> However, once people realize they can pay $35,000 for a killer car that can earn them $30,000 in a year by simply pressing a button and telling your car to go pick up passengers for you while you work or sleep
Long before that is the case, there'd be no incentive for the manufacturer to sell the car at all; they'd make more money just pushing the button themselves the minute the car rolled off the assembly line.
>Long before that is the case, there'd be no incentive for the manufacturer to sell the car at all; they'd make more money just pushing the button themselves the minute the car rolled off the assembly line.
If they sold a car, they get profit immediately. If they kept the car for their own fleet, it would take longer to earn the same profit and then add additional overhead of maintaining the fleet, the reservation system, refunds, additional litigation, etc. Also, if the market is super saturated, they can sell cars to companies unable to make a profit. The manufacturer still gets the sale even thought the car doesn't realize a profit through a fleet.
The smart move would be to sell cars and also keep a fleet. It really depends on how well they could manage the fleet being a car manufacturer. They are quite different businesses and you don't get much overlap, other than the vehicle at cost and perhaps maintenance parts.
The even smarter move would be to franchise the fleet so you push off the management and operating costs but increase your sales and take part of the profit for branding, advertising, etc. The fleet would of course cross brand the vehicles.
> Long before that is the case, there'd be no incentive for the manufacturer to sell the car at all;
True! Given that a large portion of US car sales are 'fleet sales'[1], it's very likely that car companies that lead in automation with sell their cars to their own subsidiary automated taxi companies.
It's also worth noting that some car companies already have their own car-sharing services - BMW with ReachNow and Mercedes Benz with Car-to-Go. The moment they have their own reliable automated driving systems, they will turn those into taxi services.
That's exactly what they plan on doing. Musk even implied as much. Though it will take a few years to get to that point. First they have to deliver all the pre-orders and the purchases that follow. Then there's the matter of states creating a legal framework that allows for cars with no occupants.
I think that this is the endgame. The car companies (or Uber or Google) will provide fleets. Competition between them will keep prices low enough to dissuade people from buying cars of their own. Uber/Google/GM/Ford would probably not want you to have the sharing app if you're not part of their world.
Don't they know about depreciation? Or are these cars riding on perfect roads and in perfect weather? This resembles the fairy-tale of Moses's followers receiving manna from God while crossing the Sinai.
And I really can't understand how some people still think that these cars will run on free power from now to eternity. Energy costs money, be it gasoline, coal or electrical power, there's no silver bullet, there's no free lunch.
>Long before that is the case, there'd be no incentive for the manufacturer to sell the car at all; they'd make more money just pushing the button themselves the minute the car rolled off the assembly line.
So there will be many tens of millions of people who want to buy such a car, plus car rental agencies, but no car manufacturer will sell to them? That seems pretty unlikely. Can you think of any similar case?
"Tesla also has an 8 year, unlimited mileage warranty for the Drive Train & Battery. This was great, as I did have the drive train replaced at about 65,000 miles and the battery replaced at about 76,000 miles."
You can read this as:
"Tesla also has an 8 year, unlimited mileage warranty for the engine and fuel tank. This was great, as I did have the engine replaced at about 65,000 miles and the fuel tank replaced at about 76,000 miles."
That just makes it that much crazier. The most important and expensive components of this car actually do break down fairly quickly, but the manufacturer just covers them under a lifetime warranty!
>However, once people realize they can pay $35,000 for a killer car that can earn them $30,000 in a year by simply pressing a button and telling your car to go pick up passengers for you while you work or sleep — it’s game over.
That is not happening in the near future. At least not in a meaningful scale.
There are these things called markets. I don't expect this particular scenario to happen anytime soon. But I pretty much guarantee that if I can buy $OBJECT in a competitive market and rent it out for some ridiculous rate of return in a competitive market, competition for that renting will drive down prices until it's not a ridiculous rate of return any longer.
I think deprecation should only be taken into consideration if one is planning on selling the car in the future, and I get the feeling that he is planning on driving that car into the ground.
Absolutely agree. Another commenter says "doesn't matter if he's planning to run the car into the ground" but a) we don't know that and b) In theory anything mechanical (or electronic) has a useful life whereby that life is reduced by wear and tear. You could argue that 100 miles is de-minimis but not 100k miles.
