The future of the Porsche dealer network ?
07-08-2018, 11:20 AM
#31
You clearly are clueless when it comes to Porsche so let me clue you in. One of the first cars Porsche built was electric. Which if you can be troubled to look it up (probably not, facts and all), little Elon wasn't even a gleam in his father's eye when Ferry was already driving around in an electric car that he designed and built nearly 100 years before the guy you think he is now following.
Porsche did indeed master the art of car manufacture, but its the worst weakness of the mind to conflate that with the inevitability of all cars being electric in just 10 years, which is what you just did. Two completely different things. One is pretty much a fact of history. The other, nonsense on stilts.
Yeah, yeah, what you probably meant to say was Porsche being so good at building cars will undoubtedly be good at building electric cars. But that's not what you said, its what I just said. The one is true. The other, nonsense.
I am dying to know though, exactly which things Elon is doing will Porsche be following? Building cars in a tent? Skipping brake testing? Oh, wait! I know! Launching cars into space! Its that one, right?
The one thing you sort of hit on by accident, a lot of people sure have been following Elon Musk. Following him like a Pied Piper.
Or lemmings. Take your pick.
Porsche did indeed master the art of car manufacture, but its the worst weakness of the mind to conflate that with the inevitability of all cars being electric in just 10 years, which is what you just did. Two completely different things. One is pretty much a fact of history. The other, nonsense on stilts.
Yeah, yeah, what you probably meant to say was Porsche being so good at building cars will undoubtedly be good at building electric cars. But that's not what you said, its what I just said. The one is true. The other, nonsense.
I am dying to know though, exactly which things Elon is doing will Porsche be following? Building cars in a tent? Skipping brake testing? Oh, wait! I know! Launching cars into space! Its that one, right?
The one thing you sort of hit on by accident, a lot of people sure have been following Elon Musk. Following him like a Pied Piper.
Or lemmings. Take your pick.
As for the other stuff, yes, I’m aware that Porsche have mastered the art of manufacturing cars and maintaining brand dominance to mate with business dominance to the degree of producing profits more fitting for a tech company than a car company. They own the ICE age, no one has or ever will do it like them, from bottom to top: From iconic models that perform at the top of their games, to brand management, to the business within said products, to countless models that appreciate in value, they own it. But they’re already shifting focus. It’s happening. Am I happy about that? No. I rail against new turbo Porsche’s for being too muted and soulless. I buy and love Porsche for their raw, classic, driver and purity focused models within a world of boosted or electric emotionless toasters. I don’t think a Porsche EV will inspire me enough to buy, as one of the main reasons I wanted my 911 was the sound. And the revvs that come with it.
Tesla won’t go anywhere. Elon knows what he’s doing. And you don’t have to be a fanboy (I’d call myself a Porsche fanboy, not a Tesla one) to see the method to his madness. Cultivate and promote up the highest market cap in the auto industry, due to successfully getting investors to view you as more of a tech company than an auto one. Then use that market cap to leverage against almost anything you need. Oh, and buy up majority shares so you can bail yourself out.... at least make it look that way (perception is everything for investors). If sh*t really hits the fan? I can’t see them not getting bought out by some big tech company who could pretty much achieve frightening levels of world dominance with a Tesla in their repertoire, and easily afford to fund them. I’d imagine that’s Elon’s ultimate goal. At least, until their market cap started to swell up.
The products get top marks constantly. Their skipping of an extra brake test is probably a test that other automakers don’t do anyway. Making (overflow, to meet demand) cars in tents.... so? They’re a startup literally revolutionizing an industry. You think Ferdinand started building cars in a state of the art facility straight away? They were literally hammering sheetmetal in barns on cars that are worth millions today.
I have no interest in buying a Tesla right now. I want loud, emotional cars for my money. But my brain recognizes what they’re doing, and why they’re doing it. For all the guff Tesla supporters get, it’s often those who are giving that guff to such extreme levels, that appear to have an emotional vested interest in the company. Such as being stuck with a short position that’s sucking them dry.
07-08-2018, 12:43 PM
#32
IMO, Tesla’s biggest weakness, assuming they survive the looming cash crunch, which I think they will, is that the cars are pretty bland. I think the competition is going to simply build more desirable cars and the market is going to gravitate away from Tesla. Once they’re not the only game in town, their cars are going to look even more meh than they already do.
