Tesla's production woes can't hurt the Model 3 (AutoComplete, Ep. 13)
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Tesla's production woes can't hurt the Model 3 (AutoComplete, Ep. 13)

Roadshow
[MUSIC] Welcome to Road Show's Auto Complete on our weekly look back at all that's going on in the world of automotive news. My name's Tim Stevens. I'm editor in chief of Road Show, and this week I've got a very special guest. Mr. Antone Goodwin, how are you Antone? I'm well, how are you, Tim? I'm doing great. So we've got a lot going on this week. We're gonna start by picking up on some Tesla news, but not necessarily directly related to model three updates, which was the big news last week. We actually got an update on model X production, It's not very good. Tesla announced this week that it's model X production fell well short of expectations in the first quarter of this year. The company made over 12,000 model S sedans, but only 2,400 model X SUV's. Tesla blamed the production shortfall on missing parts. And interestingly on Hubris, they're talking about those golden doors right? Yeah, pretty much. When they say missing parts, in Hubris that's probably code for the doors were too ambitious. They ran into a lot of issues getting started with those. A lot of technical issues getting the doors to work the way that they wanted them to work and so I'm pretty sure that's what What's loaded up. Yeah they said there just about six I think parks that were actually causing all the delays so everything else in the car was ready to roll except for those six parts. I have to imagine they're something to do with the door mechanism in the car. And the hubris is that definitely pointing to Musk's own personal desire to open that in an interesting and distinctive way. Do you think there's any chance they're going to release a model x in the future that just has Normal good old boring doors on it. I mean, personally I think sliding doors would probably be the best sorta compromise between that sort of, get close to the wall ability that they want out of the model Lex and a simpler mechanism that's already sorta proven in the industry. I mean the gull wing doors Definitely look cool, but I'm not 100% sure they actually add anything as far as functionality to the vehicle. And since one of the sort of, the things that people cite when they talk about their Tesla Model S and what's so great about it is that there's only a handful of moving parts. And that it's simple in its high-techness and I think that by going extremely complicated on the doors, it sort of gets away from what's good about any sort of Tesla vehicle. Yeah, they definitely added a lot of probably unnecessary complexity to make those doors work. They certainly are quite a bit of a talking point. If you want to impress some people, you can stand behind the car and hit the button on the remote, and have them fold themselves open. But they take a long time to open, and we've heard a lot of Reliability issues which takes us into our next story. Tesla this week sent an email to some of the people who've preordered their Tesla Model X, but actually haven't placed the formal order to get their cars. Tesla's ramping up production and sent a note to those people saying, The quality on the SUV has never been better. And then members of the management team including Mr. Musk himself have been personally inspecting cars as they role off a line. And there definitely some talk of the liability issues since the production quality issues. Panel gaps and things like that. And certainly motions around those doors. So it seems like while they are not getting production now, It also sounds like they are having issues getting people to convert those reservations into actual orders. Yeah I think that's sort of the good thing and the bad thing about the reservation system is that Well the good thing is you're not locked into it. But the bad thing for Tesla is you're not locked into it. You don't really have to ever convert that registration into an actual sale. So while it's good for sort of raising money up front, it doesn't necessarily mean, that like we see here, that the vehicle is going to be a huge success, even if Tesla can get the sort of production out. It will be interesting the see if we see the same sort of situation roll around with the Model 3 two years from now, or a year and a half from now, whether they actually get the same sort of success in converting the 100's of thousands of pre-orders into actual sales. Right. We don't really have hard numbers on conversions from Telsa themselves. But there are sites online that have been tracking in Model X preorders. And it's taken there's something on the order of three to five percent cancellations of Model X, which is quite low. But ultimately there are still something on the order of 20 to 30% of people who haven't converted those reservations. Into actual orders, and so they haven't paid the $5,000 to actually get the car moving, actually be able to pick the thing