Elon Musk once scoffed at the notion that BYD could compete with his company. Now, the automaker run by billionaire Wang Chuanfu is poised to be the new No. 1 in electric vehicles.
If Tesla actually comes out and makes 20 million vehicles sometimes in the 2030’s and can get reasonably high profits, I don’t think it’s as far fetched
Problem for Tesla becoming that big, is not just that others are making decent electric cars now. The problem is that Tesla is no longer the technology leader, which they were by far for about 10 years. But today we have Blade batteries from BYD that are both safer and cheaper than Tesla, The 50% VW owned Yiwei, just released a new car with sodium-ion batteries, which are cheaper more durable and works better at low temperatures, and can charge faster than existing batteries. The engines VW already uses in their ID series are way better engineered than Tesla, resulting in both more compact and lower weight than a Tesla with equivalent power. All in all Tesla is losing their technological leadership in key areas like Batteries, charging and engines. The rest is basically a traditional car, except the computer AI which Tesla is also behind on.
It’s naive to think other EV makers can’t build cars as cheap as Tesla, Tesla had a very strong head start, and traditional car makers have had a very serious disruptions in their development and some supply chains, which they are only just now beginning to manage about as well as the old ways.
But something is happening in the industry, that I’m not quite aware of what is. But 10 years ago, we could buy a new car here for 75K DKK, adjusted for inflation that would be about 87K today. But the cheapest car available today is 139K, so it’s 50% more expensive to buy the cheapest car today, than what was possible 10 years ago??? To be fair it’s one model series higher.
Obviously for a time, it was the chip shortage, that meant the cheapest cars were the first to get axed dur to the shortage. But the shortage is over, so why haven’t the cheap cars come back? This is something that has happened across all makers of the cheapest available cars! More expensive cars have gone up too, but not as much.
My point of mentioning this, is that you shouldn’t discard the competition from traditional car makers, they are all in this to make money. The money is moving more towards EV, so car makers too are moving more towards EV. They are far from in full force yet, as they ICE production is still the majority of their revenue and profits. But maybe the reason the cheap cars haven’t come back, is that they want to make us used to pay more, and make EV more attractive?
I claim that currently, traditional car makers could make and sell ICE cars that are at least a third cheaper than what is currently available, and still make a profit on them. But for some reason they choose not to. So don’t be too sure they can’t make EV cheaper and more competitive too, but they do what makes them the most money. And when VW sell an ID7 it’s very likely at the cost of a VW ICE car.
So just like you say Tesla competes with ICE mostly, so do traditional car makers, except they are also competing against their own products. How the bean counters value this I don’t know, but I bet they try to prevent to much disruption, because disruption cost money, and they try to prevent competing to much against themselves.
In a few years the tilt will be more clearly towards EV, and that will change the economic models for traditional car makers, and that’s when traditional carmakers will be all in to compete in EV markets.
Most have already arrived, and they’ve come to stay, but they are not in full force yet. Except the Chinese that have car makers that like Tesla started with electric and only make electric.
I think you’re really discounting the engineering lead that Tesla still has, especially against legacy manufacturers, and it’s that lead and vertical integration, which is why their profits are higher than others, and others won’t be able to match. I don’t think it’s naive to think VW or Stellantis can’t make an EV as cheap as Tesla. All of legacy auto has been high volume lower profit cars. Even after price cuts, Tesla still makes more on their cars (excluding trucks which are high profit). That’s not a bad strategy and you can make a good business on it, but Tesla has really changed how cars are manufactured and they figured out how to make a high volume high profit vehicle. You can’t compete with that without following, and following means you’re always behind.
A few years ago VW said it took Tesla 10h to make a car, and it takes them 30h. They haven’t matched Tesla on that yet. They would need to implement giga castings among other things to do that for example. In 2022 they said they were working on giga castings for their trinity factory which would start production in 2026, and now that’s delayed until 2030. Most of legacy is repeatedly delaying things like this. Ford is cutting back F150 Lighting production in half. GM is delaying things. They need to get economies of scale going to be profitable, but they’re pulling back because it isn’t profitable. They must commit to scale to make it work, but they aren’t.