09-25-2018, 02:35 AM
#33
But
IMO, Tesla’s biggest weakness, assuming they survive the looming cash crunch, which I think they will, is that the cars are pretty bland. I think the competition is going to simply build more desirable cars and the market is going to gravitate away from Tesla. Once they’re not the only game in town, their cars are going to look even more meh than they already do.
But they have NOT. Don't look at Porsche or Jaguar - look at what the other car companies are planning to release in the next few years. There is only one word to describe most of them, and that is UGLY!
I am sure they can make better looking cars than Tesla, they have in the past, but if you looked at the new BMW for example you should barf that it is the future competition. Tesla may look bland, but that is better than most future designs.
Earl Colby Pottinger (Tesla and Bollinger fan)
10-17-2018, 03:45 PM
#34
After owning a Porsche for over 30 years and as of last week throwing down my deposit on a Taycan, thought I’d throw my 2 cents in on this subject.
First, I’d like to state that I think Elon Musk is a brilliant engineer & entrepreneur. He is also part PT Barnum and a showman that has created a marketplace for dedicated EV’s where none existed. The current Tesla EV’s are state of the art and currently the “best of breed” as of today.
That said, I believe Tesla the car company will be bankrupt and gone from the marketplace within about 5 years. This has nothing to do with believing in Elon or fault with Tesla products. It’s a finance and numbers game that Tesla can’t win.
· Tesla currently has roughly 12 Billion in debt with a 2.5 Billion payment due in early 2019. They will likely be able to roll this debt over but at a significantly higher interest rate. That additional debt service cost will not be insignificant in conjunction with their additional debt load. Bottom-line their debt keeps growing as they have no positive cash flow to pay it down.
· The Model S & X are getting old and need to be refreshed and or replaced with new fresh products. Cost’s about 1 -1.5 Billion to retool an auto assembly line. As there is no free cash flow to pay for this, it means additional debt or delay implementation.
· The largest threat is all the luxury car makers entering the market space that Tesla has had all to itself for the past 7 years. Porsche, Mercedes, Audi have all announced very competitive products that will launch in 2019-2020. Each has announced follow on products; sport Ute, crossovers and coupes that will be in the marketplace by 2022. Each manufacturer is gunning for market share in the space currently occupied by the Model S and X.
· As Tesla currently has virtually 100% market share there is nowhere to go but down. Even assuming they stay the big dog in the luxury market with say a 50% market share that still translates to losing the sale of 50,000 units globally or roughly 5 Billion in revenue by 2022. For a company that has a major debt load that is a major league aw-****.
· As the original post was about the Porsche dealer network sustainability, I believe the OP was totally wrong. Tesla’s direct marketing strategy is a total loser when compared to the existing dealer networks that all the major manufacturers have established. On a global scale those roughly 300 Tesla showroom/ serve centers have to be creating an overhead cost in excess of $500 Million annually when real estate, labor costs, and taxes are calculated.
· In the dealer model, the manufacturer has no costs for real estate, labor, etc. Per the excerpt below, Porsche is telling its dealers that they have to buy the charging stations from Porsche, and install them at their own cost. That’s roughly $75 million in costs that Porsche moved onto their dealers.
Porsche Cars North America CEO Klaus Zellmer told Automotive News that they are ramping up the effort to 700 charging stations.
“The company wants its U.S. dealers to pay an estimated $300,000 to $400,000 per store on average to install 200 of those charging stations.”
Zellmer said that it could take them a few years to see a return on the investment:“It’s typical, if you’re an entrepreneur, that the investment doesn’t pay off within the first one-two-three years. It’s a long-term investment.”With the charging stations, dealers will have to install Porsche’s energy storage solution to reduce peak demand charges and more easily enable its high charge rate.
First, I’d like to state that I think Elon Musk is a brilliant engineer & entrepreneur. He is also part PT Barnum and a showman that has created a marketplace for dedicated EV’s where none existed. The current Tesla EV’s are state of the art and currently the “best of breed” as of today.
That said, I believe Tesla the car company will be bankrupt and gone from the marketplace within about 5 years. This has nothing to do with believing in Elon or fault with Tesla products. It’s a finance and numbers game that Tesla can’t win.
· Tesla currently has roughly 12 Billion in debt with a 2.5 Billion payment due in early 2019. They will likely be able to roll this debt over but at a significantly higher interest rate. That additional debt service cost will not be insignificant in conjunction with their additional debt load. Bottom-line their debt keeps growing as they have no positive cash flow to pay it down.
