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https://insideevs.com/features/403530/gm-put-tesla-out-business/

MAR 11, 2020
By: Geoff Shelley

Or, not.

A recent CCN article touted that GM licensing its new battery tech could put Tesla out of business. After reading and listening to reviews of the event (1) I have my doubts that GM's outlined strategy could have even a hint of doing that. My remarks here about the EV day are directed to GM. However, what I'm saying applies to Ford, VW and others.

Dear GM Management:

Congratulations on your EV Day event. It's great to see you make intimations of serious intent to move toward electro-propulsion. However, I do have some thoughts about what was presented.

The thing that I find most crazy about your proposed EV strategy is that you are relegating yourselves to playing in Tesla's sandbox. You’re playing right into their hands. You're running the large battery pack, hope to get the cost down, race. You are hoping to speedily navigate the curve. Essentially you are trying to do the same thing Tesla is doing, and hoping to be able to do it as well or better than the market leader. A leader who has an eight-year head start. Does that sound smart?

Here's the memo for you. You're not going to be able to beat them at their game. April will be a revelatory month. If Elon's recent comments on the "Third Row Tesla Podcast" are any shadow of what's to come, Tesla is going to rule the day its way.

The timing of your EV event was also so unwise. You may have wanted, for rationale of your own, to beat Tesla to the line. But you have essentially unwittingly shown your hand to your opponent. You've said, here, see, take a look, here are our cards, before the bets have been placed. Does that sound smart?

This gives Tesla the perfect opportunity to pull its ace from its sleeve and not only beat your hand, but blow way past it.

Here is the thing that is most maddening about the EV Day. You (and other IC automakers) could entirely change the game. You have within your power to do differently and make Tesla pursue you.

Here's what's smart.

You can do something Tesla will NEVER do. You can include a gas (petrol) burning REx in your EV. You can use small, less expensive battery packs and yet offer more usable range than any Tesla vehicle. Why fall into Tesla's trap? Why only pursue the expensive 100 - 200 kWh battery strategy? Why not entirely change the game?

OK, conceded that electro-propulsion is indeed a superior customer experience, a superior technology (which it is), but implement it in your own way? Move your products to electro-propulsion as rapidly, yet sanely, as practicable and without the need for huge battery packs. Even a solution like Nissan's e-power could feasibly work. This is YOUR competitive advantage. Tesla will NEVER put a combustion engine REx in their vehicles. You, however, can do it and thereby capture the greater part of the market, because most of the market is OK with having a gas-powered range extender.

If you'd come out on EV day and said, yes we're going to electrify our fleet. Here is how we're going to do it. We're going to begin offering a few high-end BEVs AND, more importantly, low-cost 500-mile range RExEVs. That would have totally changed the game. Other automakers would be pressing to follow you.

It's true it would take some iterations to get the costs of the electro-propulsion and REx down. However, consider this. What do you think most people would prefer, a $35,000 BEV with 220 miles of range, or a $35,000 RExEV with 440 miles of total range? I'm quite confident that the middle of the bell curve wants plenty of affordable range. So, rather than wait for batteries to come down to crazy low prices, get in now and work toward producing low-cost RExEVs. There already exist several companies wanting and waiting to license developed REx technology solutions. (2)

I realize that I don't have access to all the information. I realize that there may be government regulatory considerations and other factors at play. However, the auto market is changing and you must change with it. Why not do it in your own way, instead of Tesla's. Don't let "The Tesla Effect" govern your moves. You may not put Tesla out of business, but you may at least survive, and possibly even thrive.

Or, just keep playing Tesla's game Tesla's way for another 12 years and see how that works out for you. If you’re still around.
 

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The only way GM could put Tesla out of business would be for GM to buy Tesla, keep it as a separate brand and then assign GM's inept management team to run the newly acquired Tesla brand. :)
 

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Everyone who says XXX legacy car manufacturer could put Tesla out of business is ignoring Tesla's single and overwhelming strength over the entire auto industry - Elon Musk. Musk has proven over and over to be a risk taker who learns from failure. He owns the failures, not placing blame on his employees, but instead pushes them to learn from those failures and improve. As long as Musk is at the head of Tesla (and SpaceX) the competition, with their entrenched risk adverse corporate bureaucracies simply cannot compete.

Once Musk either retires or moves to Mars then it may be possible for GM, Ford, FCA, VW, etc., to finally catch and surpass Tesla.
 

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What the author does not address is that the basic configuration he's talking about it was already tried (Volt), and it didn't sell well. We're all Volt fans here, but for some reason the masses didn't want it. Would they if Voltec was put in a CUV (and was actually marketed)? Maybe... though last I check the Outlander PHEV wasn't going gangbusters or anything.

I actually kind of agree with him, though. I feel like Volt-like PHEVs still have a decade of usefulness as battery tech (and access to charging for city/apartment dwellers) improves. But only if customers understand it and buy it, and I don't think they will.
 

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What the author does not address is that the basic configuration he's talking about it was already tried (Volt), and it didn't sell well. We're all Volt fans here, but for some reason the masses didn't want it. Would they if Voltec was put in a CUV (and was actually marketed)? Maybe... though last I check the Outlander PHEV wasn't going gangbusters or anything.

I actually kind of agree with him, though. I feel like Volt-like PHEVs still have a decade of usefulness as battery tech (and access to charging for city/apartment dwellers) improves. But only if customers understand it and buy it, and I don't think they will.
The Volt was a small, low, cramped hatchback. Logically, people should be drawn to something like that, but look around you. The market belongs to CUV's and pickup trucks. The Outlander is a bad example (I feel). Does anyone in the mainstream market even know that it exists? Probably 2/3 of the market doesn't know that Mitsubishi exists.

You have a good point about the need for customers to understand the tech (and be interested in the tech).

Finally, of course, GM didn't market the Volt. Let's see how Ford does with the Mustand Mach-E.
 

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Just last week I had somebody asking me how my 2014 Volt worked. They thought it was a great idea and would prefer to buy something like it over a BEV. I think lack of marketing might have been more an influence than I first considered.

I think a EREV with a EV range of around a 100 miles and a range extender sufficient for road trips would be a success if marketed seriously.
 

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I think there is a valid point being made by the OP.
Here is a little numbers game.
In today's world, the smallest range EV that I would purchase would be something like the Model Y, with a 315 miles range, comes with a usable 71 kwhr battery pack. So the pack is probably around 80 kwhr in size.
Lets go with the new battery pack pricing being bandied about at a price around $100 / kwhr
So this 80 kwhr pack would cost the mfgr about $8k

I propose a plug in EV hybrid like the Volt, with the same chassis as the Model Y, but with a 35 kwhr battery pack, with an ICE range extender, and an EV range of 137 miles (show your work 35kwhr/80kwhr =.4375 then take .4375*315 miles = 137 miles ).

Battery pack savings for the plugin hybrid over the EV? $8k - $3.5k = $4.5k total saving
Could GM put a range extending ICE in for $4.5k their cost?

I have said it before, but I think they have given up too soon on this idea.
They have to envision what it could be, not what it is.

Musk has the edge on envisioning a better future and going all in on it.
This is a big reason my next EV will probably be Tesla.
In some number of years, a number of these legacy auto companies will be gone.
I don't know when, but I am fairly sure it will happen.
 

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In a US auto market free of outside influences an auto company, i.e. GM would be more likely to market or continue to market a vehicle such as the Volt or a Voltec crossover. The single greatest influencer is the California Air Resources Board (CARB.) California represents one third of the US market for cars and trucks. If CARB decided that all vehicles sold in California had to have solar reflective roofs or other such demands then you can bet that the manufacturers would comply because they need to be able to sell their vehicles in that state.

If you are a major auto manufacturer, producing more than 20k vehicles per year, you can't sell your vehicles in the state of California unless you comply with CARB requirements for also producing/selling zero emission vehicles (ZEV) or acquiring ZEV credits from another auto manufacturer. Previously CARB allowed manufacturers of PHEV to earn almost a full ZEV credit for every PHEV sold. This is changing or has changed to only 1/3 of a ZEV credit for every PHEV sold. It makes more economic sense to earn ZEV credits by selling vehicles such as BEV and fuel cell vehicles (FCV) as these continue to earn the manufacturer a full ZEV credit for each vehicle sold. This is especially true if these vehicles offer minimal to no profit for the manufacturer.

This raises the question of just why Toyota and Ford are moving forward with introducing new PHEV offerings; Toyota will sell a RAV4 Prime PHEV and Ford will sell a PHEV version of the new Escape vehicle. Toyota earns ZEV credits from the Murai FCV while Ford currently has no ZEV vehicles while awaiting the arrival of the Ford Mustang Mach-E. Meanwhile GM can earn a full ZEV credit for every Chevrolet Bolt sold, enabling GM to continue to sell the full line of GM vehicles in California.
 

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What he says is true. Tesla has a problem. They and their supporters have bad mouthed ICEs so much, I can't see them ever offering a REx model while GM does have the means and credibility to offer many varieties of REx vehicles. Consumers feel they need three, or even four hundred miles of range to overcome perceived range anxiety fears. The problem with this is the current state of battery technology doesn't support this. To achieve this goal, particularly with trucks and large SUVs require massive battery packs that are large, expensive and heavy.

BEV manufactures are trying to hide this issue by using EPA mileage rating which are performed with a nearly empty vehicle. This allows the manufacture to use a much smaller battery to achieve the advertised range. What should be disclosed, particularly with trucks, is the range at max vehicle weight, or towing max vehicle load. Diesel trucks increase consumption by about 300% at these points, the few tests made of BEVs show similar increases in consumption. So for a BEV to provide the desired range at full load requires 3 times more energy storage. You can't just triple the size of the battery because batteries weigh a lot. For example, if a BEV truck had a thousand pound battery that gave it an empty range of 300 miles, tripling the battery means a three thousand pound battery which would not only be prohibitively expensive, but also all but eliminate it load carrying capacity. In comparison a REx truck could have a small battery, say 60 kwh, good for a fully loaded range of 80-100 miles and a petroleum powered REx. The REx plus ancillary equipment like fuel and exhaust equipment would cost and weigh about the same as the 60 kwh battery. This means there would be no advantage for the REx vehicle until the loaded range gets to the 160-200 mile mark, but after that significant gains are achieved with the REx. The BEV would require another thousand pound battery to gain a reduced increment of range (reduction due to increased weight). The REx vehicle would require about 4 more gallons of diesel or gas, weighing less than 32 pounds. You can see under these conditions a REx vehicle would have a significant advantage.

An argument could also be made for the REx being cleaner for the environment. The cost of a large BEV vehicle due to its large battery plus the practical considerations of real world range would deter many buyers. So I ask, what's better for the environment, one BEV truck or SUV plus three 17 MPG ICE vehicles purchased by people not willing to put up with the inconveniences of a BEV, or four REx truck or SUV with fully loaded range of 80-100 miles plus a REx capable of operating as long as their are fuel stations at an efficiency about 50% better than the conventional ICE?
 

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Let me say that I'm not a big Tesla fanboy but if it wasn't for them we wouldn't be having this conversation.
For some reason GM has decided that they need to go pure electric when a lot of other manufacturers are offering Volt like tech. With the cost of cells for pure electric being as costly as they are at this point, I really feel that a vehicle such as the Volt is the best solution.
 

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Another person stopped to talk to me this afternoon at a charging station. During the course of the conversation it was again apparent that he was unaware of the difference between an EREV like the Volt versus a plug-in hybrid like the Prius. I don't think EREV is that hard to understand; just little effort was made to make the public understand the difference.
 