There’s a lot of innovations like the castings inside the cars that people just don’t see that lead to Tesla’s high margins. Tesla’s power electronics are leagues ahead of the legacy automakers as well, almost all designed in house on the CT even, and they just leapfrogged everyone by moving to 48v. Then they do things like steer by wire with no backup in the Cybertruck which no one has done in production (they all have backups). Put aside what you think of the Cybertruck itself, and it’s really an engineering marvel underneath. Underneath it’s the future of where Tesla is going, and others will again, need to follow, but it’s going to take years and years. I imagine the Chinese will follow the quickest cementing their lead over legacy. I’ll be surprised if any other legacy manufacture makes a high volume 48v car by 2030. Someone like Porsche might in the meantime?
And Tesla is doing all of this and more again in Gen 3. Maybe VW finally gets their 30h car down to 15h, but Tesla gets their Gen 3 to 5.
Obviously we won’t know until we see what happens with Gen 3, but the Cybertruck is a glimpse into that which I think shows enough to not dismiss this possibility.
If you’re actually interested in how things are engineered, I’d recommend you watch these two Cybertruck videos for a glimpse of what’s going on. They include a lot of the leads at Tesla and are super informative and get into a lot of detail on things. They aren’t short though so if you’re not interested in that kinda thing that’s understandable.
The engines VW already uses in their ID series are way better engineered than Tesla
That’s cool about VW’s new motor for the I7, I hadn’t seen that, hopefully we get to see a tear down in the near future. It also only comes (for the time being) in a car more expensive than a Model 3, but they say it will work on other models, so I’m curious to see what happens with that. Tesla isn’t resting on their laurels there either, they have their carbon wrapped motors for performance vehicles which I’m hoping to see trickle down to the performance 3, and they’re working on cheaper to mass produce motors for the Gen 3 platform using no rare earth metals.
Batteries
Those sodium ion batteries are cool, but don’t expect to see those outside lower range commuter cars anytime soon due to their low energy density. There’s definitely a market for cheaper cars like that which don’t make sense with higher cost batteries. A lot of people won’t want one as their only car though. As a second car they’re probably perfect though. Sodium Ion batteries are probably going to shake up the storage business, and we might even see Tesla adopt them there?
BYD literally makes their own cells and batteries for their own cars and is a supplier to Tesla, so they were always going to lead in that. That’s why they’ll probably pass Tesla for pure BEV sold in 2024. Those blade batteries are definitely cool.
If Tesla can pull off their 4680 batteries though as described at battery day, they’ll be joining BYD on that stage. Legacy isn’t doing what Tesla is on this front, and that’s again another reason why they won’t be able to match Tesla on margins. If they can’t realize their 4680 goals, that probably ruins their 10-20 million car goals as well though. (Edit: Also Tesla is going as far as making their own lithium refinery. That’s how committed they are to this and how they will keep their margins high)
high prices
I’m not sure what’s going on over there that’s a little fishy, maybe they think they can get more money out of you guys and charge less elsewhere? A 2013 Corolla cost $15,450.00 CAD vs $22,690 for a 2023. Inflation adjusted would be $19,946, so about 13.5% more?
The 350-volt (nominal, 400v max) Model 3 battery packs
So I guess that’s actually almost the same, which makes sense.
EDIT:
Oh boy, I just found out it’s the low voltage system, they are switching!! OK that’s probably basically irrelevant.
VW said it took Tesla 10h to make a car, and it takes them 30h.
I can’t find any information on this, on the surface it looks like Tesla should be 3 times as efficient at making cars as one of the world leading car manufacturers, and I fin that hard to believe without evidence.
They must commit to scale to make it work, but they aren’t.
Good point, and I agree they are not 100% committed on EV yet except a few Chinese makers that started all electric like Tesla, but that’s because ICE cars are still very relevant for many reasons. But they are moving more and more towards EV, and as they do, they will compete harder.
steer by wire with no backup in the Cybertruck which no one has done in production (they all have backups).
Are you aware that Cybertruck isn’t street legal in most countries, because the safety is horrible?
it’s really an engineering marvel underneath.