· The Model S & X are getting old and need to be refreshed and or replaced with new fresh products. Cost’s about 1 -1.5 Billion to retool an auto assembly line. As there is no free cash flow to pay for this, it means additional debt or delay implementation.
· The largest threat is all the luxury car makers entering the market space that Tesla has had all to itself for the past 7 years. Porsche, Mercedes, Audi have all announced very competitive products that will launch in 2019-2020. Each has announced follow on products; sport Ute, crossovers and coupes that will be in the marketplace by 2022. Each manufacturer is gunning for market share in the space currently occupied by the Model S and X.
· As Tesla currently has virtually 100% market share there is nowhere to go but down. Even assuming they stay the big dog in the luxury market with say a 50% market share that still translates to losing the sale of 50,000 units globally or roughly 5 Billion in revenue by 2022. For a company that has a major debt load that is a major league aw-****.
· As the original post was about the Porsche dealer network sustainability, I believe the OP was totally wrong. Tesla’s direct marketing strategy is a total loser when compared to the existing dealer networks that all the major manufacturers have established. On a global scale those roughly 300 Tesla showroom/ serve centers have to be creating an overhead cost in excess of $500 Million annually when real estate, labor costs, and taxes are calculated.
· In the dealer model, the manufacturer has no costs for real estate, labor, etc. Per the excerpt below, Porsche is telling its dealers that they have to buy the charging stations from Porsche, and install them at their own cost. That’s roughly $75 million in costs that Porsche moved onto their dealers.
Porsche Cars North America CEO Klaus Zellmer told Automotive News that they are ramping up the effort to 700 charging stations.
“The company wants its U.S. dealers to pay an estimated $300,000 to $400,000 per store on average to install 200 of those charging stations.”
Zellmer said that it could take them a few years to see a return on the investment:“It’s typical, if you’re an entrepreneur, that the investment doesn’t pay off within the first one-two-three years. It’s a long-term investment.”With the charging stations, dealers will have to install Porsche’s energy storage solution to reduce peak demand charges and more easily enable its high charge rate.
10-18-2018, 10:41 PM
#35
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also produces power walls, power packs, solar roofing, and a small number of smaller products. In five years the other car companies will take a big share of the market, but the market for electric cars will also be a lot bigger - the result Tesla grows at the same time other companies grow.
And if worse comes to worse, it will make a killing just selling batteries to everyone else.
Earl Colby Pottinger (Tesla and Bollinger fan)
And if worse comes to worse, it will make a killing just selling batteries to everyone else.
Earl Colby Pottinger (Tesla and Bollinger fan)
10-20-2018, 08:40 PM
#36
As the original post was about the Porsche dealer network sustainability, I believe the OP was totally wrong. Tesla’s direct marketing strategy is a total loser when compared to the existing dealer networks…. “The company wants its U.S. dealers to pay an estimated $300,000 to $400,000 per store on average to install 200 of those charging stations.”
Nobody is going to care if you are standing by a non-branded (2-plug) highway fast-charger that’s broken, and have to use up your Taycan's remaining miles for “plan B”.
Tesla doesn’t have to make a franchise jump through hoops (so it can see less service revenue, to boot). That isn’t a disadvantage. The more oblique benefit of the direct sales model is escaping the laws that compel other manufacturers to provide independents with parts and diagnostics tools. Tesla is notorious for remaining captive with sales, used sales, service and repair. It’s a reason to hate them. But it's profitable. I have no idea where Zellmer is coming from, with the long-term “entrepreneur” payoff for the Porsche dealers. Nissan tried dealer located CHAdeMo. Those cars penetrated far more than Taycan ever will, and yet I don’t believe more than few used them.
10-21-2018, 11:36 PM
#37
Again, this is a numbers game. As several people have commented, it’s correct that Tesla is more than a car company. Painting with a broad brush, Tesla is made up of four major components:
· Automotive – Roughly $8.5 Billion in revenue in 2017
· Leasing – Roughly $1.2 Billion in 2017
· Energy Generation - $1.2 Billion in 2017 – This group includes what is left of Solar City and the battery factory.
· Services – Roughly $1.0 Billion in 2017
As the automobile group is almost 3 times that size of all the other groups together, it’s very apparent that as the auto group goes so goes the company as a whole. Even if the other 3 groups are generating a profit, it’s relatively small in comparison to the cash burn of the auto group and servicing the overall debt.
