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Cummins Talks Tesla, Electric Trucks, The Need For A Carbon Tax

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Published on January 5th, 2019 |

by Matt Pressman

Cummins Talks Tesla, Electric Trucks, The Need For A Carbon Tax

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January 5th, 2019 by Matt Pressman

Originally published on EVANNEX.

The Tesla Semi has captivated scores of corporate customers. Pre-orders for Elon Musk’s electric trucks are growing. Competitors, however, aren’t so impressed. The Wall Street Journal spoke with a potential adversary in the trucking space, Cummins, for their take on Tesla, electric trucks, and their thoughts on how governments around the world should deal with carbon emissions.

A look at the Tesla Semi (Image via Kyle Field, CleanTechnica)

Wall Street Journal‘s Greg Ip writes, “What will make a bigger difference to global warming: sleek electric sedans like those made by Tesla Inc., or heavy-duty trucks, powered by the sort of [combustion] engines that Cummins Inc. is testing at its research center here just south of Indianapolis?”

Ip argues it’s the latter. “Most of the world thinks like a Cummins customer, not a Tesla customer. A Tesla buyer isn’t trying to save money: It is ‘an emotional buy,’ says Wayne Eckerle, Cummins’s head of research. Cummins customers are commercial truck operators: ‘They don’t buy on emotion. At all.'”

Unlike Tesla’s commitment to an all-electric approach, “Cummins is spreading its bets, developing a mix of electric, hybrid and natural-gas powered motors for small and medium-size trucks. But long-haul heavy trucks will, for the foreseeable future, run on diesel.” According to Ip, Cummins is concerned about electric trucks “costing a fortune” with batteries that “reduce payloads” while the act of recharging them would invariably “lengthen trips.” [Editor’s note: There were very similar concerns in the industries Tesla has already disrupted, until Tesla came along. Also, interestingly, there’s no talk here of the fuel efficiency benefits of autonomous driving and platooning.]

Regardless, the stakes are high for the trucking industry as a whole. “Though less numerous than passenger vehicles, trucks collectively emit almost as much carbon dioxide because they travel further and weigh more. According to the International Energy Agency, road freight accounts for 35% of transport-related greenhouse gas emissions and 7% of total emissions,” notes Ip.

Cummins, however, is perplexed over policies surrounding the uptake of electric vehicles. Eckerle says talk in Europe of a 50% reduction in carbon emissions would mean “legislating the internal combustion engine out [of existence] as we know it today. The U.S. is doing nothing like that.”

Instead of encouraging incentives for electric vehicles, Ip reports that “Cummins would prefer a carbon tax: By forcing customers to internalize the cost of climate change, it would naturally incentivize them to pay up for lower-emission technology, no matter the fuel type.”

Cummins’ Julie Furber discusses the company’s outlook for electrification and diesel moving forward (YouTube: Diesel Progress)

“If we want rules that are more effective, decide the end result we want and let technology compete for the best solution,” says Cummins’ Chief Executive Tom Linebarger. “Carbon taxes are much better than all the other choices.”

About the Author

Matt Pressman is all about Tesla. He’s a TSLA investor, pre-ordered the Model 3, and loves driving the family's Model S and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he’s served as a contributor/editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes daily about Tesla and you can follow his work on the EVANNEX blog.

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Tesla Discontinues 75 kWh Battery For Model S & Model X Effective January 13

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Published on January 10th, 2019 |

by Steve Hanley

Tesla Discontinues 75 kWh Battery For Model S & Model X Effective January 13

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January 10th, 2019 by Steve Hanley

Things are constantly changing at Tesla as the company juggles prices and content in its quest for sales and profitability. As of January 1, the company’s cars are no longer eligible for the full $7,500 federal EV tax credit. For the next 6 months, they will qualify for only half that — $3,750. In response, Tesla lowered prices on all of its cars by $2,000.

So, it seems counter intuitive that Tesla has now decided to discontinue the 75 kWh battery for its Model S sedan and Model X SUV as of January 13. The announcement came in a tweet from Elon Musk on Wednesday and gives customers only 5 more days to order a car with that battery. Raising the price of its large cars hardly seems like a strategic way to boost sales, so the company must have something else in mind to encourage demand.