up, so I think people are just waiting to see how things are going to go. It is an interesting note, they're saying quality has never been better. That is a bit of a [INAUDIBLE] that the quality maybe wasn't so good in the first place, but I'd imagine, Antonia, we've seen a lot of preorders. When we came out of the event last week, they were just south of, I think, 200,00 preorders. Jus today, before we went to record this, Elon Musk tweeted that they've crossed the 325,000 preorder mark, reservation mark, I should say, for the model three. that's 325,000 people that have put down $100 dollar each to basically get a spot in line to buy the car. Tesla says this could result in $14 billion in implied future sales. How much of that do you think they will actually see? A significant amount of it. What will be interesting is I think they will see a lot of that in actual sales. Because I think that the goals they have set for the model 3 are deliverable. The challenges are going to be keeping people excited between now and late 2017 and, also, making sure that the rest of the industry doesn't catch up to them. That people like Nissan don't catch up to them with the next generation Leaf. That the Chevrolet Bolt doesn't turn out to be as good as everyone thinks it does. I will be.>> Yeah the Volt's definitely looking good and that is scheduled to go into production in the not too distant future, and I think everybody, if you had to place your money on which company can get the car to market more on a predictable way I think everybody would put their money on the general in that case, but certainly the Model Three is a more exciting car, and it's. [UNKNOWN] got a lot of people excited based on all the numbers we're seeing thus far but of 325 cars, now let's see if they built 12,000 model Ss in the first quarter of this year, we're talking years and years before they're gonna be able to fulfill all those orders nevermind all the cars they actually wanna sell on retail. Well, I think that sort of speaks to that, sort of, that very candid tweet from Elon Musk, where shortly after the Model 3 launch where they say they's gotta rethink production. Because I think they expected there to be a lot of people excited about it, but I don't really think they really expected these levels of excitement. But again, that sort of The dual edge sword of the eve of the preorder is that anybody can plunk down $1,000 to get in line. Whether or not their still in that line two years from now or whether they, like the model X Pre-orders. Just sit on them well into production. Well, that remains to be seen. Yeah. And of course Tesla bought the former NUMMI facility which was a joint venture between General Motors and Toyota there in Fremont. And that's Facility was at one point, producing around 400,000 cars a month. So obviously, Tesla has the room to be building a lot more cars, but of course, they didn't have to worry about battery packs and and all sorts of other complex things, that are thus far proving a little bit more slow and more difficult to manufacture. But Tesla of course is also making the big investment in their Gigafactory in Nevada. Which will be churning out batteries at record rates when that goes online, assuming that does go online. So, things are looking to improve. And certainly Tesla's going to be building a lot more cars in the future than they are now. But, you've gotta figure they're probably going to have some hiccups along the way. I don't know. What's your thinking? Do you think 2017 is a realistic estimate for the first Model 3? Or are we looking more like 2018 at this point? Well. The underpinnings of these Tesla vehicles are all very similar so I think that, for starters, the Model 3, at least on the surface, looks less ambitious than the Model X. It's got regular doors. [LAUGH] If anything, that sweeping glass roof is gonna be the trickiest Production element for them to sort of pull off in a way that makes people comfortable. When people come to me and talk to me about what do I think about the car, the concern they usually bring up first is that glass roof. Is that safe? Is that something that we should be worried about? But if they can do something as simple as that and it doesn't really seem like it's a tremendously mechanical Issue, it's just more of a production issue, and they can get the price I think. Yeah, and they've done a lot to simplify the interior of the car as well, with no dashboard for example, and that'll save them costs, and it should also save them some manufacturing headaches as well. Especially as they're talking about making models for US left hand drive, and for the UK and for Australia and Japan for right hand drive. And [UNKNOWN] wanna launch this care internationally in pretty short order. They've been taking preorders internationally already, so that'll help them along the way as well. But we'll see, time will tell. But they did get some fair blessings from the competition. Carlos Ghosn, CEO of Nissan said that the fact that so many people are willing to pay a down payment to get this car Which becomes available at the end of 2017 is a good sign. Finally good competition for EVs is picking up. Nissan was kind of at the forefront of the current generation of EVs with the Leaf. But the big question on my mind is how is Nissan going to compete. You mentioned earlier Antoine, that they've got a next generation Leaf coming with more range. But is that gonna be enough to really hold the tide against the Bolt and the Model 3 or does Nissan need something even better? Well what Tesla sort of maybe wittingly, maybe unwittingly done, is that they have shown that this many people are willing to pay this much for this range. They basically set A benchmark for the rest of the industry. And, so, that $35,000 price point, that 215 plus mile range is something that the rest of the industry can now look at and target. And, so Nissan can, if their battery technology's there, price the next generation Leaf below that. Capture a lot of those people who are. Not really Tesla zealots, but are just interested in buying an electric car that's affordable. Elon Musk said that the average transaction for a Tesla Model 3 is gonna be in the $45,000 range. And so those people who were really looking at that $35,000 magic number, or even thinking that's a little bit above my budget, but I'm willing to spend that to free myself. From you know gasoline, those people are you know now sort of low hanging fruit I think for the rest of the industry. Yeah I definitely think this is a case where new competition raises the level of the water for all the boats which is good news for everybody involved, [UNKNOWN] been playing in the water for a long time now. They haven't had a huge amount of success within the league but ultimately. One of the more compelling EV options on the market right now and whose gonna be increasing the range that's be making it even more compelling of course, but ultimately it still feels like kind of generation 1.0 technology versus the Bolt and the Model 3 which are pushing things forward so I think Nissan's gonna have to take a big step forward. But at this point they can sit back a little bit and see how the market reacts and then come out with something that Maybe it will be even better. All right there's a lot of talk about EVs. Let's talk about autonomy, we got a lot of stories on that front. And you may know him as Geo Hotz, but the former iPhone hacker named George Hotz this week got a pretty good chunk of change for his automotive startup called Comma.ai. The company just received $3.1 million in funding lead around by increase in Horowitz. But, Hoss wants to do is basically create an autonomous module that you can plug into your existing car and turn it into a self driving car or at least a semiautonomous car. It'll have to go on to car with electronic power steering, and also with some sort of active breaking system. But, Hoss says it wants to be able to sell this thing and get it into consumers hands for less than a $1,000. So imagine being able to plug something into your OBG2 port, and stick it to the inside of the windshield and read a book as you're driving to work. Anton, how feasible do you think this sort of technology is? Well, depends on how they are doing it. It could be a very labor intensive installation. Mm-hm. It could be something as simple as plugging into, like you said, the diagnostics port. The, Problem with that the later of those whose that the diagnostic poor technology is at best a lose collections of standards the beyond things like emissions automakers don't really have Have to, for example, put things into that diagnostic port that allow you to take over the braking or take control of the steering. As a matter of fact, with last year's sort of big hack scares and the auto makers sort of locking down their vehicles from external intervention, you would think that if If a future vehicles don't already support this as is, the alternative is that the automakers are probably actively pursuing making their systems more bulletproof. Making them less apt to accept an external input from a device like this. So it's a, it's a definitely It's an interesting technology but I think there's a very tricky road ahead for this. Yeah, it's pretty fascinating to me as well but I just can't imagine how this sort of system's gonna work without some amount of soldering involved which means it won't be the kind of thing you'll probably be doing yourself. And we haven't exactly seen a lot of success lately for after market head units and things like that even though people want to add enter it out on Carplay to their cars This just seems like another step of complexity that makes me wonder if people are really going to be interested in a system like this and whether that's actually the endgame here or if this is kind of the startup that George is positioning to be acquired by some manufacturer and have their technology sucked in.