GM - General Motors

[ERICOPOLY]

I know  Tesla and GM would never merge.  Neither side would enjoy that. 

 

What Tesla figured out was how to efficiently put a lot of cheap, commodity batteries together - cheaply.  They took something like 8,000 commodity batteries.  Now traditionally you'd need some dude to solder in 8,000 little points into the car, which would blow the costs out of the water.  But Tesla figured out how to efficiently solder them together, then to cover them with a fire-resistant goop, and then patented their techniques.  It's the "putting them together" that GM doesn't know how to do (obviously they know how to buy batteries).  Tesla did it very cleverly, and GM never even had the imagination to do it.  Tesla was really clever and smart here.  So while a custom-built car battery might be $600/kWh (for GM), Tesla's cost $140/kWh + $60/kWh to combine them together.  Until Tesla released their patents earlier this year, it wasn't in the cards for GM to copy Tesla's strategy. 

 

And likely, GM never will.  Because eventually, custom-designed car batteries will get to a scale where they are at similar prices to Tesla, but more specifically designed for a car.  I view Tesla's strategy as very good in the short-term, but eventually I think Tesla and GM will use similar battery technologies. 

 

I view Tesla's primary "moat" being putting together commodity parts into a cheap car battery.  I think they've done other smart things with design, but, once you level the battery playing field, I don't think their engineering moat is very wide.  I do however believe the brand is very good, they've got Tesla charging stations, etc - that's where I think their long term moat resides.

 

 

 

 

When the Volt was released, there was no way to make a 200-mile EV without using Tesla's batteries, at any reasonable price.  Within the constraints that GM had at the time, I think it was an excellent compromise to get a mostly-EV car that also had range.  Here's actual Volt stats:  http://www.voltstats.net/  There are people who have driven nearly 70,000 miles on their batteries. 

 

With battery costs coming down in 2016 or 2017, they don't need to make compromises, they can simply make a 200-mile EV from scratch for $30,000. 

 

Fundamentally, I view Tesla's "monopoly" on EV's being related to battery costs.  As such, I think it only lasts until about 2016 or 2017.  I think Tesla's engineering is darned good, but, GM has recently proven itself at "borrowing" ideas from competitors and coming out with equally good cars.  I don't say that GM can beat Tesla, but, GM should have a cost and scaling advantage on Tesla in the long run. 

 

Alternately, I think that Tesla could merge with GM, and then Tesla could use Cadillac's manufacturing and dealers to scale up sales.  They sort of have complimentary strengths. 

 

 

 

I disagree that you get the best of both worlds with the Volt.  It actually highlights the limitations of electric and gas by compromising on both. 

 

It fits a certain niche but the goal of Tesla is to get companies like GM to focus on pure EV.  The more success Tesla has in this regard, the more GM will be backing away from products like the Volt.

 

Tesla would never merge with GM.  GM destroyed the electric car many years ago.  Why would Musk let his baby in the hands of convicted murderers?  Maybe Tesla gets big enough to buy GM since their enterprise value is almost the market cap of Tesla.  That would be funny to watch unfold.

 

Tesla sources the batteries from Panasonic.  If GM wanted to make an electric car, assuming it was so easy, they would have done it.  The fact is a good electric car is best designed with a blank sheet of paper.  There are little if any compromises that Tesla have made in designing the Model S.  Given they focus on cash flow and not EPS, they are willing to not focus on profits until it forces the competition to do the same. 

 

There is a lot more to Tesla's "monopoly" than just the batteries.  Not to say the Volt isn't okay for what it is.

 

Don't forget charging the batteries.  Putting them together is one thing, super-charging them with 120 kW is another.

 

Tesla needed to design both the charger, the battery, and the charging babysitter to make them all work together properly.

 

Batteries heat up when you charge them quickly -- it's really tricky to charge the battery at the speed of Tesla's superchargers.

[ERICOPOLY]

GM's 200 mile range pure EV for $30,000 will have to use Tesla's supercharging network, or perhaps GM will have to build one of their own.

 

Otherwise the $35,000 Tesla will have a huge charging advantage for not much extra monthly payment on the car.

 

So that's fine if GM joins Tesla's network of chargers -- there will be a lot of money paid by GM to Tesla that will fund expansion of the network.

