tech

Tesla starts mass production of batteries

2 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© 2017 AFP

©2024 GPlusMedia Inc.

2 Comments
Login to comment

Tesla has this habit of announcing future "maybes" as things that have already happened. The press picks up on it, and pretty soon this alternate reality takes on a life of its own. One is also usually hard-pressed to find the facts amid the science fiction. Because really, who cares, right? Wasting huge amounts of capital on pie in the sky ventures is what "disruptive technologies" are all about.

Look at the last sentence. That is not even the whole story. They missed their whole-year target of 80,000 vehicles by 5,000 vehicles or more. So they are producing less than they hope to, and they are selling less than they hope to. Does anyone see a problem with this? And they are losing money. And they acquired a huge company this year that is not only losing money, but which is also saddled with debt.

But wait, world electric vehicle production is up 64%? That is good, right? Well, those are not Tesla vehicles. Only some of them are. In fact, Tesla production is up a little less than 60%, which means that they are actually LOSING market share, even if they sell all their vehicles, which they say they are not.

But that is ok because they will sell 400,000 vehicles for 35,000 dollars each, and that will make everything all right. Really? Let's say that they are OBLIGATED to sell that many for that price. What if they cannot do it profitably? What if people don't want to buy? What if the terms change? They produced fewer than 80,000 vehicles this year, so 400,000 vehicles would be 5 years of production? Starting in 2018. So we are counting some chickens that have not hatched.

Can Panasonic save them? Raise your hand if you think that Panasonic can produce batteries cheaper in a NEW factory with a NEW staff and NEW supply networks in US dollars than it can using the most efficient battery facilities in the world in Japan, in yen. Their projections were that they could save 30% when they planned the gigafactory. That was with the yen at about 70 to the dollar. Today it is 116 to the dollar. That means that their 30% savings are already a 20% loss on every battery they make. And the loss will be greater because they are not going to achieve 30% better efficiency anyway.

But Musk and Trump are getting along well, so look for subsidies to make it all work out.

0 ( +1 / -1 )

It would be nearly impossible for SpaceX to not make mountains of money. They compete with a moribund monopoly in ULA. ULA was formed by merging Boeing and Lockheed rocket programs. Because if they were to compete it could drive down prices. SpaceX has every possible advantage in this situation.

Tesla is nearly the exact opposite. They have a vision for sure. Sometimes their vision is a bit delusional. But they have a vision. Unfortunately their execution rarely delivers on that vision. That would be OK if they were SpaceX. In an industry that thinks launching half a dozen rockets a year is a blistering pace it doesn't take much to become wildly successful.

But cars are not rockets. And rather than competing with cold war relics Tesla is really just doing the market prep work for Toyota, Nisan, and eventually even GM. The day that one of these companies decides to put 2 million electric cars on the ground is the day Tesla ceases to exist. Toyota has forgotten more about mass production this week than Tesla will ever know.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites