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Tesla rival Porsche is starting to realize it’s not easy to produce the Taycan
Porsche recently opened reservations for the company’s first all-electric car, the Tesla Model S-rivaling Taycan (formerly known as the Mission E sedan). In an announcement earlier this month, Porsche Managing Director Alexander Pollich stated that the reception to the upcoming vehicle, whose final production version has not yet been unveiled, has so far been encouraging. Porsche expects to start producing the Taycan sometime in 2019, in order to meet what appears to be a healthy demand for the electric car.
As it turns out, ramping production of the Taycan is turning out to be a challenging task for the veteran automaker. Porsche plans to build its Taycan line at a facility located at Zuffenhausen, a suburb in Stuttgart, Germany. The site is a historic location for the pedigreed brand, considering that it is the location where the Porsche 911, one of the company’s most iconic vehicles, is being produced. Other important cars in Porsche’s lineup, such as the 718 Boxster, as well as the 718 Cayman, are also manufactured in the same facility.
Porsche is aiming to produce 20,000 Taycans per year in the Zuffenhausen site. Starting and ramping the production of the all-electric sedan requires a complex reorganization of Porsche’s facility, especially considering that the Taycan’s line has to be built while the production of the 911, 718 Boxster, and 718 Cayman is running at full capacity. In a statement to Dutch auto publication Vroom, Porsche head of production Albrecht Reimold described the difficulties facing the company.
“Finding the right location is a difficult decision. Transforming the existing factory costs a lot of money, moving to a new location as well. Transforming a factory while the production lines are running at full capacity is not an easy task,” he said.
Project manager David Thor Trygvason elaborated on the complex challenge involved in building the Taycan’s production line. According to Trygvason, the location where the Taycan’s line would be set up has to be overhauled. Apart from this, Porsche’s estimated timeline for the project is 48 months, making the project quite costly and demanding.
“The existing location has to be demolished and rebuilt in a short time, but at the same time the production of the 911 and 718 Boxster and Cayman must continue to run. That makes it not only difficult in terms of time and money, but also in terms of logistics and mobility. After all, we are in a location where there is already a factory, where other companies are nearby and where people live nearby,” he said.
Despite these difficulties, Reimold noted that Porsche employees have expressed a sincere commitment to begin the production of the Taycan as early as possible. According to the Porsche executive, the company’s workers have agreed to help finance the factory overhaul by opting to keep their pay flat until 2026, at which point the employees will start getting their investments back. This means that the employees will not have regular salary raises for the next few years.
“We have agreed with them to invest a part of their wage increase until 2025 in the construction of the new factory. From 2026, they will simply receive their investment back,” Reimold said.
Considering that Porche has dubbed the Taycan as one of the company’s most important vehicles after the iconic 911, sacrifices made to start the electric car’s production appear to be necessary, at least for now. If any, Porsche’s struggles to build the Taycan at scale mirror those that have been faced by Tesla with its Model 3 ramp. Just like Porsche’s factory, Tesla also set up its Model 3 lines in the same facility building the Model S and Model X. The aggressive ramp, which CEO Elon Musk aptly dubs as “production hell,” has been haunting the electric car maker for the past year. Ultimately, Porsche’s current difficulties with the Taycan are an indication that Tesla’s struggles with Model 3 production are not problems exclusive to the California-based electric car maker.
Building cars is not a simple task. Building cars that people want to buy is even more challenging. With car buyers and the auto market steadily shifting its interest to electric vehicles, carmakers with upcoming battery-powered cars are now feeling the pressure to roll out their offerings as quickly as they can. Being one of the legacy carmakers who has committed to releasing an electric car, this is something that Porsche appears to be experiencing now. Nevertheless, with a line of reservations that are growing longer, and with a workforce determined to make sacrifices for the company, there is a good chance that the Porsche Taycan can still make it in time for its anticipated debut next year. According to Trygvason, the work being done in Porsche’s factory might be daunting, but “the good news is that the work is still fully on schedule.”
The Porsche Taycan is expected to feature the legacy carmaker’s trademark performance, with the vehicle listed with a 0-60 mph time of 3.5 seconds, a range of 310 miles per charge, and a top speed of 155 mph.
Tesla launched a new configuration of the Model Y this week, bringing more complexity to its lineup of the vehicle and adding a new, lower entry point for those who require an All-Wheel-Drive car.
However, the broadening of the Model Y lineup in the United States could signal a somewhat uncomfortable reality for Tesla fans and car buyers, who have been vocal about their desire for a larger, full-size SUV.
Tesla has essentially moved in the opposite direction through its closure of the Model X and its continuing expansion of a vehicle that fits the bill for many, but not all.
Tesla brings closure to Model Y moniker with launch of new trim level
While CEO Elon Musk has said that there is the potential for the Model Y L, a longer wheelbase configuration of the vehicle, to enter the U.S. market late this year, it is not a guarantee.
Instead, Tesla has prioritized the need to develop vehicles and trim levels that cater to the future rollout of the Robotaxi ride-hailing service and a fully autonomous future.
But the company could be missing out on a massive opportunity, as SUVs are a widely popular body style in the U.S., especially for families, as the tighter confines of compact SUVs do not support the needs of a large family.
Although there are other companies out there that manufacture this body style, many are interested in sticking with Tesla because of the excellent self-driving platform, expansive charging infrastructure, and software performance the vehicles offer.
