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Why can Tesla build successful electric cars?As compared to other EVs, Tesla’s have the following advantages:They have a fairly “normal” appearance. Other widely produced EVs tend to have unique “looks” that are somewhat polarizing. Teslas appeal to a wide range of people.They have a LOT of batteries. This makes them very expensive, but it opens up their vehicles to consumers that think (or actually do) they need the range. I.e. there are very few compromises needed.With their Supercharger fast charging network, they truly have enabled long distance travel, eliminating most other barriers to adoption in their chosen target market.Tesla took some inherent advantages of EVs: 0–60 performance and safety; and accentuated them. They made their cars the FASTEST of all cars. They made their cars the SAFEST of all cars. This gives them a huge selling point, even if the average person will rarely exercise the car’s ludicrous 0–60 time.Taking all that into account, while admitting that they have priced themselves out of the mass market for now, they have created a very popular and aspirational vehicle when compared to even non-EVs. This has built their brand image and as can be seen by the huge demand for the mass market Tesla Model 3, will propel them into the mainstream market if the Model 3 has a reasonably successful rollout. Meanwhile, other automakers keep dragging their heels with respect to EVs and will take years to fully commit to them and catch up with Tesla.What is special about Tesla’s batteries?Not as much as you’d think. While other automakers thought they had to custom design automotive batteries (at great expense mind you), Tesla went with a relatively widely available consumer battery like the kind found in laptops. While they did tweak the chemistry a bit for the automotive market, they were basically able to take advantage of the existing economies of scale for their batteries and thus could afford to offer large battery packs.The cylindrical form factor of their batteries may at first seem like it didn’t offer as efficient a space utilization (Tesla designed their vehicles from the ground up with a “skateboard” battery pack where the battery pack actually makes up the floor of the vehicle—unlike other automakers that tried instead to put their batteries into traditional open spaces in their cars like under the seat, under the trunk (where the gas tank would be), etc. However, the gaps between the cells allow for efficient cooling of the batteries and therefore the Tesla batteries do have an advantage over the competition when it comes to longevity.And because Tesla is actively creating a new market for their batteries in terms of the Tesla Powerwall and Powerpack, they can create even further economies of scale in their battery Gigafactory.All this should allow Tesla to create an affordable, mainstream and desirable vehicle in the Model 3, years before the competition. If they can pull off releasing the Model 3 at a reasonable rate with an acceptable quality level, it should be a very successful car.

UK prime minister Boris Johnson’s comments on tariff free trade are falsehoods and can be safely ignored.“However, the very idea that an FTA ENSURES all automotive products will be traded tariff-free has always been fundamentally WRONG. There is no such thing as a “tariff-free” FTA. Rather, tariffs apply by default, unless you can comply with rules of origin set by the new deal.”Alessandro Marongiu, Trade policy adviser for UK Automotive, 29 December 2020The UK-EU Trade & Co-operation Agreement allows for conditional tariff and quota free preferential market access. Mr Johnson and his ministers have published a government document explaining the conditions which businesses need to meet in order to sell the goods without tariffs.These conditions are rules of origin, which are a standard feature of trade agreements. Rules of origin require goods to be certified by value of their qualifying components by source. These are particularly complex for the automotive industry where components come from several different countries while being assembled in another.The UK-EU Agreement requires 40% EU or UK content to be sufficient for electrified vehicles to avoid tariffs until the end of 2023. There are further changes after 2023. By 2027, 55% is the content threshold for all vehicle’s components.Food is also complex with raw ingredients from several countries and conditional processing before the final product is sold.Rules of origin are not needed for customs unions. This is because countries participating in the customs union have a common external tariff. Goods assembled within the customs union have been assembled with components imported at the same external tariff and can be then sold within the customs union, tariff free and without rules of origin documentation.

People who look car as a prestige symbol are declining.Automobile industry is currently in the situation where construction/real estate was 5 years back which was facing loss in productivity as they failed to meet the demand for its production capacity.For past two years overall passenger vehicle (PV) sales in our country takes a huge hit and now many automakers are struggling. There are many reasons for the poor sales of PV in India which was a driving force of manufacturing sector years ago. There are multiple reasons ranging from slower economy, policy changes to consumer sentiments.Slower EconomyDue to slower growth rate, rising unemployment and reducing purchasing power of consumer as a reflection of the poor monsoon records, protectionist policies that impacted the overall world trade, an economic blunder called Demonitisation that put many sectors mainly MSMEs to drastically reduce the production and subsequently resulted in low growth rate over the years. This put a hole in a pocket of the consumer who obviously had a reserve about spending huge chunk of money in a depreciating asset like automobile.Policy changesAs a measure to counter rapid climate change India is on a position to adopt cleaner energy and reduce the carbon footprint. India is working towards it in almost all sector by taking various measures. In automobile industry for past 2 years India is advocating for BS-VI engine (low emission) and electric vehicle segment as a replacement for current BS-IV norms.Indian automobile industry is supposed to adopt BS-VI emission standards in its production which requires further change in technology used for production, where they are working on it.And Indian govt recently announced, by 2022 Indian automobile industry should switch to electric for manufacture of 3 wheeler autos and 2 wheeler bikes under 150cc.This is a serious debate in automobile circle but govt is keen on pushing for electric vehicle sales, by giving various incentives for electric vehicle buyers and increasing cess for petrol/diesel and looking to increase the faster charging facility across nation. These policy changes put automobile companies in a fix to quickly shift to electric and BS-VI norms but also not making serious damage in productivity for current setups and they had to sell the available BS-IV emission vehicles.Consumer sentimentsLarge chunk of people is migrating to cities and there is no stoppage in expansion of metro cities which results in increasing number of urban population. All our metro cities were not planned for this ever growing population density, results in congested roads and poor infrastructure in public transport facilities in most of our cities.From a consumer (middle class working population) point of view it is not financially viable to buy and maintain a vehicle especially cars in a metro city. Realising the population inflow government emphasised on developing transport facilities majorly in the form of Suburban trains, Metro trains, Buses. Every city will have major shift in the transport facility in a few years.And also along with public transport people in cities are provided with alternate options like office buses/cabs, commercial taxis like Ola/Uber to travel within the city. And rise of car rentals like Zoom car/zap subscribe satisfy their driving pleasure at a considerable price.So people especially younger generation view putting their money in a depreciating asset like cars as not as a wiser/favourable opinion. So gradually people that looks car as a prestige symbol is getting reduced. People are getting more aware and desirable on planning their investment in land, stocks, fixed deposits, mutual funds, jewels that give them a certain return rather than spending money in automobiles that obviously put a hole in their pockets.