The Verge reports that a Tesla spokesperson declined comment on the announcement, which means there is plenty of speculation about what the elimination of the 75 kWh battery means for the company going forward. In the short term, it means the base price of the Model S will jump from $76,000 to $94,000 come Monday. Similarly, the price of a Model X goes up from $82,000 to $97,000. This at a time when competing electric SUVs from Jaguar and Audi selling for $75,000 or less are already on the market or due to arrive shortly.

Has Tesla taken leave of its senses? Probably not, but in the absence of hard information, there is a lot of speculation. The staff here at CleanTechnica has been tossing around some of those questions while lazing beside our rooftop salt water pool at CT Central. Bear in mind, our thoughts, although informed by years of reporting on all things Tesla, may or may not be accurate. By Monday, Tesla may have made other announcements that add considerably to our understanding of the situation.

Are New Batteries Coming?
The Model S and Model X use 18650 battery cells produced by Panasonic. The Model 3 uses the newer 2170 battery cell made by Tesla at its Gigafactory 1 in Nevada. The Model 3 is currently offered with two battery sizes — a 75 kWh Long Range unit and a 62 kWh Mid Range option. Eventually a 50 kWh Standard Range model will be offered, but that option is not yet in production. When it is, the Mid Range choice will probably be eliminated.

Tesla has almost always offered a choice of batteries in its cars. How likely is it that its large vehicles will now go forward with only one battery available? That seems unlikely, but we’ll see.

When Tesla introduced the Model 3, there was no mention of battery size, no kWh to decipher. Elon Musk eventually responded that, indeed, most humans don’t think in kWh and it made more sense to just talk miles when communicating with the masses. Is Tesla going to do the same with the S & X now? The answer may be contained in a somewhat cryptic Twitter response by Elon Musk to Alistair Gray, who asked, “Are you moving away from battery sizing in a similar sense to how Model 3s are sold ie Long Range, Performance etc?” Musk’s answer was “Yes.”

More Questions Than Answers
There are a couple of moving pieces to the Tesla puzzle at the moment. The 2170 battery cells are believed to be more energy efficient and less costly to manufacture than the older 18650 cells. People have speculated for some time that eventually the newer cell design would find its way into the battery packs for the larger cars.

The Model S has been on sale since 2012, with no dramatic styling changes except for a new front end treatment (even though thousands of changes have been made through the years in a quiet manner). Rumors of a redesigned Model S have been swirling for years. Presumably, a new version of the Model S would be able to take advantage of the manufacturing lessons learned by Tesla since 2012, making it less costly to produce and therefore more profitable.

Battery prices have continued to fall every year and it is believed Tesla is already at or slightly below the $100 per kWh level with its latest 2170 cells. Could Tesla reduce the price of its large cars with the 100 kWh battery packs and add a 120 kWh or 125 kWh battery pack that uses 2170 cells as the new premium price offering? Such a large battery in a redesigned, more efficient chassis could push the range of the car closer to 400 miles. That would also better differentiate the Model S from the Model 3 (and the Model X from the coming Model Y).

Finally, Tesla is scheduled to begin rolling out its Version 3 Superchargers soon. Could the company have new battery packs and upgraded battery management systems that would allow its cars to obtain an 80% state of charge in 15 minutes or less?

We don’t know the answers, but will continue to share the latest Tesla news with our readers as soon as it is available. If you are interested in owning a Tesla but find the Model 3 a bit snug for your tastes, this may be the ideal time to order a Model S 75 at an affordable price. Is Tesla planning changes to that car? Almost certainly so. It is constantly making improvements to all its cars. As Elon says, the cars coming off the line today are the best Teslas ever made and the best time to buy a Tesla is now, as always.

About the Author

Steve Hanley Steve writes about the interface between technology and sustainability from his home in Rhode Island and anywhere else the Singularity may take him. His motto is “Democracy is socialism.” You got a problem with that?

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Tesla Model 3 Range Updates — #NewsQuickie

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Published on January 10th, 2019 |

by Zachary Shahan

Tesla Model 3 Range Updates — #NewsQuickie

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January 10th, 2019 by Zachary Shahan

There have been a couple of recent announcements regarding Tesla Model 3 range ratings. Not being groundbreaking news, we never covered the updates, but now is the time. So say the rulers of the Internet.