>>Yeah because right now we're sort of in a weird middle ground the vehicles that Conceivably this could work with, would have to be, of a generation that have the ability to have electronic power steering, autonomous braking, but we're very rapidly approaching a generation where autonomous emergency braking will be standard. Where auto makers will be offering their own sort of auto pilot systems. So there's like a very small generation of cars that are cutting edge now but by the time this technology reaches the market it'll probably just be easier to buy a new car with them on it. Certainly a lot easier. Maybe not cheaper, but probably more reliable as well, but we'll find out. Definitely, it's interesting research and certainly a more exciting area of intrigue and current mobility. We've got a lot more updates on Thomas cars coming after the break. We're also gonna talk about some features coming up the Road Show. And Antone, I want to ask you about the Audi A3 [UNKNOWN] reviews as well, but we'll be back. Right after this break. [MUSIC] [BLANK_AUDIO] [MUSIC] Welcome back to Road Show Auto Complete. We're giving you a run down On the weekend automotive news, but I also wanna give you a little bit of a key into some of the great stuff we have going on the site this week. We have a deep dive on the Chevy Bolt EV power train system, not the Volt. Andrew Krok went to speak with some of the engineers at General Motors to get all the details on the battery pack and the motor is in that car. We've also got a review of the Tesla Model S 90D, the latest generation of that car. And Antuan, you spent some time in the A3 e-tron, which is a car we've been waiting to get our hands on for a long time. Can you give us some of your thoughts on that guy? Yeah, well the most interesting thing for me is that for this generation of the Audio A3 Well, the E-tron is the only way for us to get the hatchback version here in the United States. So if you were a fan of the A3, interested in the latest generation of the technology that's in that car, but disappointed to see that the sedan version was the only one to come to us last year. Well, here is your chance to get the hatchback. The E-tron powertrain is actually pretty good. It's got that 31 mile range which is Enough for most people sort of commuting needs, and it charges up relatively quickly when you plug it up to a 240 volt source. My biggest point of hesitation is that for the amount of money you spend on it you could buy a Chevy Volt and still have a nice chunk of change left over to buy something nice. Yeah, I was surprised at the options packages, and how much that car comes down to. Especially if you want some of the driver assistance features. We were talking about upper $40,000 range, right? Yep, it was upper $40,000 range as equipped. And it starts just under 40. For that amount of money You can fully load up a Chevrolet Volt, have 50 miles range, have maybe not the same level of driver aid technology. But definitely a much more efficient vehicle. Probably a more spacious vehicle. And, like I said, you'll have money to pay for fuel and charging. In addition to spending less overall so. It might help you tide the time until your model three deposit pays out too. [CROSSTALK] Yeah. We'll see. [LAUGH] You put a couple of model three deposits down. Yeah, there you go. All right, so that review and a lot more on RoadShow available this week at the Roadshow.com, so make sure to check it out. But now let's get back to the news, and more news on the autonomy front. Pick up the autonomy scene with news that Mitsubishi Electric, which is not the same company that makes cars, by the way, wants to use its missile guidance technology to improve autonomous cars. Basically they're talking about some of the technology that they use in their air missiles which are sold to the Japanese defensive force To make their autonomous cars better. Or to basically license that technology to other manufacturers. One of their engineers said, all we have to do is put together the components that we all ready have, none of our competitors have such a wide array of capabilities. Do you think, Antoine, this will make anybody nervous to have missile guiding systems built into their cars? I mean maybe that's not something that the consumer really When you go to the Mitsubishi dealership to buy your self driving i-MiEV, or whatever, maybe that's not in a bullet pointed. I think, I can imagine Japanese consumers getting on board with the idea off putting keels on the side of their car, like little Prius silhouettes, on the side of their car. I think that would be pretty sweet. Yeah, actually I think it would be interesting if Mitsubishi. They're a big conglomerate, so maybe some of their dryer technology can make it's way into the car and television technology. So let's just, why stop at missiles? Absolutely, it makes a lot of sense to pull from all the [UNKNOWN] in your company. So but it does make sense. We're basically talking about the same sort of stuff, talking about radar, lidar, camera