No it really isn’t, maybe the production side of it is, IDK about that, I know Musk spewed some bullshit about “demanding” Micron precision because the it was horrible. but the Cybertruck is riddled with poor engineering decisions. Claiming the car is bullet proof? For Christ sake, that’s just about the most useless feature a car can have!! It’s too rigid for safety, both for passengers and people outside. It’s too tall and poorly designed to see what’s going on in front of the car, this actually causes accidents in peoples own driveway! Accidents are simply waiting to happen in so many ways with this car, it’s a crime against humanity.
I’ll be surprised if any other legacy manufacture makes a high volume 48v car by 2030. Someone like Porsche might in the meantime?
You are aware that Porsche is VW right?
Those sodium ion batteries are cool, but don’t expect to see those outside lower range
IDK, if batteries are cheap, it doesn’t matter the car is a bit heavier. Obviously it’s not for performance cars. But that’s not really the point, I’m mentioning this and Blade batteries, because it illustrates 2 areas where others are ahead of Tesla, and that will prevent Tesla from ever becoming bigger than VW, Toyota, Hyundai , Stellantis, Ford and GM combined. I doubt they’ll ever become #1. Also the sodium battery may be good for infrastructure, and could undermine Tesla completely in that area.
If Tesla can pull off their 4680 batteries though as described at battery day,
I don’t see why a thicker battery should be anything special, It’s just bigger, that’s it. I’m sure other makers are doing things that are similar, because they are cheaper per Watt and easier to package. The weird thing is more that it was better to make the smaller 2600 batteries they started with. When bigger standard form factors already existed at that time. the 4680 is 6 times bigger than the 2170, AFAIK Tesla claims 6 times power, which is directly in line with the bigger size, but they only claim 5 times the energy, meaning the battery is actually not quite as good. But probably close enough to make the savings worth it.
I’m not sure what’s going on over there that’s a little fishy,
Absolutely, maybe they found out they make more money by selling fewer but more expensive cars? Maybe they have a sort of silent agreement to not ruin when they have something “good” going. And they certainly can use the money for development of EV cars. So my guess is that that’s what they are doing.
Problem for Tesla becoming that big, is not just that others are making decent electric cars now. The problem is that Tesla is no longer the technology leader, which they were by far for about 10 years. But today we have Blade batteries from BYD that are both safer and cheaper than Tesla, The 50% VW owned Yiwei, just released a new car with sodium-ion batteries, which are cheaper more durable and works better at low temperatures, and can charge faster than existing batteries. The engines VW already uses in their ID series are way better engineered than Tesla, resulting in both more compact and lower weight than a Tesla with equivalent power. All in all Tesla is losing their technological leadership in key areas like Batteries, charging and engines. The rest is basically a traditional car, except the computer AI which Tesla is also behind on.
It’s naive to think other EV makers can’t build cars as cheap as Tesla, Tesla had a very strong head start, and traditional car makers have had a very serious disruptions in their development and some supply chains, which they are only just now beginning to manage about as well as the old ways.
But something is happening in the industry, that I’m not quite aware of what is. But 10 years ago, we could buy a new car here for 75K DKK, adjusted for inflation that would be about 87K today. But the cheapest car available today is 139K, so it’s 50% more expensive to buy the cheapest car today, than what was possible 10 years ago??? To be fair it’s one model series higher.
Obviously for a time, it was the chip shortage, that meant the cheapest cars were the first to get axed dur to the shortage. But the shortage is over, so why haven’t the cheap cars come back? This is something that has happened across all makers of the cheapest available cars! More expensive cars have gone up too, but not as much.
My point of mentioning this, is that you shouldn’t discard the competition from traditional car makers, they are all in this to make money. The money is moving more towards EV, so car makers too are moving more towards EV. They are far from in full force yet, as they ICE production is still the majority of their revenue and profits. But maybe the reason the cheap cars haven’t come back, is that they want to make us used to pay more, and make EV more attractive?
I claim that currently, traditional car makers could make and sell ICE cars that are at least a third cheaper than what is currently available, and still make a profit on them. But for some reason they choose not to. So don’t be too sure they can’t make EV cheaper and more competitive too, but they do what makes them the most money. And when VW sell an ID7 it’s very likely at the cost of a VW ICE car.
