less than the sales tax. Nobody cares. They lower the price of the car $5000 and nobody cares. They lower it $50,000 and nobody cares. Either you're on board, or you're not as an early adopter. Hong Kong is completely different and not applicable here.

I think where we agree is that it's just another fuel source. A percentage of new cars will be electric. Many won't be electric. Many will be hybrid and able to travel on EV only.

I'm in the minority in thinking that all of the oil will just be burned at the power plant if it's not being burned in cars. That's a fine outcome as power plants are more efficient than cars and emissions can be controlled centrally, rather than at the end user level.


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But you in the far coast. That's not an apartment building in East Nowhere with 100 apartments spread over many acres of land. You are land poor. That's not the US in general. The US is land rich outside the inner urban areas.

Once the subsidies end, and those 500K deposits evaporate as reality hits those buyers, or they can't produce on schedule, the stock could collapse.

Forbes https://www.forbes.com/sites/bertelschmitt/2017/07/25/ultrafast-charging-solid-state-ev-batteries-around-the-corner-toyota-confirms/#414f047844bb

Tesla is tainted with their cause. Don't think for a second that consumers don't know this. It leaves a bad tastes in some consumers who are sick and tired of hearing "The world is going to end and we are all going to burn up".

Toyota is a company that sells cars, not an ideology. Toyota is not the anti-battery monster it is made out to be, especially by surrogates of companies that bet their existence on one type of battery alone. They obviously make hybrids. Toyota did not become one of the world’s largest makers of cars without learning a thing or two about customer preferences, and that high price and low convenience can ruin the best intentions.

Five years ago, Uchiyamada famously said “The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge.”<fbs-ad position="inread" progressive="" style="box-sizing: border-box;"></fbs-ad>
In the five years since, not much has changed. Range, cost, and recharge time still stand in the way of large-scale adoption. Actual market share of battery-electric vehicles lags far behind their outsized share of media. Despite huge expenses in subsidies, and - in China – draconian measures, 99% of the society still thinks it is better served with old style technology.

I believe if Tesla even remotely become a successful mainstream player, one of the big players will eat it. Small car companies come and go all the time. Only TRUE niche car companies remain small. Ferrari is niche. Porsche was niche but is getting larger. There are a few. But the EV industry doesn't want Tesla to be niche. They want it to RULE. And if so, the big boys will eat it for lunch.

Tesla is selling life style pushing an agenda. Someone like Toyota is selling cars and doesn't care if its hybrids, EV, gas, diesel, hydrogen, water, or anything else. A car is a car. That's not what Tesla is doing. They are pushing "save the world" and many find that offsetting. For EV to succeed, it NEEDS a Toyota (or Honda).
 

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I do think it will behoove the Germans to join the Tesla standard for US bound cars, since Tesla is seeding the market. Then the business model becomes explosively larger. Everyone can supercharge and charge at the same rates.

Regardless of coastal or not, preferences of young people to live in urban areas will bring enough demand for these services like charging in concentrated areas.


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Sure, sorry about that. My bad. Mission E will sell in Europe. They have no choice and it will to those well heeled folks with the money, because they will have no choice.

Its won't sell well here. Macan's might sell some as a sports SUV, different market. Macan to go all EV https://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=UTF8&prev=_t&rurl=translate.google.com&sl=de&sp=nmt4&tl=en&u=http://www.manager-magazin.de/unternehmen/autoindustrie/porsche-jedes-zweite-fahrzeug-soll-bald-elektroauto-sein-a-1153417.html&usg=ALkJrhg3w8KFvxLUQ7GccwcZyLyiqwGzxg

"As the first electric model, the subsidiary of the Volkswagen Group in 2019 will launch the sports car Mission E on the market.One or two years later, a battery-powered SUV coupe will follow, says the company.Probably already 2022 come then Porsches bestseller Macan new on the market.CEO Oliver Blume wanted to offer the new generation of this model only electrically, reports board members."

Full size 4 door sedan? Porsche already is considered niche. How are this Pannies doing selling? They keep saying record breaking Panny sells but 100% of nothing is still nothing. Lets see 3511 Pannys sold year to date. Not exactly a best seller. I don't believe American consumers care at all about a 4 door Porsche sedan, regardless of what powers it. In this case, Tesla does have them beat.

Win to Tesla for being the foot in the door.
 

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This is a pretty fascinating video that goes into deep detail about all of the modes in Panamera Turbo S Hybrid. It basically does everything possible with electric hybrid on 4 wheels. You almost wish the engineers made it simpler.

https://youtu.be/4hevwnhQrZ0


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Teslas are not environmentally friendly. They are coal or natural gas powered. That is the misconception. We need to change the source of our power grid to be environmentally friendly. This whole thing is just a charade unless you live in Denmark.
 

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Teslas are not environmentally friendly. They are coal or natural gas powered. That is the misconception. We need to change the source of our power grid to be environmentally friendly. This whole thing is just a charade unless you live in Denmark.
See misconception video above. Agreed we need to get off coal and gas for electricity but the good news is we can.

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