Ok, but what are the costs beyond $100k? Even the worst cars as far as maintenance (BMWs and such) can make it to $100k fairly reasonably. This is even more important in the Tesla apparently because after 8 years you're shit out of luck on the powertrain apparently, at least according to another post here, and that's where the actual expensive parts lie. If this guy comes back in a few years (after the warranty expires) with this same Tesla at 200k still going strong and still having spent only a couple thousand max on repairs, that'll be a real achievement. As it stands, this simply shows the Tesla is not a total lemon, incredibly useful information, but expected.
Their main point is not that Tesla cars are badly manufactured. But that they don't make repair manuals available, they don't sell replacement parts, they lock down access to the car's systems, don't give salvage titles, and that these cars will be very difficult and expensive to repair in the future.
Flagstaff, AZ gets electricity from the Cholla Power Plant in Northern Arizona. The plant burns coal and is considered one of the dirtiest power stations in the nation.
Just consider that owning a Tesla or any plug-in electric in Flagstaff is completely backwards.
Correct me if I'm wrong, but quick calculation indicates that Tesla using only energy from Cholla (one of the dirtiest plants in the US) would produce about the same amount of CO2 (13.6kg per 100km) as 5L/100km car (Ford Fiesta) would produce (12kg per 100km).
As you can probably improve your electricity mix quite easily, it sounds like that from fuel CO2 emission perspective, electric car is always at least as good choice as gasoline car.
From a city pollution point of view, it is not, as you have no exhaust. And you are only a power plant upgrade away to have all cars automatically "switch".
Are you also in Flagstaff? I've been surprised by the number of Tesla's I see given that one likely has several hours of charging to look forward to to get to Phoenix and back.
Interesting take. There is already a subprime lending crisis in the automotive loan market, along with a glut of used cars that somehow arent depreciating. I wonder if people start deciding that they want to overspend on a car they want and decide to "uber" their way into affording it...
I sure hope not. Many gas cars don't even go in for their first service until 100,000 miles. 300,000 is not even difficult to hit on any car built in the last 30 years.
I had to replace an interior door handle on a '99 Miata (interior is far easier than an exterior; exterior means pulling the door skin off for access and having to deal with paint matching), and a Miata is real straightforward repair job. But I still took a photo of each and every little piece I pulled off not knowing when one would break or be deformed before or after this process. (And having to locate a dealership to order the part shipped while showing him a handful of broken parts and a complete photo of "this doohickey".)
$1000 would be steep price to pay for a Corrolla but not outlandish. I would bet the cost of replacing one on a BMW 3 series would be more.
I suspect all of tesla's high end cars will always have it- their lower grade cars are probably going to have a subscription of some kind.
Also, consider that tesla essentially owns the largest amount of electric stops in the US. They've got their foot in the door, no other manufacturer is going to come close. When electric cars really kick into gear, tesla controls the gas pumps, and can charge everyone else, while still giving free to their own cars, which is a pretty good incentive.
Eh the $1k of lifetime Supercharger energy per customer aren't very concerning for Teslas bottom line.
I'd be much more concerned they have to keep warranting so many batteries and engines. This guy got a new battery and engine at 75k miles, so they are pretty much down >$10k on his car alone. And he's far from the only one who casually mentions having the most expensive part of the car exchanged for free.
It's likely that the Model 3 will not include free Supercharging, so that's probably when it'll be over as far as when they start selling cars that don't get it for free.
As for existing cars, never. Free charging is part of what you get with the car, and they'd be breaking that contract if they changed it unilaterally. Fortunately, electricity is usually pretty cheap, and on average the money they set aside from each car for running the Superchargers will match or exceed the cost of running them.
A speculation I read often is that Tesla will continue offering free charges to Tesla vehicles and will pay for it by charging to charge (hmm, how to better phrase that) non-Tesla electric vehicles.
Here is another positive testimonial[1] of Tesla Model S's long term reliability. Great reliability, simpler design (than conventional ICE cars), unlimited mileage warranty and cheaper per-mile operating cost make Tesla Model S a terrific choice for taxis.
