Ford Spent $200,000 To Dissect a Limited-Edition Tesla Model X (bloomberg.com) 185
An anonymous reader writes: Ford Motor paid a sum of $199,950 ($55,000 more than the retail price) to buy one of the first sport utility vehicles made by Tesla Motors, reports Bloomberg, citing vehicle registration documents. The white Model X is a Founders Series with a vehicle identification number indicating it was the 64th one made at Tesla's factory in Fremont, California. The vehicle, with Michigan plates, has been spotted recently in the Detroit area. Automakers often buy cars made by competitors for road testing and for 'tear-downs' to reveal components and materials and how they're put together. But it's unusual to pay such a high price -- almost $212,000 after Michigan sales tax and title -- for such an early model.Well, this $200,000 could shave off hundreds of thousands of dollars in research and development.
Patents (Score:2)
And this is why we have the patent system
Re:Patents (Score:5, Informative)
Tesla opensourced them. Citation: https://www.teslamotors.com/bl... [teslamotors.com]
Re:Patents (Score:5, Insightful)
Thanks for posting that link...
Umm... My respect for Musk just went up a few degrees... yes, he is still self-interested, but I tend to believe him when he says:
Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis. By the same token, it means the market is enormous. Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the worldâ(TM)s factories every day.
It is rare that a wealthy person takes that long view...
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Not that there is anything wrong with that.....
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Not that there is anything wrong with that.....
Of course not... but it sounds like he is trying to balance self-interest with interest in all of society...
Imagine if Exxon tomorrow said, "we're going to invest half our profits into clean energy, because clearly there is no future in burning oil forever and if we don't get off our addiction, then we all suffer for it".
That too would impress the crap out of me.
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That is because currently there is no market for the extra lithium. No sane person is going to mine stuff that there is no market for. There is more than enough *KNOWN* reserves of lithium to make one billion 40kWh batteries.
Oh and for good measure there is an estimated 230 billion tonnes of the stuff in sea water. Given that the current price of lithium is not a major factor in the end price of Li batteries (I think like 6US per kg for the lithium and well over 100USD per kg for the finished product) and f
Re:Patents (Score:4, Informative)
Unfortunately, it looks like he's only talking about EV-related patents. I clicked that link hoping to find open-source plans (and ideally, source code) for retrofitting autopilot to my current car and was disappointed. : (
Not only cars (Score:5, Interesting)
After engineering, some of my friends went into IC design. There first few projects were rather painful.
They would sit in large halls where laid large sheets of competitors ICs. The competitor products were stripped apart, grinned few microns and each layer scanned into these large sheets.
There fresh out of college labor was in charge of then crawling over these large print outs and decoding the design.
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Re: Patents (Score:4, Interesting)
If Tesla had some patents, Ford can get some people to just read them.
Most patents explain how a technology works, but not how to make the product. When car companies tear down their competitors' products, they are looking more at how it's made than how it works.
What's surprising is that Ford is trying to figure out how a very expensive car was manufactured. Most of the time the challenge is trying to figure out how to make economy cars cheaper, since the profit margin is much smaller on those products.
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Not all patents are available.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Unusual? (Score:3)
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Ford spends 10 million a year in toilet paper.
That's no way to describe the fire wall in the Pinto.
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Ford spends 10 million a year in toilet paper.
That's because their company produces nothing but crap :)
How Much (Score:3)
I'm still unclear on WHY they paid so much over retail.
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I'm still unclear on WHY they paid so much over retail.
To get one of the first ones off the line.
Ford didn't buy it directly from Tesla, Ford bought it from the first owner who got it via referral promotion, then made a nice sum of profit in flipping it to Ford.
The $55K to Ford is trivial to get a few extra months of lead time in tearing it apart and testing it.
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Not to mention that Ford's just gonna write the whole thing off as a business expense. The income that was made and then spent to buy the car will be untaxed income - they'll even get to write off the expense for registering it, insuring it, and paying the State taxes on it. I'm actually kind of surprised that they paid State taxes - I'd think they'd have a tax exempt ID number on file with 'em.
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Re:How Much (Score:4, Insightful)
They probably spent more money doing the tear-down itself. $200k is the cost of one average employee for one year.
As they say, knowledge is power, and time is money. The faster they get hold of the vehicle, the more quickly they can utilize the information. Possibly getting the technology or their response to the technology into their product line a year sooner, for example.
