The EV Race Is Simply Starting And Tesla’s Going To Win It


As Singapore doubles its EV adoption efforts by announcing its ambitions to install 60,000 charging points nationwide by 2030 – more than double its original target of 28,000 – EV automakers are expected to step up their presence here.

There are already a handful of EV automakers in Singapore vying for the automotive market. Tesla is one of them now as it recently received the green light to sell electric vehicles in Singapore.

Image credit: CleanTechnica

Tesla, the world’s leading supplier of electric vehicles by market capitalization, will dominate the industry for years to come.

While some expect their market share to decline as soon as traditional automakers switch to electric, Tesla has some advantages that make it difficult to track. Here are some reasons why.

Vertical integration

The shift towards the production of electric vehicles will mean the need to rebuild an entirely new manufacturing capacity, which cannot be easily achieved overnight.

Some automakers like Volkswagen and Jaguar have already announced plans to go fully electric within this decade, but it will take a lot of resources, time, and outside supplier relationships to make that happen.

The manufacture of an electric vehicle differs from the manufacture of vehicles with an internal combustion engine (ICE). In addition to a thorough understanding of battery technology, you need both hardware and software know-how.

With that expertise only now being acquired with the advent of the EV industry, these automakers are lagging behind the in-house capabilities to make breakthroughs in EV technology – either in terms of battery innovation, AI and autonomous driving, or energy storage. or all of these components together.

To cut costs, most of these “old” automakers need to outsource at least one of these three key factors to stay in the race. However, you may be at the mercy of suppliers and rely on third-party product performance.

Tesla, which began its journey as an EV company much earlier than its ICE competitors, vertically integrated its design, engineering, software development, research and manufacturing capabilities from the start.

At nearly every stage of manufacturing, Tesla’s teams are structured so that the design of each component goes hand in hand with the design of the machines from which those components are made.

For example, to increase efficiency in the manufacturing phase, Tesla’s engineering, construction and production teams have come together to develop a new casting method that will make the battery a structural part of the vehicle.

Tesla ev carExample of how Tesla 70 can reduce separate parts into a single piece of cast aluminum / Image credit: TeslaTesla ev carRevolution in body and battery technology / Photo credit: Tesla via CleanTechnica

Not only does it save space, it also packs more batteries, strengthens the structural integrity of any car, and ultimately saves time on assembly. So it’s much more efficient than what other automakers might be doing.

Data and autonomous driving

To be successful in these three categories – battery innovation, AI and autonomous driving, and energy storage – you need a lot of data to constantly improve, learn and update.

Tesla autonomous drivingPhoto credit: David Paul Morris via Bloomberg

When it comes to AI and autonomous driving, no other player can match the amount of data that Tesla has collected, as all Tesla 3s and Ys on the road today come with the autopilot feature that comes with it.

This means that Tesla has more data than its competitors to learn from and improve on.

As noted by Cathie Wood of ARK Invest on CNBC, the company with the most and best quality data on real-world driving will win the race in self-driving vehicles.

According to her, Tesla is way ahead of everyone else with data on real-world driving of 30 billion miles. The next company to come close is Google with 30 million miles.

This also has implications for the future when self-driving taxis are the order of the day.

Once the legal hurdles for fully autonomous vehicles are overcome, Tesla’s lead on the ground means more accurate and reliable data, so autonomous driving software is more likely to be widely adopted.

Battery technology

Another reason Tesla will emerge as the EV category leader is its commitment to revolutionizing the way batteries are made.

Tesla lithium-ion batteryImage credit: Electrek

EV cars use lithium-ion batteries – this is the same type of battery used in our smartphones and laptops, but in much larger quantities.

The technology used to source and manufacture these batteries has remained largely unchanged since the early 1990s. This is a process that needs to change to meet the growing demand for electric vehicles in the years to come.

The tipping point for widespread adoption largely depends on the price of the vehicle, which can be lowered significantly once average battery prices go beyond what is achievable on a scale alone.

Tesla isn’t waiting for an electronics company to find out.

The company has already started to significantly reduce and revolutionize the cost per battery not only in terms of how the batteries are manufactured, but also in terms of sourcing and sourcing every single mineral.

During Tesla Battery Day, CEO Elon Musk spoke about how Tesla’s approach is to never accept the current processes of material manufacturing and to find new ways to achieve efficiency at all levels and cost per material at every level.

Tesla battery dayOverview of the traditional cathode process / Photo credit: TeslaTesla battery dayTesla cathode / Photo credit: Tesla

As an example, Tesla developed new methods of extracting lithium from the earth that reduce costs and increase efficiency while reducing waste in ways no one had thought of before.

