Tesla's Battery Deal More Significant Than Just The Batteries

from the vroom dept

Tue, May 22nd 2007 10:11am — Joseph Weisenthal

Electric car startup Tesla Motors has signed a deal to sell $43 million worth of lithium-ion battery packs to a Norwegian electric car company. This is a big deal for the company, as it's evidence of a growing market for the company's technology. The technology, however, is only part of the story. What's interesting is that a new generation of auto companies have business models that look more like computer makers than Detroit automakers. Instead of simply thinking about the car as the finished product, new companies in the automotive space (with Tesla being the most prominent) are able to focus on specific technology problems while nimbly swapping in and out parts made by other companies. It'll be some time before the change is complete, but it's clear that the technology itself is only part of the revolution.

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27 Comments

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Peet McKimmie (profile), 22 May 2007 @ 11:25am

Would you...
...buy a car where Sony made the batteries?

(First!)
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Theoden, 22 May 2007 @ 11:26am

Re: Would you...
Only if I needed the insurance money from the fire!
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bob, 22 May 2007 @ 11:27am

(loser)
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dorpus, 22 May 2007 @ 11:29am

How is this any different?
The auto industry has long had parts suppliers that focus on a specific part of auto production. How is this any different from the past? Are we sure that the computer industry did not imitate the auto industry's supply chain model in the first place?
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Anonymous Coward, 22 May 2007 @ 11:30am

Re: Would you...
For the same reason I want a Fiero: because it's cool.
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Casper, 22 May 2007 @ 11:33am

Whatever...
I don't care if my next car is powered by batteries or hamsters, just as long as it's as fast or faster then a gas car, performs as well or better, and I'm not getting screwed on parts and labor.
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Dirtboy, 22 May 2007 @ 11:36am

I forsee it more like laptops
The assembly line and replaceable parts is what helped to make the production of automocars so efficient. In the past 100 years, though, they have been increasingly moving towards more proprietary parts. The parts are replaceable, as long as you purchase from the car's manufacturer. They like it this way, as a 6X markup on an alternator should tell you.

I doubt they will totally drop this market for more standard interchangeable parts. Think of it more as a laptop instead of a desktop. You can't build your own from scratch, but maybe you will be able to upgrade the batteries from another source.
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GoblinJuice, 22 May 2007 @ 12:27pm

Uber cool Computer Car + Bonzi Buddy = Much Hilarity! :D

Btw: Tesla was cool. Let's hope the company can live up to the name.
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CowHerd Anon, 22 May 2007 @ 12:37pm

Re: Re: Would you...
Well, until they got hot, anyway...
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CowHerd Anon, 22 May 2007 @ 12:39pm

Re: I forsee it more like laptops
Umm....

automocars?

Homer? is that you?
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SubjectChanger, 22 May 2007 @ 12:51pm

Can I ask a question?
Slightly tangential, but can I ask a question?

How high does the gas price have to get before you would move close enough to work to cycle or walk instead of driving?

$8 a gallon? (Yes I know this is normal price in UK)
$12 a gallon?
$20?
How much is too much?
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dennly, 22 May 2007 @ 1:02pm

hybrid autos - batteries
they're the Achillies heel, they wear out before the car does, and then cost more than the car is worth (at 5 to 8 years old, say) ... are we we being taken to the cleaners on this bit of so called smart technology?

And then there is the auto that runs on compressed air , where are they? That could be THE answer.
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anonymous coward, 22 May 2007 @ 1:17pm

Imagine sitting on the freeway talking to a DellAuto customer support technician in Bangalore telling you to insert your DellAuto Restore CD (which is at home) because your car's drive crashed and you need a clean install.

After two hours of reinstall hell, your car still doesn't work, and then you find that the problem is actually something that the DellAuto tech never mentioned and that could be fixed in five minutes...
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Almost there, 22 May 2007 @ 1:29pm

Re: Can I ask a question?
$0

I got my new job a month after signing a lease. I don't want to pay the penalty fees to break contract, but as soon as the lease is up I'm moving right next to work.
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Jose, 22 May 2007 @ 1:31pm

Re: Whatever...
Sounds like you should get a Tesla then.
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Johan Christian Høgåsen-Hallesby, 22 May 2007 @ 1:42pm

Brainstorming with Google
Supposedly the 'new business model' is a product of the brainstorming Think! had with Google. a while back.
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MD, 22 May 2007 @ 1:50pm

Re: Can I ask a question?
You must live in a large city...

