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Saudi Arabia Invests $1 Billion In Potential Tesla Rival (cnn.com)
Saudi Arabia is investing more than $1 billion in Lucid Motors, an electric car startup that may give Tesla a run for their money. CNN reports: Lucid is planning a new high-performance electric car. It said the investment from Saudi Arabia's sovereign wealth fund announced Monday will allow it to finish engineering on its first car, the Lucid Air, as well as build a factory in Casa Grande, Arizona, and begin to sell the car by 2020. Saudi Arabia is already a big investor in Tesla. Last month Tesla CEO Elon Musk disclosed that the Saudis had taken nearly a 5% stake in his electric car company.
Musk said that the Saudis had been urging him for almost two years to take Tesla private, offering to provide funds necessary to do so. (Musk announced the plan to go private in August but quickly dropped the idea.) Saudi Arabia is investing in electric vehicles to diversify away from its dependence on oil. Lucid's Chief Technology Officer, Peter Rawlinson, was formerly a vice president and chief vehicle engineer at Tesla. He helped design the Model S, the company's breakthrough car. He left Tesla in 2012, shortly after the Model S went into production.
Musk said that the Saudis had been urging him for almost two years to take Tesla private, offering to provide funds necessary to do so. (Musk announced the plan to go private in August but quickly dropped the idea.) Saudi Arabia is investing in electric vehicles to diversify away from its dependence on oil. Lucid's Chief Technology Officer, Peter Rawlinson, was formerly a vice president and chief vehicle engineer at Tesla. He helped design the Model S, the company's breakthrough car. He left Tesla in 2012, shortly after the Model S went into production.
Isn't every car manufacturer, and every would be "entrepreneur" out there building their own electric car?
Yes. Jaguar and Mercedes are both bringing out electric cars, for instance. The Jaguar I-PACE looks to be a better car than the equivalent Tesla.
They are all way too expensive. Anyone can build a really expensive EV, those aren't very interesting.
It's the affordable end of the market that is exciting. Kia and Hyundai both have really strong offerings (Niro and Kona) with 250-300 mile range and a lot of value for money. Nissan may have a decent Leaf out this year, Tesla may one day get to $35k but that's looking expensive for a very basic, stripped down car now...
Kona/Niro are both really impressive. Range, tech (including auto-steering), quality and performance are all there.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Emphasis mine
C. Sagan : A demon haunted world:
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Unlike the early days of cars there are many established car companies in the game. It takes a lot of expertise and supply chain management to build a car. You need to know a lot about robots, labour, etc.
Ossified management has allowed startups to dominate when technology changes if the barrier is not too high. So all the newspapers ceded their classified adds to ebay et. al. Nokia to Apple. Big retailers to Amazon. TV networks to Netflix. None of those things should have happened, the established players should have dominated, but did not.
On the other hand, Webvan died for delivering groceries ordered on line, here in Oz they are delivered by the big supermarket chains, Coles and Woolworths. It was easier to add a web site to a supermarket than to add a supermarket to a web site.
I'd bet pennies to pounds that electric cars will be like supermarkets. The established players will dominate. It is an incremental improvement for them. And many are already there, e.g. the Leaf, Prius.
Telsa is toast.
OTOH self driving car AI is likely to come from someone other than the big car manufacturers. But they will buy it from the third party. Might be Google. If Apple try to build the cars rather than just the software, they will become irrelevant.
"oil production is the #1 strategic concern of Saudi Arabia, and electric cars are their anathema."
yes, oil currently is their no #1, but they are pouring money into renewables, they see the future better than Trump
https://www.bloomberg.com/news...
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
"electric car" is NOT synonymous with "self-driving car". Yes, you can have a self-driving gasoline-engine car. Yes, the jihadis could use one of those, too....
