Tesla Announces Ambitious European Expansion Plans
techcrunch.com
techcrunch.com
For example, in the UK the majority of cars at the level Tesla is going for are business vehicles. In that category, the tax laws make it such that the best thing to do is to lease a car.
Which is why you get business leasing options from every manufacturer:
BMW: http://www.bmwbusinesspartnership.co.uk/
Mercedes: http://www2.mercedes-benz.co.uk/content/unitedkingdom/mpc/mp...
Lexus: http://www.lexus.co.uk/company-cars/company-car-driver/2013/...
Basically, company car perks are paid in cash in monthly installments. Everyone with a business vehicle leases the vehicle using the cash they are paid.
Tesla may sell a fair few cars in the UK, but if they want to put a lot of cars on the road they'll need to package the car in a way that will attract this market.
I'm sure similar market differences exist throughout Europe too, where local conditions mean that buying outright isn't usually the best deal.
[NB I walk to work, my wife walks to work and my son walks to school - we even do a lot of our shopping by walking - I wouldn't pretend our car usage patterns are typical].
I get the impression that they like to talk up monthly costs not because they prefer leasing, but because it tends to show the car in a better light. They have a calculator which lets you calculate the "effective" cost of the car, which basically starts with the actual monthly cost and then subtracts off various savings, ranging from reasonable things like paying less for gasoline, all the way down to fairly dumb things like the value of the time you no longer spend filling up at the gas station.
- if you buy a car on a loan, you have to deduce it from tax in one batch (as you now own a car). edit: it's also part of your assets with has a set of ramifications
- if you lease it, you can deduce the montly payments (as you don't own the car). note that in the case of leasing the offering company can request the car back after the leasing ended or if they so whish sell it to you for a small price
[0] http://www.teslamotors.com/en_EU/about/press/releases/tesla-...
In that market assuming that tesla would be in the best emissions category, I'd expect them to do really well.
On the other hand, Tesla has better getting their supercharger network ready before the sales catch up, the other way around would be bad for the brand. And seeing supercharger on the roadside when going to fill one's tank can get people thinking, given gas price.
Many luxury buyers have no interest whatsoever in electrics. buyers of Rolls are one such type of buyer. When Rolls trotted out an all electric and took it across the world owners of existing Rolls were not interested. Europe does produce quite a few 100k cars but they tend to be performance exotics, last I checked the main market is much further down stream and for much much smaller cars than the S (which is big even in the US)
Most of my observations are from France, since it's where I live, but it should be correct for Germany, Spain, UK at least.
Plus :
* shorter distances
* higher gas price in EU than US
Minus :
* people usually commute by public transportation. In big cities, they don't even own a car. There is no place to park it, and it's kinda useless, since it take longer to go somewhere by car than by public transport.
* For medium distance (100~1000 km), people use both car and train. It's maybe 50/50, depending on the need of car at destination. You are always more independent by car, but by train you arrive quicker, and rested (a good rail network helping).
* On the 'social' side of things, the car ownership is not a thing the way it is in america (or is it a generation thing / Hollywood exaggeration, I don't know). European young adult buy a car when they need one, not as soon as possible to show they can support themselves.
RE: "* On the 'social' side of things, the car ownership is not a thing the way it is in america (or is it a generation thing / Hollywood exaggeration, I don't know). European young adult buy a car when they need one, not as soon as possible to show they can support themselves."
This used to be the case, but both car ownership and young adults obtaining driver's licenses has been on the decline for the last decade.
EDIT: LINKS! Because data.
http://www.theatlanticcities.com/commute/2012/10/end-car-own...
http://www.thedailybeast.com/articles/2013/07/05/young-ameri...
http://www.nytimes.com/2013/06/30/sunday-review/the-end-of-c...
In 2013, there were 12 million¹ vehicles registered in the EU out of 733 million people. And in the U.S. there were 15 million² sales out of 315 million people.
So it looks like Europe is buying cars at about a third the rate of Americans.
¹ http://www.nytimes.com/2014/01/17/business/international/car...
Also, when you look graph ², you can wonder how much of that is due to recession.
(found at random via google search, so I don't know how trustable it is, but seems legit. : http://www.calculatedriskblog.com/2011_12_01_archive.html )
¹ http://en.wikipedia.org/wiki/European_Union
² http://2.bp.blogspot.com/-gzzddTbQ7Mg/TtfoT07ehTI/AAAAAAAALe... (via ³)
³ http://www.calculatedriskblog.com/2011_12_01_archive.html
Nonetheless, your point is still valid, European buy less car per person.
