Elon Musk Tells Tesla Willing to Buy Idle GM Plants(bloomberg.com)
bloomberg.com
Elon Musk Tells Tesla Willing to Buy Idle GM Plants
https://www.bloomberg.com/news/articles/2018-12-07/musk-to-the-rescue-as-tesla-may-consider-buying-idle-gm-plants
7 comments
Not sure how good of a move that is financially, but damn is that a good political move. If he took over the plant in Oshawa, ON he would gain goodwill from all 3 levels of Canadian government.
I'm not sure Tesla can remain competitive with the major car manufacturers as they begin their shift to electric vehicle production. For example, the Jaguar I-Pace is cheaper than the Tesla Model X and also a slightly better car for the money:
https://www.jaguarusa.com/all-models/i-pace/index.html
How will Tesla be competitive with the Mercedes, BMW, Audi, VW, Porsche, Lexus, etc. electric cars coming out in the next few years? It may not be a good idea for Tesla to buy more plants. Maybe they should look for a buy out.
https://www.jaguarusa.com/all-models/i-pace/index.html
How will Tesla be competitive with the Mercedes, BMW, Audi, VW, Porsche, Lexus, etc. electric cars coming out in the next few years? It may not be a good idea for Tesla to buy more plants. Maybe they should look for a buy out.
>How will Tesla be competitive with the Mercedes, BMW, Audi, VW, Porsche, Lexus, etc. electric cars coming out in the next few years? It may not be a good idea for Tesla to buy more plants. Maybe they should look for a buy out.
It is clear that the market for EV's is going to explode, and so there will be plenty of room for Tesla plus various competitors. I think the real questions are which new companies will be in the new market, and which of the incumbents will make the transition and which will fail.
It is clear that the market for EV's is going to explode, and so there will be plenty of room for Tesla plus various competitors. I think the real questions are which new companies will be in the new market, and which of the incumbents will make the transition and which will fail.
The only real competition for Tesla right now is BYD and maybe Nissan. Everything else has essentially vaporware until they get to version 2 production models and it is questionable if they will find sufficient takers for their version 1s Tesla BYD and Nissan will have mature products by then. This is exactly why Tesla is trying to ramp up so fast. The complexity of optimizing battery discharge and cooling in a wide variety of environments is a very real moat these companies have.
Your would look at vw plans. ID Neo looks a mind blowing car
As I said, we will need to wait for for second/third year production run of any car before really being able to understand if something is offering value and that's when significant adoption will happen. Tesla, Nissan and BYD are very much getting into this zone in 2019/2020. No one else will really get to this stage till early 20s.
On VW specifically, "clean disel" was mind blowing too :-)
On VW specifically, "clean disel" was mind blowing too :-)
Jaguar I-Pace both infotainment center and climate control screens have trouble keeping up and drop frames during animations. Stuttering UI in almost 100K car.
The American companies have good talented software engineers that can convert any engineering or social competition in to -who got better software engineering talent and win. With all hardware being same or even better, how will they are going to compete on autopilot, over the air update and upgrades etc ? Ultimately user will be going to decide on user experience which Tesla no doubt winning right now.
The I-pace is smaller than the model Y is rumored to be, let alone the X. Different market, different prices.
[deleted]
Any yet, few carriage makers made the transition to automobiles successfully (Buick was one that did.) Being able to make the body is one thing, being able to make a very different drive train is something else.
I don't think the analogy works. An internal combustion engine is more complicated than an electric motor. If anything, going electric simplifies their cars.
The car manufacturers know what they're doing and they're now investing heavily in electric:
https://www.businessinsider.com/mercedes-reveals-plans-to-do...
The car manufacturers know what they're doing and they're now investing heavily in electric:
https://www.businessinsider.com/mercedes-reveals-plans-to-do...
Tesla's motors are quite advanced - and at the heart of an electric motor is materials science, which is very complex and amenable to multiple trade secrets.
