OEMs Must Cannibalize ICE Sales To Chase Tesla: Is It Even Enough?


Legacy automakers have a dilemma on their hands. Transitioning to electric cars is hard. A few German automakers have calmly voiced their concerns. Others have resorted to all-out whining. So what about Big Auto in America? To get some perspective, Seeking Alpha’s Scott Morton takes a look at GM’s vexing EV challenges as the company tries to face-off with Elon Musk on Tesla’s turf.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla’s all-electric, long-range Model 3 (Photo Credit: Kyle Field / CleanTechnica)

GM should be applauded for launching the all-electric, long-range Chevy Bolt. And Morton notes, “GM currently operates at a scale of vehicle production that Tesla can only envy.” But there’s trepidation, “the company is reluctant to [really] put its resources to use. In order to compete with Tesla, GM must expend additional capital in order to transition from manufacturing ICE-vehicles to manufacturing electric vehicles.” Is GM facing a “damned if you do, damned if you don’t” moment?

No, EVs are destined to spark growth downstream. The bigger issue for a legacy automaker like “GM is that, by nature of being a mature player in a mature market, they [may] have experienced all of the significant growth that they are ever going to.” In fact, “legacy automakers must undertake [significant] R&D simply to maintain current revenue streams. Between 2013 and 2017, GM spent a combined $36bn in R&D yet revenue declined from $155bn to $145bn. Over the same period, Tesla spent a combined $3.7bn in R&D, but revenues grew from $2bn to $11.7bn.”

Above: Tesla and GM are at completely different stages in their business life cycles (Source: Seeking Alpha)

While some of GM’s R&D efforts went to EVs, some (likely) went to improving internal combustion engine tech. And looking ahead, “shifting the focus to EVs, GM will render their current factories, production lines, patents, designs – anything that specifically relates to ICE products and production – either partly or fully redundant.” Some of those assets could become liabilities. “This is the equivalent of owning a printing press in the advent of the Internet or a Blockbuster franchise during the birth of Netflix.”

And whether they like it or not, “EV sales will simply cannibalize and replace ICE vehicle sales.” This is a hard pill to swallow. At this stage in their business life cycle, “GM must therefore undertake all of these additional challenges and expenditures knowing full well that [short term] revenues will not grow by any significant amount,” writes Morton. In turn, GM’s CEO Mary Barra rightfully argues that the US federal tax credit for EVs should not only be continued, but extended.

Above: GM’s Renaissance Center (Source: Michigan Radio via Flickr / Andrea_44)

Long term, the change over to electric cars is mission critical. Yet Morton notes that “GM has little incentive to rapidly transition to EV manufacturing and would rather stave it off as long as possible… regardless of it being widely accepted as the socially responsible thing to do. You may label me as a conspiracy theorist for suggesting this, but the unfortunate reality is that for [car] businesses, profits often trump ethics.” Proof? Look at Germany’s massive Dieselgate scandal.

In contrast, Elon Musk is turning away from fossil fuels. So, Morton concludes, “Tesla has no such internal conflicts… and is therefore free to pursue a future which represents nothing but growth for the company. The combination of a lack of internal conflict for Tesla and the extreme baggage that is the legacy for established auto manufacturers may very well lead to Tesla significantly outpacing the competition.”

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

Source: Electric Vehicle News

MA updates signs to allow electric-vehicle parking: reader success story

Massachusetts updates green-car parking signs at Logan Airport [CREDIT: JOHN BRIGGS]Bureaucracies have some funny ways of saying they were wrong and you were right. Even if they can’t tell you they made a mistake, it’s nice to see them fix a problem they created. The latest bureaucracy to demonstrate this is Massport, which operates the parking garages at Boston’s Logan International Airport. Their mistake was issuing me a…
Source: Hybrid and Electric Car News and Reviews

Let’s Look At Tesla Model 3 Gross Margins: Long & Mid Range

Will Model 3 Mid Range affect profitability?

As Tesla is removing its Long Range rear-wheel drive Tesla Model 3 in favor of the all-new surprising Mid Range rear-wheel drive version, a question arises – is this wise from the business perspective?

One of the recent Teslike.com articles addresses gross margins. By assuming battery capacity of particular versions (as the only/main difference) and battery prices at $115/kWh, you can estimate how the gross margin of Mid Range or Standard Range versions will vary compared to the assumed gross margin of the Long Range version.