The Tesla Model S and Model X are the top of their food chain and fall into the luxury vehicle segment. The combined global sales volume of the S & X has been relatively flat at roughly 100-110 K units annually for 2016, 2017, and the first half of 2018. As the model 3 was at best a minor factor in 2017 the Model S & X were the main contributors to the $8.5 Billion in revenues for the auto group.
The point in my previous posts is Porsche, Mercedes, Audi, & Jaguar are entering the luxury EV space with very serious products and will give Tesla serious competition where previously they have not had any. Each of the competitors may be initially launching with a single model but each has plans to have 3-4 models in the market by 2021. This market segment will grow in the future but at this point a 10% year over year growth will be likely for the next several years. As Tesla currently has nearly 100% market share in the luxury segment, there is nowhere for the Tesla Market share to go but down. With the strength of the competitors entering the marketplace, Tesla having a 50% market share in 2021 is optimistic projection. Even so, it translates into a loss of roughly $4 Billion in top line revenue.
As to production capabilities of the Tesla competitors, I agree individually they are not launching with the capacity to out produce Tesla in the segment, but in aggregate the numbers are indeed there. Porsche – 20-25K units, Mercedes 30+ units, Audi 20-25K units, and Jaguar 30-40K units. By my calculations that would roughly match the Tesla model S & X global production numbers. Oh and if the segment grows significantly faster than expected all can very quickly ramp up production to meet future demands.
Now let’s get back to the dealer vs. direct sales model; Searched on the web for the following numbers so I’m not claiming these numbers are 100% accurate but they do show magnitude
BTW I am not mentioning BMW or the Luxury Japanese brands at this time as they do have plans but it appears they will be in play with serious products sometime after 2021.
Dealers Vs Tesla Stores & Service Centers
· Tesla – 350 Global – 150 USA
· Porsche – 500 Global – 189 USA
· Mercedes – 600 Global – 368 USA
· Audi - - 500 Global – 290 USA
Tesla’s competitors in the luxury market dwarf the Tesla channel significantly. Most importantly all the European brands have major foot prints in China, to the extent that the China market is already their #1 or #2 market on a global basis.
As the major luxury brands create BEV’s for the segment, they have a huge advantage it terms of cost and being able to recognize and control revenue. The BEV’s are just another vehicle to send through an existing distribution pipeline. Once the BEV hits the dealer lot the manufacturer invoices the dealer and is paid. The dealer is responsible all for inventory costs, operation of the dealership to include real estate costs & all labor costs. Yes, there are warranty costs but those are a shared cost between the dealer & manufacturer. The dealer does make significant profits servicing out of warranty vehicles but the manufacture makes significant monies selling parts to the dealer channel.
If a dealer balks at investing in BEV infrastructure as in the case of Porsche requirement for BEV investment, the outcome is 100% certain. Porsche would utilize the dealership contract and simply pull the dealership rights and “SELL THEM” to another interested entity looking for a Porsche dealership.
Now for Tesla, Elon reinvented the wheel and went to a direct to customer model. There are benefits but the initial and reoccurring costs are daunting. All the real estate, whether it’s a sales or service center falls on Tesla, and then add all the labor costs for sales and service, equipment to service vehicles, and let’s not forget inventory costs for loaner vehicles and sales inventory. In aggregate this is a large number for SG&A on the Tesla balance sheet. Personally I think if Tesla starts to lose market share this is going to be a key metric that Wall Street will look at that will really hurt Tesla from a profitability standpoint going forward into the future. To make my point here: In July 2017, Elon announced that Tesla would be adding 100 new service centers and 1000 new service technicians globally to support the model 3. Figure at least $1 million to open a service center from scratch and a good electronic auto tech makes at least a $100K per year, Do the math and that is a $200 Million outlay that is 100% Tesla SG&A. In a dealer model none of that expense would be borne by the manufacturer.
My last point is more of a question: I keep hearing that Tesla is a technology company not an auto company and that their technology advantage will keep them ahead of their competitors and eventually allow Tesla to prevail. Exactly what is the specific technology that will allow this to happen? Are there patents that prevent competitors from coming to market with products? Is there an operating system that is vastly superior to anything that a competitor can produce? I just do not see that Tesla has this “magic “competitive technological advantage. Please explain.
· Automotive – Roughly $8.5 Billion in revenue in 2017
· Leasing – Roughly $1.2 Billion in 2017
· Energy Generation - $1.2 Billion in 2017 – This group includes what is left of Solar City and the battery factory.