 

[xazp]

GM is really strong in two profitable (and related) areas.  They're something like 70% market share in large SUV space (Suburban, Escalade, etc).  And they're strong in pickups which is basically an American industry.  I don't even feel like foreign car companies have a desire to compete.  I feel like most U.S. pickup buyers prefer U.S. trucks.  And politician motorcades will always be composed of U.S. built SUVs and cars.

 

Where GM, Ford, and Chrysler are generally weak is "luxury" cars - Cadillac, Lincoln.  That's a profit area that is dominated by foreign cars. 

 

Eric:  NRG (an electricity company I used to own and follow closely) is adding charging stations which you can buy subscriptions to.  I believe the Leaf, for example, comes with a 1-year subscription.  There's plenty of room to add charging stations for other cars, though, ideally this would just standardize the way gas fueling is standard, and everyone can collaboratively expand the network. 

 

Picasso:  Sorry, we went too far afield.  I think Tesla is #1 in EV, but GM is #2.  Can we leave it at that?  Plenty of space for EVs in the next decade. 

 

 

So Tesla by necessity will be a niche player, and someone else will take the profits.  My view is that GM's EV technology is superior to everyone but Tesla, so, I think GM is a candidate for being the "Samsung" to Tesla's "Apple." 

 

This is an interesting conversation and the different view points are actually building a better overall story. No position yet, but looking more into this one (and for the record, I'd love for you guys to make the bet : )

 

Just want to extend the above analogy a little: There is really only 3 comfortable competitive positions in any competitive market: the premium which requires a superior product capable of commanding a premium pricing, the lowest-cost provider which can also be extremely profitable provided you are cost-advantaged, and being able to connect and serve a given niche market better than anybody else.

 

Tesla currently occupies the premium spot for EV, and may also be developing a cost advantage tied to batteries provided they can produce enough vehicles to offset their fixed costs.

 

I don't see GM as being built to service niche markets, and if that assumption is valid, will the new GM be able to establish itself as the lowest cost provider? Otherwise, it risks ending up precisely in the uncomfortable "stuck-in-the-middle" spot where Samsung seems to be headed: having its very profitable business eaten away by cheaper providers while not quite being able to command premium pricing? In theory it should, but if past is prologue, then the road ahead may be difficult...

[CorpRaider]

Combining the gas with the EV is a really smart and practical way to deal with the costs and infrastructure limitations though.  If the volt wasn't a POS subcompact, I would be into it.  The EV makes the most sense for your daily commute. 

 

 

On an unrelated note.  I had to take the GD driver's seat out of my audi suv to change the freaking battery. I'm done with sie germans.

[ERICOPOLY]

Combining the gas with the EV is a really smart and practical way to deal with the costs and infrastructure limitations though.  If the volt wasn't a POS subcompact, I would be into it.  The EV makes the most sense for your daily commute. 

 

 

On an unrelated note.  I had to take the GD driver's seat out of my audi suv to change the freaking battery. I'm done with sie germans.

 

 

Yes, if you are happy with a gutless EV it's a wonderful way to go.

 

The larger the battery, the more "oomph" when you step on the gas. 

[ERICOPOLY]

Eric:  NRG (an electricity company I used to own and follow closely) is adding charging stations which you can buy subscriptions to.  I believe the Leaf, for example, comes with a 1-year subscription.  There's plenty of room to add charging stations for other cars, though, ideally this would just standardize the way gas fueling is standard, and everyone can collaboratively expand the network. 

 

 

I have a charging unit in my garage.  However, it doesn't output 120kW to the car.

 

And neither does anything that NRG offers with that subscription.

[wisdom]

http://www.usatoday.com/story/money/cars/2014/10/24/ford-tesla/17827533/

 

I believe BYD has claimed that they will have something similar in the next year or 2.

[ERICOPOLY]

http://www.usatoday.com/story/money/cars/2014/10/24/ford-tesla/17827533/

 

I believe BYD has claimed that they will have something similar in the next year or 2.

 

Ford Mustang drivers are tired of their noisy cars being left in the dust at the traffic light?