In attached examples (below is one for 25% gross margin for Long Range), it turns out that the decrease in price is bigger than the cost savings over the lower amount of batteries, which translates to several percent lower gross margins with every step to Mid Range and Standard Range.

Tesla Model 3 gross margins (Source: Teslike.com)

It sounds reasonable to us that the more affordable Model 3 will earn less for Tesla. This is why Tesla was pursuing the Long Range, and then all-wheel drive Performance versions, as well as why the general automotive industry was moving from cars to SUVs.

In the case of the cheaper Model 3, customers will probably opt for less optional equipment too.

At first glance, it seems that by introducing the Mid Range Model 3, Tesla will decrease profitability. However, there are other factors that could increase profitability:

  • some customers will go for the Long Range Dual Motor version (because Long Range rear-wheel drive is removed), others will take Mid Range with maybe some more options
  • some customers will go for the Mid Range version now instead of continuing to wait for Standard Range version
In other words, the overall financial impact for Tesla shouldn’t be bad.

Source: Teslike.com

Source: Electric Vehicle News

2018 Nissan LEAF Battery Health Tested After 12,000 Miles

Your mileage may vary.

The battery in the Nissan LEAF has always been the cause of some concern, ever since some examples from the first few years of production seemed to suffer from premature degradation, leading to replacement. Since then, things have improved dramatically, though concerns and issues remain. In light of all this, you may be wondering how the 40-kWh battery in the overhauled 2018 is faring in this regard. While we may not be able to offer up a comprehensive answer, the video above does offer some interesting data generated by one vehicle.

Found in the Lemon-Tea Leaf  YouTube channel, the footage gives us data captured by a LEAF Spy device (here’s how to install that, in case you’re interested) and plotted out over several different charts. The car’s owner, James, has now owned the vehicle for eight months and in that time, driven 12,442 miles (20,023 km). According to his calculations, the battery state of health — its energy capacity level — has fallen to 97.42 percent of its original ability. Other interesting data includes the fact that it has had 165 DC fast-charge sessions and 163 level 1 or level 2 AC charges in its short history.

Using this information, James does a few future projections and sees some interesting results. While we won’t spoil the video for you here, we will say that at least some of the numbers are encouraging.

Of course, each and every LEAF will yield different results, depending on a host of factors, including the amount of fast charging that is done, the number of deep discharges and 100-percent full charges, not to mention the environmental conditions it is driven and charged in. So, as we cautioned at the top of this piece, if you are also a LEAF owner your result will vary from those of James. All in all, though, the numbers are encouraging.

Source: YouTube

Source: Electric Vehicle News

Electric Dreams: Matt Tkocz’s Bonkers SASUGA E-Bike Concept

Well, this rules

Matt Tkocz is a Polish-born, German-raised artist and designer based in Los Angeles, California. He works primarily in the film industry but seems to do a lot of work in the games and advertising industries as well. A quick look at his online portfolio shows a prodigiously talented nerd into Star Wars, giant robots, motorcycles, sci-fi, and other futuristic machines. In short, a man after my own heart. Among the many things I absolutely love on his site, the SASUGA e-bike is what really caught my eye. A neo-retro cyberpunk electric motorcycle with chunky tires, minimalist design, and a front swingarm decorated with Japanese characters? Sign me up

According to EVNerds.com, Tkocz came up with SASUGA because he was jonesing for a new motorcycle.

“Lately I’ve had the urge to get back onto 2 wheels again. Maybe because it’s been too long. Maybe because I saw Mission Impossible: Fallout. But in any case: I wanted to scratch that itch without actually having to purchase a motorcycle since it can be pricey hobby (and I would probably get myself killed in LA traffic),” he told EVNerds. “So I did what any reasonable design person would do in my situation: I decided to design my own concept bike in order to get that bike bug out of my system. While at the same time offering relief to the fact that—even though there are many amazing bikes out there—none of them check ALL my boxes and always leave me somewhat unsatisfied.”

I’m just going to say here that he totally knocked it out of the park. I love SASUGA, and the only thing that really disappoints me is that it’s only a render and I can’t go out right now and buy one.

Source: EVNerds.comMatt Tcocz

Source: Electric Vehicle News

Comparison: All Versions Of Tesla Model 3 Available or Not

Tesla Model 3 is to eventually include three battery options

If you remember how many times Tesla did some reshuffle in Model S and Model X offer, you can be sure that in case of Model 3 it will be more of the same with constant adjustment every couple months.

Tesla began with Model 3 Long Range rear-wheel drive, and the add all-wheel drive version and all-wheel drive Performance version. As the Model 3 Mid Range comes in, Model 3 Long Range RWD was dropped. The long-awaited Model 3 Standard is still 4-6 months from now.

Here we gathered some basic data (some estimated/preliminary ) for a quick comparison, deducting $3,750 federal tax credit for new orders (and sales from January 1, 2019):

Model 3 Standard (2019) expected from February-April

  • MSRP: $35,000 + $1,200 (D&H) – $3,750 federal tax credit = $32,450
  • 220 miles (354 km) of range or more
  • 0-60 mph (96.5 km/h) in 5.5 seconds
  • rear-wheel drive

Model 3 Mid Range (2018)

  • MSRP: $45,000 + $1,200 (D&H) – $3,750 federal tax credit = $42,450
  • 260 miles (418 km) of range
  • 0-60 mph (96.5 km/h) in 5.6 seconds
  • rear-wheel drive

Model 3 Long Range (2018) – discontinued

  • MSRP: $49,000 + $1,200 (D&H) – $3,750 federal tax credit = $46,450
  • 310 miles (499 km) of range
  • 0-60 mph (96.5 km/h) in 5.1 seconds
  • rear-wheel drive

Model 3 Long Range AWD (2018)

  • MSRP: $54,000 + $1,200 (D&H) – $3,750 federal tax credit = $51,450
  • 310 miles (499 km) of range
  • 0-60 mph (96.5 km/h) in 4.5 seconds
  • all-wheel drive

Model 3 Long RangeAWD Performance (2018)

  • MSRP: $64,000 + $1,200 (D&H) – $3,750 federal tax credit = $61,450
  • 310 miles (499 km) of range
  • 0-60 mph (96.5 km/h) in 3.3 seconds
  • all-wheel drive

Source: Electric Vehicle News

MAN Gears Up For Electric Bus Production In Poland

MAN will invest €27.4 million in EV bus production in Poland

MAN announced that the Lion’s City E electric buses, unveiled at the 2018 IAA, will be produced in Starachowice, Poland from 2020.

The German manufacturer first needs to invest some €27.4 million in the facility, which so far was engaged in the production of conventional buses – 1,724 in 2017).

Completion of the work is planned for the end of 2021.

MAN develops electric buses in various sizes, including 12-meter and 18-meter articulated buses.

“The next phase of the plant location’s modernisation and preparation for electric transport is already underway at MAN’s plant in the Polish town of Starachowice. The operating company, MAN Bus Sp. z o.o. Starachowice, received approval in August 2018 to expand its activities to include manufacturing complete electric buses within the “Starachowice” Special Economic Zone. The capital expenditure related to accommodating electric-powered bus production is estimated at close to 118 million Polish złoty (around €27.4 million). Completion of the works is planned for the end of 2021.

This is another important stage in the development of the assembly plant, which acts as a centre of excellence for MAN in the production of low-floor city buses. 1,724 buses have rolled off the production line in the past year alone. The expansion of the Starachowice plant lays the foundation for MAN to branch out into zero-emissions vehicles in the near future – while maintaining the same high quality as ever. Before mass production begins in 2020, the project will need to be carefully prepared, with a safety concept devised and the electric vehicles optimised in terms of efficiency and ergonomics.”

MAN Lion’s City 12E

4 photos
MAN Lion’s City 12E
MAN Lion’s City 12E
MAN Lion’s City 12E (on the right)

Source: Electric Vehicle News

Rural Chevy Bolt EV Owners On Texas Ranch: This Car Has Got Guts

“I want to be a cowboy baby! Where my Chevy Bolt’s charged by the sunshine shinin’.”

Harry and Elizabeth Akers are proud new owners of the Chevy Bolt EV. The couple lives in rural Merkel, Texas about 20 miles from Abilene and 200 miles west of Dallas. They own 200 acres of land and 40 cattle on their property.

