Small entrepreneurial companies conserve their venture capital and fine-tune their prototypes, while larger companies with bigger coffers take bolder steps, burning through billions to move their visions forward.
For one, the company just lost over $7 billion in market capitalization as their inflated stock price recently dropped by 20%.
Tesla is also burning through its cash on hand, which, as of their most recent quarterly report was just over $4 billion. Consequently, the company recently put together a stock offering to raise another billion in cash.
Last week, the Model 3 started rolling off the assembly line. Tesla is by all accounts betting its future on the more affordable Model 3, and it’s starting to see credible competition.
Evolving EV market
The latter started selling its Chevy Volt in 2010, but its all-electric 2017 Bolt EV model became the first mass-market EV with a 200+ mile range.
Besides price, range is perhaps the single biggest obstacle to mass adoption of EVs. The Volt EV’s range, which Chevy says is 238 miles on a single charge, is pretty good. And the price, $36,620 MSRP, approaches affordability for a larger potential customer base.
Tesla’s Model 3 starts at $35,000 and offers an expected range of 215 miles on a single charge.
So, range and price are nearly there for a mass market. While there are some environmental issues even with EVs, they are measurably greener than gas or diesel-driven combustion engines.
The other issue, of course, is driving an EV on a long trip, during which recharging would be necessary. Tesla has led the way with a network of charging stations across the U.S., but they are still not nearly as ubiquitous as gas stations.
My Toyota Camry Hybrid has a range of almost 400 miles, was $10,000 less expensive than a base Model 3, and I can very easily find gas stations on long trips.
All these considerations factor into why a lot of people won’t be buying EVs for the foreseeable future.
But, wait. There is one other thing to consider: rebates. Turns out both the federal government and some states offer incentives for purchasing an EV.
My state, Massachusetts, offers up to a $2500 rebate for purchasing an EV. And there are other considerations such as lower insurance rates, exemption from emissions tests, and preferred parking with free charging stations at an increasing number of commercial and business establishments.
I know that there are many folks who love their petro-powered rigs, and car enthusiasts who lust after classic muscle cars.
But for those of us who want to reduce our carbon footprint, but still get around in style, EVs are increasingly worthy of consideration. Somehow, if we can get the cost down another $5-10K, I think a lot of people will jump, me included. Governmental incentives and rebates, economies of scale, and technology advancements will all have to factor in for that to happen.
Despite everything, technology will continue to march on. It’s not a bold prediction to say that within 10 years, EVs will be everywhere.
According to this site, by the end of 2015, some 1.2 million EVs had already been purchased. That number is likely to grow in 2017 and beyond.
About that Model 3
Last week, production vehicle #1 of the Model 3 rolled off the Tesla assembly line in Fremont, CA. Elon Musk tweeted about it.
Musk has predicted that the Model 3 ramp-up will be exponential, starting with 30 cars in July, 100 in August, more than 1,500 by September, and then 20,000 per month by December.
In 2018, the company expects to be fully ramped up to a rate of 8000 cars a week.
With that production level, they’ll quickly exhaust the 400,000 pre-orders, and then we’ll see.