"I do not agree with what you say, but I will defend to the death your right to say it"
What's electric cars being the future has to do with TSLA's viability as a company? VAG, BMW, etc have literally tens of billions of money sitting waiting to convert their shit over if it becomes financially a good proposition to do it - they have tens of gigafactories - their ENTIRE EXPERTISE that has enabled them to remain viable car companies is based around production and logistics around it - the Tesla gigafactory seems puny in comparison and indeed it is, it's just called giga for marketing reasons - vag doesn't need to "market" it's factories, so they don't, but there's a reason why they're still alive and not bailed out for the tenth time.
The thing with Tesla is that.. they don't really have any special technology. They just sold it at a price that didn't make any fucking sense for them to be doing, since they were selling all production(supposedly) and still losing money(even after one time book shenigans). The reason Musk is under enermous pressure is that now is the time the company has to start making profit, not another 10 years into the future because electric cars are the future. Basically his promises that his supermodernhyper Gigafactory can churn out production cheaper than VAG etc's factories can need to be kept right now.
Lucid motors also however, a shit grade investment. Their car? a fucking 1000hp sedan. good luck selling that 20 000 - 130 000 units in a year. They're not sitting on any technology unique to them and they don't have decades of expertise in manufacturing.
So yeah, Saudis putting money into it - whatever. Call the market up when they have some special sauce to make 20 000 dollar cars people want to buy.
And of course teslas are nice cars, they cost an arm and a leg and still are sold for too cheap so they better well should be, but the technology really isn't all that special, whats special is putting them into a product and selling it at the price.
Why do american car companies insist on building stuff people can't afford anyways en masse? don't they realize that 80 000 dollar + cars are an extreme luxury, just because they live rich themselves? is it because they can't optimize their production for worth shit? because Musk sure as fuck sold the cheapo model of the 3 but can't deliver.
world was created 5 seconds before this post as it is.
Nope.
Tesla are making about 30% on their cars: https://electrek.co/2018/07/16...
That's a much higher margin than gasoline car makers are getting and shows that Tesla has a huge start on everybody, "special technology" or not.
Why do american car companies insist on building stuff people can't afford anyways en masse? don't they realize that 80 000 dollar + cars are an extreme luxury, just because they live rich themselves? is it because they can't optimize their production for worth shit?
They have years of back-orders right now, why would they sell for less?
(and they aren't even taking orders in all countries yet!)
because Musk sure as fuck sold the cheapo model of the 3 but can't deliver.
Targets are being met, production is on schedule.
No sig today...
No, Saudi Arabia got a shock when oil dropped from $120 per barrel down to around $30 per barrel in 2014 as it plunged their economy into deficit. This gave them a massive wake up call and created a realisation that they can't depend on oil forever.
They were surprisingly smart, where most countries such as the UK and Russia have squandered their oil wealth with nothing to show for it, other countries like Norway set up a sovereign wealth fund to see them into the future. Saudi Arabia is taking this approach of forward thinking too, and planning for the future whilst it has oil wealth, rather than waiting until the oil wealth runs out then thinking "Right, now what?" when it's ultimately too late.
This decision to plan for the future has been cemented into reality in a number of very visible ways, from using it's massive investment fund to start focussing on future tech that will only grow in value going forward such as renewables and electric cars, by strengthening it's base economy through simple things such as liberalising it's approach to women. A key realisation was that the Saudi economy could literally double in size by allowing the half of it's population that are not currently allowed to work on equal terms to do so. It will be a long process as it requires changing attitudes when there are still very dangerous hard liners in the country but we've already seen some fairly big leaps towards it, such as allowing women to drive, and allowing women to make up over 30% of the ruling council, which interestingly is a better male-female ratio than most Western democracies. When only 50% of your working age population are allowed to work, enabling the other 50% to do so as a way to obtain a quick, easy, future proof, baseline economic boost is really a no brainer.
Furthermore, we've seen things such as purges of the corrupt elite to drive corruption out the economy, which can have severe consequences as we see in Russia - where Russia has masses of natural resource wealth, it gets filtered off into Swiss and Cayman bank accounts of only a handful of individuals to the detriment of the wider and long term health of the country. In fact, the only reason Russia with all it's potential isn't a wealthy modern economy across the vast majority of it's territory and has massive pockets of 3rd world levels of poverty is almost entirely because of corruption - even where economic mismanagement is a problem, such mismanagement usually occurs precisely to aid corruption.
