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Tesla Clashes With Car Dealers

 

 

http://online.wsj.com/article/SB10001424127887324049504578541902814606098.html?mod=WSJ_business_LeadStoryRotator

 

 

Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he's up against his toughest challenge yet: Local car dealers.

 

Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., TSLA +1.89%wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.

 

The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state's most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.

 

 

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Because in America when you can't compete peacefully in an open marketplace you get the government to use its guns to protect your profits from smaller competitors with better ideas.  Without government who would use violence to ban companies from selling directly to consumers without a middleman?    If only IBM would have gotten together with Smith-Corona and paid off the government to squash the computer industry to protect the typewriter business from competition instead of trying to adapt to the new reality all those typewriter manufacturing jobs wouldn't have been lost.  Capitalism is just so cruel.

 

Tesla Clashes With Car Dealers

 

 

http://online.wsj.com/article/SB10001424127887324049504578541902814606098.html?mod=WSJ_business_LeadStoryRotator

 

 

Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he's up against his toughest challenge yet: Local car dealers.

 

Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., TSLA +1.89%wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.

 

The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state's most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.

 

 

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The government is just protecting the consumer. Just about everyone has an excellent, heartwarming experience with car salesmen....the government doesn't just want that to go away!  ;)

 

Yes, but we can all take comfort in the fact that regardless of what happens there will always be used car salesmen.

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That battery swap idea is so awesome.  The simplicity and ingenuity of this company reminds me of another much admired company discussed on this message board.

 

No wonder the other car makers and dealers are afraid.  I would pay extra just to deal with Tesla, rather than play the "I've got to talk to my manager game". 

 

 

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I've been reading the Tesla Forum on the Tesla company site.  It's where a bunch of Tesla owners and fans discuss what it can and can't do, and speculate on what the company will announce next.

 

I read about the fast battery swapping capability a while ago and for the past month several posters there have guessed correctly that the big announcement would be battery swapping at supercharger stations.  I guess Elon hinted that it would be something "right under your nose", which is where the battery resides.

 

I believe somebody else pointed out that Project Better Place was headquartered directly across the street from Tesla in Palo Alto.

 

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Battery swapping has actually been hinted at for years, so not a big surprise for those who follow tesla closely. But there always seemed to be the possibility that they wouldn't push for the feature unless there was external pressure for it, keeping it as an option. Guess they decided it was worth it, even if the vast majority of charges are done at home and at superchargers, it can make sense it if it convinces enough fence-sitters to buy Teslas...

 

Musk said that Shai Agassi of Better Place actually got the idea from a visit at Tesla.

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Guess they decided it was worth it, even if the vast majority of charges are done at home and at superchargers, it can make sense it if it convinces enough fence-sitters to buy Teslas...

 

I believe the Superchargers get you 50% of your charge at a fast pace, then the charging time gets considerably longer if you wish to hang around for the complete charge.  This I understand to be due to the battery -- similarly, your iPhone battery charges to the 50% point relatively quickly, then slows down.

 

So if you were travelling at 80 mph or so, charging down I5 from Seattle to Los Angeles, you aren't going to like the idea of spending 20 minutes or 30 minutes every 100 miles at a Supercharger station.  And much longer possibly as more Model S cars arrive on the road (and all waiting for that free super charge).

 

"I'm in a hurry, my time is valuable, I'd rather have a full charge for 90 bucks".  This makes a lot of sense to me.

 

 

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The most interesting part about battery swapping is the potential for a new business model: buy the chassis, rent the battery.

 

There are a lot of advantages to this model for both Tesla and its customers:

- Reduce the up-front cost of buying the vehicle

- Create a recurring revenue stream

- Battery swap would be free for renters

- Battery swap wouldn't require you to recover your original battery

- You will never have to buy a new battery

- As battery tech improves, your battery will improve for free

 

I'm sure there are a lot more.  As a business model, this is very compelling.

 

One challenge with battery swapping is that they won't be able to offer it for smaller vehicles without doubling their investment.  Good thing the Model X shares its chassis with the Model S.