So just like you say Tesla competes with ICE mostly, so do traditional car makers, except they are also competing against their own products. How the bean counters value this I don’t know, but I bet they try to prevent to much disruption, because disruption cost money, and they try to prevent competing to much against themselves.
In a few years the tilt will be more clearly towards EV, and that will change the economic models for traditional car makers, and that’s when traditional carmakers will be all in to compete in EV markets.
Most have already arrived, and they’ve come to stay, but they are not in full force yet. Except the Chinese that have car makers that like Tesla started with electric and only make electric.
I think you’re really discounting the engineering lead that Tesla still has, especially against legacy manufacturers, and it’s that lead and vertical integration, which is why their profits are higher than others, and others won’t be able to match. I don’t think it’s naive to think VW or Stellantis can’t make an EV as cheap as Tesla. All of legacy auto has been high volume lower profit cars. Even after price cuts, Tesla still makes more on their cars (excluding trucks which are high profit). That’s not a bad strategy and you can make a good business on it, but Tesla has really changed how cars are manufactured and they figured out how to make a high volume high profit vehicle. You can’t compete with that without following, and following means you’re always behind.
A few years ago VW said it took Tesla 10h to make a car, and it takes them 30h. They haven’t matched Tesla on that yet. They would need to implement giga castings among other things to do that for example. In 2022 they said they were working on giga castings for their trinity factory which would start production in 2026, and now that’s delayed until 2030. Most of legacy is repeatedly delaying things like this. Ford is cutting back F150 Lighting production in half. GM is delaying things. They need to get economies of scale going to be profitable, but they’re pulling back because it isn’t profitable. They must commit to scale to make it work, but they aren’t.
There’s a lot of innovations like the castings inside the cars that people just don’t see that lead to Tesla’s high margins. Tesla’s power electronics are leagues ahead of the legacy automakers as well, almost all designed in house on the CT even, and they just leapfrogged everyone by moving to 48v. Then they do things like steer by wire with no backup in the Cybertruck which no one has done in production (they all have backups). Put aside what you think of the Cybertruck itself, and it’s really an engineering marvel underneath. Underneath it’s the future of where Tesla is going, and others will again, need to follow, but it’s going to take years and years. I imagine the Chinese will follow the quickest cementing their lead over legacy. I’ll be surprised if any other legacy manufacture makes a high volume 48v car by 2030. Someone like Porsche might in the meantime?
And Tesla is doing all of this and more again in Gen 3. Maybe VW finally gets their 30h car down to 15h, but Tesla gets their Gen 3 to 5.
Obviously we won’t know until we see what happens with Gen 3, but the Cybertruck is a glimpse into that which I think shows enough to not dismiss this possibility.
If you’re actually interested in how things are engineered, I’d recommend you watch these two Cybertruck videos for a glimpse of what’s going on. They include a lot of the leads at Tesla and are super informative and get into a lot of detail on things. They aren’t short though so if you’re not interested in that kinda thing that’s understandable.
https://www.youtube.com/watch?v=J5zDNaY1fvI (Q/A and then a look at exterior and internal parts) https://www.youtube.com/watch?v=GFgGnhRZarY (walk through factory and how they work with the stainless steel)
That’s cool about VW’s new motor for the I7, I hadn’t seen that, hopefully we get to see a tear down in the near future. It also only comes (for the time being) in a car more expensive than a Model 3, but they say it will work on other models, so I’m curious to see what happens with that. Tesla isn’t resting on their laurels there either, they have their carbon wrapped motors for performance vehicles which I’m hoping to see trickle down to the performance 3, and they’re working on cheaper to mass produce motors for the Gen 3 platform using no rare earth metals.
Those sodium ion batteries are cool, but don’t expect to see those outside lower range commuter cars anytime soon due to their low energy density. There’s definitely a market for cheaper cars like that which don’t make sense with higher cost batteries. A lot of people won’t want one as their only car though. As a second car they’re probably perfect though. Sodium Ion batteries are probably going to shake up the storage business, and we might even see Tesla adopt them there?