The Tesla Model 3 Mid Range received an EPA rating of 260 miles (combined). But then Elon Musk came out and tweeted that the rating is actually 264 miles — the 260 estimate was off. (Note: The Department of Energy’s Fuel Economy site still shows 260 miles.) The Tesla Model 3 Long Range, as a reminder, has a range rating of 310 miles.

Aside from range, the EPA also provided efficiency ratings: 123 MPGe combined, 128 MPGe in the city, and 117 MPGe on the highway. That’s slightly better than the Model 3 Long Range, which scores 116 MPGe, 120 MPGe, and 112 MPGe, respectively.

All version of the Model 3 are estimated to save you $3,500 over the course of 5 years compared to buying an average new vehicle. Of course, such calculations are based on various assumptions — gas prices, where you charge and what the cost of charging is for you, and how many miles you’ll drive, for example. You can personalize the estimates on the DOE’s website.

The other range update regarding the Model 3 is that the Long Range trim got a WLTP rating in Europe. Overly enthusiastic as always, the rating there is 544 km (338 miles).

And now, you can’t actually drive further in Europe. In fact, it’s quite a bit colder in Europe, and everyone with an EV knows a cold winter will eat into your range.

In case you missed the news in the past year, you can go to the Tesla website and order a Tesla Model 3 Long Range (with all-wheel drive) or Mid Range (with rear-wheel drive) at any time and receive your car in fairly short order.

If you do and you want a the benefits that come from using a referral, feel free to use my referral code — http://ts.la/tomasz7234.

About the Author

Zachary Shahan Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

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Tesla Sales … Tesla in 2018 … Electric Flood in Europe — #CleanTechnica Top 20

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Published on January 5th, 2019 |

by Zachary Shahan

Tesla Sales … Tesla in 2018 … Electric Flood in Europe — #CleanTechnica Top 20

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January 5th, 2019 by Zachary Shahan

The top stories of the past week here on CleanTechnica again showed abundant reader love for Tesla stories. 8 of the stories in the top 10 were about Tesla. The other two were about electric vehicle sales in Europe (which included sales of Teslas, of course) and 4 new long-range electric cars coming to the US in 2019. The Tesla stories cover everything from Tesla sales to Tesla jobs to Tesla Model 3 production to … Tesla sales.

In the second half of the top 20, we had 3 solar stories, a story about the never-ending hydrogen scam, a piece about Google becoming an ally of EV drivers, and a couple of CleanTechnica top stories lists. (Ironically, our top 55 list for all of 2018 didn’t make the cut.)

Read on to see the details, and read the stories! Also, don’t forget to share the love and tweet/share/publish your own favorite pieces!

Tesla Completely SOLD OUT (Almost)
2018 Was A Giant, Awesome Year For Tesla — Because Elon Musk
Let The Fully Electric Flood Begin! — #Europe EV Sales Report
This Hypnotic Tesla Model X ASMR Video Has 2½ Million Views
4 New Electric Cars With Long Range Coming To US Showrooms In 2019
Tesla Crushes Records, Wall Street Expects More — Miracles?
Former Tesla Employees Launch 1st Used Electric Car Retailer
Tesla = Hottest Place To Work For Young Job Seekers
40 Steps & 90 Minutes To Produce Tesla Model 3
10 Reasons To Not Buy A Tesla (JK) … 23 Nasty Tesla Charts … Supercharger-Blocking Jackasses — #CleanTechnica Top 20
Google Maps Now Features EV Charging Stations #NewsQuickie
Futurist Drives Tesla Model X … & His View Of The Future Changes
10 Reasons To Not Buy A Tesla … Even Though Everyone’s Buying A Tesla — #CleanTechnica Top 30 in December
Should I Buy A Tesla In The Year-End Rush?
The Hydrogen Fuel Cell Scam — From George W. Bush & “The Big 3” To Toyota, Honda, & Japan
Powerhouse 3.0 Solar Shingles Head To The Roof
Most Utility-Scale, Fixed-Tilt Solar Photovoltaic Systems Are Tilted 20 Degrees To 30 Degrees
The US Department Of Energy Roots For Floating Solar Panels. Do You?
How I Give A Tesla Model 3 Test Ride (As Often As Possible)
Tesla News: That Red Tesla Semi, Leasing In China, & Supercharger Expansion

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Tesla Autopilot Miles Soaring

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Published on January 5th, 2019 |

by Zachary Shahan

Tesla Autopilot Miles Soaring

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January 5th, 2019 by Zachary Shahan

Tesla Autopilot miles have been soaring as the company has scored insane sales growth in recent quarters. None of those Autopilot miles have been fully autonomous, of course. However, what many Tesla enthusiasts have learned — yet much of the market seems to discount or not know at all — is that Tesla vehicles with Autopilot hardware (which is all new Teslas in recent years) are learning with every tire rotation. The ones with the software enabled must be a learning a bit more, since they are processing how Autopilot thinks it should drive and where and how drivers occasionally correct it, but I’m sure the vehicles with Autopilot latent are still gathering important data.