Additionally, the lack of variety from an aesthetic and feature standpoint has caused a bit of monotony throughout the Model Y lineup. Although Premium options are available, those three configurations only differ in terms of range and performance, at least for the most part, and the differences are not substantial.
Minor Expansions of the Model Y Fail to Address Family Needs for Space
Offering similar trim levels with slight differences to cater to each consumer’s needs is important. However, these vehicles keep a constant: cargo space and seating capacity.
Larger families need something that would compete with vehicles like the Chevrolet Tahoe, Ford Expedition, or Cadillac Escalade, and while the Model X was its largest offering, that is going away.
Tesla could fix this issue partially with the rollout of the Model Y L in the U.S., but only if it plans to continue offering various Model Y vehicles and expanding on its offerings with that car specifically. There have been hints toward a Cyber-inspired SUV in the past, but those hints do not seem to be a drastic focus of the company, given its autonomy mission.
Model Y Expansion Doesn’t Boost Performance, Value, or Space
You can throw all the different badges, powertrains, and range ratings on the same vehicle, it does not mean it’s going to sell better. The Model Y was already the best-selling vehicle in the world on several occasions. Adding more configurations seems to be milking it.
The true need of people, especially now that the Model X is going away, is going to be space. What vehicle fits the bill of a growing family, or one that has already outgrown the Model Y?
Not Expanding the Lineup with a New Vehicle Could Be a Missed Opportunity
The U.S. is the world’s largest market for three-row SUVs, yet Tesla’s focus on tweaking the existing Model Y ignores this. This could potentially result in the Osborne Effect, as sales of current models without capturing new customers who need more seating and versatility.
Expansions of the current Model Y offerings risk adding production complexity without addressing core demands, and given that the Model Y L is already being produced in China, it seems like it would be a reasonable decision to build a similar line in Texas.
Listening to consumers means introducing either the Model Y L here, or bringing a new, modern design to the lineup in the form of a full-size SUV.
Elon Musk
Elon Musk reiterates Tesla Optimus’ most sci-fi potential yet
Musk shared his comments in a series of posts on social media platform X.
Elon Musk recently reiterated one of the most ambitious forecasts for Tesla’s humanoid robot, Optimus, stating it could become the first real-world example of a Von Neumann machine. He also noted once more that Optimus would be Tesla’s biggest product.
Musk shared his comments in a series of posts on social media platform X.
Optimus as a von Neumann machine
In response to a post on X that pondered on sci-fi timelines becoming real, Musk wrote that “Optimus will be the first Von Neumann machine, capable of building civilization by itself on any viable planet.” In a separate post, Musk wrote that Optimus will be Tesla’s “biggest product ever,” a phrase he has used in the past to describe the humanoid robot’s importance to the electric vehicle maker.
A Von Neumann machine is a class of theoretical self-replicating systems originally proposed in the mid-20th century by the mathematician John von Neumann. In his concept, von Neumann described machines that could travel to other worlds, use local materials to create copies of themselves, and carry out large-scale tasks without outside intervention.
Elon Musk’s broader plans
Considering Musk’s comments, it appears that Optimus would eventually be capable of performing complex work autonomously in environments beyond Earth. If Optimus could achieve such a feat, it could very well unlock humanity’s capability to explore locations beyond Earth. The idea of space exploration becomes more than feasible.
Elon Musk has discussed space-based AI compute, large-scale robotic production, and the role of SpaceX’s Starship in transporting hardware and materials to other planets. While Musk did not detail how Optimus would fit with SpaceX’s exploration activities, his Von Neumann machine comments suggest he is looking at Tesla’s robotics as part of a potential interplanetary ecosystem.
News
Tesla China January wholesale sales rise 9% year-on-year
Tesla reported January wholesale sales of 69,129 China-made vehicles, as per data released by the China Passenger Car Association.
Tesla China reported January wholesale sales of 69,129 Giga Shanghai-made vehicles, as per data released by the China Passenger Car Association (CPCA). The figure includes both domestic sales and exports from Gigafactory Shanghai.
The total represented a 9.32% increase from January last year but a 28.86% decline from December’s 97,171 units.
China EV market trends
The CPCA estimated that China’s passenger new energy vehicle wholesale volume reached about 900,000 units in January, up 1% year-on-year but down 42% from December. Demand has been pressured by the start-of-year slow season, a 5% additional purchase tax cost, and uncertainty around the transition of vehicle trade-in subsidies, as noted in a report from CNEV Post.
Market leader BYD sold 210,051 NEVs in January, down 30.11% year-on-year and 50.04% month-on-month, as per data released on February 1. Tesla China’s year-over-year growth then is quite interesting, as the company’s vehicles seem to be selling very well despite headwinds in the market.
Tesla China’s strategies
To counter weaker seasonal demand, Tesla China launched a low-interest financing program on January 6, offering up to seven-year terms on select produced vehicles. The move marked the first time an automaker offered financing of that length in the Chinese market.
Several rivals, including Xiaomi, Li Auto, XPeng, and NIO, later introduced similar incentives. Tesla China then further increased promotions on January 26 by reinstating insurance subsidies for the Model 3 sedan. The CPCA is expected to release Tesla’s China retail sales and export breakdown later this month.
Tesla Model Y lineup expansion signals an uncomfortable reality for consumers
Elon Musk reiterates Tesla Optimus’ most sci-fi potential yet