 

There must be something emasculating about driving a muscle car with it's roaring engine but being "muscle bound".  All that bark, and no bite.  Reminds me of a line from the Reservoir Dogs "Are you going to bark all day, little doggy, or are you going to bite?".

 

Same goes for their truck lines -- you get a lot more torque out of an electric motor.  A Tesla heavy-duty pickup would be just awesome.

 

[jeffmori7]

Guys, some worlwide stats on plug-in cars: http://cleantechnica.com/2014/10/23/sales-of-plug-in-cars-exceed-600000-worldwide/

 

We can say it is becoming less and less a niche market. It will be interesting to watch it unfold in the next few years. So far, Tesla, Nissan and GM seemed the more dedicated, with Tesla being the obvious leader, but BMW and the Volswagen group are trying to catch up a little bit.

[frommi]

When we talk about hybrid/plugin cars i think its worth mentioning that Toyota is the current leading seller of these cars.

The Prius Plugin engine is vastly superior to everything i know when it comes to efficiency and mechanical design (and of course patent protected).

In 2015 they start the first fuel cell car, which is in my eyes probably even better than a pure EV because you get all advantages of a pure EV without the disadvantages.

But GM is of course a lot cheaper in valuation. :)

[Liberty]

When we talk about hybrid/plugin cars i think its worth mentioning that Toyota is the current leading seller of these cars.

The Prius Plugin engine is vastly superior to everything i know when it comes to efficiency and mechanical design (and of course patent protected).

In 2015 they start the first fuel cell car, which is in my eyes probably even better than a pure EV because you get all advantages of a pure EV without the disadvantages.

But GM is of course a lot cheaper in valuation. :)

 

Toyota is a leader in hybrids. But their plug-ins are basically glorified hybrids. Not much extra pure EV range or technology, and they haven't done much of note in the EV field. Like Honda, they missed the boat on EVs, despite a few token concept models and low-volume models to meet California's ZEV regulations and such.

 

Fuel cells probably won't ever amount to anything in transportation (might have more success with stationary applications, though). We already have an electric grid, but we don't have an hydrogen infrastructure, and hydrogen is hard to move around (very 'leaky') and getting it in the first place either requires lots of electricity or natural gas reforming or whatever. If we could just mine pure hydrogen somewhere on earth, maybe they'd be more viable, but as things stand, hydrogen is not an energy source, it's just a carrier, like a battery -- the energy has to come from somewhere else.

[Picasso]

    Oct. 24 (Bloomberg) -- Florida Attorney General Pam Bondi

is reviewing General Motors Co.’s lending arm to determine

whether she has jurisdiction to join a widening probe into its

subprime auto loan underwriting practices.

    GM Financial, which specializes in loans to people with

spotty credit, has disclosed that attorneys general of states it

didn’t identify and other government offices are demanding

documents related to its business of making car loans and

pooling them into bonds that are sold to investors.

    A spokesman for Bondi said the Florida attorney general

hasn’t issued a subpoena and is reviewing the matter.

[ERICOPOLY]

In 2015 they start the first fuel cell car, which is in my eyes probably even better than a pure EV because you get all advantages of a pure EV without the disadvantages.

 

Batteries... drive it home, plug it in.

Hydrogen... drive somewhere to refill it.

 

All the advantages of a pure EV?

 

[frommi]

I have to guess, but probably more than 50% of all people that drive a car have no power outlet to plug their EV into. And of course there exists no infrastructure at the moment, but building it is already planned. (germany for example plans to have 50 stations by 2015, california 68 by 2016.) Production of the hydrocarbon can even happen locally, you just need power and water.

 

And its superior because cars get super cheap that way when you don`t need a battery and you can refill it in 1-3 minutes. I mean who doesn`t want a cheap car that drives with cheap and clean energy where just water comes out of your exhaust and is super silent? And looking further out an EV car with a battery is useless after 7-10 years, when the battery has to be changed. (who guarantees you that you get a new one for your car?)

 

http://www.fuel-cell-e-mobility.com/

http://www.fuelcellpartnership.org/

[frommi]

And btw. GM has a fuel cell car, too.  :)

http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2014/May/0507-fuel-cell.html

[ERICOPOLY]

I mean who doesn`t want a cheap car that drives with cheap and clean energy where just water comes out of your exhaust and is super silent?