It is the deep learning aspect of Tesla vehicles that makes Tesla’s move toward autonomy seem so formidable. Sure, Waymo uses deep learning as well and has a compelling approach to autonomy that is moving forward and even, within the limits the technology can operate, trialling full self-driving without a human technician onboard. But Waymo’s system is built around limited geographical areas, a very limited vehicle fleet, and more limited learning. Tesla has a fleet of hundreds of thousands that is growing by ~90,000 vehicles per quarter at the moment and is not built around a dependency on super precise maps.

As Mike Barnard, using his robotics background, explained extremely well in 2015 (republished recently) and Paul Fosse put into other words two months ago, Tesla’s Autopilot software is a deep learning animal. Tesla Autopilot, like a young human with a voracious appetite for improvement, is getting closer and closer to some human-level driving abilities every day while already having superhuman abilities in vision, data processing, and attention span.

With all of that in mind, the below update from Lex Fridman of MIT is all the more exciting.

We have a Tesla Model S with Autopilot 1 hardware. Admittedly, I haven’t driven it in many months and there have been some software updates related to Autopilot since I have used it (it’s in our Tesla Shuttle fleet in Europe), but either way, I was struck by how much better Autopilot was in the first Tesla Model 3 I drove last year. I was again struck by how much it had improved months later in another Model 3 test drive. The technology is improving continuously, and with big step changes improvements supposed to roll out in coming months, I can hardly fathom where Tesla Autopilot will be in a year or two.

Well, actually, I can fathom it. I expect the cars will be capable of driving me from point to point without making me sweat for a second. And perhaps then charging itself with a robotic snake charger.

Technically, according to Elon Musk in 2016, Autopilot may now be out of beta mode. Though, that’s not guaranteed. 1 billion miles was considered a minimum amount of experience for the tech, but I’m not sure what other parameters graduate Autopilot from beta mode. Perhaps it is when Tesla feels comfortable releasing Full Self Driving capability to the public?

f you would like to buy a Tesla and want the benefits that come with a referral, feel free to use my referral code — http://ts.la/tomasz7234. Or not.

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Tesla FUD: Tax Credit & Tesla Pricing — #TSLA

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Published on January 5th, 2019 |

by Frugal Moogal

Tesla FUD: Tax Credit & Tesla Pricing — #TSLA

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January 5th, 2019 by Frugal Moogal

The goal of this series is to examine current topics being written about Tesla [TSLA] that appear to be stirring up “Fear, Uncertainty and Doubt” (or FUD). The plan is to try to provide reasonable analysis about the validity of the claims. I generally do not link to the articles that “inspire” me to write this, as I do not wish to reward analysis I feel is poor with increased traffic. However, I will freely admit that my analysis may contain incorrect assumptions, and will do my best to acknowledge them in future articles.

If you somehow missed it, Tesla just announced Q4 deliveries totaling 90,700 vehicles, and that the company was dropping the price of its vehicles by $2,000 in response to the phaseout of the federal EV tax credit.

The stock price responded by dropping almost 7% on the day.

There is actually a TON to unpack in Tesla’s Q4 communication, and I intend to do that soon, but I wanted to briefly touch on the believed reason for the stock hit — the price drop on the vehicles and the supposed “price ceiling” to Tesla’s current offerings.

Before I go on, my usual boilerplate paragraph about my stock: I’ll note that I remain a Tesla shareholder with a whopping 8 shares, with no intention to add to or sell that stake. I do think that Tesla remains a risky investment for a plethora of reasons that I won’t get into right now (a few people commented that they want to hear that, so I need to think about how to explain it without creating my own Tesla FUD article…), but also one that has the potential to increase astronomically in the future, which is why I decided to purchase and hold a very limited number of shares. I would not suggest anyone use the following article as their sole data point to decide to invest nor sell shares in Tesla.

