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“The Tesla Model S is our top-scoring car”

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Re: “The Tesla Model S is our top-scoring car”

#11

Post by toomuchtodo »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

Step 1: Have a fortune

Step 2: Take fortune, hire people to build your vision

Step 3: Possibly profit.

Re: “The Tesla Model S is our top-scoring car”

#12

Post by Grimm665 »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

There is a lot of money in prolonging the status quo.

Re: “The Tesla Model S is our top-scoring car”

#13

Post by codex »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

My theory: it all comes down to the maturation of the underlying technology. Tesla has been around for ten years. Why is their mainstream car only coming to market now, after all that time? Part of it is that creating a new car company takes a lot of time, but most of it is that the battery and other technologies have only recently matured enough to make EVs practical. Tesla has been waiting and waiting until this occurred and has a small jump on the other manufacturers. If this is true, I expect other manufacturers to ramp up pretty quickly. Both GM and Nissan both have electric cars that outsell the Model S (at least for now).

Another aspect of the Model S worth mentioning is that EVs are heavily subsidized with a $7.5K federal tax credit a huge pile of cash from California--so Tesla has extra money to apply to the fit and finish of the car vis a vis non-electric luxury cars. In fact, as of last quarter all of Tesla's profits came from selling ZEV credits to other auto manufacturers, not from the actual car itself. Take out the $70M from selling ZEV credits and Tesla's gross margin is only 6%--much less than other luxury manufacturers. In fact they'd be running at a $50M quarterly loss without them. So it's easier to make a great car if you don't have to make as much money at it. If Tesla manages to get their gross margin to 25% without these incentives, however, it will be a different story, and a remarkable feat.

Re: “The Tesla Model S is our top-scoring car”

#15

Post by dexen »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

> Why can't the existing industry do this? Why all the mediocre product that's the tail end of pumping billions of dollars into R&D staffed by largely the same folks Tesla has been hiring?

Innovator's dilemma: at which point it's OK for a new product to cannibalize market of your established products? Think iPhone vs. iPod.

In a large enterprise, it also is matter of inter-departamental power struggles.

Re: “The Tesla Model S is our top-scoring car”

#16

Post by acchow »

technoslut wrote: post #5
aviswanathan wrote: post #3

I can attest to this. Initially, I was extremely skeptical that the Tesla was anything great (electric cars haven't been the highlight of the automotive industry despite repeated attempts by established manufacturers). A few weeks ago, however, I had the chance to drive a family friend's Tesla and I was stunned. The Model S seems like a car from the future. Forget the fact that it's completely electric and charges vi…

After test driving a Tesla, I agree with much of what you said and one is the engine noise. I prefer sports cars and especially the sound of a V8/12. To me it's better than listening to music. I do understand that those purchasing a luxury vehicle have different expectations. Those in sedans appreciate cabin silence more than others.

> To me it's better than listening to music.

I humbly submit that you haven't listened to the right music.

Re: “The Tesla Model S is our top-scoring car”

#17

Post by arethuza »

codex wrote: post #13
bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

My theory: it all comes down to the maturation of the underlying technology. Tesla has been around for ten years. Why is their mainstream car only coming to market now, after all that time? Part of it is that creating a new car company takes a lot of time, but most of it is that the battery and other technologies have only recently matured enough to make EVs practical. Tesla has been waiting and waiting until this oc…

BMW has a full range of electric cars that will start coming to market this year, in particular the small carbon fibre i3 looks particularly interesting:

http://www.telegraph.co.uk/motoring/car-manufacturers/bmw/10...

Re: “The Tesla Model S is our top-scoring car”

#18

Post by moconnor »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

The classic "Innovator's Dilemma" attempts to address this - the idea here would be that electric cars are disruptive technology, one which otherwise good management practices more or less prevent market encumbents successfully exploiting.

Read the book, I highly recommend it if you're interested by these kinds of questions!

Re: “The Tesla Model S is our top-scoring car”

#19

Post by maratd »

bane wrote: post #8

There's something that's been bothering me about this whole thing. Not the Tesla, but the rest of the market. Is that it? Is it that easy? A guy who made his money selling a phonebook and then an online payment processor can read a few books, hire a few people out of the same industry he's disrupting and build a goddamn amazing car (electric or not)? Why can't the existing industry do this? Why all the mediocre produ…

> Why all the mediocre product that's the tail end of pumping billions of dollars into R&D staffed by largely the same folks Tesla has been hiring?

In an established firm, existing product lines pay the bills. No company is an island onto itself. Companies have partners, large clients, relationships, etc.

Bottom line? To keep existing product lines healthy, you must pay respect to your loyalties. You start seeing the behavior of purposefully undermining the new product to keep the old alive and kicking. You start using sub-standard parts, just to keep purchasing from the same suppliers. You keep on old hands that actively despise the new way of doing things. And that's just the tip of the iceberg.

Frequently, starting with a clean slate is a huge competitive advantage. No baggage.

Re: “The Tesla Model S is our top-scoring car”

#20

Post by beachstartup »

acchow wrote: post #16
technoslut wrote: post #5

Earlier quoted context omitted.

After test driving a Tesla, I agree with much of what you said and one is the engine noise. I prefer sports cars and especially the sound of a V8/12. To me it's better than listening to music. I do understand that those purchasing a luxury vehicle have different expectations. Those in sedans appreciate cabin silence more than others.

> To me it's better than listening to music. I humbly submit that you haven't listened to the right music.

I humbly submit that you haven't been driving the right cars.
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