I'll be impressed if that was 100k of "taking corners in a spirited manner on potholed" roads, something every car sold to an auto enthusiast in a state with a real winter is subject to. That's where I draw the line for "hard miles". Putting around the southwest in a manner that doesn't scare customers isn't hard miles. "Abused" is a misleading title.
> Tesla Road Trip Savings: My 27,615 mile (the circumference of the Earth is 24,901 miles) 48 State plus Canada road trip cost $8.37. I had to pay for electricity 2 times, the rest was FREE thanks to the Tesla SuperCharger network. There were about 180 SuperChargers when I started the trip. There are now almost 300 in the USA. Gas savings assuming a 25 MPG car using a national average of $2.75 a gallon = $3037.
If a Tesla is this cheap to drive, and self-driving cars cut out the labor costs of transportation services, then it becomes cheaper to just use Uber et al than own your own car. At that point the ICE auto industry will be really screwed, and the switch to all EV cars could come about a lot faster than has been predicted.
Out of curiosity I had a look at the current pricing of a Tesla in Australia. My jaw just about dropped when I found that a new P90D costs $255,000 AUD. That is a difference of $50,000 if you convert the US price to Australian. Ouch.
[+] [-] dragonwriter|9 years ago|reply
Long before that is the case, there'd be no incentive for the manufacturer to sell the car at all; they'd make more money just pushing the button themselves the minute the car rolled off the assembly line.
[+] [-] Clubber|9 years ago|reply
If they sold a car, they get profit immediately. If they kept the car for their own fleet, it would take longer to earn the same profit and then add additional overhead of maintaining the fleet, the reservation system, refunds, additional litigation, etc. Also, if the market is super saturated, they can sell cars to companies unable to make a profit. The manufacturer still gets the sale even thought the car doesn't realize a profit through a fleet.
The smart move would be to sell cars and also keep a fleet. It really depends on how well they could manage the fleet being a car manufacturer. They are quite different businesses and you don't get much overlap, other than the vehicle at cost and perhaps maintenance parts.
The even smarter move would be to franchise the fleet so you push off the management and operating costs but increase your sales and take part of the profit for branding, advertising, etc. The fleet would of course cross brand the vehicles.
[+] [-] umeshunni|9 years ago|reply
True! Given that a large portion of US car sales are 'fleet sales'[1], it's very likely that car companies that lead in automation with sell their cars to their own subsidiary automated taxi companies.
It's also worth noting that some car companies already have their own car-sharing services - BMW with ReachNow and Mercedes Benz with Car-to-Go. The moment they have their own reliable automated driving systems, they will turn those into taxi services.
[1] http://www.autonews.com/article/20160307/RETAIL01/303079955/...
[+] [-] namlem|9 years ago|reply
[+] [-] mathattack|9 years ago|reply
[+] [-] bmh_ca|9 years ago|reply
I imagine selling the cars externalizes the cost of financing the car and risks associated with the service.
[+] [-] pikachu_is_cool|9 years ago|reply
To the people who think I'm insane: There are university Facebook rideshare groups in California that offer that trip for $15. Today.
[+] [-] paganel|9 years ago|reply
And I really can't understand how some people still think that these cars will run on free power from now to eternity. Energy costs money, be it gasoline, coal or electrical power, there's no silver bullet, there's no free lunch.
[+] [-] woodandsteel|9 years ago|reply
So there will be many tens of millions of people who want to buy such a car, plus car rental agencies, but no car manufacturer will sell to them? That seems pretty unlikely. Can you think of any similar case?
[+] [-] andreasklinger|9 years ago|reply
[+] [-] tinco|9 years ago|reply
[+] [-] vaishaksuresh|9 years ago|reply
That is not happening in the near future. At least not in a meaningful scale.
[+] [-] msoad|9 years ago|reply
[+] [-] ghaff|9 years ago|reply
[+] [-] namlem|9 years ago|reply
[+] [-] mkhalil|9 years ago|reply
[+] [-] blakes|9 years ago|reply
[+] [-] gist|9 years ago|reply
[+] [-] joesmo|9 years ago|reply
[+] [-] Houshalter|9 years ago|reply
Their main point is not that Tesla cars are badly manufactured. But that they don't make repair manuals available, they don't sell replacement parts, they lock down access to the car's systems, don't give salvage titles, and that these cars will be very difficult and expensive to repair in the future.