What Did The Market Expect?
I don’t get what the market wanted Tesla to do here.

Like it or not, the federal EV tax credit is considered to be a discount on the purchase to nearly all buyers of EVs. Every other time we have had a market where EV credits or rebates have phased out, we have generally seen a surge in demand followed by a sudden drop in demand, especially if the pricing of the vehicles remains the same.

Duh?

Between Black Friday and Christmas, Microsoft knocked $100 off its Xbox One S console, making it just $199 to get one. It was advertised as a limited time promotion, and today the same console does indeed cost $299 to purchase. Is anyone expecting Microsoft will sell the same number of Xbox One S consoles this month as it did last month? If so, they seem to have missed some lessons on supply and demand, and the impact of pricing on that demand.

Tesla’s Response
Tesla decided to offset the $3,750 reduction in the federal tax credit by reducing the cost of its vehicles by $2,000. To me, it’s a genius move for a whole variety of reasons. I’m trying to keep this article short, so here’s a quick rundown of some of the positives here:

Auto loans don’t take into account the tax credit (that has to be claimed by the individual who owns the car), meaning that this makes the monthly payments for purchasing a new car cheaper. Most people take out loans to purchase cars.
Tesla is making more than $2,000 in profits off all of its cars. It can reduce the price and still make money.
According to Tesla, more than ¾ of Model 3s sold were to new customers, not reservation holders, meaning that new Model 3 demand was more than 45,000 vehicles. Considering that Tesla hasn’t started international deliveries, that means that demand remained very strong. Some of that demand may have been moved up due to the tax credit expiring, but not all of it.

Let’s also remember, Tesla hasn’t pulled several demand levers for the Model 3 — in particular, international sales and the start of leasing.

Conclusion
I have been accused of being a Tesla shill in the comments before, and I guess this article may continue that trend, as my conclusion for this one is simple: Not just did I expect Tesla to make a move like this (I expected it to be a slightly larger reduction, actually), but the scale of Tesla’s EV production leaves the company in a much stronger position to reduce pricing to raise demand as the tax credit begins its phaseout process than other automakers producing electric vehicles.

In short, I don’t understand the reaction here.

If you think I’m overly positive on this one, leave me a comment explaining why — the more detail, the better. I intend to write a longer article soon unpacking how the tax credit affects demand, and different demand levers that I expect Tesla can and will use to keep that demand up, and I’ll do my best to incorporate and reply to any comments I get.

About the Author

Frugal Moogal A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.

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Tesla Has The Highest Customer Loyalty Of All Car Brands

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Published on January 9th, 2019 |

by Matt Pressman

Tesla Has The Highest Customer Loyalty Of All Car Brands

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January 9th, 2019 by Matt Pressman

Originally published on EVANNEX.

Studies demonstrate that Tesla has forged a unique bond with its customers. Last year, Consumer Reports found that Tesla has the highest rate of customer satisfaction of all car brands. Now, according to more recent research conducted by Experian, it turns out these high levels of satisfaction are translating into exceptionally high rates of customer loyalty as well.

Tesla owners tend to be a satisfied and loyal (Image via Tesla)

In fact, electric vehicle owners (regardless of brand) have a high propensity for loyalty. According to Experian, “Once dealers have customers in an EV, there’s a good chance they get them back again in the future. Electric vehicle customers are showing early signs of being a highly loyal customer segment. When EV customers return to market, 62 percent buy another EV.”

So what about industry leader Tesla?

Experian found, “Tesla owners show an even higher make loyalty rate than EV customers as a whole. More than 4 in 5 Tesla customers — 80.5 percent – buy or lease another Tesla when they return to market. Tesla has the highest level of make loyalty in the industry, ahead of Subaru at 72.1 percent and Ford at 72 percent.” Experian also found that, “Tesla led the industry with a Conquest/Defection ratio of 13.77 to 1.”

Electric vehicle market share based on US EV sales in the first half of 2018 (Source: Experian)

While Tesla plans to introduce a lower-priced Model 3 option, its current vehicle lineup remains relatively expensive. Therefore, it’s no wonder EV owners tend to be a well-heeled crowd. Experian reports that, “individuals with higher education and high home values are currently more likely to purchase EVs.” Furthermore, if trends start in places like California, EV fever could be spreading. According to Experian, EV buyers “are also more likely to be found [see chart above] on the west coast.”