The first internal combustion engines were vastly simpler than the motor in your blender. There too, it was actually casting tech and materials science that really mattered. Ditto re batteries. I wish the big companies luck, and they have finally woken up - but across a vast range of business history giving a multiple year lead can easily be fatal to incumbents, no matter how wonderful they were at the last tech.
Investment isn't enough, I recommend Clayton Christensen's works, or just view some of his excellent Youtube videos (Innovator's Dilemma being his most famous book.)
The first internal combustion engines were vastly simpler than the motor in your blender. There too, it was actually casting tech and materials science that really mattered. Ditto re batteries. I wish the big companies luck, and they have finally woken up - but across a vast range of business history giving a multiple year lead can easily be fatal to incumbents, no matter how wonderful they were at the last tech.
Investment isn't enough, I recommend Clayton Christensen's works, or just view some of his excellent Youtube videos (Innovator's Dilemma being his most famous book.)
> Tesla's motors are quite advanced
And yet a low volume brand like Jaguar can produce a competitive electric car. What's going to happen when Mercedes releases multiple electric models? As the article says, in 2017 Mercedes sold 2.3 million cars. Tesla sold 101,000.
> they have finally woken up
It's less about them waking up and more about it finally being worth their time. They operate at a larger scale than Tesla, they have existing product lines, and why stop making what continues to sell?
A bigger motivation for them is that multiple countries have announced future bans on non-electric vehicles. They need to produce electrics to keep selling cars.
> across a vast range of business history giving a multiple year lead can easily be fatal to incumbents
I don't think so in this case. The incumbents have second mover advantage. Tesla has grown the early market for electric cars, they've set a benchmark, and they're now going to get out-produced by the larger manufacturers.
When everyone's selling electric cars, why am I buying a Tesla?
And yet a low volume brand like Jaguar can produce a competitive electric car. What's going to happen when Mercedes releases multiple electric models? As the article says, in 2017 Mercedes sold 2.3 million cars. Tesla sold 101,000.
> they have finally woken up
It's less about them waking up and more about it finally being worth their time. They operate at a larger scale than Tesla, they have existing product lines, and why stop making what continues to sell?
A bigger motivation for them is that multiple countries have announced future bans on non-electric vehicles. They need to produce electrics to keep selling cars.
> across a vast range of business history giving a multiple year lead can easily be fatal to incumbents
I don't think so in this case. The incumbents have second mover advantage. Tesla has grown the early market for electric cars, they've set a benchmark, and they're now going to get out-produced by the larger manufacturers.
When everyone's selling electric cars, why am I buying a Tesla?
There's no competitive Jaguar EV yet. It's not competitive until it's actually out there competing, with a margin above costs, in quantities above 1,000 a month at sedan prices. Right now it's a concept car being shown around; you can't buy one and have it delivered, the announced model will be high-end and c'mon man: seriously, there's no shortage of EV concept EVs in the world now.
From an article published today: "The I-Pace SUV, launched this week..." "I-Pace starts at $119,000, about $35,000 below the Model X, Tesla’s SUV." "Test drives of I-Pace started this week..." https://www.theaustralian.com.au/life/motoring/jaguar-makes-...
And within a few days: "While the I-Pace is an athletic prodigy, it doesn't do much to advance the EV state of the art. The sole battery pack, a 90.0-kWh unit, is EPA rated for 234 miles between charges. Tesla's Model X earns a 238-mile rating with a 75.0-kWh battery, and a Chevy Bolt covers that distance with just 60.0 kilowatt-hours. Perhaps the Jag's inefficiency is the price you pay for an EV that doesn't look like a suppository." https://www.caranddriver.com/reviews/2019-jaguar-i-pace-by-t...
https://electrek.co/2018/08/23/jaguar-e-type-zero-production...
https://www.techradar.com/news/jaguar-i-pace-the-future-now
Why shill for this firm? It's really great at hyping itself. Production is the test, it may happen, and Jaguar might even be able to compete at the very high end: but it's not out there competing now, and won't be trying sedan sales for years, if ever.
You only have a second-mover advantage if you have a better tech that can leapfrog the first tech; Google did, Watt did, Westinghouse did but this is the exception, not the rule.
From an article published today: "The I-Pace SUV, launched this week..." "I-Pace starts at $119,000, about $35,000 below the Model X, Tesla’s SUV." "Test drives of I-Pace started this week..." https://www.theaustralian.com.au/life/motoring/jaguar-makes-...
And within a few days: "While the I-Pace is an athletic prodigy, it doesn't do much to advance the EV state of the art. The sole battery pack, a 90.0-kWh unit, is EPA rated for 234 miles between charges. Tesla's Model X earns a 238-mile rating with a 75.0-kWh battery, and a Chevy Bolt covers that distance with just 60.0 kilowatt-hours. Perhaps the Jag's inefficiency is the price you pay for an EV that doesn't look like a suppository." https://www.caranddriver.com/reviews/2019-jaguar-i-pace-by-t...
https://electrek.co/2018/08/23/jaguar-e-type-zero-production...
https://www.techradar.com/news/jaguar-i-pace-the-future-now
Why shill for this firm? It's really great at hyping itself. Production is the test, it may happen, and Jaguar might even be able to compete at the very high end: but it's not out there competing now, and won't be trying sedan sales for years, if ever.
You only have a second-mover advantage if you have a better tech that can leapfrog the first tech; Google did, Watt did, Westinghouse did but this is the exception, not the rule.
> Right now it's a concept car being shown around; you can't buy one and have it delivered
You can buy a Jaguar I-Pace and have it delivered:
https://electrek.co/2018/10/17/jaguar-starts-i-pace-deliveri...
https://www.electrive.com/2018/10/01/jaguar-i-pace-delivered...
https://insideevs.com/in-norway-jaguar-i-pace-400-deliveries...
And the current and future competition is already hurting Tesla sales in Europe:
https://www.bloomberg.com/news/articles/2018-08-11/jaguar-i-...
> Why shill for this firm?
I'm not shilling for anyone, son. I'm just objective.
You can buy a Jaguar I-Pace and have it delivered:
https://electrek.co/2018/10/17/jaguar-starts-i-pace-deliveri...
https://www.electrive.com/2018/10/01/jaguar-i-pace-delivered...
https://insideevs.com/in-norway-jaguar-i-pace-400-deliveries...
And the current and future competition is already hurting Tesla sales in Europe:
https://www.bloomberg.com/news/articles/2018-08-11/jaguar-i-...
> Why shill for this firm?
I'm not shilling for anyone, son. I'm just objective.
I stand corrected on this one point. No indication of whether they are selling below cost but it's wildly unlikely they aren't - so that's not yet sustainable competition even at the high end. Your word competitive referred to my comment on Tesla motors, but as I've already stated, in fact Jaguar's car is clearly less efficient. Tesla started high-end UV deliveries ancient years ago. Lower cost Ford EVs, etc have been driving around for a while. So why do arabesques for Jaguar?
You weren't objective enough to note the $100,000 price tag; there's no objective analysis that makes Jaguar EVs competitive with Tesla's model 3 today.
Nor are you objective enough to answer any of my other points, such as the inefficiency of Jaguar's car, contra your denial of my statement that "Tesla's motors are quite advanced." It would be civil not to just ignore points you can't answer.
You weren't objective enough to note the $100,000 price tag; there's no objective analysis that makes Jaguar EVs competitive with Tesla's model 3 today.
Nor are you objective enough to answer any of my other points, such as the inefficiency of Jaguar's car, contra your denial of my statement that "Tesla's motors are quite advanced." It would be civil not to just ignore points you can't answer.
Just realized "that 1,000 shipped" or "delivered" may just refer to their test drive cars; they may not have sent one to a customer yet.
My guess is they will sell them the battery they develop for their car.
Maybe, but everyone's developing their own drivetrains and battery packs. Tesla's current advantage is that they've been using them for longer, but that advantage will diminish with time.
