AD #2464 – ADAS Drives Up Repair Costs, OTA Needed to Boost EV Sales, Tesla Pops the Champagne Corks

October 25th, 2018 at 11:35am

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Runtime: 6:25

0:30 Tesla Pops the Champagne Corks
1:10 Ford Profit Plummets
1:40 Tesla Stock Up, Ford Down
2:32 Consumer Reports Drops Tesla Recommendation
3:16 ADAS Drives Up Repair Costs
4:36 OTA Needed to Boost EV Sales
5:27 Gestamp Opens Factory in Japan

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37 Comments to “AD #2464 – ADAS Drives Up Repair Costs, OTA Needed to Boost EV Sales, Tesla Pops the Champagne Corks”

  1. Chuck Grenci Says:

    So I get to eat some “crow” today after suggesting that Tesla will/might offer more excuses about why they didn’t make a profit in Q3. Well, they did make that profit, however, almost in that same sentence they offered that Q4 and Q1 next year may see that vanish (profit) as bonds will be up for payment putting them, perhaps, back in the red forthcoming. Too soon to tell, so I guess we’ll wait and see.

  2. Barry Says:

    Sad to hear that there’s no Afterhours today. I truly enjoy watching it and learning from you and all your guests. Just glad to know you’ll be on next week.

  3. Lambo2015 Says:

    The real sign will be once Tesla fills all the back orders. They will continue to have a steady stream of sales and money coming in until those orders are filled. I wonder if there are orders still coming in for model 3′s

  4. Steve W Says:

    Tesla= Smoke & Mirrors!

  5. phred Says:

    For EVs the ovr the air upgrades will not really encourage people to keep their car past 10 years as the “newer car” on the market will look “modern” and have better specs than the older model. Give the EV a range boost after 5 years of ownership and maybe they will reconsider. BUT,,, the “industry wants the owner to trade in or sell the “Older model” and but the newer model. This was the big sea change in auto marketing in the late 20′s to sell more cars. The annual model “change”.

    Why not walk “us” through the timeline” for this Detroit Marketing concept????

  6. Kit Gerhart Says:

    5 The mid 1950s to late 1960s was the big time of annual model changes in car appearance. Now, people buy new cars to get the latest electronic gadgets.

    As far as styling tweaks, the “refreshes” often seem to make the cars look worse, rather than better. To me, that is certainly the case with the front of the 2019 Camaro.

  7. Kit Gerhart Says:

    1 If they can keep selling 20,000 Model 3s a month for ~$55-60K, that will help a lot. When the pipeline is filled with those buyers, and they need to sell the promised $35K model 3s, it will be tougher. Now, according to the Tesla web site, you can order a “mid-range” Model 3 for $46K, with a $2.5K deposit, promised delivery in 6-10 weeks.

  8. Lex Says:

    The ADAS systems employed by GM and Subaru which are mounted in the front windshield behind the rearview mirror should not be damaged in the event of a minor collision.
    Systems that have cameras mounted in the front grill of a vehicle should be moved out of harms way. This will be a major consideration when I make my next new car purchase. I therefore hope that Honda/Acura move there system from behind the front grill logo and up out of harms way.

  9. GM Veteran Says:

    I agree with Kit. No one knows what the unit demand per year will be for the Model 3 once the backlog is filled. With more EV choices on the market in the next year or two, its hard to imagine Tesla continuing the production volume and sales of the Model 3 that they are enjoying right now.

    Along with the decline in revenue from a lower level of Model 3 sales, Tesla will have big development and pre-production expense for the Semi, the Model E and the Pickup.

    Still waiting to hear the announcement of where the Semi will be built. If they are going to deliver trucks in 2019, that should already be under construction. Hmmmm, another hastily stated deadline that will be missed?

  10. Lex Says:

    Now that Wall Street is predicting that Ford stock will drop below $7.00 per share maybe Elon Musk should see if Ford would be willing to sell the Model “E” trademark to Tesla?