So it's fairly clear that Saudi Arabia is one of a few countries that gets that oil isn't going to be around forever, and that is liberalising it's economy to cater to the realisation of that fact in many ways, from more forward thinking investments, to enfranchising women, to tackling corruption. It's likely Saudi Arabia will always be, or at least for the next few decades a fairly conservative country, but that doesn't appear to be a complete barrier now to modernising their nation as it has been for the last few decades, oil is no longer king, precisely because they saw how badly oil as a dependency can let them down in 2014.
Don't assume countries can't change and that because they were dependent on oil that they'll always be dependent on oil, Saudi Arabia is undergoing a very silent, but very rapid change to make sure that it's secure even if oil prices collapse. They've still got a lot of work to do, but the trajectory should be abundantly clear to anyone paying attention to the changes the country has undergone over the last few years.
Tesla are making about 30% on their cars: https://electrek.co/2018/07/16..
Only if you don't count the Model 3. Tesla's own numbers tells a different story:
Gross margin for total automotive decreased from 28% to 21% in the three months ended June 30, 2018 as compared to the three months ended June 30, 2017.
I was mostly wondering why it even bothered with the "To give Tesla a run for it's money" line. It's like someone just needed to have the article related to Tesla somehow.
I mean I guess they are the electric car only company, but still seems a bit silly to go ahead and say that.
Well, geography was not my primary interest at school, but I think Saudi Arabia gets a nice amount of sunshine. As the world divests from oil, they sure can divert the investments into solar energy.
I think oil products won't get away entirely. Plastics can still be the best things to use in sterile environments (operating rooms), or in aeronautical structures. But throwing plastic away into the ocean or even burning oil as fuel will be an increasingly stupid idea.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
This company has only slighty better chances at being Tesla's rival as I.
Man, I hate the news these days...
we don't need another supercar, we need electric cars for normal people.
they should be cheap to produce right? we don't need sub 2 seconds acceleration, or +300km/h top speed.
just make it good enough to replace your regular current petrol car, i'm even willing to cut off some 100km of range, but;
- it needs to be afforable
- be practical (no silly sci-fi looking impractical car)
The Nissan Leaf or Hyundai Ioniq almost have me sold, i just need a bigger boot (ie a station wagon, thank you!).
On a long enough timeline, the survival rate for everyone drops to zero.
they have tens of gigafactories
If you're talking about battery factories...no, they don't have them, at least not yet.
Ezekiel 23:20
Actually, I wish Lucid well. They seem to know what they're doing and have a reasonable strategy. They're way behind the curve and have a lot of slog ahead of them, but I think they could become a legitimate minor player on the high end. And that's rather high praise from me compared to my take on many EV startups.
"Who the hell is Nietzche? It's a question stupid people are asking." -- Newscaster, "Jesus Christ Supercop"
They do actually have a working prototype. MKBHD drove it: https://youtu.be/jbXEWi-OK4o
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Saudi arabia and other Arabic countries are "changing" since decades.
Just look at in what companies they invest. In the 1970s "Mercedes Benz" was divided up into "Daimler Benz" and "Mercedes Benz" just so that one company owns the other one, but the stocks in that company had no votes on the other one. That was done because out of fear that specifically Saudi Arabia would by to much stock in German companies and would control them.
SA and the other Arabs own 'half the world' already, an no one pays attention.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
Mercedes has yet to run out of people who can afford $120,000-240,000 AMG models. The Model S is a mid-tier luxury car - plenty of volume there as luxury cars go. That's not really the point, is it?
Tesla's future is about the Model 3, not the high-end stuff. If they're making any kind of profit on them now, that's great long term, as their per-unit cost will fall over time. The question is whether they can make it through the next 6 months.