Mercedes and Porsche will enter Formula-E starting from the 2019-20 season as part of the marketing push for their electric vehicles:
http://www.fiaformulae.com/en/news/2018/may/mercedes-eq-form...
Mercedes will be in it to win it (as they have done in Formula 1) so they can claim they have the best electric car know-how.
Mercedes and Porsche will enter Formula-E starting from the 2019-20 season as part of the marketing push for their electric vehicles:
http://www.fiaformulae.com/en/news/2018/may/mercedes-eq-form...
Mercedes will be in it to win it (as they have done in Formula 1) so they can claim they have the best electric car know-how.
Well they are hedging their bets with their gigafactories at least. Economies of scale should ensure somewhat of a niche.
Having recently been in the market, to choose between these two, I don't believe that the Jaguar is clear-cut the better car. Disclosure, I chose the Tesla Model S!
The Jaguar does have advantages. The Matrix headlamps are awesome, it has a heads up display, the interior _is_ nicer, and IMO, it looks like the ant's pants!
However, the Tesla is faster (at least the Model S), and the P100D of either the X or S blows it out of the water. The Model S has a longer range, more space in the back, both for passengers and luggage. The X has _even more_ space, and the Tesla has a nicer screen, with better software. The adaptive cruise, and lane keeping features also work better IMO.
However the three big winning points for the Tesla: 1. Charge time: The Tesla can just charge faster, and it uses a lot less energy per km (or mile), so you end up needing to charge it less often, and when you do charge it, it can charge faster. 2. OTA software and map updates. This is just an awesome feature, particularly the map updates! They are just pushed to your car, no need to get it serviced to get the new maps, which also means that your maps tend to be more up to date. 3. This one is probably temporary, but still important for now: The Charging Network. The Tesla superchargers are in a lot more places than CCS-2 100kW chargers, which makes the Tesla more convenient for longer road trips.
If you _never_ do long trips, then 1 and 3 won't make any difference to you, since they both have enough energy for most people for day to day running, particularly if you have a charging pole at your work and/or home.
So, as I said, it's not clear cut which is better, since different needs could tip the above scales different ways. Which is just great IMO, since real competition is the only way forward.
The Jaguar does have advantages. The Matrix headlamps are awesome, it has a heads up display, the interior _is_ nicer, and IMO, it looks like the ant's pants!
However, the Tesla is faster (at least the Model S), and the P100D of either the X or S blows it out of the water. The Model S has a longer range, more space in the back, both for passengers and luggage. The X has _even more_ space, and the Tesla has a nicer screen, with better software. The adaptive cruise, and lane keeping features also work better IMO.
However the three big winning points for the Tesla: 1. Charge time: The Tesla can just charge faster, and it uses a lot less energy per km (or mile), so you end up needing to charge it less often, and when you do charge it, it can charge faster. 2. OTA software and map updates. This is just an awesome feature, particularly the map updates! They are just pushed to your car, no need to get it serviced to get the new maps, which also means that your maps tend to be more up to date. 3. This one is probably temporary, but still important for now: The Charging Network. The Tesla superchargers are in a lot more places than CCS-2 100kW chargers, which makes the Tesla more convenient for longer road trips.
If you _never_ do long trips, then 1 and 3 won't make any difference to you, since they both have enough energy for most people for day to day running, particularly if you have a charging pole at your work and/or home.
So, as I said, it's not clear cut which is better, since different needs could tip the above scales different ways. Which is just great IMO, since real competition is the only way forward.
Are all these chargers compatible? I hope we don't end up with a mobile phone situation, where you needed 5 chargers for 5 phones.
I guess independent charging stations can have support for every car interface, but that still feels like a waste compared to a universal interface.
I guess independent charging stations can have support for every car interface, but that still feels like a waste compared to a universal interface.
Nope.
There are four standards, although only three per market. And, in essence, there are two surviving standards per market.
1. Tesla US connector 2. Tesla Everywhere else connectors (CCS with a mod to allow DC charging over it) 3. CHAdeMO (used to be the thing, but lost the war) 4. CCS-2 (European standard, what most new cars, except Tesla, support)
The rumour is that the EU Model 3 _will_ have a CCS-2 port, which would be great news, as that means essentially one standard in Europe. The S/X though have an older port which will only work with Tesla SuperChargers, the hope is that there will be a CCS-2 adapter made available, but that is only a hope, not even a rumour.
In the US, all Teslas have the "Tesla socket", and all/most other cars have CCS(-2).
A few manufactures still make CHAdeMO cars, but, IMO, they _will_ stop soon, since the infrastructure just isn't there to support them, so people will also soon stop buying them.
There are four standards, although only three per market. And, in essence, there are two surviving standards per market.
1. Tesla US connector 2. Tesla Everywhere else connectors (CCS with a mod to allow DC charging over it) 3. CHAdeMO (used to be the thing, but lost the war) 4. CCS-2 (European standard, what most new cars, except Tesla, support)
The rumour is that the EU Model 3 _will_ have a CCS-2 port, which would be great news, as that means essentially one standard in Europe. The S/X though have an older port which will only work with Tesla SuperChargers, the hope is that there will be a CCS-2 adapter made available, but that is only a hope, not even a rumour.
In the US, all Teslas have the "Tesla socket", and all/most other cars have CCS(-2).
A few manufactures still make CHAdeMO cars, but, IMO, they _will_ stop soon, since the infrastructure just isn't there to support them, so people will also soon stop buying them.
I think you missed that chademo isn't dying anything soon in Japan. And China has a local standard of its own. Those two markets are sort of out of reach for everyone else
Ah, this is very useful info, thanks. Hopefully one standard will emerge, but at least we don't have one standard per manufacturer.
The EU model 3 has officially been announced with a CCS2 port. Other than the US, it’s likely that this will be THE port that everyone will support. Hopefully we won’t have any bigger charging port wars going forward...
The EU Model 3 will have a CCS-2 port, not a rumour any more ;)
https://electrek.co/2018/11/14/tesla-model-3-ccs-2-plug-euro...
https://electrek.co/2018/11/14/tesla-model-3-ccs-2-plug-euro...
> The rumour is that the EU Model 3 _will_ have a CCS-2 port, which would be great news, as that means essentially one standard in Europe.
This isn't a rumour anymore btw, it's confirmed
This isn't a rumour anymore btw, it's confirmed
Tesla offers other EV manufacturers the ability to be compatible with their superchargers... so far no takers
> How will Tesla be competitive with the Mercedes, BMW, Audi, VW, Porsche, Lexus, etc. electric cars coming out in the next few years? It may not be a good idea for Tesla to buy more plants. Maybe they should look for a buy out.
That all depends on how successful the continued ramp-up of Model 3 is, and how fast they can ramp up Model Y.
Once the production line for those two are running smoothly, I'm sure they can continue to bring the price down, and I'm sure they'll stay ahead of the others in this regard. I think the heavy focus on automation was a mistake in the short term, but they'll still gain from it in the long term once they've de-automated the things that don't make sense. Trying for something hard like that always leaves you with some new innovative methods that actually work.
Once they have one truly mass-producing production line, they're safe as far as I'm concerned. Once the bring-up and capital costs of it starts to be written down, they can at least make a couple of model just as cost-effectively as other manufacturers.
Once the Model 3/Y is stable I'm sure they'll bring some of the development in battery cells/packs back to the S/X. Perhaps the motor as well. If they came out with a new model right now I'm sure it'd be cheaper and more profitable than the Jaguar I-Pace. But that's not their focus atm.
There's still some uncertainty for Tesla ahead, but I think they're over the worst of it. There's good reasons to be optimistic.
That all depends on how successful the continued ramp-up of Model 3 is, and how fast they can ramp up Model Y.
Once the production line for those two are running smoothly, I'm sure they can continue to bring the price down, and I'm sure they'll stay ahead of the others in this regard. I think the heavy focus on automation was a mistake in the short term, but they'll still gain from it in the long term once they've de-automated the things that don't make sense. Trying for something hard like that always leaves you with some new innovative methods that actually work.
Once they have one truly mass-producing production line, they're safe as far as I'm concerned. Once the bring-up and capital costs of it starts to be written down, they can at least make a couple of model just as cost-effectively as other manufacturers.
Once the Model 3/Y is stable I'm sure they'll bring some of the development in battery cells/packs back to the S/X. Perhaps the motor as well. If they came out with a new model right now I'm sure it'd be cheaper and more profitable than the Jaguar I-Pace. But that's not their focus atm.
There's still some uncertainty for Tesla ahead, but I think they're over the worst of it. There's good reasons to be optimistic.
I guess it depends on the price GM is asking for. The problem is that this news item itself increased the selling price probably significantly, as it's harder for Elon to say no to buying.
I don't think GM would take that risk. They would draw the ire of the largest private-sector union in Canada and also the provincial and federal governments. They have 2 factories in Canada that don't have closures announced and sell cars here so they can't have a PR disaster like that.
Maybe he could leverage it the other way. He could say that Tesla is willing to save the factory but the evil GM, who previously saw no value in the factory and was going to close it, now wants an outrageous price. Tesla should be able to get it for a fire sale price.
Taking a page out of the Gavin Belson book? https://www.youtube.com/watch?v=3XE5m_meLVw
Classic! And yes, that's exactly the angle Musk should take.
Corporations don't work that way. GM has already weathered bring called evil by Trump and politicians with the power to cause it trouble. A little name calling from Musk would not do anything.
Prediction: This is purely a marketing stunt and absolutely nothing will come of it.
I will get downvoted for this "cynical" comment, and in six months or a year, everyone will have forgotten.
I will get downvoted for this "cynical" comment, and in six months or a year, everyone will have forgotten.
> I will get downvoted for this "cynical" comment, and in six months or a year, everyone will have forgotten.
No need for that. It's not an unreasonable thought. If you get downvoted now it's probably because of this second part of the comment, or because the first part doesn't contribute much.
Personally I think it's impossible to say. You could've made the same prediction for the tweet Elon made about solving Australias power problems with that battery plant. It'd be totally reasonable to be skeptical, but see how it turned out.
No need for that. It's not an unreasonable thought. If you get downvoted now it's probably because of this second part of the comment, or because the first part doesn't contribute much.
Personally I think it's impossible to say. You could've made the same prediction for the tweet Elon made about solving Australias power problems with that battery plant. It'd be totally reasonable to be skeptical, but see how it turned out.
If you hear the actual interview, it's quite different. Elon says very casually and non deterministically that it may be a good idea. That too after the interviewer pressed him.
There's not even a marketing stunt. This was a question in an interview and Elon answered offhandedly. No marketing involved. Nothing deep involved. No actual plans involved.
Yes, very likely nothing will come of it as it was just an offhand comment.
Yes, very likely nothing will come of it as it was just an offhand comment.
The thing about Elon is that he is a bit arbitrary and likely would follow up on random trains of thought just like that Boring Company he formed
An old GM plant near my city got bought up by a Chinese glass manufacturing company. They make windshields and ironically sell them to GM.
Thats a good move to bring in more investors for some cash.
Why would they need cash now that they're highly cash flow positive?
Their revenues are increasing 50+% YoY and they became profitable while ramping up. Competitors are now publishing profit warnings and are quickly losing market shares in segments where EV are being produced in volume. The latest figures should be pretty scary: https://cleantechnica.com/2018/12/08/tesla-model-3-completel...
Some ICE manufacturers won't cross the EV chasm. They may even try to sell themselves to Tesla (too late I guess).
Their revenues are increasing 50+% YoY and they became profitable while ramping up. Competitors are now publishing profit warnings and are quickly losing market shares in segments where EV are being produced in volume. The latest figures should be pretty scary: https://cleantechnica.com/2018/12/08/tesla-model-3-completel...
Some ICE manufacturers won't cross the EV chasm. They may even try to sell themselves to Tesla (too late I guess).
Jesus what a hero