That way, we’ll likely see more affordable Tesla cars that don’t compromise on performance. This is another major Tesla selling point.

Compressors and the Compressor Network

Fear of range is a real problem for many car buyers and a barrier to entry.

Knowing that you have to sit long at a charging station is a big lifestyle change compared to just five or ten minutes at a gas station.

Therefore, to be a successful EV company or brand, you need to address the long charging time issue.

Electric cars by range in 2019 / Photo credit: Statista

While there are a growing number of EV chargers around the world, very few charge a car as quickly as a Telsa Supercharger does with a Tesla car.

For Tesla it is already the third version of the supercharger, with which you can cover 250 km in 15 minutes.

When the Shanghai plant pumps these out, there will be nearly 10,000 new compressors per year, adding to the 20,000 units already available worldwide.

Since these chargers are exclusive to Tesla vehicles, owning a Tesla before any other electric vehicle is a huge advantage.

However, with many traditional energy and oil and gas companies investing heavily in charging technology, this is probably the quickest way for competitors to gain the most ground through partnerships.

Tesla Model 2: The cheapest model yet

Another major factor that will add to Tesla’s growing dominance in the EV industry is the launch of its cheapest model to date: the currently unnamed Tesla at $ 25,000.

Tesla model 2Tesla Model 2 / Photo credit: Tesla via Weibo

The car, dubbed Model 2 by industry commentators, will be the cheapest Tesla to date. It’s $ 10,000 cheaper than the base Model 3, which is currently the best-selling electric vehicle in the world.

It is also comparable to other entry-level electric alternatives like the Nissan Leaf ($ 32,000), the Hyundai Ioniq ($ 33,000), and the Mini Cooper SE ($ 30,000).

Most rumors point to a hatchback design for the Model 2, which will be manufactured at Tesla’s Shanghai facility.

While the launch was originally announced in 2023, rumors from China are optimistic for an announcement in late 2021 and a 2022 launch for the new electric vehicle, according to industry commentators.

Although prices have not yet been announced in Singapore, we can assume that the price for the Model 2 will be between S $ 90,000 and S $ 100,000 before the COE.

The introduction of the Model 2, given the price, is likely to lead to an explosion of Tesla vehicles around the world.

Instead of traditional automakers, the likely source of competition in the near future could come from other EV companies, most of which are from China.

Hong Guang Mini Ev ChinaHong Guang Mini / Photo credit: Shunsuke Tabeta via Nikkei Asia

For example, state-owned SAIC Motor recently announced a $ 4,500 EV called the Hong Guang Mini, which is far cheaper than anything Tesla currently has to offer.

The car is being built in partnership with General Motors (GM) and may be the model for other ICE automakers looking to take on Tesla.

A look at what has happened in other industries

Some believe Volkswagen, Toyota, GM, Ford, and Hyundai are too big to keep Tesla leading in electric vehicles for long.

However, if we look at the smartphone industry, the market looked different in 2010 than it was in 2000. Nokia, Sony Ericsson, Siemens, HTC, O2 and Blackberry did not survive the smartphone revolution.

While having proprietary technology and software, R&D facilities, long-term contracts with suppliers, and the like, many of these companies either lost massive market share or are no longer in the consumer phone business.

Apple versus SamsungPhoto credit: CHS Global

Sure, Apple and Samsung were big companies back then. Apple wasn’t a leader in computers when the iPhone hit the market, however, and Samsung didn’t launch its first smartphone until 2008.

They had to learn a lot of new things and develop new ways to build all of their current products, just like Tesla is doing now.

With all of the competitive and technological advantages Tesla now has, they will eventually be the category leader, well ahead of any older automaker.

The Tesla fandom is real

Aside from comparing Apple, I think Tesla enjoys a fandom that can only be compared to Apple.

Tesla Elon MuskElon Musk, CEO of Tesla / Photo credit: Reuters

There is a growing group of people who worship Tesla and Elon Musk as much as Apple fanboys Apple and Steve Jobs.

Not everyone becomes die-hard fans, and buying behavior is one every 15 years instead of buying a new iPhone every 2 years, but that’s the same time gap that competitors will face.

Diehard fan or not, I think a significant group of people who buy Tesla are going to buy one, not because they were in the market for an electric vehicle, but because they were in the market for a Tesla – it’s just that Electric vehicle. The competition doesn’t have that.

Considering a Nissan Leaf is like asking an iPhone user to switch to an Android, and as an iPhone user, I can’t stand the thought.

Selected image source: Tesla




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