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Why Nissan Is Talking To Tesla Model S Owners
cartechboy writes "What do you do when you're the first to market with a mainstream item, and yet the competition seems to be a hotter commodity? Naturally you do your homework. That's exactly what Nissan is doing. With disappointing sales of its Leaf electric car, Nissan is doing the smart thing and talking to Tesla owners about their cars. One would assume this is in hopes of understanding how to better compete with the popular Silicon Valley upstart. The brand sent an email to Sacramento-area Model S owners with four elements ranging from general information and a web-based survey to asking owners to keep a driving diary and to come in for in-person interviews with Nissan staff. The question is: Is Nissan trying to get feedback on its marketplace and competition, or is the brand looking at either offering an electric car with longer range or planning to challenge Tesla with an upper end plug-in electric car?"
I don't see the Tesla as competing with the Leaf. The Leaf basically competes with the Volt. It's biggest problem is range. The Leaf suits only a narrow market who either has a very short commute or a relatively short commute with charging at their destination.
There's nothing wrong with that, but it does mean there's necessarily a small audience for it.
My wife is a LEAF owner. In shopping for the LEAF, multiple Nissan dealers were dismissive about the vehicle as a passing fad, a toy, or just dumb. Several dealers didn't even stock one, let a lone a selection. One dealer's demo LEAF was parked behind other cars, under a tree, covered with bird crap.
The LEAF requires much less service (no gas, no oil changes) while presenting a steep technology learning curve, and making the issue worse, by treating the LEAF as an outcast, dealers sell fewer and have even less reason to be enthusiastic.
To understand why the Tesla is so hot while the LEAF is not, Nissan need look no further than their own dealer network. Tesla has not dealers, only showrooms, so none of the internal combustion versus electric hangups as the Nissan dealers.
BTW, we did finally find a Nissan dealer that had a good attitude about the LEAF and we are satisfied customers.
How did Nissan get a list of Tesla owners and their email addresses?
Fire department. :-)
It must have been something you assimilated. . . .
When you sell a new product, there are four cases:
A) Your product is better and more expensive.
B) Your product is better and cheaper.
C) Your product is worse and cheaper.
D) Your product is worse and more expensive.
There is only one case which will fail to materialize any significant sales, in case you didn't notice: it's D.
Tesla just about managed to get into the A category by having a roadster that is genuinely better than the competition in many, though not all, respects. It's a sports car, people are prepared to make compromises for performance. Most of all, they are prepared to make compromises in terms of the price. While the superiority of the Model S is limited to bragging rights, while range issues where addressed by brute force, that is in fact a unique selling point to a certain demographic that doesn't mind spending as much money on one car as other people would spend on five. Bragging rights aside, the Model S is still an inferior product compared to most other cars, including those of similar or much lower price.
Most other electric cars are firmly in the D category. They are both worse and more expensive. None of this is a game breaker by itself, but the combination is. The leaf is too limited by its battery to get even roughly in the territory of a normal car and it has no reserves to drive at higher speeds while still maintaining acceptable range. That's a non-issue for the Tesla, due to a huge battery pack and an equally huge price to go with it.
What nobody has done so far, is move into the C category. It doesn't matter if your product is worse, if you can sell it at a cheaper price than all the rest. We've seen this work with netbooks. Given full basic functionality, performance is much less of an issue than linear extrapolation would have you expect. You can sell a product at half price that has much less than a quarter of the performance in several metrics, so long as it still has full functionality. You could sell electric cars at half the price of the cheapest conventional cars - that is roughly 3-4000 euros - if they are still cars. An aerodynamic two-seat half-width car (passengers sitting behind each other, not next to each other), that can drive about 70km/h is enough for most needs in a city and limited over-land travel. Given the low price expectations are much lower. Given the smaller size and lower speed, much less energy is consumed. A 4 kWh battery could yield a range of about 100km, with some extra margin. Even a conventional wall outlet can charge this battery within an hour.
Most problems associated with high cost of electric cars are down to large size, high speeds, high weight and high range requirements, making large batteries an absolute necessity. Once you back away from large size and high speeds of conventional cars, the rest follows automatically. A small, relatively slow car needs 4kWh / 100km. A conventional car needs about four times as much, about 16kWh/ 100km. A battery that has only a quarter of the capacity can be charged in a quarter of the time. It is also just a quarter of the price, so it matters less if quick charging wears it down faster. The result is a much cheaper and much lighter car, that certainly doesn't need carbon fibre parts to save a few pounds. You could use something as pedestrian as a steel tube frame and still get a 300kg car.