VW boss blasts Tesla from somewhere within a cloud of #dieselgate smoke

Domenick

Domenick

Well-Known Member
VW CEO Blasts Tesla For Low Sales, Losing Millions

With all the trouble of jail terms, lawsuits and lost billions of the #dieselgate scandal apparently behind him and forgotten, Volkswagen CEO’s Matthias Müller has taken it upon himself to warn the world that the 15-yr-old Tesla doesn't sell nearly as many cars as his 80-yr-old outfit, and is spending a lot of money as it grows its product line and production capacity.

Thanks, Mattie. We'll keep that in mind. :p

(Brief video below is in German, but it's surprising how deflection sounds the same in so many languages.)

 
The widespread fraud of the "clean diesel" scandal is forgotten? Well, I think it's safe to say that the majority of those who regularly visit InsideEVs have not at all forgotten it!

In fact, the fallout from that it still getting headlines:

From Sept. 29, 2017: "Porsche R&D’s Former Chief Wolfgang Hatz Arrested in Connection with Diesel-Emissions Scandal"
https://blog.caranddriver.com/porsc...-in-connection-with-diesel-emissions-scandal/

From Oct. 23, 2017 (two days ago as I post this): "Price-Fixing Inquiry Moves From BMW to Daimler and Volkswagen"
https://www.nytimes.com/2017/10/23/business/daimler-volkswagen-eu-car-bmw.html

A quote from that second link:

Regulators are looking into whether Germany’s three major vehicle manufacturers — BMW, Daimler and Volkswagen — worked together to fix the prices of various vehicle equipment, including design aspects that help control emissions. The searches came as the companies face a backlash over their efforts to evade rules on diesel emissions.
 
Just finished reading "Elon Musk" by Ashlee Vance. The rest of the car industry is going to have to change their way of thinking if they're serious about producing EV's like the "S" "Model X" and "Model 3". Just producing their own batteries in the way Tesla is building their "Gigafactory" will be challenge enough! When you combine the 'Solar City' and 'SpaceX' businesses with Tesla, and the contributing technologies and development, it really puts Tesla way out in front.
 
I wouldn't write off the traditional approach. Sure, a more vertical integration works well for Tesla right now (or will, if they can improve execution), but there are also advantages to outsourcing as well -- less capital-intensive, spreads risk to other entities, etc.

The cross-pollination with SpaceX is a nice thing for Tesla to have, obviously, but Japanese (keiretsu) and Korean (chaebol) corporate organizations can have similar potential, with close contacts to cousin companies.

With Tesla's success and growth rate so far, it makes sense to go with the risk of vertical structures, with the pay off of higher margins helping out cash flow for further investment. Traditional OEMs can create equally compelling vehicles, but Tesla certainly has first-mover advantage and the advantage of its own high-speed charging network.
 
Oh dear! Looks like BMW are in the cross hairs of the emission police now!

BMW offices raided.

The raids on Tuesday, in which about 100 investigators targeted BMW offices in Munich and an engine factory in Austria, suggested that all of Germany’s top domestic automakers may have evaded emissions rules, although perhaps not to the same degree as Volkswagen.

https://www.nytimes.com/2018/03/20/...nl=morning-briefing-europe&nlid=72533936&te=1
 
Andrew K said:
Just finished reading "Elon Musk" by Ashlee Vance. The rest of the car industry is going to have to change their way of thinking if they're serious about producing EV's like the "S" "Model X" and "Model 3". Just producing their own batteries in the way Tesla is building their "Gigafactory" will be challenge enough! When you combine the 'Solar City' and 'SpaceX' businesses with Tesla, and the contributing technologies and development, it really puts Tesla way out in front.
Click to expand...

Solar City may well go out of business. Elon bought them to bail out his cousins and bury their losses in Tesla. Their installs are down 40% and drumpf just put a 25% tariff on imported panels. Musk swapped out Solar City's original plant to build unique panels and brought in Panasonic from their gigafactory and now just sell rebranded Panasonic panels. It's not different in any aspect of what you can get from others, and maybe not even as good a product.

Many a solar install company have gone under, the only thing that will keep them churning longer than otherwise expected is the Tesla shield.

So no I would not be quoting Solar City as anything positive for the Tesla way. Pure cash out for the cousins and strip down job.
 
Feed The Trees said:
Solar City may well go out of business. Elon bought them to bail out his cousins and bury their losses in Tesla. Their installs are down 40% and drumpf just put a 25% tariff on imported panels. Musk swapped out Solar City's original plant to build unique panels and brought in Panasonic from their gigafactory and now just sell rebranded Panasonic panels.
Click to expand...

I don't necessarily see the "installs as down 40%" as being a bad thing. If SolarCity was losing money on every install, then reducing the number while changing to a more profitable business model would have been a good thing. Altho I originally thought the bailout was bad for Tesla, with the drastically revised business model I was taking a "wait and see" attitude toward SolarCity being run by Tesla.

But with a 25% tariff on imported solar cells, I don't see any way the SolarCity division of Tesla is ever going to be profitable, or even achieve break-even status.
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Well solar city does in fact make their own panels with Panasonic, I do assume this actually wont hurt them and may actually help.

Solar City's issue was operational. Their revenues were growing like crazy but what lead to the losses was their Op Costs were running out in front. Very much like Tesla except the Op Costs are not R&D that will lead to more growth, they're operational. Motley Fool did an article on this and points out that Op Costs don't go anywhere if they sell less, they're fixed cost like in nature.

https://www.fool.com/investing/2016/09/02/solarcity-corporation-in-5-charts.aspx

1dbb616e85b9532773992181ce25fce4.png
 
Feed The Trees said:
Well solar city does in fact make their own panels with Panasonic, I do assume this actually wont hurt them and may actually help.
Click to expand...

If my understanding is correct, and I'm fairly sure it is, then SolarCity merely assembles Panasonic solar cells into solar panels. It's also my understanding that, at present, 100% of the solar cells that SolarCity uses are imported.

However, according to this Ars Technia article, the tariff might wind up eventually benefiting SolarCity, because -- according to the article -- Tesla plans to eventually make its own solar cells.
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Feed The Trees said:
Solar City's issue was operational. Their revenues were growing like crazy but what lead to the losses was their Op Costs were running out in front. Very much like Tesla except the Op Costs are not R&D that will lead to more growth, they're operational. Motley Fool did an article on this and points out that Op Costs don't go anywhere if they sell less, they're fixed cost like in nature.
Click to expand...

I'm not a "financial guy", but I'm sure there is more than one valid way to look at the entire picture.

The explanation which made the most sense to me is that SolarCity's business model was based on leasing the solar installation to the property owner, and making its profit on selling the electricity thus generated, because the cost would be lower than the cost of electricity from the grid.

Unfortunately this was based on a "net metering" business model, which was profitable for SolarCity in regions where electric utilities are required under State regulations to buy, at retail cost, the electricity generated by a home solar power installation. Sadly for solar power enthusiasts, that arrangement to buy electricity at retail cost was basically an "introductory offer" to entice people to install solar power systems. Now that such installations have taken off in a big way, many regions and States have scaled back or eliminated the "net metering" advantage. Arguably, a fair price for such energy would be the wholesale price, not the retail price. SolarCity couldn't make a profit selling electricity to electric utilities at wholesale prices, or at least not enough of a profit to offset their expenses.

Or, to make the long story short: SolarCity's business model was based on taking advantage of a short-term introductory incentive which, quite naturally and entirely predictably, was being phased out, leaving SolarCity losing more and more money as time went along.
 
If Tesla is making the panels in the US, I don't see how this hurts them. It should help them, really.
 
Domenick said:
If Tesla is making the panels in the US, I don't see how this hurts them. It should help them, really.
Click to expand...

Assembling in the US, not building. The cells are being shipped in and those are being subjected to tariffs. They maybe wont be hurt as badly as others bringing in entire panels, because some cost does occur on US soil (assembly).
 
Feed The Trees said:
Assembling in the US, not building. The cells are being shipped in and those are being subjected to tariffs. They maybe wont be hurt as badly as others bringing in entire panels, because some cost does occur on US soil (assembly).
Click to expand...

Do you have a source for this? I hadn't dug into it, but I was under the impression the Buffalo factory was manufacturing solar panels, not merely assembling them.
 
https://www.teslarati.com/tesla-expanding-gigafactory-2-despite-trump-30-percent-tariff/

Despite manufacturing its Solar Roof product domestically, Tesla also relies on partner Panasonic to provide its solar cells, which are manufactured overseas and imported to the United States. However, developments taking place at Tesla’s solar factory in New York will soon change that.

So today yes imported, but sounds like it may be possible to shift to producing them in Bufflo
 
Feed The Trees said:
https://www.teslarati.com/tesla-expanding-gigafactory-2-despite-trump-30-percent-tariff/

Despite manufacturing its Solar Roof product domestically, Tesla also relies on partner Panasonic to provide its solar cells, which are manufactured overseas and imported to the United States. However, developments taking place at Tesla’s solar factory in New York will soon change that.

So today yes imported, but sounds like it may be possible to shift to producing them in Bufflo
Click to expand...

Ok, that's more in line with what I thought was happening.
 
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