  11. Kevin Anderson Says:

    Question for John: as gasoline sales decline due to EVs, I expect governments to start taxing electricity for cars. Can you tell us if EVs would still be competitive with gas cars if both were taxed at the rate gas is now?

  12. Lex Says:

    If Ford would be willing to sell the Model “E” trademark to Tesla then Tesla’s vehicles lineup would be the Model S, E, X, Y (in the pipeline)!

  13. Larry D. Says:

    4 GM CRUISE is INDEED “smoke and Mirrors”, Steverino. And Wall Street is catching up on it.

    Get a clue. OR are you one of these poor souls GM is paying to post favorable comments in social media?

  14. Bob Wilson Says:

    Actually the proposed EV tax works perfectly fine for gas cars by reducing or eliminating the gasoline tax. The Federal and State governments are assured of a steady, income for road projects and the gasoline cars get some much needed relief.

  15. Larry D. Says:

    10 Related to your post, here is an equation for you and all the rest in this forum:

    Tesla = Ford plus FCA. (approximately).

    Solution: Everybody: see the two cut and pastes below, read them CAREFULLY. Maybe you will learn something, since I believe I am the only one (besides Bob Wilson) in the group that carefully read the Tesla details link posted here yesterday

    “…Now might be the time for Tesla to keep one eye out for an opportunity to buy Ford. Tesla’s market cap is 54 billion. Ford’s is 33 billion. I can see Ford falling to 25 billion. Making a tender offer of Tesla stock may let Telsa acquire Ford for a stock dilution of about 1/3 with Tesla gaining control. Ford has profitable trucks, but virtually no cars and, most distressingly, nothing in the pipeline. Ford seems to have lost direction regarding electric vehicles. Ford has underused manufacturing plants. Tesla has a can-do mentality, but sometimes doesn’t have the means to carry out the ambitious projects. Ford seems to have no ambition, but does have a solid engineering pedigree. The Ford family might actually admire Musk for doing what Henry Ford did. I’m sure “Ford” would have to be in the combined company’s name. PLUS, if Tesla buys Ford, I think the company could sell another 200,000 Ford electric vehicles (that look A LOT like Tesla Model 3s) with 7,500 tax credit.”

    and then read this other comment:

    “..Note the FCA market cap is only 23 billion, but there are so many issues with the company that I wouldn’t think of buying it. ..”

    Now do the math. Do you see why my equation above is correct? LOL

    PS I am STUNNED at all the negative spin on the STELLAR news. Go back for important details in yesterday’s show’s comments posted in the evening, after detailed study of the news.

  16. Larry D. Says:

    https://www.thetruthaboutcars.com/2018/10/more-evidence-that-self-driving-cars-are-on-a-road-to-nowhere/

    here is the full article on the GM Cruise real “SMOKE AND MIRRORS”!

    Study it if you want to know “The Truth about Cars”. This is the site that had a GM “Death watch” for years every day until GM went broke in 2008, and nobody was paying attention to it, BTW.

  17. Kit Gerhart Says:

    15. They could put a big blue oval in the nose of the rebadged Model 3, to fill up that empty space.

  18. Chuck Grenci Says:

    I have a problem calling Tesla news as stellar; positive, yes but not stellar. I was reading elsewhere some of the advisors were saying about Tesla stock. I don’t remember the exact number of recommendations but I would say 40% sell recommendation, 30% hold and 40% buy. That certainly sounds arbitrary on the news of today’s reporting.

  19. Chuck Grenci Says:

    Make that 20% hold; fat fingers (again).

  20. Kit Gerhart Says:

    18 Getting a significant number of Model 3s out the door was a good thing for Tesla, and showed up in the numbers. Time will tell how things go, moving forward.