· Services – Roughly $1.0 Billion in 2017
As the automobile group is almost 3 times that size of all the other groups together, it’s very apparent that as the auto group goes so goes the company as a whole. Even if the other 3 groups are generating a profit, it’s relatively small in comparison to the cash burn of the auto group and servicing the overall debt.
The Tesla Model S and Model X are the top of their food chain and fall into the luxury vehicle segment. The combined global sales volume of the S & X has been relatively flat at roughly 100-110 K units annually for 2016, 2017, and the first half of 2018. As the model 3 was at best a minor factor in 2017 the Model S & X were the main contributors to the $8.5 Billion in revenues for the auto group.
The point in my previous posts is Porsche, Mercedes, Audi, & Jaguar are entering the luxury EV space with very serious products and will give Tesla serious competition where previously they have not had any. Each of the competitors may be initially launching with a single model but each has plans to have 3-4 models in the market by 2021. This market segment will grow in the future but at this point a 10% year over year growth will be likely for the next several years. As Tesla currently has nearly 100% market share in the luxury segment, there is nowhere for the Tesla Market share to go but down. With the strength of the competitors entering the marketplace, Tesla having a 50% market share in 2021 is optimistic projection. Even so, it translates into a loss of roughly $4 Billion in top line revenue.
As to production capabilities of the Tesla competitors, I agree individually they are not launching with the capacity to out produce Tesla in the segment, but in aggregate the numbers are indeed there. Porsche – 20-25K units, Mercedes 30+ units, Audi 20-25K units, and Jaguar 30-40K units. By my calculations that would roughly match the Tesla model S & X global production numbers. Oh and if the segment grows significantly faster than expected all can very quickly ramp up production to meet future demands.
Now let’s get back to the dealer vs. direct sales model; Searched on the web for the following numbers so I’m not claiming these numbers are 100% accurate but they do show magnitude
BTW I am not mentioning BMW or the Luxury Japanese brands at this time as they do have plans but it appears they will be in play with serious products sometime after 2021.
Dealers Vs Tesla Stores & Service Centers
· Tesla – 350 Global – 150 USA
· Porsche – 500 Global – 189 USA
· Mercedes – 600 Global – 368 USA
· Audi - - 500 Global – 290 USA
Tesla’s competitors in the luxury market dwarf the Tesla channel significantly. Most importantly all the European brands have major foot prints in China, to the extent that the China market is already their #1 or #2 market on a global basis.
As the major luxury brands create BEV’s for the segment, they have a huge advantage it terms of cost and being able to recognize and control revenue. The BEV’s are just another vehicle to send through an existing distribution pipeline. Once the BEV hits the dealer lot the manufacturer invoices the dealer and is paid. The dealer is responsible all for inventory costs, operation of the dealership to include real estate costs & all labor costs. Yes, there are warranty costs but those are a shared cost between the dealer & manufacturer. The dealer does make significant profits servicing out of warranty vehicles but the manufacture makes significant monies selling parts to the dealer channel.
If a dealer balks at investing in BEV infrastructure as in the case of Porsche requirement for BEV investment, the outcome is 100% certain. Porsche would utilize the dealership contract and simply pull the dealership rights and “SELL THEM” to another interested entity looking for a Porsche dealership.
Now for Tesla, Elon reinvented the wheel and went to a direct to customer model. There are benefits but the initial and reoccurring costs are daunting. All the real estate, whether it’s a sales or service center falls on Tesla, and then add all the labor costs for sales and service, equipment to service vehicles, and let’s not forget inventory costs for loaner vehicles and sales inventory. In aggregate this is a large number for SG&A on the Tesla balance sheet. Personally I think if Tesla starts to lose market share this is going to be a key metric that Wall Street will look at that will really hurt Tesla from a profitability standpoint going forward into the future. To make my point here: In July 2017, Elon announced that Tesla would be adding 100 new service centers and 1000 new service technicians globally to support the model 3. Figure at least $1 million to open a service center from scratch and a good electronic auto tech makes at least a $100K per year, Do the math and that is a $200 Million outlay that is 100% Tesla SG&A. In a dealer model none of that expense would be borne by the manufacturer.
