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Tesla To Produce 'a Few Million' Electric Cars a Year By 2025
HughPickens.com writes: Reuters reports that Elon Musk, speaking at an industry conference in Detroit, said Tesla may not be profitable until 2020 but that Tesla plans to boost production of electric cars to "at least a few million a year" by 2025. Musk told attendees at the Automotive News World Congress that "we could make money now if we weren't investing" in new technology and vehicles such as the Model 3 and expanded retail networks.
Musk does not see the Chevrolet Bolt as a potential competitor to the Model 3. "It's not going to affect us if someone builds a few hundred thousand vehicles," said Musk. "I'd be pleased to see other manufacturers make electric cars." On another topic, Musk said he was open to partnerships with retailers to sell Tesla vehicles, but not until after the company no longer has production bottlenecks. "Before considering taking on franchised dealers, we also have to establish (more of) our own stores," said Musk adding that "we will consider" franchising "if we find the right partner." Musk did not elaborate, but said Tesla "is not actively seeking any partnerships" with other manufacturers "because our focus is so heavily on improving our production" in Fremont. Last year, Tesla delivered about 33,000 Model S sedans and said the current wait for delivery is one to four months. Tesla has already presold every Model S that it plans to build in 2015. "If you ordered a car today, you wouldn't get it until 2016."
Musk does not see the Chevrolet Bolt as a potential competitor to the Model 3. "It's not going to affect us if someone builds a few hundred thousand vehicles," said Musk. "I'd be pleased to see other manufacturers make electric cars." On another topic, Musk said he was open to partnerships with retailers to sell Tesla vehicles, but not until after the company no longer has production bottlenecks. "Before considering taking on franchised dealers, we also have to establish (more of) our own stores," said Musk adding that "we will consider" franchising "if we find the right partner." Musk did not elaborate, but said Tesla "is not actively seeking any partnerships" with other manufacturers "because our focus is so heavily on improving our production" in Fremont. Last year, Tesla delivered about 33,000 Model S sedans and said the current wait for delivery is one to four months. Tesla has already presold every Model S that it plans to build in 2015. "If you ordered a car today, you wouldn't get it until 2016."
Can Tesla do something like pick a dealership and add conditions like, "must sell only tesla or only electric cars", "Tesla will retain the right to sell directly too" etc? Why are the standard auto makers not able to sell directly? Is it because A: the law stops them or B: They had signed exclusive agreements already. If Tesla starts with a clean slate, can it have dealerships and sell directly too? Or at least have some more balanced rights and decent negotiating position compared to the gas giants who are wimps against NADA.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I love the idea of electric cars, and Tesla is on my "lottery win" shopping list. With that said, if you apply hard numbers these cars do not make any sense at the current gas prices. Tesla's battery mega factory may change these numbers, but as of right now electric car premium substantially overshadows any and all gas savings. This is even before we start talking about hidden costs of scaling electric car ownership up.
As to mass-producing these cars, I have doubts that infrastructure could handle mass-adoption. The key issue is time it takes to charge, with gasoline one fuel pump can get driver in and out under 5 minutes. With charging stations you need 30 minutes or so. So Tesla has to build lots and lots concurrent "charging slots" and then develop congestion-mitigating techniques at the popular sites. Then they will have to invest into electric grid to support massive loads incurred by charging stations (ironically, the cost effective way to do this is by building 'load balancing' natural gas generators). Then they will have to mitigate inevitable increase in electricity costs due to supply&demand curves. Imagine what will happen to electricity costs during peak usage when everyone runs AC AND charges electric cars at the same time!
So we have following major roadblocks: a) cost of batteries b) cost of expanding charging stations network c) cost of electric grid infrastructure upgrades d) cost of accommodating increased load during peak times . Could all of these challenges be met? Sure, but it is unlikely achievable without public funds.
Can Tesla do something like pick a dealership and add conditions like, "must sell only tesla or only electric cars", "Tesla will retain the right to sell directly too" etc? Why are the standard auto makers not able to sell directly? Is it because A: the law stops them or B: They had signed exclusive agreements already. If Tesla starts with a clean slate, can it have dealerships and sell directly too? Or at least have some more balanced rights and decent negotiating position compared to the gas giants who are wimps against NADA.
Yes, Tesla could do all of that. Most dealers wouldn't sign such an agreement. For that matter, most dealers wouldn't want to sell an electric car.
Seriously, most existing car dealers don't know how to sell an electric car and make money at it. Since, for the most part, a Tesla requires far less maintenance than a modern internal combustion car, and since, for the most part, the biggest profit center in most car dealerships is the service center I can't see how the existing dealer networks can adapt to selling a Tesla or any other electric car.
Right now there is a dizzying patchwork of laws requiring automobiles be sold through dealers and not direct from the manufacturer. Historically, a lot of this was to protect local small businessmen (car dealers, who even today are quite well represented in local government). The other argument was that with a local dealer the purchaser of a car could also be sure his car could be serviced locally as well -- and since an electric car requires so much less service, that logic is kind of questionable.
Oh, and car dealerships (or any franchisee) can protect themselves from being undercut by the automaker by insisting on the same terms as any other dealer in their territory. There is also this thing called the Sherman Anti-Trust act that also prohibits undercutting your own dealers.
The stated ambition was "about a million cars" The article is incorrect in its quote. The liveblog (and video) are much more accurate.
One thing unique about Tesla's manufacturing is that the supply chain is materials. Most everything else is produced by Tesla themselves at the Fremont factory. Many questioned why this decision was made but there are many long-term benefits. When your supply chain is all raw materials, availability becomes much more predictable and your ability to influence the supply by pumping some money into a mine is far easier than say, getting a different company to shape up and manufacture more parts.
The only part of a Tesla that isn't produced at Fremont are the batteries and that's why the Gigafactory is coming online.
My father used to own a Texaco gas station. He often competed with stations that were owned by Texaco itself. There were times when those company-owned stations would sell gas for cheaper than they would sell it to him wholesale. Corporate mentality doesn't care about anything but profit.
Of course through the effects of corporate self-interest, consumers got cheaper gas than they could from your father's rip-off gas station...