imaging systems, and of course Processing systems that have to work in all conditions so it makes sense to pull that in, but ultimately they say they want to have this technology ready for licensing by 2020 which is kind of the inflection point that a lot of companies are pointing to as the year when all this stuff is gonna come together. But Volvo though has an interesting lead. They're actually saying they're gonna have 100 cars On the road in Gothenburg in their home city, Sweden, this year that would be fully autonomous on a highway at least. But this week, they said that they wanna have 100 cars available in China as well and then not to use in the future. They're currently looking at cities in China to figure out which one would be the most appropriate for them to have since [INAUDIBLE] test program there. But once they do that, basically what they want to do is install some vehicle to vehicle and vehicle to infrastructure systems in that city and basically enable 100 Volvos in whatever city it is to drive themselves on the highway. This would be the second such program, and I think it's pretty encouraging news to see that these sorts of programs are actually spreading out a little bit more. Right, right, and it's almost a no-brainer considering that Volvo is owned by Geely The Chinese company. But it's interesting and that Volvo is already sort of pledge to make this sort of semi-autonomous technology standard on its vehicles sold here in the United States. So it's hopeful for them to bring a program over to this side of the water at some point in the near future. But it's also interesting because. As I understand it the Chinese driving conditions are unique. It's sort of an interesting environment to drive in, so it'll probably be an interesting challenge for their software, for their sensors and whatnot. And I think that they'll see, hopefully we'll see some good stuff come out of this. interesting being a bit of a euphemism for chaotic, I think. Gridlocked. I would rather be a little politically correct. Yes, it's definitely going to be an interesting environment. But certainly it's a huge market for Volvo, and as you mentioned, it's a parent company line, so it's certainly a lot of incentive there too. But it's great. I hope that they have a program in the US in the not so distant future too. But again, these systems only work on highways right now but Volvo will be the first to get a fully autonomous car on the road so that's good news. They also seems inevitable that autonomous racing is coming in the not too distant future and Roborace wants to be the first series to make it happen. This week that series announced that Nvidia will be the partner to provide the brain power for it's cars. They'll be running the drive PX2 computers, the same one's that we saw unveiled at CES earlier this year. And they'll be taking inputs from lidar radar, cameras and other sensors. The car is going to be pretty similar to what we see in the form of the E series right now, the fully electric cars that can only go about half way through the race and needs to change cars about half way through. So they'll be similar in technology but minus one big thing which will be the drivers. Ed would you go see a race where there's no human beings in it? Yeah, my first gut reaction is you're taking the The most interesting part, I guess the most important part of a race car out, being the driver, but you're actually just replacing it with a computer, but it will be interesting to see, if nothing else, much like how Motorsports technically often makes its way into the cars that we drive on the road. You hear BMW always talking about How their M3 or whatever is built on race technology. Right. I think again, much like with Volvo and their sort of autonomous testing in China, racing is hard. And it's really hard for computers to do. And so the sort of challenges that the sort of computers will have to deal with Would be interesting to see how they sort of reflect on to the road. As far as making self driving cars safer, maybe not more fun to drive. I don't think that's really the point of this. But, I think it'll be interesting to see how the [INAUDIBLE] pushes the technology. Even if I don't think I'd be that interested in watching computers race. Yeah, as a Formula One fan, I think I can safely say that robots have replaced the drivers for a long time now. So might as well just take them out of the cars altogether. [LAUGH] But I look at the engineering challenge, I think this is a pretty exciting notion that software engineers can really be the heroes here where they're thinking of new and innovative solutions to passing strategies, and What to do with the competitor crashes in front of you or debris on the track that kind of thing. And of course managing the charge of these cars will be an important thing to as I mentioned the cars don't have enough battery power to go through an entire race. So managing and Going when to change will be an important thing to. So, there's