And now the Bolt is their primary mode of transportation for errands and hauling cargo. So far, Elizabeth Akers loves the range of the Bolt and its 56.6 cu ft of cargo hauling:

It’s about a 55-mile round trip to pick up feed for the cattle. We got the Bolt EV mainly for that reason—to go into town, run errands, and pick up what we need. We can go into town three times on a single charge, and it’s got more than enough room.

Chevy Bolt Texas Ranch

This is a daily trip hauling feed for the couple. So the cost of driving to and from town on gas was becoming a burden. Now with their new electric, their fuel comes from geothermal power and a solar panels installation. The switch to a greener lifestyle is going to pay for itself in no time. According to Harry Akers:

The numbers just made sense when I looked at what we’d save with the Bolt EV. Bottom line is that we invest in things that reinvest in us, and we can put the money we’re saving back into things we want to do—like going on vacation and taking cruises.

The long range of the Bolt means a trip to Dallas/Fort Worth, Austin/San Antonio and Midland/Odessa are all more than do-able thanks to their centralized location. As charging infrastructure fills in, travel will become even easier.

But it’s not just the energy savings, range and cargo capacity the couple appreciates. The electric Chevy, is also fun to drive. Of the vehicle’s performance, Harry says “This car’s got all kind of guts to it.”

Thanks to electrics like the Tesla Model 3 and Chevy Bolt, people all over are starting to see the value of electric cars.

Source: New Roads Magazine

Source: Electric Vehicle News

BMW Discusses Range Of Future Electric Vehicles: Over 400 Miles

BMW aims to deliver a range to rival the likes of Tesla’s Model S

For BMW, the path to electrification has been slow. Even though the company stunned the world with its high-performance i8 and the city slick i3 models, both were just test beds for the Bavarian carmaker. Currently, there’s around 300,000 BMW i3s and i8s running on the roads today. A substantial number, but when compared to the overall output of the carmaker throughout a single year, rather small.

However, BMW aims to make that number a lot bigger. One of the biggest steps to producing more plug-in hybrid and fully electric vehicles in the future is the BMW CLAR architecture. The CLAR platform is a modular architecture designed to underpin everything in their range from the 3 Series up to the 7 Series. Furthermore, CLAR is designed in order to accommodate petrol, diesel, plug-in hybrid and pure-electric powertrains. And in the next few years, the Bavarian carmaker aims to release several fully electric vehicles, set to be built on the same CLAR architecture, as confirmed by the BMW CEO and boss Harald Kruger.

“We have already over 300,000 electric vehicles and plug-in hybrids on the road and more are on the way. In 2019 we’ll launch the MINI Electric. In 2020 the BMW iX3 will come. Then in 2021 we will launch the BMW iNEXT and the i4, so by that year we will have five core electric vehicles on the ground. This underlines our strong commitment to future mobility.”

However, for BMW’s success in the EV field, the utmost key area will be the range. The first model that will build upon the battery tech developed for the i3 and i8 and which will be used in full effect finally, will be the i4. For BMW, it is mandatory that the i4 delivers a range similar to the rivals like the Tesla Model S – up to 375 miles (600 kilometers) – in order to be competitive. Furthermore, BMW aims that the iNEXT – when revealed in full production guise – delivers a range even better than that. This was revealed by BMW’s head of the BMW  i division, Robert Irlinger.

“We asked the customers; it seems to be that the starting point for i3 in the early days was okay. But it seems that now, 300km (186 miles) is the minimum that you can offer to have an accepted range for customers. Then there’s competition – Tesla, Audi and Mercedes are doing 400km (250 miles) in WLTP. So it seems to be again beyond 300km – up to 600km (375 miles) or 700km (435 miles). But if you look at the numbers we’ve already spoken about, the iX3 will be beyond 400km and the i4 will be around 600km. The iNEXT will be on top of that, as well.”

For what may be the first time in the last 50 years, BMW is entering a race as an underdog. How well are they going to be able to translate the design cues, driving feeling and overall performance nature of their cars, combine it with the current range requirements from their potential customer base, paired with the timely release of their EV models, is going to underline the future for one of the world’s most prominent carmakers.

Source: AutoExpress

Source: Electric Vehicle News