BYD literally makes their own cells and batteries for their own cars and is a supplier to Tesla, so they were always going to lead in that. That’s why they’ll probably pass Tesla for pure BEV sold in 2024. Those blade batteries are definitely cool.
If Tesla can pull off their 4680 batteries though as described at battery day, they’ll be joining BYD on that stage. Legacy isn’t doing what Tesla is on this front, and that’s again another reason why they won’t be able to match Tesla on margins. If they can’t realize their 4680 goals, that probably ruins their 10-20 million car goals as well though. (Edit: Also Tesla is going as far as making their own lithium refinery. That’s how committed they are to this and how they will keep their margins high)
I’m not sure what’s going on over there that’s a little fishy, maybe they think they can get more money out of you guys and charge less elsewhere? A 2013 Corolla cost $15,450.00 CAD vs $22,690 for a 2023. Inflation adjusted would be $19,946, so about 13.5% more?
This actually shocked me! That EVs were ever made that only used 12V, even our garden tools on Lithium batteries use higher voltages than that! https://www.popularmechanics.com/home/tools/a28522787/battery-powered-chainsaws/ Here you see even Chainsaws averaging about 40v. Because you can make better designs with higher voltages, because of lower resistance, you can make more compact wiring, carrying the same amount of energy. This isn’t new, and it isn’t a “break through”. The typical working power of a Lithium battery is from 3.8 to 4.2V some can go slightly higher and lower, but this is the typical safe area. So stacking 3 gives you a 12 Volt average battery. But if you stack 12 instead, you get 48V. It’s not that hard, although the charging needs to be controlled differently, the principle of 12V and 48V is the same, and everybody can do it. Even garden tools.
https://www.hyundai.news/eu/articles/press-releases/hyundai-48-volt-mild-hybrid-system.html
https://tide.theimi.org.uk/industry-latest/motorpro/how-it-works-vws-48v-mild-hybrid-system And of course Both Hyundai and VW have been using this for several years, already in Hybrid cars. The more surprising thing is why anybody ever used 12v? https://insideevs.com/reviews/660753/2025-volkswagen-id7-first-drive/
https://en.wikipedia.org/wiki/Tesla_Model_3
So I guess that’s actually almost the same, which makes sense.
EDIT: Oh boy, I just found out it’s the low voltage system, they are switching!! OK that’s probably basically irrelevant.
I can’t find any information on this, on the surface it looks like Tesla should be 3 times as efficient at making cars as one of the world leading car manufacturers, and I fin that hard to believe without evidence.
Good point, and I agree they are not 100% committed on EV yet except a few Chinese makers that started all electric like Tesla, but that’s because ICE cars are still very relevant for many reasons. But they are moving more and more towards EV, and as they do, they will compete harder.
Are you aware that Cybertruck isn’t street legal in most countries, because the safety is horrible?
No it really isn’t, maybe the production side of it is, IDK about that, I know Musk spewed some bullshit about “demanding” Micron precision because the it was horrible. but the Cybertruck is riddled with poor engineering decisions. Claiming the car is bullet proof? For Christ sake, that’s just about the most useless feature a car can have!! It’s too rigid for safety, both for passengers and people outside. It’s too tall and poorly designed to see what’s going on in front of the car, this actually causes accidents in peoples own driveway! Accidents are simply waiting to happen in so many ways with this car, it’s a crime against humanity.
You are aware that Porsche is VW right?
I don’t see why a thicker battery should be anything special, It’s just bigger, that’s it. I’m sure other makers are doing things that are similar, because they are cheaper per Watt and easier to package. The weird thing is more that it was better to make the smaller 2600 batteries they started with. When bigger standard form factors already existed at that time. the 4680 is 6 times bigger than the 2170, AFAIK Tesla claims 6 times power, which is directly in line with the bigger size, but they only claim 5 times the energy, meaning the battery is actually not quite as good. But probably close enough to make the savings worth it.
Absolutely, maybe they found out they make more money by selling fewer but more expensive cars? Maybe they have a sort of silent agreement to not ruin when they have something “good” going. And they certainly can use the money for development of EV cars. So my guess is that that’s what they are doing.