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$200k is rounding error to someone like Ford. Just getting one idea that improved sales of just one of their vehicles by a percent would create profits that dwarf that.
Tear downs are very valuable. When I worked in the cellular power amplifier business a few years ago I found the tear downs of our competitors extremely useful, but not for the reasons you would initially suspect.
Our management was convinced we were state of the art, and the reason for losing out was due to bad engineering. Tear downs show
Wonder how much someone spent dissecting FordFocus (Score:2, Funny)
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I think a Dodge Aires would be a good target:
https://www.youtube.com/watch?... [youtube.com]
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Oh yeah? Well, I bid $250!
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How about 2015? http://www.consumerreports.org... [consumerreports.org]
Ford is not that bad (slightly below average), but the Asian brands still dominate. Fiat is last by a wide margin.
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Fiat is last by a wide margin.
How can you say such cruel things about Chrysler products?
Just today I saw a Dodge Discharge on the road and it looked okay.
There was a Dodge Wiper running along behind it cleaning up, of course.
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200K is chicken feed for Ford (Score:5, Interesting)
But these auto companies are notorious for penny pinching too. One of the Chrysler mini van tail gate latches were weak. A proposal to strengthen it was rejected because the additional cost of some 50 cents was deemed too high.
My brother consulted for Chrysler. The employees will get a beige phone with a blinking red light to show [google.com] there was pending voice mail. But contractors are not allowed that expensive phone. They get a phone without the light. Stupidly the phones were all rented from the telco, for ages, decade after decade. This was not in 1970s or 80s. It was in 1999 or so. They could have bought the whole damned phone, better phone for cheaper price. But still Chrysler rented these phones and saved money by denying the consultants the blinking red light.
In general, in all bureaucracies, once a precedent is set, it will be followed, come hell or high water, costs be damned. But getting the precedent set would be very difficult.
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That ^
$200K is lunch money and probably not even worth debating to Ford. Not that I know, but getting early access was probably more valuable to their business process than saving a few bucks.
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We used to spit out 1000+ vehicles per line per work-day.
Just a few 50 cent savings on different components, across that volume, quickly becomes real money.
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And each vehicle sells for enough that 50 cents to make a better quality product should be worth it. The fact that most companies don't is the reason why the average consumer is dissatisfied with almost everything they buy. Saving 50 cents times a half million is a lot of money, but it's still nothing compared to a recall or a customer who won't buy your car again.
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One of the Chrysler mini van tail gate latches were weak. A proposal to strengthen it was rejected because the additional cost of some 50 cents was deemed too high.
you think that's bad? They dropped the hemi (back in the day) to save five bucks. show of hands, who thinks "hemi" on the trunk is worth five bucks. they sure think so now
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Most people don't even know what "hemi" means or understand what the purpose is.
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It means you got suckered in by marketing.
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Comment removed (Score:5, Informative)
Re:its also about reducing liability (Score:5, Informative)
Tesla has open sourced [teslamotors.com] their patents so the liability should be very low.
Re:its also about reducing liability (Score:5, Insightful)
Tesla has issued a press release stating they have open sourced their patents. But open source isn't (so far as I am aware) a legal term of art, especially with regards to patent law. Nor is a press release a legal release. (Though it may establish intent.)
So, it's not clear to me at all that the patents are in fact open and free to the point where Ford etc... can spend billions of dollars free from the possibility of a lawsuit.
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Tesla has issued a press release stating they have open sourced their patents. But open source isn't (so far as I am aware) a legal term of art, especially with regards to patent law. Nor is a press release a legal release. (Though it may establish intent.)
Specifically, such a press release establishes promissory estoppel [thefreedictionary.com]. If you make a promise that you would reasonably expect would induce others to take some action, you cannot later retract that promise, even if the promise wasn't committed in any sort of formal contract.
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Simply saying it's "likely" is an understatement, since Ford started making at least one model of fully electric car that is still in their current lineup some time ago.
Re:its also about reducing liability (Score:5, Funny)
disclaimer: im an automotive engineer.
I believe by internet rules, that makes you opinion here worthless. You should go opine on a subject you've only read about.
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But... if he can make it into a car analogy, isn't it *always* correct?
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Chevrolet is an example of a company that tried to dance around the battery vehicle market and likely ended up frustrated enough to just add an engine to get around litigation with the Volt.