These insights into electric vehicles (and industry leader Tesla) are definitely encouraging. Experian concludes, “the auto industry should be enthusiastic about the electric vehicle segment’s future … as battery costs continue to come down, EV [pricing] will more closely mimic today’s vehicles. All things being equal, customers are likely to opt for a more environmentally friendly option in the future and eventually, the scales will tip in the favor of EVs.”

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Tesla Model 3 Used Car Stats As Depressing For BMW & Audi As New Car Sales

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Published on January 6th, 2019 |

by Michael Barnard

Tesla Model 3 Used Car Stats As Depressing For BMW & Audi As New Car Sales

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January 6th, 2019 by Michael Barnard

The Tesla Model 3 has many superlatives associated with it. The most pre-orders of any production car ever. The highest volume sales of any small or midsize luxury sedan in the USA. The highest revenue for any car sold in the USA for the last 4–6 months of 2018. The fewest buttons, switches, and dials of any car.

But there’s another superlative.

The fewest used cars available. By an order of magnitude.
Autotrader is the largest online used car site in the USA. A search for second-hand Tesla Model 3s on January 1st found 78 Tesla Model 3s for sale on the site. There were roughly 140,000 Tesla Model 3s sold in 2018 when you include likely December sales per earlier CleanTechnica reporting.

78 used cars represents about 0.06% of the Tesla Model 3s on the road. That number doesn’t seem that high.

Using the November sales chart, I also looked at the cars which ranked just above and below the Model 3 in January–November 2018 sales volume. Checking for used 2018–2019 Chevy Malibus on Autotrader, there are over 1,000 for sale right now, and there were only a few more of them built and sold in 2018 than the Model 3. There are 986 used 2018–2019 Ford Focuses available for sale right now, 13 times more than Tesla Model 3s, with fewer built and sold. That’s about 0.8% that are up for resale.

There’s an order of magnitude fewer Tesla Model 3s for sale than cars which sold in equal numbers in 2018 in the USA.

But what about its closest competitors, small, luxury, performance sedans such as the BMW 3 Series and the Audi A4? They have similar price points and target demographics, so are arguably better to compare to the Model 3 than either the Malibu or Focus.

New Tesla Model 3s outsold new 3 Series and A4s by a large margin in 2018 in the USA, three to four times the sales volume. But going back to Autotrader and looking solely at used 2018–2019 cars for sale is instructive. There are over 1,000 BMW 3 Series available right now for those model years. There are 502 Audi A4s available. There are 7 to 13+ more used new-model BMWs and 6 times as many Audi A4s for sale as Tesla Model 3s.

Let’s run the numbers a slightly different way. If all else were equal, the number of cars available used should be aligned to the number of cars sold. The ratios should be relatively close. There were more BMW 3 Series sold than Audi A4s and there are more available used. The ratio isn’t perfect, as new is roughly 4:3 and used is in the range of 2:1, but the principle applies.

When we look at Tesla vs BMW, we see a ratio of 3:1 new and 1:13 used. Really, the way to look at this is that potentially 40 times as many BMW owners are dumping their new 3 Series as Tesla owners are doing with their Model 3s. Audi is 4:1 and 1:7. There are about 30 times as many Audi owners dumping their A4s as Tesla owners.

There were certainly anecdotal stories of people who bought the two-wheel drive as soon as they could but then put down the more serious money for the AWD or Performance version when it was made available. And there are certainly people who were speculating on the Model 3, intending to make a fast buck by flipping it to people who wanted one.

But what about mileage? Well, a scan of the mileage on Autotrader found a range from 11 miles to 14,000 miles on the cars. There were some that were obviously bought to flip second hand with 11 to 45 miles on them. There were some in the 1,000–2,000 range. The majority were in the mid-1,000s. There were a handful over 10,000, which is reasonable given annual mileage averages in the USA are about 13,500.

Did some people buy to flip? Yes, and no surprise. They probably did okay in June, but wouldn’t be doing okay today with Tesla running 6,000–7,000 a week. Speculation on the Model 3 for quick flips is more a thing of the past, although obviously this does suggest that resale value remains high. Some of the variance can be explained by high demand for used Model 3s, meaning that used inventories remain low.

But really, the statistics show that Tesla Model 3 owners are very happy with their cars and keeping them. Demand is very strong for the newest Tesla. For BMW and Audi? Not so much.