My last point is more of a question: I keep hearing that Tesla is a technology company not an auto company and that their technology advantage will keep them ahead of their competitors and eventually allow Tesla to prevail. Exactly what is the specific technology that will allow this to happen? Are there patents that prevent competitors from coming to market with products? Is there an operating system that is vastly superior to anything that a competitor can produce? I just do not see that Tesla has this “magic “competitive technological advantage. Please explain.
10-22-2018, 09:20 AM
#38
Race Car
My 4 year/50,000 experience with my Model S is as follows:
1. brake jobs are nearly non-existent - 250,000 miles minimum - properly driven regenerative braking takes most of the load - my Model S P85D has 50,000 miles on it and we've worn 5-8% of the brake pads…the Tesla forums have standing threads for anyone who's done a brake job on a. Tesla - there are reports of 400,000 miles Tesla's with 50% pad wear…very few Tesla owners have done a brake job ever...number of people reporting a brake job is measured single digits (even at the Bay Area service centers when I've asked - the Sunnyvale service center has their original order/stock of 200'ish Model S brake pads still on the shelf from when they ordered them in 2013…they used 48 pads in that time)
2. Suspension parts are rated for 100-200k miles before needing any maintenance
3. Battery coolant is replaced on a chevy bolt every 150,000 miles ($175 dealer service) - no recommended/required schedule published by Tesla for battery coolant.
4. Windows and doors are like all cars
5. 12 volt batteris (To date all electric cars have them for compatibility with existing 12 volt car gizmo's) need replacing every 2-3 years
6. Gearboxes and differentials are rated for 250,000 miles between services
7. in reviewing a years worth of a service invoices from my local porsche non-dealer mechanic 85% of their service business disappears with an EV, and the service business that is left is a "consumables" business which is less profitable - in all honestly and horror the Owner of the shop says his business in unsustainable if his customers all move to EV's - he is quite pleased about the slow uptick in EV sales for his personal business, but is considering an EV for his personal use given it's lower costs to maintain - ROFL.
8. tires wear about the same on an EV as a gas car - perhaps faster - you replace those on the same schedule - Wheel Works and various tire shops have nothing to fear - Jiffy Lube is toast and a goner in an EV world.
9. wiper blades get replaced just as often.
10. the main traction battery can be replaced, but doesn't need to - there is a myth that these batteries will simply stop working, and while that's possible it's not their design, what does happen is they "degrade" and lose capacity - so what may have been delivered to you as a 85 kWh battery - after 8-10 years may be a 65 kWh battery - but it still works as a battery, but yes it holds less electrons - the time period in which this occurs is much longer than average car ownership - and the battery can be replaced/refreshed for about the same cost as a transmission job for a similar number of miles driven. A refurbished Nissan Leaf battery is $3200 installed and beneficial for the restoration in driving range after about 8 years - but not required. Nissan leafs lack active thermal management for the LiON battery so they have the worse battery degradation in the industry. EV's with active thermal management (Ford, BMW, Chevy, Tesla and others) see far less battery capacity loss and therefore the replacement cycle is far longer.
11. I have lost 2% maximum capacity on my 85 kWh battery in 4 years - or about 1.7 kWh or about 6 miles driving range on a full charge - I expect to lose another 3% in the next 4 years - or another 8 miles driving range, for a total loss of 14 miles of driving capacity over 8 years of ownership.
12. Brake fluid should be replaced every 2-4 years - this is a $150 Tesla service, and a $120 Chevy Bolt service from the dealer - EV's have no magic here
13. and yes I've had my sun roof adjusted/lubricated under warranty - but it would've been a $250 service if I had to pay for it.
In talking to most dealers, people who have worked for dealers, and general internet wisdom - a new car sale for a dealer is a 8-12% margin for them, but 60-70% of their revenue is their service bays - A chevy dealer will make about $3,500-$5,200 profit on selling a $65K Silverado, but the 6 year service costs for a Silverado are $12k - $18k in service costs to drive the car. Dealers make more on service and used cars than they do on new car sales, but new cars sales are very likely to return to the dealership where is was purchased. The 8 year service potential of a Chevy Bolt is about $2000 - tires and the one $175 battery coolant change.
EV's required far less maintenance than a gas car - this is proven
The maintenance they do required is a lower margin business
The frequency of maintenance is far less
There are fewer parts that wear out lowering the parts business opportunities for both the manufacturer and the parts industry
The life cycle of most EV's and the parts that do wear out is much longer than the average car is on the road
I don't see any threat to Porsche dealer in a 10 year window - but _IF_ EV's become popular enough there will be consolidation and some dealership may end up closing - I expect ICE vehicles and their associated maintain requirements and revenue opportunities to be with us for at least the next $75 years…so I don't see the dealer network going away but perhaps smaller and more focused could be a reality if EV's become a significant percentage of the driving population.