Texas is roughly similar size as France.
http://mapfight.appspot.com/texas-vs-fr/texas-us-france-size...
Given the fact that average distances in Europe tend to be shorter will likely mean the majority of EV owners (e.g. commuters) will simply charge up at home and rarely need to use a supercharger. Having a supercharger nearby sweetens the deal.
Also, petrol prices are so much higher here, so the economic case for owning an EV is even stronger. For example, where I live it's about €1.49/liter of petrol, which is something in the region of $8.20/US Gallon if I'm doing the conversions correctly. So the payback period would be quicker over here (versus regular new car), plus there's likely to be tax incentives to purchase EVs also. Another plus would be strong support instead of the situation with the dealer network in the US.
I hope Tesla can hit their goal of a low cost EV (€30k-40k), they would dominate the budget car market so quickly if they can deliver at that price, and decent build quality. It would force the big european car makers to complete, which would bring great competition in the lower priced EV segment.
Combustion taxes makes sense if it's only used by transportation means, but that is not the case of electric energy. You could tax at the plug/socket level, but that's probably something that will be easy to tamper with.
There could always be something fancy such as remotely tracking the vehicles, but that will open a can of privacy worms.
The only viable option is to do tolls. Not necessarily representative of actual use, but a good enough approximation of use.
What is funny is that much of the benefit of an EV is effectively they are a rolling tax-avoidance scheme - in many cases you actually get subsidised for the purchase. The cost-to-run figures rely heavily on the lack of taxation to work out better - and this is even more so in highly-taxing regions like most European countries.
This is obviously not sustainable once larger volumes of vehicles start to appear on the road.
Of course it would make me happy if EVs became popular and avoided getting loaded down with all the other taxes that vehicles currently attract. Because then it would raise the question why all transportation is taxed so heavily.
I know I am dreaming, though. EVs will end up just as taxed as every other vehicle on the road.
[There are other low cost models from Smart, Renault, Peugeot/Citroen etc.]
However, I wouldn't describe E30k as "budget"! I might be tempted by an ex-dealer secondhand Leaf at £10-£15k: http://www.autotrader.co.uk/used-cars/nissan/leaf
Eh, the market wasn't ready for a very expensive SSD-only laptop, or a $500 touch-only phone, or a bigger phone called a tablet.
The market "not being ready" didn't hurt any of those things... Skate to where the puck is going, not where it is now.
I basically can't own a Tesla (even though I would like to!) as I would never be able to charge it.
EDIT: The electrical nerd in me had to see if someone has done this before, and yes, it would look like this: http://www.teslamotorsclub.com/showthread.php/19974-NEMA-14-...
NEMA-14-50 is the kind of outlet used by RVs and Campers, so putting one outside is pretty much a solved problem.
Though as other commenter have mentioned, actually getting a parking space outside your house may be the biggest challenge!
What's the solution to this? Maybe municipal EV charging networks or people charging their cars while they're at work during the day? And if you have a charger at work, trying not to drive too far over the weekend until charging stations become more widespread?
Also, there may not be any available even then. Certain areas in europe, in particular, are not architected for vehicle co-habitation with residential real estate in urban centers. So, by all means you can own a Tesla for your country home. But it may be rather impractical for your town-house. Even in NYC, its quite normal for people who own cars to keep them garaged off-stite. Athough, presumably, this is less of an issue as over time professional parking storage businesses could make a nice secondary income stream by charging a "convenience fee" to Tesla owners. Maybe 100 to 200 a month, maybe a whole lot more more. This type of fee is what they charge currently for a Range Rover or other SUV.
With batteries being the constraining cost I do not see how they are going to have a low end car with any real range beyond 100 or so. I just don't see the math.
I am seeing Leafs popping up all over, they may have hit their price threshold for that to occur in my area (US). It fits the commute profile of a large number of people, I would suspect that is true for those here.
Apparently there is already charging network http://elmo.ee/laadimispunktide-vorgustik/ (compatible thou? I doubt)
And you can get up to 18 000 euros backing from goverment when buying electric car. (http://translate.google.com/translate?hl=et&sl=et&tl=en&u=ht...)
Interesting map of UK charging points: http://www.nextgreencar.com/electric-cars/charging-points.ph...