[+] [-] serge2k|9 years ago|reply
If ford tried it people would complain, but Tesla locking things down is just fine.
[+] [-] tedmiston|9 years ago|reply
[+] [-] eddieh|9 years ago|reply
Just consider that owning a Tesla or any plug-in electric in Flagstaff is completely backwards.
[+] [-] dirtyaura|9 years ago|reply
As you can probably improve your electricity mix quite easily, it sounds like that from fuel CO2 emission perspective, electric car is always at least as good choice as gasoline car.
[+] [-] outworlder|9 years ago|reply
[+] [-] monocasa|9 years ago|reply
[+] [-] dikaiosune|9 years ago|reply
[+] [-] unknown|9 years ago|reply
[deleted]
[+] [-] revelation|9 years ago|reply
[+] [-] S_A_P|9 years ago|reply
[+] [-] arprocter|9 years ago|reply
Is that a regular occurrence?
[+] [-] olyjohn|9 years ago|reply
[+] [-] dragontamer|9 years ago|reply
But the Drive train of the Tesla Model S is notoriously bad.
http://www.edmunds.com/tesla/model-s/2013/long-term-road-tes...
> Drive Unit IV: The Milling
That's the article when Edmunds had to replace the drive unit for the 3rd time (aka: the 4th Drive Unit)
[+] [-] matt_morgan|9 years ago|reply
[+] [-] vosper|9 years ago|reply
[+] [-] jms18|9 years ago|reply
I had to replace an interior door handle on a '99 Miata (interior is far easier than an exterior; exterior means pulling the door skin off for access and having to deal with paint matching), and a Miata is real straightforward repair job. But I still took a photo of each and every little piece I pulled off not knowing when one would break or be deformed before or after this process. (And having to locate a dealership to order the part shipped while showing him a handful of broken parts and a complete photo of "this doohickey".)
$1000 would be steep price to pay for a Corrolla but not outlandish. I would bet the cost of replacing one on a BMW 3 series would be more.
[+] [-] maxxxxx|9 years ago|reply
[+] [-] Vexs|9 years ago|reply
Also, consider that tesla essentially owns the largest amount of electric stops in the US. They've got their foot in the door, no other manufacturer is going to come close. When electric cars really kick into gear, tesla controls the gas pumps, and can charge everyone else, while still giving free to their own cars, which is a pretty good incentive.
[+] [-] revelation|9 years ago|reply
I'd be much more concerned they have to keep warranting so many batteries and engines. This guy got a new battery and engine at 75k miles, so they are pretty much down >$10k on his car alone. And he's far from the only one who casually mentions having the most expensive part of the car exchanged for free.
[+] [-] mikeash|9 years ago|reply
As for existing cars, never. Free charging is part of what you get with the car, and they'd be breaking that contract if they changed it unilaterally. Fortunately, electricity is usually pretty cheap, and on average the money they set aside from each car for running the Superchargers will match or exceed the cost of running them.
[+] [-] baddox|9 years ago|reply
[+] [-] devy|9 years ago|reply
[1] http://jalopnik.com/heres-how-a-tesla-taxi-held-up-after-100...
[+] [-] serge2k|9 years ago|reply
[+] [-] dsfyu404ed|9 years ago|reply
[+] [-] foolfoolz|9 years ago|reply
[+] [-] tedmiston|9 years ago|reply
[+] [-] tedmiston|9 years ago|reply
> Tesla Road Trip Savings: My 27,615 mile (the circumference of the Earth is 24,901 miles) 48 State plus Canada road trip cost $8.37. I had to pay for electricity 2 times, the rest was FREE thanks to the Tesla SuperCharger network. There were about 180 SuperChargers when I started the trip. There are now almost 300 in the USA. Gas savings assuming a 25 MPG car using a national average of $2.75 a gallon = $3037.
[+] [-] woodandsteel|9 years ago|reply
[+] [-] deevus|9 years ago|reply
Out of curiosity I had a look at the current pricing of a Tesla in Australia. My jaw just about dropped when I found that a new P90D costs $255,000 AUD. That is a difference of $50,000 if you convert the US price to Australian. Ouch.
[+] [-] colinprince|9 years ago|reply
https://news.ycombinator.com/item?id=12304241