a lot of strategy involve then ultimately that's been most exciting about Formula 1 for the past few years. There's been strategy in this kind of will take that to the next level. So, I'm excited to see what happens here and the cars I mean the colors look awesome. They look the most, they look like something out of F-Zero and faintly futuristic which I think will bring a lot of people to the table in the first place. Yeah, it's interesting when you don't have to design a place for the driver to go, what you can do with the shape of the vehicle. [LAUGH] It's pretty much gonna make it a missile on wheels. it does exactly what it looks likely, looks pretty cool, so hopefully we will see you soon in not too distant future the material is called rubber race and it will be public it will be partner series to the formally e series. she is having some pretty good successes this year which is, which is good to see. Alright we can't go a week without giving some kind of an update on diesel gates and the march 24th deadline was basically the Kind of the line the same that was drawn for Volkswagen to provide some kind of a solution to their US woes. That deadline came and went. There was a month delay given until April 21st. And now EPA administrator Gina McCarthy is expressing doubt that Volkswagen is gonna have any solution in time for that date either. So we may go another month with no actual solutions, no proposed fixes in place. Antwon, do you think the end is in sight for diesel gate or do we still got a ways to go? I don't think we'll ever hear the end of it. I mean, it's gonna be a big problem to fix. It seems like every week someone else is sort of getting involved in it. Last week we were talking about the SEC getting involved in it and I think it's also gonna be one of those things that for years will here enthusiasts and buyers Pointing back to going like, yeah, remember Volkswagen had problems with their vehicles back in, and then Audi, so it will be interesting. Yeah, yeah, it's definitely a big concern, and you have to imagine that there's going to be some sort of exemption that's written in the rule books for these cars so they can continue to be used in the future even if they don't pass emissions regulations and It's a big, big mess. And certainly there are a lot of consumers out there with a lot of doubts. So if that's you, if you have a Volkswagen diesel and you're kinda hanging in there waiting to see what happens, sorry, you're gonna have to be patient for a little bit longer. I wish we had some better news for you. But it's kind of out of our hands, I'm sorry to say. And finally this week, if you've been dreaming of Corvette with room for a couple of labradors, you're gonna have to wait a bit longer. But if you do have dogs that are more beagle sized, you might be in luck. Callaway, this week, promised that they are going to start building what it's calling the Corvette era wagon. Especially a conversion that can be applying to any C7 Corvettes in the current generation Corvette. And it basically turns it into a shooting break kind of thing with a hatchback on the rear. It can be reversed which is interesting. It's built of carbon fiber so it shouldn't weigh that much. While they haven't announced pricing yet, they'll be putting them on cars in there California and there Connecticut work station is sometime before the end of the year. Antoine [UNKNOWN], what do you think? And it looks awesome. While I'm looking at the photos now, and I'm just kinda thinking, if it's just like a hard top to the snap on. It kinda look like they're after placed everything from the rear, the rear rocker that fenders to the roof and everything. But the Corvette were being Designed as a convertible. It doesn't seem like it would be that tricky to do. But it's a gorgeous looking car, I'll give them that. Yeah, I think it looks fantastic too. I'm pretty excited to see these things on the road. They probably won't sell more than a couple of dozen at the most. It's not gonna be cheap either. We're talking custom carbon fiber body work. And as you mentioned the installation process is probably going to be a little bit Little bit difficult, but they did mention it's reversible, so that means they won't be cutting into the bodywork or anything like that. So that is interesting, but yeah, I think it looks great, especially if you are a track day fiend, then maybe you could fit some tires in the back. That'd be good news, too. You could probably fit one tire back there. [LAUGH] Okay, yeah, those are Those are pretty wide tires you're talking about, Dakota, that's fair enough. All right and that's our weekend news on Autocomplete. Thanks very much for tuning in and joining us as ever. We'll be back next week with another episode of Autocomplete but until then, please do check us out at the Roadshow.com for all the latest and greatest in the automotive world. Thanks again for tuning in, We'll see you next week.

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