Or you just need to live very close to one of the few charging points that do exist. There's one about 30 yards from my front door in London, quite cool if you actually need a car here...
Tangential but relevant here: "15 Facts That Reveal The Utter Insanity Of Britain’s Housing Market" (http://www.buzzfeed.com/dlknowles/britains-dysfunctional-pro...)
Indeed: per Edward Glaeser's book The Triumph of the City, denser cities are much more environmentally friendly than suburbs, exurbs, or rural areas.
Everyone has to live somewhere.
While it is true there are some limitations on building up in central London, for example, vast areas of London is not built up to anywhere near the legal limits. As we see, as there are massive amounts of building projects in Central London aiming to increase density. Over the last ten years, for example, large parts of the Thames have seen buildings of 10+ stories going up next to the river on old industrial sites, with many towers of 20+ stories.
As for the green belt... Croydon, where I live, is out in zone 5, bordering the green belt. It's one of the greenest boroughs in London, and also one of the largest (5th, after Bromley, Hillingdon, Havering and Barnet). Yet it also have large industrial areas, a large business district with substantial space for re-development, and several empty plots cleared for re-development. Space is not the limiting factor for developers here. In fact, there is space on vacant plots immediately adjacent to the main railway station for many thousands of new flats, several of which have planning permission.
We also have massive areas of 1930's terraced houses, on plots of about 100-200 m^2, and total liveable area of about 70-100m^2 over two floors. There's massive room for increasing density there just by building 4-8 story buildings. There, certainly, there's lots of room for streamlining the planning process. But hardly anyone are applying for smaller projects like that.
Typical new developments in Croydon are 20 floors or above, with one 44 floor tower going up, planning applications going in for a combination of a 16 and 31 floor tower next to the station, planning permissions near being granted for a range of buildings from about 10 to 30 floors next to the station, a major mixed project including other towers in the same range have had permission for years. And there are a number of other similar projects.
The thing is, this is not cheap, nor is it fast, and furthermore: It takes a lot of time to fill these buildings in the current economy, which has also slowed various of the building projects that does have permission. Altitude 25 - one of our existing 25 floor buildings, is still not sold out after several years.
There's no reason to go into the green belt when there are such massive amounts of land available to build on that is still under-developed.
More importantly, though: It's easy to fantasise about increasing density, but increased density has massive societal repercussions that someone need to pay for:
- You need more schools. Croydon is already struggling to handle the increase in primary school demands from the new development that is happening. My son goes to a new academy which, when full, will take 750 students. The current classes are full, and all the other nearby schools are near capacity again, though, despite adding classrooms and increasing students per class.
- You need more hospitals. Croydon's biggest hospital is near capacity. Increase density much, and massive investment will need to happen to expand hospital capacity.
- Policing, fire department, higher education, sanitation, etc. etc. - the investments needed costs a lot of money, and much of it needs to happen before significant housing capacity increases unless you want existing residents to go through years of pain while services catch up. Ultimately you may end up paying less per tax payer than before by increasing density, but in the meantime you may be looking at substantial capital investments to prepare.
- Transport. My street is one of the main roads connecting Croydon centre to one of the smaller town centres in the borough, and two of the busier train stations. It is already congested during rush hour, and buses are full. Increase density more, and substantial investments would be needed in improving transport, or you'd cause massive issued for tens of thousands of residents. You won't get more people onto the buses withought buying more buses and adding more drivers. The biggest train station is already being massively overhauled, because it is at capacity and additional highrises nearby will push it way above capacity from additional commuters. It is already one of the busiest stations in England, and a chokepoint for large parts of the train traffic from parts of the South coast to central London. They've set aside space for two extra tracks to terminate, but where would the trains go? The train junctions North of East Croydon are running at capacity most of the day, and large parts of the track is running at near capacity, and the areas next to them are built up almost all the way. The investments required to substantially increase rail capacity will run in the billions - someone needs to pay...
A lot of this is part of the planning process. You can not just massively increase density without addressing these issues, and how these things are going to be paid for.
One of the main reasons Tesla S' are this popular is that as a business owner you can get tax breaks for electric vehicles which can change the actual price you pay from €80.000 to ~€35.000...(Curious when that gets shut down by the government...)
For perspective, Kia sells TWENTY TIMES more cars in Europe than does Jeep. Kia's market share is ~2%.
I believe the difference in distances, city planning and fuel price play quite a role in consumer preference on the two sides of the ocean.