 

 

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I agree VAL9000.

 

It's also impractical for everyone to purchase a battery that has 500 miles of range (and a battery like that will be available relatively soon I imagine).

 

It makes more sense to own a shorter-range battery and "rent" the 500 mile range battery for your long range holiday weekend driving.

 

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One challenge with battery swapping is that they won't be able to offer it for smaller vehicles without doubling their investment.  Good thing the Model X shares its chassis with the Model S.

 

 

One Tesla fan rendered a guess at what the compact model might look like:

 

http://www.theophiluschin.com/?p=5161

 

Perhaps they can do that with the same battery as the Model S.

 

You only need to make it shorter for compact parking spaces -- people don't really want their interior to be crammed.  Normally cars are made super small for gas mileage reasons -- not as big an issue when the large Model S is getting 90 MPG equivalent.

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Guess they decided it was worth it, even if the vast majority of charges are done at home and at superchargers, it can make sense it if it convinces enough fence-sitters to buy Teslas...

 

I believe the Superchargers get you 50% of your charge at a fast pace, then the charging time gets considerably longer if you wish to hang around for the complete charge.  This I understand to be due to the battery -- similarly, your iPhone battery charges to the 50% point relatively quickly, then slows down.

 

So if you were travelling at 80 mph or so, charging down I5 from Seattle to Los Angeles, you aren't going to like the idea of spending 20 minutes or 30 minutes every 100 miles at a Supercharger station.  And much longer possibly as more Model S cars arrive on the road (and all waiting for that free super charge).

 

"I'm in a hurry, my time is valuable, I'd rather have a full charge for 90 bucks".  This makes a lot of sense to me.

 

Interesting..  they could start either building these around landmarks and entertainment centers, or start putting them in hotels or other places, thus driving business to those places and maybe getting licensing fees as well.  Kind of how train stations started opening up convenience stores etc..  A bit far fetched but not too much..  I doubt it'll be a big source of revenue though.

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Perhaps somebody here knows more about battery technology...

 

My understanding is that Lithium-ion is especially attractive due to it's fast recharging.  If there were perhaps a higher energy density battery that could be made (at the expense of slow recharge), then battery swap would be the application to make that battery commercially viable.

 

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Guest valueInv

The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

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The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

 

They will have a car out at 1/2 the price in 3 years.

 

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Guest valueInv

The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

 

They will have a car out at 1/2 the price in 3 years.

 

Even if you buy a car for $40k, you can still afford a parking spot.

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The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

 

They will have a car out at 1/2 the price in 3 years.

 

Even if you buy a car for $40k, you can still afford a parking spot.

 

$30k. 

 

One thing you are forgetting is that butlers are expensive these days.  The rich and famous in their $30k cars...

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My understanding is that Lithium-ion is especially attractive due to it's fast recharging.  If there were perhaps a higher energy density battery that could be made (at the expense of slow recharge), then battery swap would be the application to make that battery commercially viable.

 

There will be if they ever commercialize this girl's science project :-)

 

http://www.mercurynews.com/breaking-news/ci_23445865/saratoga-teen-wins-intel-award-longer-lasting-cell

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Guest valueInv

The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

 

They will have a car out at 1/2 the price in 3 years.

 

Even if you buy a car for $40k, you can still afford a parking spot.

 

$30k. 

 

One thing you are forgetting is that butlers are expensive these days.  The rich and famous in their $30k cars...

 

$30k is not exactly the people's car.

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The battery swap is not just about long distance driving -- people in cities that don't have a driveway/garage and park on the street.  They have nowhere to plug in.  So swapping is their best option.

 

If you can afford a Tesla, you can afford to pay for a parking spot. It'll cost you more when someone decides to key your car.

 

They will have a car out at 1/2 the price in 3 years.

 

Even if you buy a car for $40k, you can still afford a parking spot.

 

$30k. 

 

One thing you are forgetting is that butlers are expensive these days.  The rich and famous in their $30k cars...

 

$30k is not exactly the people's car.

 

I didn't realize that $30k cars all have private parking spots.  My bad.

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