Comparing Tesla, GM, etc 200+ mile range electric cars – Tesla’s control gives the advantage

It’s a bit premature to do this, but can we compare between the Chevy Bolt and Tesla Model 3?  While precise details for these cars haven’t been published, enough is publicly known to draw a few conclusions.  And while we’re at it, we can include some hypothetical information on some other 200+ mile range affordable EV’s that have either been announced or we expect will be announced shortly.  Over the next 2-3 years we’ll see multiple affordable 200+ mile range electric cars on the market.  It’s worth our while to ponder the relative potential for each.

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Chevy Bolt: This was publicly shown at CES a few days ago, and we should expect more details at the NAIAS auto show in Detroit next week.  It should go to production in late 2016, have a 200 mile range, a price of $30,000 (* After tax breaks), and all of GM’s goodies like OnStar and a dealer network.

Tesla Model 3: Tesla Motors has repeatedly promised there will be an unveiling in March 2016, and it should go to production in late 2017.  Range will be over 200 miles, it will have access to the Supercharger network, an MSRP of $35,000, and the cachet of being a Tesla.  If Tesla is true to its stereotype, this car will be fast and sexy looking.

Nissan Leaf: While the 2016 Nissan Leaf pushes the range to nearly 110 miles, the company hinted strongly at a 338 mile range version last summer, and showed a concept car last fall with 300 mile electric range.

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VW e-Golf:  An unverified statement from a VW exec (who was since pushed out due to Dieselgate) last September suggested a 200+ mile range e-Golf would be available sometime.  This is in line with VW’s promise it would be a leader in electric vehicles by 2018, and to fulfill that promise means delivering several models and to push their electric driving range way beyond the current norm of 80-100 miles.

Surely BMW (i3) and Kia (Soul EV) will be doing a longer range, but I’ve not seen anything.  These vehicles named here gives us enough to chew on.  Any other entrants in the affordable 200+ mile range BEV club will be very welcome.

Tesla Direct sales versus and independent Dealership Network

Tesla Motors has built for themselves a loyal following and hugely positive goodwill.  Most of us are excited about the company and eagerly waiting to learn about the Model 3 and are hoping to plunk down the dollars for a deposit as soon as possible.  It’s hard to buy that kind of excitement, especially when you’re General Motors.

There are some distinct differences, one of which is the business model.  The customers may actually be better served by an independent dealer network and independent service network.  Or the customers may be better served by Tesla’s model of direct sales through company owned stores.  I don’t know how to gauge which model is better, but of course the non-Tesla automakers all sell through a network of independent dealerships.  Further, the laws across most of the U.S. require that sales and service be handled by companies which are not the manufacturer.

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We love to hate dealerships and car repair shops.  Many think the direct sales model is better, but the history of laws requiring independent sales and service companies is based in real events.  When a manufacturer sells and services direct to consumers it’s possible for the manufacturer to screw its customers.  But we’re talking about the car business, and it’s hard to tell who’ll screw the customers worse, the manufacturer or the independent dealerships and repair shops.

At least Tesla Motors is, at the moment, acting with great honor.

What we should look for is whether or when Tesla Motors will begin sales through franchised dealerships.  The company plans to be selling hundreds of thousands of cars per year by 2020, and in the millions per year by 2025.  Will the company-owned dealership model scale to this sales rate?

Tesla’s control of repair, versus independent repair shops

Tesla Motors has tight control over Model S and Model X repair.  I’ve reported before that some Model S owners have received cease-and-desist letters when doing their own repairs on their car.  I’ve even asked the un-askable, whether Tesla would ever turn evil due to all this control.

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Tesla’s management says they’ve designed the Tesla Service department to provide excellent service to customers, and not to be a profit center.  Hence, Tesla’s staff is incentivized to give great service and not to screw the customers to make an extra buck.  With the other manufacturers the incentive is the other way around, which is why we have so many bad experiences at repair shops.

At the same time it means owners of Tesla’s cars cannot exercise the Right To Repair the same as can owners of other car brands.  While it’s not 100% prohibited for others (the car owner, or independent shops) to work on Tesla automobiles, I believe this is greatly limited.

What we should look for is indications that Tesla Motors is training independent car repair shops, selling parts, and even allowing owners to service their own car.

Fast charging infrastructure

Owners of 200+ mile range electric cars will want wide-spread fast charging stations, especially along highway corridors.  With a sufficient range and sufficient fast charging, even electric car owners can take road trips.

In the case of Tesla Motors, their Supercharger network is being built all across areas where Tesla sells its cars.  They haven’t discussed the conditions under which Model 3 owners will access this network.  Will they, like Model S owners, have free access to the Superchargers?  Or will they be required to pay a fee?  Will Supercharger support be a bundled feature or an option?

For all the other automakers, the fast charging network is owned, built and operated by independent 3rd party companies.  The other automakers have to trust that 3rd party companies will step up to the plate and build out fast charging.  So far that hasn’t worked out too well (in the U.S. — the Netherlands is a different story).  But we’re starting to see some changes, but because the automakers are working directly with charging network operators to build fast charging infrastructure.

Autopilot

Here Tesla Motors has a head start, but the other automakers are all working on related technology.  A few months ago Tesla rolled out “Autopilot” (not autonomous driving) to Model S owners as an over-the-air update.  It’s a first step towards autonomous driving, but decidedly is not the real deal.

Even though Tesla is ahead right now, the others will be doing this as well.

Over the Air Updates

Another impact of the requirement for independent sales and service, is that every other automaker (besides Tesla) cannot send out over-the-air updates to their cars.  Instead this is a service action, and has to be done by an independent repair shop.  Which reminds me, there’s a Recall notice for my Soul EV that I must take care of.

Because Tesla Motors handles this themselves, they can and do send out over-the-air updates.  These updates make major improvements, with the autopilot feature being just one example.  We’re accustomed to this kind of manufacturer support in our computers and smart phones, why not in our cars?

Performance

Tesla Motors knows it’s necessary to blow up old stereotypes about electric cars.  (Slow, ugly, boring golf carts)  That, and the fact that Elon Musk loves fast cars, has meant a focus on high performance electric cars.  We should expect this to remain true with the Tesla Model 3.

The other automakers instead strike a different balance of performance and energy consumption.  If past experience with EV’s from other automakers are anything to go by, they’ll tend to offer more sedate performance than the Tesla.

Upgrade-ability

Tesla Motors has been good in many cases about upgrading features on their cars.  For example, it’s possible to buy a bigger battery pack as Tesla bumps up the energy storage capacity.  Not all features can be upgraded onto older models.  For example, the autopilot software requires sensors that do not exist on older models, and cannot be retrofitted.

All the other automakers follow a rigid “model year” paradigm.  Features added in later model years cannot be retrofitted into older instances of the same model.   For example, the new 30 kiloWatt-hour battery pack in the 2016 Nissan Leaf cannot be installed in older models.

Summary

In almost every way, there’s a sharp distinction between Tesla Motors and all the other automakers.  Tesla controls the sales and service of its cars, and can therefore do many things the other automakers are prohibited from doing.

I wonder how long Tesla Motors will be able to continue doing this.  Or will they face a legal requirement to start opening up their business to 3rd party companies.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

2 Comments

  1. David, UBER is challenging the taxi license requirements across several national jurisdictions. Although the Uber regulations tend to be city regulations, instead of State or federal law/regs, it is important to note that Uber has sufficient resources to engage competition law lawyers to challenge city rules and regulations.

    The same may apply to Tesla. Although state laws and regulations may require dealerships to sell new vehicles it is not clear whether the ‘old model’ of new vehicle sales would hold under federal anti-trust laws related to constraints on inter-state trade. New car services offer more profit than new car sales for many “independent” dealerships. The advent of vehicle-to-network diagnostics would harmonize diagnosis of Tesla on real-time basis – providing warnings whenever the on-board alarms are triggered. A new Tesla owner can be directed to a state or city “qualified/certified” repair depot that would have access to the diagnostics and recommended service follow-up online as and when the owner’s Tesla entered their shop.

    Who owns new car dealerships? The “independent dealers” own the brick, motor and equipment but manufacturers’ IP (intellectual property) holding companies owns the rights to “GM, FORD, etc.”. Dealers are granted contractual rights to use IP and have exclusive sales and service for a particular market area – at the prerogative of the manufacturer’s IP Holdco as provided in dealers’ franchise agreements.

    When GM was on the ropes during the Financial Crisis it eliminated many of its sub-performing car dealerships simply by directing the dealers to remove the Trade Mark signage and ending new car allotments to the dealer’s inventory. References to the IP Holdco products were no longer exclusive to the dealer. Many dealers went bust during the Crisis after the IP Holdco pulled the IP rights from their dealership agreements and new car inventories were sold.

    The bigger issue today is the exuberant expectations of market penetration of “autonomous vehicles” (“AEV”). Most accept that technology will continue to have an impact on transportation business models and product solutions. But several technical hurdles will need to be crossed before AEV’s will be noticed one on the roadways of major cities and inter-state highways.

    The investment in AEV infrastructure required to implement AEVs into the current transportation system is one big hurdle. Smart grid technology and V2V and V2N communications will need more access to special purpose ‘secure’ network configurations – see the FOG Network, Prof. Mung Chiang, Princeton, as possible part solution to integration of Smart Grid and advanced vehicle technologies.

    Thank you for your well-informed articles.

  2. Pingback: Chevy Bolt EV vs. Elon Musk, Tesla - Boston Commons High Tech

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