  21. Kit Gerhart Says:

    Duesenberg has been mentioned here, and there is an interesting history. The “two notches above a Rolls-Royce” model J was mainly a result of E. L. Cord. Cord made cars in the 30s, front drivers, which were noted for innovative styling. Cord bought a bunch of companies, including Duesenberg and Auburn car companies, but also Lycoming, Stinson, and others. Lycoming built the twin overhead cam straight 8 engines used in the Duesenberg J. The Cord empire collapsed in 1937 or so. It’s anyone’s guess how it would have turned out, had there not been the great depression. The Auburn-Cord-Duesenberg museum, in Auburn, Indiana, is worth a visit for any car nut, especially those interested in the “classic” era of the 1930s.

  22. WineGeek Says:

    John, ADAS may be expensive to fix, but how many fewer accidents occur when cars are equipped with these ADAS. I would bet that if the research was done the overall costs associated with ADAS is actually less for the insurance companies than for non-ADAS equipped cars. I can guarantee that you will never get that information from the insurance industry otherwise they wouldn’t be able to say “all this new ADAS stuff is expensive so we need to raise the rates to cover repairs… They will always cry poverty even if their profits increase.

  23. w l simpson Says:

    Re:ACD–Kit—During WW2, when I was learning the trade, Dad took on major engine rebuild of Auburn Speedster engine ( had a mint body) Took 3 of us to handle the crank . amazing that all engine parts were readily available from ACD. Got to test drive when rebuild was done, unforgettable thrill for a 14 yr old even if he was born with a wrench in his hand

  24. Bobby T Says:

    21,Kit, the ACD is a great museum, including the building. I just came back from the Gilmore Museum today. They will soon have a Duesenberg exhibit ( they were still setting it up). They also have a nice lineup of 1934 Auburn V12s and a few Cords. Another great museum and probably only a few hours north of the ACD.

  25. Kit Gerhart Says:

    24 I’ve never been to the Gilmore museum, but should go sometime.

    The art deco ACD Museum building was the Auburn factory showroom. Yep, the building is almost as cool as what’s in it.

  26. Kit Gerhart Says:

    23 Quite an experience you had. When I was a kid in the ’50s, it was fairly common to see at Auburn or Cord, and occasionally a Duesenberg in a local car show in Indiana. Now, I doubt that many of them ever leave museums, and run under their own power.

  27. Kit Gerhart Says:

    According to google maps, the Gilmore museum is only 3 hours, 7 minutes from Kokomo, IN, where I usually spend summers. I need to go next summer.

  28. MERKUR DRIVER Says:

    27) Definitely go Kit. The Gilmore is a very relaxing venue. You can spend the entire day there as it is so large. If you like them on FaceBook, you will get information on days that they offer classic car rides to visitors. It is one thing to see these classic cars, it is quite another to actually ride in them!

  29. Kit Gerhart Says:

    28 Thanks for info.

  30. Larry D. Says:

    4 The Fake News Channel claims that most of the Tesla Model 3s have been bought by George Soros. Do you have any independent confirmation for this?

    9 the backlog is enormous, despite the significant 90,000 or so cancellations. There are deposits for 455,000 Tesla 3s, and so far ALL the production has been delivered to US customers ONLY. Not one unit to the EV Champion China, or even to all of Europe (they will get theirs in early 2019). So EVEN at 20,000 units a month, the demand reaches as far as the eye can see.

    9 very, very few of the 90,000 cancellations are ever hoped to result in Bolt, Leaf, or even BMW i3 Sales. These EVs just don’t have what it takes, period.

    Stay tuned next Thursday for the October sales. Not so much for Tesla sales, which should be huge, but to see the PAIN they inflicted to their rivals, and especially the BMW 3 series.

    The Germans will not have for sales serious Tesla rivals for years still. AND when they do (porsche) they will be so expensive, they will only compete with the “Ludicrous” tesla S.

  31. Larry D. Says:

    18 We aim to please. Let me know what you consider “Stellar” Tesla sales/profits for the next quarter and I will let Elon know.

    19 Some Duesys were extremely expensive for their time. One was even named for its price, the “Twenty Grand”. $20,000 then was MILLIONS in today;s worthless dollars. Winston Churchill bought a new Rolls in the 1930s for a mere 2,000 Pounds. But the Pound was $8 then, so he paid about $16,000, less than the Duesy.