UPS is aggressively pursuing an EV truck fleet partly justified by 80% less maintain cost over the life of one of their delivery trucks…we'll see if that pans out - I personally believe it and expect it to be mostly true - and this is a company driven purely by per-mile cost to deploy a vehicle over the life of the vehicle…so the potential is there.
EV's will disrupt the dealership/service model - no question - it's one of the reasons EV's have been slow to take off - the after sale revenue potential is vastly lower for an EV sale vs. a ICE sale.
I'm reminded of a quote from Robocop
ICE's are a guaranteed parts/service revenue stream post sale - EV's are less so.
1. brake jobs are nearly non-existent - 250,000 miles minimum - properly driven regenerative braking takes most of the load - my Model S P85D has 50,000 miles on it and we've worn 5-8% of the brake pads…the Tesla forums have standing threads for anyone who's done a brake job on a. Tesla - there are reports of 400,000 miles Tesla's with 50% pad wear…very few Tesla owners have done a brake job ever...number of people reporting a brake job is measured single digits (even at the Bay Area service centers when I've asked - the Sunnyvale service center has their original order/stock of 200'ish Model S brake pads still on the shelf from when they ordered them in 2013…they used 48 pads in that time)
2. Suspension parts are rated for 100-200k miles before needing any maintenance
3. Battery coolant is replaced on a chevy bolt every 150,000 miles ($175 dealer service) - no recommended/required schedule published by Tesla for battery coolant.
4. Windows and doors are like all cars
5. 12 volt batteris (To date all electric cars have them for compatibility with existing 12 volt car gizmo's) need replacing every 2-3 years
6. Gearboxes and differentials are rated for 250,000 miles between services
7. in reviewing a years worth of a service invoices from my local porsche non-dealer mechanic 85% of their service business disappears with an EV, and the service business that is left is a "consumables" business which is less profitable - in all honestly and horror the Owner of the shop says his business in unsustainable if his customers all move to EV's - he is quite pleased about the slow uptick in EV sales for his personal business, but is considering an EV for his personal use given it's lower costs to maintain - ROFL.
8. tires wear about the same on an EV as a gas car - perhaps faster - you replace those on the same schedule - Wheel Works and various tire shops have nothing to fear - Jiffy Lube is toast and a goner in an EV world.
9. wiper blades get replaced just as often.
10. the main traction battery can be replaced, but doesn't need to - there is a myth that these batteries will simply stop working, and while that's possible it's not their design, what does happen is they "degrade" and lose capacity - so what may have been delivered to you as a 85 kWh battery - after 8-10 years may be a 65 kWh battery - but it still works as a battery, but yes it holds less electrons - the time period in which this occurs is much longer than average car ownership - and the battery can be replaced/refreshed for about the same cost as a transmission job for a similar number of miles driven. A refurbished Nissan Leaf battery is $3200 installed and beneficial for the restoration in driving range after about 8 years - but not required. Nissan leafs lack active thermal management for the LiON battery so they have the worse battery degradation in the industry. EV's with active thermal management (Ford, BMW, Chevy, Tesla and others) see far less battery capacity loss and therefore the replacement cycle is far longer.
11. I have lost 2% maximum capacity on my 85 kWh battery in 4 years - or about 1.7 kWh or about 6 miles driving range on a full charge - I expect to lose another 3% in the next 4 years - or another 8 miles driving range, for a total loss of 14 miles of driving capacity over 8 years of ownership.
12. Brake fluid should be replaced every 2-4 years - this is a $150 Tesla service, and a $120 Chevy Bolt service from the dealer - EV's have no magic here
13. and yes I've had my sun roof adjusted/lubricated under warranty - but it would've been a $250 service if I had to pay for it.
In talking to most dealers, people who have worked for dealers, and general internet wisdom - a new car sale for a dealer is a 8-12% margin for them, but 60-70% of their revenue is their service bays - A chevy dealer will make about $3,500-$5,200 profit on selling a $65K Silverado, but the 6 year service costs for a Silverado are $12k - $18k in service costs to drive the car. Dealers make more on service and used cars than they do on new car sales, but new cars sales are very likely to return to the dealership where is was purchased. The 8 year service potential of a Chevy Bolt is about $2000 - tires and the one $175 battery coolant change.