Some of us live in rural areas where we have to commute...

I'd rather live rural and commute, than be stuffed in a "ratbox" big city
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You never know, 22 May 2007 @ 1:55pm

Any car that runs on a renewable resource gets my vote. Be it methanol, ethanol, hydrogen or electricity, All can be produced in country, and exported. The big pulse it will provide jobs for our people, stimulate our economy, and not use up resources we no longer have an abundance of. If I have to pay $3 or more a unit for energy I would prefer it stay here and not spent over seas.
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Bob, 22 May 2007 @ 2:06pm

Re: Re: Can I ask a question?
So, you would rather be stuffed in a little rat-box car stuck in traffic for 2-3 hours each way .... I live IN Atlanta and watch many, MANY commuters stuck in jams both ways 5 days a week. Of course houseing costs in the city are much higher than in the 'burbs and to get to truly rural living you might end up driving 3.5 to 4 hours each way. So, what is the cost worth? 8 hours of work plus 8 hours of drive time = very little time to have a life of your own. Of course, you might live where there isn't much traffic and your commute is less than an hour each way ....
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Almost there, 22 May 2007 @ 2:11pm

Re: Re: Can I ask a question?
Not quite a large city. I live in a suburban area. About a year and a half ago I moved after having lived in a rural area for 20 years, so I know that experience. The area I live in now is far from "ratbox" though.
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Datahound, 22 May 2007 @ 2:24pm

Re: Can I ask a question?
I was thinking 5$ would cause me to stop driving and start biking the 10 miles to work.

I really hope that if gas prices went that high that our municipalities would invest in bike paths so I didn't have to worry about getting run over. I would do it today if they existed.
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Jonathan26, 22 May 2007 @ 3:10pm

Hi-priced gas
... and if you bike to work, you can drop your fitness club membership too. You will arrive with your metabolism up and not needing a shot of Starbucks, another savings.
Not all of us can, but there are a lot of benefits for those who do. What would you do with an extra kilobuck a year?
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Anonymous Coward, 22 May 2007 @ 3:14pm

Haven't you heard about Microsoft's new OS for the auto industry? Your car will unexpectedly crash every few days, but hey, it's the wave of the future!
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Almost there, 22 May 2007 @ 4:03pm

Re:
This is a shameful truth about the MS OS for automobiles. Unfortunately, the only way to run a Mac OS vehicle will be with Mac-compatible fuels, and these will be sold almost exclusively at the Apple store.
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Thought Cancer, 22 May 2007 @ 6:46pm

Re: Can I ask a question?
Well, I can tell you this much: it's not just gas prices that are preventing people from moving closer to where they live. The people I talk to cite job security as a big reason why they're not about to rearrange their lives around their workplace. I feel the same way, given how I live in a Right To Work state, where employers have exactly zero obligation and responsibility to the worker.

How about I move 30 miles closer to my employer and I am let go, downsized, fired, or otherwise dismissed? How about the non-compete that I am required to sign in my industry prevents me from working for a competitor in the region for three years? How now, brown cow?

In this era of free-agent employment, one has to look out for themselves, since no one else will. With the decline of unions and the rise of anti-worker legislation and regulations, it's a fools errand for a worker to build their domestic life around proximity to their employer.

It's not just the gas prices, it's the whole employment system that's fubar'ed.
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Shaine Mata, 23 May 2007 @ 1:00pm

Missing the point
I don't think it was intended to imply that cars would run like computers. I think the point is that cars could be built from components.

You could, for example, get a Toyota engine, GMC chassis, and a custom body. If automakers built cars with standardized components, they could sell pre-built autos or sell you the parts to make your own in combination with parts from other automakers.

Thus, this story points out a step in that direction.
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Ivan Ilic, 3 Feb 2008 @ 4:49pm

Tesla Car
The ORIGINAL Tesla Car"ARROW"was real THING!500miles distance no need to charg battery!!It can Go 95.MPH..!That was in 1933!Today The New Car on Bottery Just suck!Onlu 200milas is a distance!need 4-5 hours to charge battery!Who much is a charging????We need the original Tesla Car!No imitasion!
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