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One drawback of an EV . . . .

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On 11/17/2020 at 10:51 AM, Enthalpic said:

Your title is drawback of an EV.  It should be drawback of expensive cars. I'm sure insurance on a Lamborghin isn't cheap.

Well, no, its worse for Teslas - note this from a consumer article

Teslas are more expensive to insure than many luxury cars due to their high repair costs, which increases the cost of collision coverage.

The article admittedly doesn't say how much more expensive which is what the die hard defenders of EVs would want to defend against, but it must be a significant margin for the article to comment. However, drivers under 23 with access to the car (my daughter and son for a time) really jacks up the premium and never mind any other considerations.. 

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On 1/13/2021 at 1:32 PM, Jan van Eck said:

My hunch is that insurance costs on those cars are going to continue to be high well into the future - because the insurers recognize one truth: the buyers of those cars can afford outside insurance premiums.  Insurance is like any  other product: it is priced according to the perceptions of the customer's ability to pay. 

You see costs start to come down when volumes are sufficient for aftermarket parts to start entering the marketplace.  On my low-volume BMW big sedan, the rear suspension is mounted on a sub-frame that in turn is connected to the unibody by various rubberized mounts.  It is a complex design, and over time the mounts deteriorate and the car takes on a set downwards.  That in itself would not be so bad but BMW, in order to lower its manufacturing costs by a few pennies, no longer makes the independent rear wheel alignment with two directional variables.  If the suspension sags then the wheels will tilt on the vertical axis and the tires will wear out really quick, with rapid wear on the inside tread.  Now the way to fix this is to install a new set of A-arm bushings in the upper control arms, and to install ride height rubbers over the rear shocks.  The bushings, that have this neat cam action to tilt the wheels back into position, cost $500 a set and are made by an independent vendor in Australia.  The height rubbers will raise that settled rear end platform by up to an inch and those parts are made in Novosibirsk, Russia, which is in the Siberia area. Since no shop wants to touch putting these in, I will do it in the garage next summer, probably take me a full month, but at least it will get properly fixed. 

You get into these problems because the BMW attitude is that its customers should not be riding around in old iron, but perpetually spring another hundred grand on something new at the dealership.  It is an arrogant attitude. The way capitalism resolves this attitude is for some entrepreneur to go into Eastern Europe, I would have picked the Czech Republic, and made a deal to import the Skoda sedan to the USA, where you have this utterly tough machine that delivers good performance and lasts forever.  Skoda ran into money problems with the re-integration of Europe and the collapse of its captive market, so it got sold off to Volkswagen, and now the Skoda is another over-priced VW (no surprise there).  But in the USA, four out of five car sales are used cars, precisely because the manufacturers have driven up the cost of buying their new product  (everything gets loaded up), and the insurance and taxes on new product puts that out of the reach of the ordinary folks  (who then buy the used stuff). 

Can you get into that business and build a low-priced car for the masses?  Probably not.  The USDOT has regulated new cars out of that price bracket.  For example, all new cars today require tire pressure monitoring systems, and back-up cameras. That costs money. Have a small rear-ender and you need a new camera set-up.  That costs money. That costs more insurance.  And that puts the cars out of the reach of first-time buyers who are not flush with cash.  Not like you can go buy a new 1954 Chevy with a straight 6 for less than $2,000, not these days. 

The incumbent insurance companies will try to rig prices, and they will fail. There's already competition:
https://www.tesla.com/support/insurance

Their greed would also give Tesla a beachhead in the insurance industry, focusing the tech world's attention on a new, lucrative target. From talking to an insurance agent, my impression is that the industry is technologically backward and inefficient. As she described her job, my consistent thought was, "Why hasn't software been written to do this?" Of course, that software hasn't been written because the techies have been preoccupied with other things. If the insurance industry draws attention to itself, the techies will look a little closer, discover a target-rich environment, and tear it apart - just as they're doing with retail, finance, and so many others.

As for the increasing cost of vehicles, I would argue that's not relevant to Tesla's ability to compete. If every automobile must adhere to the same requirements, then Tesla competes on an even playing field.

We've also not discussed Tesla's efforts to simplify vehicle design. What started as $80k cars will soon become $25k cars. The 3km of wiring in the Model S became 1.5km in the Model 3 and will become 200m of wiring in future models. Complicated instrument panels have turned into a single touch-screen. Vulnerable engine components have been replaced by storage space. Etc. Like our phones, which now duplicate the functions of dozens of devices through software, our cars will become more functional with less complexity. Of course, we don't see that in the legacy automakers, who are still doing things the old way. The change is being led by Tesla just as Apple lead the smartphone revolution amidst a sea of legacy phone manufacturers. If the legacy automakers stay the course, they'll go the way of Nokia.

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