About the Author

Michael Barnard is Chief Strategist with TFIE Strategy Inc. He works with startups, existing businesses and investors to identify opportunities for significant bottom line growth and cost takeout in our rapidly transforming world. He is editor of The Future is Electric, a Medium publication. He regularly publishes analyses of low-carbon technology and policy in sites including Newsweek, Slate, Forbes, Huffington Post, Quartz, CleanTechnica and RenewEconomy, and his work is regularly included in textbooks. Third-party articles on his analyses and interviews have been published in dozens of news sites globally and have reached #1 on Reddit Science. Much of his work originates on Quora.com, where Mike has been a Top Writer annually since 2012. He's available for consulting engagements, speaking engagements and Board positions.

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Tesla’s Software-First Approach Foreshadows The Future Of Cars

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Published on January 6th, 2019 |

by Guest Contributor

Tesla’s Software-First Approach Foreshadows The Future Of Cars

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January 6th, 2019 by Guest Contributor

Originally published on EVANNEX.
By Charles Morris

Everyone knows that Tesla is an innovative company, and almost everyone knows that its cars don’t need gasoline. But as Lou Steinberg points out in a recent article entitled “Some of the Greatest Innovations are not What You Think,” electrification is not Tesla’s only innovation, and when it comes to competing in the global auto market, it may not even be the most important.

Tesla’s center stack touchscreen display in the Model S (Image: Tesla)

In Steinberg’s view, Tesla’s most important innovations stem from the fact that it’s the first company to approach cars the Silicon Valley way: as a software problem. Steinberg perceived the power of “tin wrapped software” as the CTO of Symbol Technologies. “Symbol built hardware, but was able to use software to tune how it worked in different environments. Flexible software meant that the hardware behaved one way in a hospital (long-battery life for a 12-hour shift) and another way in a retail store (higher-power radios to overcome dead zones).”

“I bought the Model S because it was the first time I had ever seen someone treat a car as a software problem,” Steinberg writes. Sure, modern cars are full of software, but their builders are hardware companies, and automotive hardware is a mature market with few opportunities to disrupt, or even to differentiate their products.

Tesla has changed everything — for the first time, a car can improve itself over time via software upgrades. “Aside from navigation maps, all of my cars [he has owned many] had features that were largely fixed on the day they left the factory,” says Steinberg. “Not my Tesla. Every month, it gets software updates that make it better. It learned how to park. Then it learned how to do it better. It opens my garage door when I come home. It improved its self-driving. It improved the stereo. It added anti-theft features. After one year, my car is safer and better to drive than the day I bought it. My Tesla driving experience keeps improving through patches and updates.”

Tesla owner describes why he loves the car’s software updates: “It’s the feeling that your car is always new.” (YouTube: Tesla)

Steinberg vows never again to buy “a car whose capabilities are frozen in time,” and once they’ve experienced the ever-improving Tesla ownership experience, most drivers probably feel the same.

Another important but overlooked innovation that the Sages of Silicon Valley have made is to free up constrained resources. The Tesla Rangers — mobile teams that perform minor service at customer locations — provide an example. Why are the Rangers such an innovation? Because they free up resources at service centers. “The most constrained real estate at a service center is in the service bays,” Steinberg writes. “You can hire more technicians if demand increases, but the service bays are a big capital investment that can’t be flexed up and down. The second most valuable real estate at a showroom is in the parking lot. You can fill it with cars to sell, but only if you don’t have a lot of cars you already sold taking up space while waiting for a service bay to become available. Cars waiting for service, especially warranty service, crowd out cars that are ready to be sold and delivered. Add to this the fact that many owners will ask for a loaner car, and you need a fleet of loaners. It all costs money.”

Thus, the Tesla Rangers represent not just a convenience for customers (though they certainly are that), but also “a way to optimize constrained resources and save capital. It frees up the parking lots to sell and deliver cars.”

And the third and greatest innovation of all? Tesla isn’t selling just cars. There’s a saying in the software business: “People don’t buy software, they buy a roadmap.” In other words, customers, especially large companies, don’t buy software based only on what it can do today, but based on their confidence that it will continue to get better and keep up with future needs. Once you conceive of a car as software, the capabilities you can offer to customers are almost unlimited.