I find this unlikely, as the Volt was well along in design and had been a show car before the Tesla Roadster made it to production. Also, it beat the Tesla Model S to production by over 1 year. It was on the road about a month before the Leaf even. The Volt was one of the first (modern) production EVs. In fact, the story might be that Tesla and others tried to avoid breaching patents GM had created with the EV1, not the least of which was the acquisition of Ovonics patents for battery technology, way back
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Tesla does a good deal of spot welding on 5000 and 6000 Aluminum for their S and X. Do you think Ford is evaluating Tesla's joining methods for future Aluminum projects? (ie F-150 is 100% riveted, replacing some rivets to spot welds will shave weight and production costs) Hell, maybe they just want to see the friction stir weld on the battery tray.
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Well of course fords going to care about the X (Score:5, Insightful)
There are a number of reasons why ford would be very interested in the model X.
The model X is Tesla's 3rd time around in developing a pure EV car platform. There will be a lot of lessons learnt the hard way embedded in the design of the model X.
The model X is a SUV, playing right in Fords bread and butter market. The previous models where in the small sports car and then the luxury saloon car market. First one is almost absent from the ford lineup, and the second a fairly small part of what they do. The model X is a benchmark for any EV SUV's fords have in development. Ride quality, handling, real range, real performance etc. are all important things to compare against and difficult to get purely from specs. Also simply understanding how it compares to fords conventional and hybrid offerings is important to drive marketing and sales information in the short term.
So they buy 1 or 2 of these. Look at all aspects of it, and use this to drive marketing in the short term and product development long term.
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Re:It's unclear whether they chopped it up or not. (Score:5, Interesting)
One of the most important cases was when Compaq used one team to reverse-engineer the IBM PC BIOS in 1982 or so, then another team to take the documentation that the first team created in order to implement a new BIOS to the same specifications wtihout actually looking at the IBM product.
If Ford takes apart the Tesla, documents the kinds of welds, the kinds of materials, the kinds of battery chemistries, and a bunch of other relevant stuff, then passes that information to another team to design a car using those technologies, with the automaker's patent lawyers involved to help avoid treading where they shouldn't, then they're probably good.
Also bear in mind that Musk has made public statements about letting others use his patents. Could be that Ford is protected, to an extent, but such a well-documented public declaration, at least for Tesla patents at the time that Musk made the assertion.
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more importantly, they aren't trying to make an exact copy of the car, they are just learning techniques that they can use to design their own car. In that case I don't think they would even have to be as careful about splitting out the information as compaq had to be where the behavior of the finished product had to be exactly the same as the original in every respect.
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Tesla would be wise to do the same with other EVs. They probably have.
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Musk has given the patents for the EV aspects of their cars to the public domain. They are free to use by anyone who wants to make use of them, no cost and not even a demand to return any advances on those patents to the public domain should anyone do so.
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plenty of manufacturing techniques are unpatented... it might be a common and well known technique but figuring out which one they chose over 10 others may be useful. You can also analyze the parts that they chose to source, why this motor instead of another one. The patents tell you only part of the story of how the car is made... what materials are used where and how they are connected.
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Maybe they did tear it apart but as ford is a very old company perhaps they weren't looking to copy but instead look for violations of their patents. Ford has a truck load of patents and were even producing electric cars before Tesla motor company was around there are many parts that could be patented outside the electric power train also.
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Ford is probably about to build more lightweight vehicles. Every major automaker has their own specific technologies for doing this. They are all basically similar*, and in some cases they are identical, but there are differences here and there. Ford will be looking both for the kinds of violations you're talking about, and any slick tricks that they can pull that help them reduce costs or improve their product. Every automaker takes apart other automakers' cars, it's not even slightly unusual. Usually they
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Yes, a lot of startups sell-out to other companies, but so far that doesn't seem to be Musk's style. On top of that Tesla is poised to grow exponentially without having to be purchased by another company. Tesla is generally doing things that most of the other companies don't want to do or haven't figured out how to do, there's not a lot of reason for them to want to be bought.
Re:Buying the bakery (Score:5, Interesting)
Why would Tesla sell to Ford?
There's no way to stop it, one way or another Ford will get it. Every technology company on planet earth buys their competitors products and does a tear-down analysis. Often it's done by marketing or marketgineers to come up with a product spec & cost target, but if you are smart you pay attention to what your competition is doing. If nothing else it challenges your notions of what is possible, and that is always a good thing.