EV's required far less maintenance than a gas car - this is proven
The maintenance they do required is a lower margin business
The frequency of maintenance is far less
There are fewer parts that wear out lowering the parts business opportunities for both the manufacturer and the parts industry
The life cycle of most EV's and the parts that do wear out is much longer than the average car is on the road
I don't see any threat to Porsche dealer in a 10 year window - but _IF_ EV's become popular enough there will be consolidation and some dealership may end up closing - I expect ICE vehicles and their associated maintain requirements and revenue opportunities to be with us for at least the next $75 years…so I don't see the dealer network going away but perhaps smaller and more focused could be a reality if EV's become a significant percentage of the driving population.
UPS is aggressively pursuing an EV truck fleet partly justified by 80% less maintain cost over the life of one of their delivery trucks…we'll see if that pans out - I personally believe it and expect it to be mostly true - and this is a company driven purely by per-mile cost to deploy a vehicle over the life of the vehicle…so the potential is there.
EV's will disrupt the dealership/service model - no question - it's one of the reasons EV's have been slow to take off - the after sale revenue potential is vastly lower for an EV sale vs. a ICE sale.
I'm reminded of a quote from Robocop
ICE's are a guaranteed parts/service revenue stream post sale - EV's are less so.
10-22-2018, 03:50 PM
#39
Burning Brakes
10-22-2018, 03:54 PM
#40
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a money losing car company. But it is not, it also loses money on power walls, power packs, solar roofing, and a small number of smaller products.
10-22-2018, 03:54 PM
#41
Rennlist Member
just to NOTE for those not 100% up to speed - the V-O-L-T has an gas powered generator which has less maintenance than a normal gas car, but still has maintenance
the B-O-L-T is a pure EV which no legacy ICE components, and has a suitably light weight maintenance schedule - first fractory service is 150,000 mile battery coolant swap according to the owner's manual, other than that tire rotations as needed.
the B-O-L-T is a pure EV which no legacy ICE components, and has a suitably light weight maintenance schedule - first fractory service is 150,000 mile battery coolant swap according to the owner's manual, other than that tire rotations as needed.
10-22-2018, 04:27 PM
#42
Burning Brakes
just to NOTE for those not 100% up to speed - the V-O-L-T has an gas powered generator which has less maintenance than a normal gas car, but still has maintenance
the B-O-L-T is a pure EV which no legacy ICE components, and has a suitably light weight maintenance schedule - first fractory service is 150,000 mile battery coolant swap according to the owner's manual, other than that tire rotations as needed.
the B-O-L-T is a pure EV which no legacy ICE components, and has a suitably light weight maintenance schedule - first fractory service is 150,000 mile battery coolant swap according to the owner's manual, other than that tire rotations as needed.
Of the 10-12 gallons of gas I've put in the Volt over the past three years, most of it was burned due to the Volt insisting on limbering up the ICE after every 6 weeks of non-use ("Engine Maintenance Mode"), and keeping the average fuel age under 1 year old ("Fuel Maintenance Mode"). I only keep 2-3 gallons of gas in the tank.
Funny thing is that my wife actually likes the PHEV aspect of the Volt better than my Model 3 Long Range. She just feels a lot more comfortable knowing that if she ever needs to, she can just head to a gas station for a refill.
10-22-2018, 06:11 PM
#43
Changing my quotes
My Quote was: Originally Posted by earl pottinger 
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
10-22-2018, 06:36 PM
#44
My Quote was: Originally Posted by earl pottinger
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
Take a deep breath, calm down.
10-22-2018, 06:38 PM
#45
Rennlist Member
Join Date: Nov 2016
Location: Waterloo, Ontario, Canada
Posts: 1,523
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452 Posts
My Quote was: Originally Posted by earl pottinger
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
Pardon bmwexpat, have you looked at the production numbers these other companies you talk about? None of them (except the Chinese) are preparing to produce the number of electric cars to take over the market. Also you seem to be assuming Tesla is only a car company. But it is not, it also power walls, power packs, solar roofing, and a small number of smaller products.
Lying about my quotes tells me a lot about you! Honest people state clearly that they are changing the quote. You do not. That tell us a lot about how trust worthy your words are.
Earl Colby Pottinger (Tesla & Bollinger fan)