Socialism: a lie told by totalitarians and believed by fools.
I wish them success just so we can maybe have an end to the conspiracy theories about how big oil killed the electric car.
Socialism: a lie told by totalitarians and believed by fools.
...It's the affordable end of the market that is exciting.
Agree completely. I took a long drive in a Chevy Bolt earlier this summer, and fielded quite a few questions when I stopped at rest areas with fast chargers. There's a lot of curiosity about the technology out there--thanks, no doubt, to Musk and Tesla. Those manufacturers that are able to deliver a capable base model and charging solution that's accessible to the mass market will win this emerging market.
No, Saudi Arabia got a shock when oil dropped from $120 per barrel down to around $30 per barrel in 2014 as it plunged their economy into deficit.
No, Saudi Arabia didn't "get a shock". Saudi Arabia engineered the price drop so that the shale oil development would die.
The thing with Tesla is that.. they don't really have any special technology.
Neither does Coca Cola - nothing special about carbonated sugar water - but that doesn't mean they cannot succeed. It's all about execution. And when it comes to electric vehicles to date Tesla has been out executing pretty much everyone. That's not to say they have any sort of insurmountable advantage - they don't. But the incumbent auto makers sleep on Tesla at their own peril. Tesla is vertically integrated, has a fantastically popular brand, products people are willing to wait literally years for, the best electric vehicle technology on the market, patents (even if they don't use them aggressively), and a visionary leader. Yes they still might shit the bed but I'm not about to bet against them at this point.
They just sold it at a price that didn't make any fucking sense for them to be doing, since they were selling all production(supposedly) and still losing money(even after one time book shenigans).
Yeah, yeah... People made the same short sighted argument about Amazon back in the day. While I wouldn't buy Tesla's stock at the current price and they definitely aren't on solid financial ground yet, they also have a long term strategy that if it works will pay off very handsomely. They didn't make money because they were aggressively investing in future products to grow bigger instead of remaining a boutique maker of high end cars - ala Ferrari. This was a calculated gamble by Tesla but there is a good chance it will actually work. They probably could have made money on the Model S but they had larger ambitions. Nothing wrong with that.
Why do american car companies insist on building stuff people can't afford anyways en masse? don't they realize that 80 000 dollar + cars are an extreme luxury, just because they live rich themselves?
What are you talking about? Tesla sells a tiny of the cars sold every year in the US and almost everyone who buys one can definitely afford it. They sell in numbers comparable to other luxury car maker for similar products. Tesla has less than 1.5% market share in the US.
Tesla are making about 30% on their cars
No they are not. You referenced a cost estimate of gross margin on their cars which is a bunch of educated guesses by outside cost accountants without access to actual cost data. These sorts of reports are useful but you should be careful reading too much into them. What is undeniably useful is the public financial statements each company has to put out which gives a good basis for comparison.
Gross margin for a company like Toyota (one of the more profitable big auto companies) hovers around 18-20% which is pretty good for what they do. Tesla's gross margin is similar but more volatile but low by the standards of luxury car makers. Bear in mind that Tesla sells no cars in the lower end of the market where margins are tighter while Toyota sells quite a few. Compare with a high margin manufacturer like Ferrari which has gross margins around 50% and Tesla doesn't look so special. Tesla might have a lot of room to improve gross margins but they aren't getting gross margins wildly better than many of their competitors.
Disclosure: I'm a certified accountant.
They have the money. yes.
Do they have the will? Are they willing to make a no compromise electric that would definitely cannibalize their ICE sales in the short term? No.
They are threading the needle. Slowly gradually build their electric capacity and when the gross margin in EV becomes better than their gross margin in ICEV they will switch. That is their plan.
Without Tesla their time line will stretch well into 2030s and 2040s. If Tesla is dead, it will be that long before you get no compromise electric car.
That is the reason to root for Tesla. If you want the switch over to EV be fast, you need to light a fire under the tail of the dinosaurs. And Tesla's viability is the fire. No Tesla, No EV till 2040.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact