There is a vast difference in the Model 3 and the Fiat 500e. They aren’t even in the same category. What he said was he can’t sell the Fiat even loosing $14000 a vehicle. The Tesla’s sell before they are made
Sent from my iPhone > On May 30, 2018, at 4:44 PM, Len Moskowitz via EV <ev@lists.evdl.org> wrote: > > https://www.designnews.com/electronics-test/op-ed-elon-musk-and-sergio-marchionne-have-lot-common/51044819658824 > > > ----- > > > > Tesla CEO Elon Musk is learning what Fiat's Sergio Marchionne already knew: > Squeezing profit from an entry-level electric vehicle is a monumental task > that > requires a great deal of patience. > > > --- > > > [Photo] Last week, Elon Musk (right) tweeted that shipping $35,000 versions > of the Model 3 right now would cause Tesla to “lose money & die.” (Image > source: Wikipedia/ By Steve Jurvetson). In 2014, FCA chairman Sergio > Marchionne (right) said about his Fiat 500e: “I hope you don’t buy it because > every time I sell one, it costs me $14,000.” (Image source: Wikipedia/from > Dgtmedia) > > > > > Many lessons can be learned from Elon Musk’s recent tweets about the trials > and tribulations of the Model 3 electric car, but the main one is this: Musk > and Sergio Marchionne have a lot in common. > > Musk’s most revealing tweet occurred last week, when he said that shipping > $35,000 versions of the “affordable” Model 3 right now would cause Tesla to > “lose money & die.” He added that he needs three to six months after reaching > production levels of 3,000 to 5,000 cars a week, just for Tesla to stay alive. > > As if those words weren’t shocking enough, Musk also announced that Tesla has > hatched a plan to market a souped-up, $78,000 version of the Model 3. The > underlying plan is for Tesla to sell higher-priced versions of the Model 3 > until it can make ends meet with the $35,000 models. This would be > accomplished by boosting performance and adding such features as bigger > battery packs, automated driving capabilities, glitzy wheels, and colors > other than black. Only after that could the company begin delivering > lower-cost versions to the 400,000-plus customers who have plunked down > $1,000 deposits over the past few years. > > Not surprisingly, Musk’s tweets weren’t met with a lot of happiness—even > among the media that has helped hype the company for the past decade. In a > typical headline, the Los Angeles Times called the Model 3 unaffordable for > the masses. Similarly, US News & World Report ran a story saying that Tesla > lost $14,000 on each of the Model 3s it delivered (based on an average sales > price of $54,000) in the first quarter of 2018. > > The Old Reality > > In essence, Musk’s comments aren’t much different from those of Sergio > Marchionne, the plain-spoken chairman and CEO of Fiat Chrysler Automobiles > (FCA). In 2014, Marchionne made this blunt statement about the little Fiat > 500e electric car: "I hope you don't buy it because every time I sell one, > it costs me $14,000." > > Marchionne was, of course, heavily criticized for his comment. But the > criticism seldom mentioned the fact that Marchionne recognized the > inevitability of electrification. He frequently said that as emission > standards were tightened, the auto industry would naturally gravitate toward > a combination of combustion and electrics. Under his leadership, Chrysler > even launched its effort to build the Pacifica plug-in hybrid minivan.The > lesson here is that Marchionne’s reality was not much different than the > reality now facing Elon Musk. And that same reality is shared by the rest of > the auto industry, which has long known that the entry-level market would be > a tough nut to crack for the electric car. In fact, the auto industry has > known for decades that all small cars—even those with internal combustion > engines—exist on razor-thin profit margins. > > Somehow, though, that reality has managed to elude much of the public, the > media, and even Wall Street. That’s why Tesla’s market cap is so absurdly > high. Today, Tesla’s market value is about $450,000 per car sold—about 16 > times that of BMW and 90 times that of GM. > > What this means is that investors have showered money on Tesla, largely > because of its vision of the future. And—let’s be honest here—that assumption > is based on the fact that Tesla is a Silicon Valley company led by a genius, > whereas the conventional auto industry is characterized as a Midwest, Rust > Belt industry with one foot firmly planted in the past. > > The corollary to this assumption is that Silicon Valley knows how to quickly > drive the cost out of new technology and will do so in batteries and electric > cars. In 2010, The New York Times even explained this in an article that > introduced the concept of “Moore’s Law for Electric Cars.” > > Which, of course, is ridiculous. Gordon Moore’s famous “law” applies to > semiconductor chips, not to batteries and not to cars. The cost of electrics > is never, ever going to drop the way semiconductor chips did for 40 years. > > Detroit knows this and so does Musk. But the public doesn’t, which is why the > concept seems to linger. > > The irony now is that the viewpoints of the two sides are converging. Detroit > (which has brilliant engineers, too) now knows what Musk has taught—that > there’s a market for electric cars in the luxury sector. And Musk is learning > what Detroit already understood—that squeezing profit from an entry-level > electric vehicle is a monumental task that requires a great deal of patience. > > Maybe Sergio Marchionne actually knew what he was talking about. > > > > -- > Senior technical editor Chuck Murray has been writing about technology for 34 > years. He joined Design News in 1987, and has covered electronics, > automation, fluid power, and auto. > > > ----- > > Len Moskowitz > _______________________________________________ > UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub > http://lists.evdl.org/listinfo.cgi/ev-evdl.org > Please discuss EV drag racing at NEDRA (http://groups.yahoo.com/group/NEDRA) > _______________________________________________ UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub http://lists.evdl.org/listinfo.cgi/ev-evdl.org Please discuss EV drag racing at NEDRA (http://groups.yahoo.com/group/NEDRA)
