I regret to inform you all, that it would seem the Model 3 now has a superior competitor,
better in every way.
At least according to the Tesla bears as they rejoice.
I am of course talking about the new Mercedes CLA.
It is a new Mercedes, but it is being named the CLA, which is actually already an existing
Mercedes.
The Mercedes CLA and the CLS, weren't particularly nice designs in the first place.
But this would likely be more a competitor to the BMW i4, a car that did eventually make
it into production, although it ended up looking just like a typical BMW, rather than the initial
concept.
And I think it would be beyond safe to assume, that the same will be true for the Mercedes.
If it goes into production, which it may very well, then it will look nothing like this,
and will likely not contain many of the features shown either.
This vehicle is just an advertisement to showcase how cool the vehicle can be, and how creative
and innovative Mercedes are.
However, this is a concept and thus not having to be built at mass scale.
This is the big difference.
In order for cars to be affordable, they need to be built by robots.
The more complex a design, the more human intervention is required, i.e. fewer robots,
and higher price tags.
This is why the likes of Ferraris, or Rolls Royces are hand built, it means they actually
can make these amazing looking cars, but with a price tag to match.
One great thing about Tesla, and you often will hear me praise their manufacturing skills,
is that Tesla make great looking cars, and in high volume production.
This is often overlooked, or not even understood by many.
For me this is one of the most tangible elements of Tesla's valuation.
The fact they have proven again and again that they excel in manufacturing.
Well manufacturing EVs, we still have yet to see if they can make battery cells to the
same level.
But we would hope that with the manufacturing prowess they have, they will to be able to
excel at that, which is something I very much look forward to seeing.
But Mercedes make some of the best quality cars in the world, so they can probably do
a better job than Tesla right?
Well Volkswagen make a lot more cars than Mercedes, and a Model Y in Shanghai is coming
off the line about 5 times faster than any electric Volkswagen.
The speed of Tesla's production lines is highly impressive, and this is with them still using
mostly designs from 2017.
We look forward to seeing what billions and billions and years in R&D with some of the
best manufacturing and engineering minds on the planet, when Tesla starts gen 3 manufacturing.
Parallel production lines, I am not entirely sure how many actually have even grasped this
concept.
It looks like it all makes sense, almost like lego.
Tesla managed to achieve the front and rear castings with structural battery pack, albeit
limited by the structural cells.
But hopefully with gen 3, they are not limited as they can use any cell apparently.
Anyway, back to this Model 3 killer.
It is capable of 466 miles, that WLTP, which is about 415 miles EPA, thats a lot of range,
don't get me wrong.
Very impressive.
But how is it achieved is far more important.
Along with Tesla's manufacturing, another core advantage Tesla has over the competition
is the drivetrain.
Tesla make incredibly efficient drivetrains.
If you don't understand what I mean, then essentially Tesla would get more range than
anyone else, with the same size battery.
Ok perhaps Lucid might if you want to pedantic, but look at the cost of a Lucid drivetrain.
Tesla don't stop there with efficiency either, as the entire vehicle is designed to be as
light weight as possible, with as best drag coefficient as possible, all embodied to offer
the most range possible, on as small a battery as possible, or as low a cost drivetrain so
it can compete in the mass market.
Now if Mercedes are offering this much range, then it would likely be 100 kWh battery, which
is huge for a mid-size sedan.
That much additional battery will add to the weight, thus affecting handling, braking and
performance.
Not to mention the additional cost.
But Mercedes are achieving this with an anode designed with silicon-oxide, in other words
similar to what Tesla have been doing with the 2170 cells for about the last 5 years.
And Mercedes will also be offering an LFP version.
I normally wouldn't talk about such a non-event vehicle, but the bears were all over this,
actually believing that this is the end of Tesla's Model 3.
The big boys are finally here.
This pleases me, it means that if this makes them happy, then it shows just how little
they know about Tesla or EVs, and reduces any credibility the bears have on Tesla, and
the negative things they say.
It also shows the psychology, and that they are not being objective, yet instead acting
for confirmation bias, and creating echo chambers to validate this.
Oh and this is a Model 3 competitor, then it would also need to be in the same ballpark
for price as the Model 3, perhaps $50,000 in the US starting price perhaps.