    Packard was more of a direct competitor to Rolls then. Duesys were far sportier and had huge HP by comparison.

    The Soviets had a license with Packard and also made their own luxury limos looking a lot like the Packards of the time. (However Lenin had an ancient Rolls Royce, as befits a man of the people and the working class.)

  32. Kit Gerhart Says:

    30. As I posted in #7, the Tesla web site says you can order a car now, and get delivery in 6-10 weeks. Does that mean all, or most of those 455,000 depositors are waiting to buy the promised $35K Model 3?

  33. Larry D. Says:

    https://www.autoblog.com/2018/10/25/mazda-volvo-buick-consumer-reports/

    John, you devoted a segment in this show to the problems of Tesla models shown in Consumer Reports, but I wonder if you took a look at the serious reliability issues of some of the rest of the industry.

    In the above article in Autoblog, my frequent criticisms of Chinese owned (and for some models, Chinese made) Volvo unreliability are verified.

    “Then there is Volvo, about which there is one word to sum up its woes: infotainment. Specifically, the new infotainment system shared by the XC60 and XC90 crossovers and S90 sedan. But with so much tied to the technology — it controls everything from heating and cooling, to navigation and entertainment — when it goes wrong, it can render the vehicle nearly unusable. Think of a car you can’t heat during the dead of winter, for instance. Owners of the XC90 also reported some issues with engine computer problems, exhaust leaks and harsh shifting from the transmission, Linkov said. “They have so many new systems that there’s a lot going on that they need to work out,” he said…”

    But GM, despite all the clobbering (and even one bamnkruptcy) and market share loss it suffered since the 80s, mainly for making, to quote Mary Barra herself, “Crappy Cars”, continues to have BIG reliability issues. And they were not about the Chinese made Buick Envision SUV, but the North Am made Enclave. Says COnsumer Reports:

    “…For Buick, the redesigned Enclave SUV earned a “Much Worse Than Average” rating after owners reported problems with the new nine-speed automatic transmission it shares with the Chevrolet Traverse as well as some issues with the climate system. There were issues with rough shifting, plus complaints about the torque converter that necessitated fixes to the computer or outright replacement. “Again, similar stuff that we saw with the Traverse: both first-year vehicles, similar powertrains,” LInkov said…”

  34. Larry D. Says:

    32 I have not seen any breakdown of the 455,000 waiting, but I’d give it less than 1% chance that ALL are waiting for the $35k version.

    First of all, I don’t know how many of the 455,000 are US and how many are reservations in the many, substantial, EV markets in the rest of the world, but I know that Europeans will NOT see any Tesla 3s before January 2019, and the Chinese don’t even have a date I know if.

    I know that at least until Jan 1, all Tesla 3 sold are sold to US depositors.

  35. Kit Gerhart Says:

    34 If a lot of those deposits are from outside the U.S., it might explain the ordering information on the web site. If the 6-10 week delivery claim can be considered real, anyone wanting a ~$50K Model 3 should just order it. They need a $2500 deposit. There is a long order agreement, and in most cases, the deposit would not be refundable, but if they actually build the car you want and get it to you in 6-10 weeks, you wouldn’t want a refund.

  36. Kit Gerhart Says:

    33 CR lists the trouble area for the Enclave as “transmission minor,” whatever that means. Hopefully, both for customers and GM, it is something software tweaking will fix. It is one of the transmissions jointly developed by GM and Ford.

  37. Stephen Says:

    OTR updates may not slow new car sales but as EVs age so will their battery. OTR may slow that degredation by improving efficiency with new software to control how the car works.
    As to Tesla- its more than one quarter that will show if Tesla is profitable. Lies, damned lies and statistics with magic accounting are still too common.
    Forget the Tesla big rig- Tesla can still make an impact with a Truck/Van and extra SUV to make cash from and fill in its product gaps.