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Another person stopped to talk to me this afternoon at a charging station. During the course of the conversation it was again apparent that he was unaware of the difference between an EREV like the Volt versus a plug-in hybrid like the Prius. I don't think EREV is that hard to understand; just little effort was made to make the public understand the difference.
Even the EPA never made the distinction.
 

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There are shades of difference. The Honda Clarity PHEV is, similar to the Prius Prime, a plug-in hybrid but the motor is powerful enough that it can easily be driven purely electrically without kicking in the ICE. I can use it like an EREV.
 

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There are shades of difference. The Honda Clarity PHEV is, similar to the Prius Prime, a plug-in hybrid but the motor is powerful enough that it can easily be driven purely electrically without kicking in the ICE. I can use it like an EREV.
Only as long as you don't demand full power from the car. It kicks in the ICE engine when you do this.
 

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Only as long as you don't demand full power from the car. It kicks in the ICE engine when you do this.
I fully understand. If you use ECON mode, the accelerator is mapped to reach a mechanical detent before the ICE will be kicked in.

Don't get me wrong--I prefer the way the Volt is set up but I think it's a mistake to put the Clarity and the Prius plug-in in the same category.
 

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I fully understand. If you use ECON mode, the accelerator is mapped to reach a mechanical detent before the ICE will be kicked in.

Don't get me wrong--I prefer the way the Volt is set up but I think it's a mistake to put the Clarity and the Prius plug-in in the same category.
Maybe so, but the argument could be made that the Clarity is more similar to the Prius than the Volt.
 

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Back to the original topic. Take another look at jcanoe's post. He's got it right. CARB rules prevent manufacturers from producing EREVs. If I were in GM's shoes, I'd recognize that I need to sell cars in the CARB states. And, the cars I want to sell are the ones that make a profit: gas-burning SUVs and trucks. In order to do that, I have to accumulate ZEV credits. And, the quickest way to accumulate credits is to sell a BEV. I'd need to sell 3 EREVs to get the same amount of credits as I get with one BEV. This isn't a hard problem to solve. It's just that a company that needs to make money is forced to reach a conclusion that we would rather they not.

I think EREVs are a great transition technology, and so did CARB, for a few years. But CARB decided that time has passed and, therefore, so has the EREV's.
 

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I think EREVs are a great transition technology, and so did CARB, for a few years. But CARB decided that time has passed and, therefore, so has the EREV's.
I think CARB made the wrong decision. EREV in a greater variety of vehicles would have motivated more drivers to risk taking the next step toward BEVs, drastically reduce fossil fuel consumption, and allow more time for charging infrastructure to expand. Even the most ambitious charging network right now is barely enough for road trips for a tiny population of US cars.
 

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I agree, but we've got to live with the cards we're dealt. And CARB has killed the EREV. They'll be a short-term test vehicles as other manufacturers (Ford, Hyundai, Volvo, etc.) ramp up their electric expertise.
 

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I think CARB made the wrong decision. EREV in a greater variety of vehicles would have motivated more drivers to risk taking the next step toward BEVs, drastically reduce fossil fuel consumption, and allow more time for charging infrastructure to expand. Even the most ambitious charging network right now is barely enough for road trips for a tiny population of US cars.
I guess it's the "use case" a EREV is operated under. I have owned 3 Volt's since March 2012 (2012, 2013 and now a 2017) all three were purchased as my DD but primarily as my work car. My R/T is 20 miles so I knew even under the harshest conditions I could operate 100% electric minus ERDTT periods. And I did. all three of my Volts averaged over 94% electric traveling close to 80K miles. Here's a recent look at my 2017:


I'm over 33K miles today sitting at 98.3%. and this includes trips over to St Louis and even to STL IAP 27 miles from my home frequently.

For my family a Tahoe sized EREV SUV with about a 50 electric range would provide my well over 90% all-electric and still take long trips with no planning or anxiety to me or my family.
 
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