As it could argued that Mercedes is a more prestige brand with more luxury, which is
fair enough.
But then already it is not therefore competing with the Model 3, so it would actually need
to be much closer in price.
However, I bet that Mercedes couldn't even make this car for $50,000, let alone sell
it for less than that.
In fact I bet closer to $70,000.
Which is why when it is released the production will only be around 30,000 units a year.
Well aside from losing too much money on each sale, it would be too hard for them to manufacturer
that many, as they can't hit volume production, as its near impossible.
Oh and this car is more likely to cost about $70,000, or about twice the price of a Model
3.
Then it wont come with many of the standard options, like cooling seats, or screen in
the back.
But the Mercedes does have a huge screen as the dash, which is total over kill, and likely
an optional extra that costs at least an additional $5,000.
But it makes it look so much more futuristic.
I mean look at the interior, it looks so futuristic, except extremely sterile, in fact it gives
the feeling of a medical refrigerator from the future.
The Model 3 looks futuristic, but I feel comfortable in there, and I am some ingredient in storage
for a scientific experiment.
And the seating, they look like they would cost an absolute fortune to make.
And obviously will be typical seats when in production.
This is just an advert for Mercedes to say, look we can also do better than Tesla.
Legacy like to give the illusion their electric cars are more electric by showing more lights,
and screens, as they area powered by electricity.
But what matters is more range per kWh of battery.
Tesla's screen is perfect, I do not need a bigger screen, or one that goes across the
whole dash.
Which brings us on to the other competitive advantage Tesla has with their EVs, the technology.
Now although Tesla really is a car company, it does invest heavily into technology as
well, and was a literal silicon valley start up.
The majority of the R&D spend does go into FSD.
And we have all seen the FSD presentations of just how painful it would be to work in
that department, in solving what is required to make a car a self driving robot.
It does not look like fun.
Now do we really think the Germans are going to have beaten silicon valley on technology?
Alright Mercedes are making it a big deal that they are using an Nvidia chip, even highlighting
it as if it is the brain of the car, which seems quite gimmicky and not classy.
And Tesla's hardware 4 would destroy it hands down anyway.
The Mercedes is level 2 autonomy, but retrofitted to become level 3.
Well all Teslas are upgradable to level 5 once the software is solved.
But when this car finally goes into production, it's probably going to be 2025.
Well imagine what Tesla is doing with the gen 3 vehicle by that stage, and just how
much further ahead it is.
Anyway, I in no way think that Tesla is threatened by this new Mercedes, even if it goes into
production.
My main point of this was to feel better than the bears, or TSLAQ crowd understand the industry
this badly, and are only acting on confirmation bias.
It discredits a lot of their other ideas too.
Don't get me wrong, I think the Tesla hyber bulls are far too bullish as well, as somewhat
delusional when it comes to some things, and are also reinforcing confirmation bias in
an echo chamber too.
Basically anything that happens with Tesla or Elon the bulls see as good news, even when
the opposite happens again or contrarian things happen to what they have said in the past,
it is always good news, and then the bears are the same too, everything is always bad
news.
For example the bulls say that Tesla don't need to advertise, they sell every car they
make, etc.
But if Elon did say we are going to start adevertising on TV now, then the same bulls
would praise him for it, and saying its an absolutely genius move.
Elon is playing 4D chess, no one expected this to happen etc.
Well in my expderience Elon playing 4D chess, is another way to say Elon got something wrong.
And it's ok if he does, but too many people look up to him like a God who can do no wrong,
and he has a perfectly planned out future and thought about every single step along
the way.
Well know that is not the case, EVs are a very new industry and there is a lot to still
be worked out in order for it to become more mainstream, and Elon is not always sure on
how it can be achieved, but will work hard to solve it, even if it is a different path.
I feel like I have worked very hard into trying actually work out what is good and what is
bad, and focus on being as objective as possible.
The other positive to this new Mercedes, is the fact that Mercedes are further increasing
their badge of approval for an EV future, a brand prestigious and credible as the oldest
car company in the world is good to see for the future of EVs.
And we will just end up discovering how much better value Teslas are than Benz.