I've taken apart many systems in my time. You know you're in a healthy organization when you take apart a competitors system and say "Wow, they did something really clever here". You know it's time to leave your company when you do it, see something really clever, and your peers say "Aw but that must cost too much" or "We'll never get to be able to do this", etc.
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yes there is.
"Yes I will sell tesla to you ford... for 51% of the current ford stock.... yes Controlling interest in Ford motor Co."
That will make them go away as it will scare the shit out of the board and executives.
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You can stop it. (Score:2)
So what stops a Ford employee from buying one and then giving it to his employer in return for a bonus? You can't stop it.
Contract Law.
You could prevent it if you set up the ownership of the car differently or possibly if you had certain specific terms in your contract. Or set up the car itself so that by opening the hood, you agree to a contract. There are lots of creative things you could do to try and set it up so that if a competitor dissects it, they have to pay you a fortune.
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First sale doctrine prevents this sort of thing.
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First sale doctrine prevents this sort of thing.
The first sale doctrine only applies to copyright law, not to all contracts. It also only applies to ownership, so you can change the ownership structure to a lease-to-own if you want to keep your competitors from looking at it legally for the first few years.
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Re: You can stop it. (Score:2)
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Re:Buying the bakery (Score:5, Insightful)
He didn't mean "Why would Tesla sell a car to Ford?" he meant "Why would Musk sell Tesla to Ford?"
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Totally missed it, you are correct.
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There's no way to stop it, one way or another Ford will get it. Every technology company on planet earth buys their competitors products and does a tear-down analysis.
You're correct, but the OP was talking about Ford buying Tesla the company, not a Tesla automobile.
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I used to work for a research company that did this. One of their major projects was to go buy the latest stuff from Japan every month (two copies of each item) and tear down one item. Then sell the report to other manufacturers.
I was playing with smartphones, flat screen TVs, tiny digital cameras and all sorts of other widgetry in the early to mid 90's. I still laugh heartily when someone tells me Apple invented the smartphone. Admittedly, Apple was the only one who thought Americans would like it. Al
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I don't think any sizable population thinks apple invented the smartphone. They did, however, make the first mass-market-usable smartphone by refining and simplifying the idea.
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Re:Buying the bakery (Score:5, Interesting)
Why would Tesla sell to Ford?
Lots of reasons...
First, Ford has a dealer network and service network that is far greater than anything Tesla can put together.
Second, Ford might well say, we have done well with EcoBoost, what if we offered EV versions of everything we sell. Musk has said that his goal is to promote EVs, not just sell them. If Ford came to him and said, "Merge with Ford and you'll be the head of the EV division, tasked with making EV versions of every Ford product" he might find that idea attractive.
Finally, while Tesla is growing, they have a huge challenge in front of them. Going from 50,000 cars to 500,000 cars is not nothing, selling and servicing them isn't as simple as you'd think, and many things could yet prevent him from hitting his targets.
A lot of people consider Tesla's success to be a forgone conclusion. That is never a good idea and it isn't true either. All companies run into challenges both big and small, some break through and win, some do not.
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From all we've seen so far, I think Musk would only agree to sell batteries to Ford or any other manufacturer, maybe help them make EV cars, but I don't see any "merger" type deal in the future.
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Musk doesn't get to make those decisions on his own. He opted to go with the IPO and now a number of us own shares in the company. I believe Musk only owns 1/5 of TSLA.
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Exactly, and look what happened to Virgin America. Branson did not seem happy but he could not do anything about it.
So now shitification of the only decent airline will start.
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He opted to go with the IPO and now a number of us own shares in the company.
Shareholders provide investment funds but do not manage the company or get to make decisions about it; if the management doesn't approve the sale it's not likely to be doable, and doesn't matter if the CXo has 1/5 or 1/10 the shares.
In some companies, shareholders have additional rights --- it just depends on organizational structure and bylaws.
You don't buy and retain shares in a company, if you fundamentally do not agree wit
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Shareholders provide investment funds but do not manage the company or get to make decisions about it; if the management doesn't approve the sale it's not likely to be doable, and doesn't matter if the CXo has 1/5 or 1/10 the shares.
The common stock has the vote - that's pretty fundamental (there are some odd cases where there are multiple runs of common stock and only one has the vote, but that's rare outside pre-IPO private stock).
Common stockholders choose the board. The Board chooses those who will manage the company. I've worked at 3 companies where the board fired the CEO while I was there - in one case because activist investors had enough votes to oust the board, and thus to force their hand.
If Ford made a large enough offer
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He opted to go with the IPO and now a number of us own shares in the company.
Shareholders provide investment funds but do not manage the company or get to make decisions about it; if the management doesn't approve the
sale it's not likely to be doable, and doesn't matter if the CXo has 1/5 or 1/10 the shares.
In some companies, shareholders have additional rights --- it just depends on organizational structure and bylaws.
You don't buy and retain shares in a company, if you fundamentally do not agree with what direction management will be expected to take the business.
If you want your investment property sold out to the highest bidder anytime the price is right, then buy shares in a company whose management will do that.
In the case of the sale of a publicly traded company, shareholders do get to make the decision, not Management. While Management in a publicly traded company can set the agenda, try to influence shareholder opinions, and may have "poison pill" clauses, they do not have the power to refuse or rescind a successful majority vote to sell the company. The shareholders, by-and-large are the owners and can do what they want with it as long as there are enough of them that want the same thing.
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In the case of the sale of a publicly traded company, shareholders do get to make the decision, not Management.
FALSE. Many companies have multiple classes of shareholders, The Common shares, and another class of shares held by management and their heirs, where the Common shares have Zero or reduced voting rights.
Example: The Blackstone Group LP (BX): Our common unitholders do not elect our general partner or vote on our general partner’s directors and have limited ability to influence dec
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First, Ford has a dealer network and service network that is far greater than anything Tesla can put together.
Not a primary concern for a company that has a multi-year backlog on orders with deposits already paid.
selling and servicing them isn't as simple as you'd think
Actually I'd argue that yes it is. The problem is only one of a skillset. Dismantling and re-assembling an ICE is far more difficult than regreasing a motor bearing, and swapping a lithium battery, and the rest of it is normal car stuff. The great benefit there is also that the service being simple means that you can handle more services yourself before you have to farm them out.
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Dealers may make a profit on sales, but th
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and financing.
They make a good chunk on the financing.
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I've been to said ford dealer, I have no wish to ever experience that again! You see a dealer network as a cool way a company can squeeze every last dollar from the customers, but I see a bunch of dicks wasting my time while they walk back and forth to their manager.
Good ones exist... I bought my last truck at my dining room table, the F&I guy brought all the paperwork to my home so we could review it and sign it, and so that my wife didn't have to go to the dealership...
I doubt it. The idea of slapping an EV kit into existing versions of those cars is ass backwards. Take a look at the design decisions of the model 3. We're talking major chassis changes to accommodate that battery pack, you end up with a whole different car.
While I agree with you in the long run, in the short run, adapting existing cars would be faster. It also would be easier to accept if the same models that customers already know came in both versions. F-150 EV anyone?
At that point you'll ask why bother buying Tesla.
For the same reason they came out with "EcoBoost", a brilliant marketing plan
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Look at Elon Musk's and Tesla's past. Open use patents alone show the willingness to encourage "competitors" to duplicate their technology. Musk as always said that as soon as Tesla is self sustaining, he is going to get out and devote most of his time to SpaceX.
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Why not? Musk seems more conserned about expanding the electric car infrastructure then just being the only player in it.
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> Why would Tesla sell to Ford?
More than that, could Ford even afford to buy Tesla? They're similarly sized companies by value, and Tesla's market cap will probably rise as the Model 3 ramps up. Musk also owns a decent chunk of Tesla: he's increased his share of the company from 22% to 27% over the past few years by buying additional stock.
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These days, companies like Morgan in the UK buy their engines from other car companies. They use a BMW-sourced
Re: Buying the bakery (Score:2)
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A Tahoe is a truck converted to have extra seats to bloat profits.
Most SUV's are only aspirationally off-road worthy. For most folks buying them it is about sitting higher on the road, feeling safer by being above average in vehicle size, and maybe being all wheel drive in case there is a snow flurry on the way to pick up the kids from their after school "My kid is a special little butterfly" class.
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It is huge, ghastly and has relatively large ground clearance. Those are pretty much the criteria for an SUV and it meets those just fine. I don't see the problem.
"It is huge, ghastly and has relatively large ground clearance" is the description of a crossover, not an SUV (or, at least, that is not sufficient for SUV). Crossovers are all hideous-looking beasts, the mutant offspring of a light passenger van (SUV) and a station wagon.
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"SUV" is entirely a marketing term. They are van-bodied light trucks with passenger seating.
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