Tesla uses the phone as a “key” for the Model 3 (Image via Tesla)

“Tesla isn’t limited to promoting the current features,” writes Steinberg. “Tesla and Musk are either lauded for offering a vision or panned for over-promising, but they offer a glimpse of what your car will be able to do in the future. Not another car you have to purchase again…the very same car you buy today. My car knows how to park, and will someday have full autonomous driving. Why shouldn’t it drop me off in front of the store and then find a parking space on its own?”

Many stock market observers believe that the high valuation of TSLA stock has a lot to do with investors’ belief that the company will someday offer full self-driving capability, an innovation that could have even greater implications for mobility and society than electrification. And it’s not just the stock price. A Mercedes or a BMW is a great automobile, but once you buy it, it’s going to be the same vehicle you bought until the day you sell it. If, instead, you could have a machine that’s going to get better and better, and eventually be able to drive itself, how much more would you be willing to pay?

“By treating cars as software, and constantly pushing updates, Tesla can command a premium price today by selling the roadmap,” concludes Steinberg. “Other manufacturers may innovate incrementally, but as the character ‘bored Elon Musk’ once tweeted, ‘Incremental innovation is really just adjusting for inflation.’”

About the Author

Guest Contributor is many, many people. We publish a number of guest posts from experts in a large variety of fields. This is our contributor account for those special people.

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The “Tesla Stretch” — Proving Car Buyers Will Pay More For A Tesla Model 3

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Published on January 9th, 2019 |

by Matt Pressman

The “Tesla Stretch” — Proving Car Buyers Will Pay More For A Tesla Model 3

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January 9th, 2019 by Matt Pressman

Originally published on EVANNEX.

The Tesla Model 3 is turning out to be an electric car that’s seducing car buyers across multiple market segments. According to a CleanTechnica report, “45% of current electric car drivers plan to buy a Tesla next.” Okay, that’s understandable. Non-Tesla EV drivers might be interested in a Tesla. That said, it’s extraordinary how many gas-powered car owners, from vastly different auto segments, are transitioning to Teslas.

Tesla Model 3 (Photo by Zach Shahan, CleanTechnica)

Bloomberg reports, “When Chief Executive Officer Elon Musk first revealed the Model 3 at a late-night party in March 2016, the vehicle was expected to compete in the premium sedan market against the likes of Audi, BMW, Lexus and Mercedes. Instead, owners of mass market cars like the Honda Accord and Toyota Prius are opening their wallets for the sedan, signaling that the vehicle is pushing Tesla beyond its luxury niche and more into the mainstream.” Buyers are also coming from the BMW 3 Series, and surely other luxury cars, but luxury car sales are not down much and Tesla appears to be pulling much more from lower classes.

“For Earl Banning, getting behind the wheel of a Tesla meant spending more than he ever had on a car. The 43-year-old Air Force neuropsychologist from Dayton, Ohio, ponied up $54,000 for a Model 3, figuring he would save on gas and keep the car for a long time. It was almost double what he had previously paid for a fully loaded Honda Accord,” reports Bloomberg.

The most common cars traded in for a Model 3 according to Tesla’s CEO Elon Musk (Chart by Bloomberg)

Banning says, “I call it the Tesla Stretch — everyone I’ve met who owns a Model 3 is willing to spend more to get into a Model 3.” For example, a former Nissan Altima owner, 36-year-old Eric Snapat, spent nearly $60,000 on his new Tesla. And 26-year-old Robert Preston actually charges $155 a day to rent out his Tesla on Turo to help pay for his new Model 3. “Every weekend I have someone renting it,” Preston said.

“Tesla recently said that more than half the trade-ins for the Model 3 were from vehicles priced below $35,000. And there are signs that the sedan’s popularity is adding [some] pressure on rival carmakers. … In October, sales of cars such as the Accord and Prius continued to slip as deliveries of the Model 3 ramped up,” according to Bloomberg.

⇒ Related: Honda Accord Sales & Civic Sales Drop 80,000 In 2018

A Tesla Model 3 charging in Florida. (Photo by Zach Shahan, CleanTechnica)

“Tesla has captured lightning in a bottle,” said Jeremy Acevedo, manager of industry analysis at researcher Edmunds. “It’s hard to even benchmark the Model 3 against other cars because it’s broken the mold in so many ways.”

⇒ Tesla Model 3 = Lightning, Model Y = Thunder

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