 

 

People like me who care about the amount of energy that is wasted:

 

According to the United States Department of Energy Office of Power, the most daunting problem associated with current hydrogen production is the energy needed to produce it and to provide for energy losses in the hydrogen-to-application chain. Using existing conventional technology, "hydrogen requires at least twice as much energy as electricity twice the tonnage of coal, twice the number of nuclear plants, or twice the field of PV panels to perform an equivalent unit of work. Most of today's hydrogen is produced from natural gas, which is only an interim solution since it discards 30% of the energy in one valuable but depletable fuel (natural gas) to obtain 70% of another (hydrogen). The challenge is to develop more appropriate methods based on sustainable energy sources, methods that do not employ electricity as an intermediate step."

 

http://www.altenergy.org/renewables/hydrogen_and_fuel_cells_production.html

 

 

There are some powerful interests who want hydrogen to succeed -- can you guess who they might be?  ::) ::) ::)

 

Anyone remember ethanol?  What was wrong about ethanol?  Who could argue with growing fuel in the fields, turning lawn clippings into fuel?  What is the problem with the equation that creates ethanol?  Yes, the amount of energy required in the process of conversion to ethanol.  So, how could it possibly be that it ever got political support... if it required a lot of energy?  ::) ::) ::)

[frommi]

Do you really think the average customer is interested in where the hydrocarbon comes from in the first place?

 

I must admit i don`t know what will win in the end. Perhaps you are right. But when the entire oil & gas industry is behind it, i am pretty sure we see a lot of governmental help for this.

 

http://www.fastcompany.com/3033198/duel-for-fuel

http://green.autoblog.com/2014/08/05/why-battery-electric-vehicles-will-beat-fuel-cells/

http://qz.com/186432/why-hydrogen-powered-cars-will-drive-elon-musk-crazy/

[Liberty]

Hydrogen is not a hydrocarbon btw.

[wisdom]

The reason batteries may succeed is because batteries do not care about the source of power. You can switch to any system that is the cheapest and clean at any given time.

 

Infrastructure - most of the infrastructure is already in place- you just need the chargers set up - one of the cheaper and quicker solutions.

 

Large plants tend to be more efficient in generating power - less waste. Thus, you are better off when you generate electricity at a central location and transmit it rather than having a small inefficient plant in each automobile.

 

With all other solutions you are making a bet on 1 tech or source of energy.

 

These are some of the reasons i believe EV's could win as long as battery tech improves over time.

[frommi]

Hydrogen is not a hydrocarbon btw.

 

Ups.  ;D

[frommi]

The reason batteries may succeed is because batteries do not care about the source of power. You can switch to any system that is the cheapest and clean at any given time.

 

Infrastructure - most of the infrastructure is already in place- you just need the chargers set up - one of the cheaper and quicker solutions.

 

Large plants tend to be more efficient in generating power - less waste. Thus, you are better off when you generate electricity at a central location and transmit it rather than having a small inefficient plant in each automobile.

 

With all other solutions you are making a bet on 1 tech or source of energy.

 

These are some of the reasons i believe EV's could win as long as battery tech improves over time.

 

No. A fuel cell is a storage of energy, too. I guess Toyota choose this technology because they see an advantage in mass production/scale vs. batteries. Price of lithium can probably kill the battery scale at some point.

[jeffmori7]

An old article on hydrogen, but still useful: http://phys.org/news85074285.html

 

 

[ERICOPOLY]

I guess Toyota choose this technology because they see an advantage in mass production/scale vs. batteries.

 

IMO, they are diverting tax incentives away from battery electric in order to slow/kill it's adoption.

 

It's basically like fouling the player to prevent a layup.

[rishig]

I there (free) tool, which could show price history (chart) of those warrants?

 

Thanks!

 

https://dl.dropboxusercontent.com/u/31093934/GM.WS.B.png

[fareastwarriors]

GM and Ford Should Be Pumped About Gas

 

Economic Woes Overseas Could Boost Car Makers as Price of Gasoline Drops

 

 

http://online.wsj.com/articles/gm-and-ford-should-be-pumped-about-gas-heard-on-the-street-1414183502