One of the critical myths that many hold to be true is that Tesla has a serious advantage in battery mileage.

This write-up looks at Tesla’s reported battery performance results versus performance in real world driving tests, and versus its results in the tests supervised by the Environmental Protection Agency (“EPA”). Tesla’s relative performance is compared to the relative performance of other manufacturers. Some of the tests and reported results look at the fully-charged range and others address issues of efficiency. Some of the tests and reported results are done under highly controlled conditions, whereas others are less rigorous.

The following tables summarize the results from all the comparative tests under controlled circumstances that the author was able to find:

Comments

• Note that there is not a single test where any other brand did comparatively worse than
  any Tesla.
• Multiple tests and multiple forms of tests all show the same results: Tesla
  underperforms its EPA ratings materially, consistently and uniquely.
• Tesla has responded to the Autocar/What Car? results by claiming that the failure to
  fully drain the battery invalidates the test. But multiple other tests that show full
  draining produce the same results.
• Highway results are likely to be most relevant since this is the type of driving where
  range is most important.

Additional evidence: The EPA test versus the WLTP test

• The EPA test is the standard in America. Elsewhere, the World Harmonized Light Vehicle
  Test Procedure (“WLTP”) is used. Both are government-authorized and highly controlled
  tests. The WLTP test consistently produces longer range results than the EPA test.
• An analysis of all 10 vehicles (including 3 Tesla’s and 7 other brands) for which the author
  was able to find comparable results shows that the average ratio of the ranges
  produced by the tests (EPA/WLTP) is 83% for the Tesla’s versus 93% for the other brands.
  However, unlike the controlled, comparative tests reported above, there is greater
  variance of the results and some non-Tesla brands have results lower than some Tesla’s.
• Since it is difficult to “game” two very different tests at the same time, this is evidence
  that Tesla is looking to optimize results on the EPA test.

Three professional testers/automotive writers (Edmunds, The Drive, Road & Track) have all commented on this subject. These authorities all come to the conclusion that Tesla materially, consistently and uniquely overstates its range. Here are some representative quotes:

“I’m tired of this. I am not able to match, let alone exceed, the Tesla’s rated range. This flies in
the face of every other EV…. I’m thinking [Tesla’s] ratings are overstated. Of course they are.” (Edmunds)

“But Tesla’s numbers have never really made sense to me either. These are great cars, but I can tell you that there’s no universe in which a Tesla can approach its EPA ratings in real-world driving.” (The Drive)

“It seems Tesla optimizes its cars for the EPA test, which gives them range numbers to brag about on paper—numbers that owners I’ve spoken with can’t seem to reach.” (Road & Track)

Spritmonitor.de is a German website where car owners can input their actual consumption results for both EVs and ICE vehicles. This is obviously not a controlled result. However, if Tesla’s had materially more efficient EV Drivetrains, you would expect to see a systematic difference between Tesla’s and other brands in the website’s measure of efficiency (average kWh consumed per 100km of driving). Adjusted for the weight of the vehicles, which is admittedly a very crude standard, there appears to be no material difference.

Tesla’s contain a GPS feature that directs that driver to the nearest Supercharging station. The feature also shows whether the driver has sufficiently battery charge to make it to the station. To make this calculation, Tesla uses data crowd-sourced from Tesla cars. The results imply battery ranges much closer to the shorter real-world results than the EPA results. This belies the claim from many Tesla bulls that the other tests are biased against Tesla.

Conclusions

In the real world, Tesla’s do not have a material technological advantage in the company’s EV Drivetrains. Although Tesla’s range and efficiency results are as good as, but not materially better than, other manufacturers, this “advantage” needs to be tempered with the following considerations:

• There are clear indications that Tesla uses technologies, such as battery chemistries and
  configurations, which are inherently less safe than those used by other manufacturers
  but which produce higher power densities. Other manufacturers are not willing to make
  this trade-off versus safety.
• There are also clear indications that Tesla uses technologies that are less reliable and
  durable than those used by other manufacturers. The range of Teslas seems to decline
  faster than other brands with use, Teslas very quickly go into “limp” mode to avoid
  overheating (like in the quarter-mile races in this test), and Teslas quickly reduce
  charging speeds. All of these are indications of EV Drivetrains optimized for short-term
  “bragging” results rather than long-term performance and customer satisfaction.
• It has to be remembered that Tesla’s are designed from the ground up to be EVs,
  whereas most of its competitors to date are general models that have an EV Drivetrain
  option. The ground-up designs should be more efficient. Tesla’s more recent
  competitors, which are not included in these test results, are starting to be ground-up
  designs and therefore should perform relatively even better.
  As is so often the case with Tesla, a seeming technological advantage is just Tesla’s willingness
  to be more reckless and short-sighted than other companies.

It is clear that Tesla is “gaming” the EPA test. Although this is probably done to a degree by all manufacturers, it is clear that Tesla is doing this far more aggressively than other manufacturers. This is another case where Tesla is not better, merely more reckless.

For most of the time since Tesla began delivering the Model S eight years ago, Tesla has enjoyed sole possession of the luxury EV market.

Is this because they are lightyears ahead of the other auto manufacturers? Were other auto manufacturers simply not as nimble, innovative, and disruptive as Tesla?  Or, have they been preparing to release EVs for years, but didn’t want to introduce money-losing cars into market until regulations kicked in that made it a necessity?  These are the questions we will explore in this piece.  Hint Hint, its the latter.

In the U.S., EVs receive generous tax credits and subsidies, but the limited scope of California’s Zero Emission Vehicle (ZEV) credit scheme was not broad enough to force OEMs to introduce EVs at scale. And, until recently, while China offered generous subsidies for EVs, it did not impose emissions caps or other mandates.

Europe, however, is an entirely different matter. Several years ago, the EU formulated policies that implement mandatory CO2 emission targets for new cars. Those regulations began to be phased in this year (2020) and will reach full force in 2021. Quite predictably, most OEMs held back on introducing EVs until 2020 and 2021. Suddenly, this year, for the first time, Tesla has faced a deluge of competition in the European Union. Two years ago, there were only three other EV choices. Last year, the number increased to 11, though with production numbers choked back in anticipation of the 2020 inception of the EU’s emission standards.

By the end of 2020, there are expected to be 28 new EV offerings on sale, most of which will appear in the second half of the year. And, in 2021, another 18 new EV launches are scheduled, bringing the total number of Tesla rivals to 57.

For the first time, Tesla faces (at least in Europe and China) the kind of intense competition other OEMs have always faced. And it does so with limited product offerings. The Models S and X are already stale; despite price cuts and added content, both their market share and their absolute numbers have plunged. Tesla has no luxury EV offering on the horizon to replace either of them, and is already ceding the luxury and performance EV markets to Jaguar, Audi, Mercedes, and Porsche.

In the middle market, Elon Musk’s forecast that the Models 3 and Y combined eventually would achieve annual unit sales of two million seems highly improbable. In Europe, Model 3 sales are dropping off even before the arrival of the Model Y. And, in the U.S., Model 3 sales have peaked, and evidently are being cannibalized by Model Y sales.

Either because of Elon Musk’s over-confidence in Tesla’s current model line-up or weak product planning, Tesla has no new models coming out in 2021. This will hurt.

Of the 28 new EV launches this year and the 18 next year, there are 16 models that should easily give Tesla a run for their money. They include sleekly styled models from Audi, BMW, Polestar, Rivian, Volvo, and VW, with prices ranging from $33,000 to $96,000 and with ranges averaging 294 miles (470 Km).

Many of these models will not show up in the U.S. because, as noted, right now it is the EU and China which have the strict emission laws that all but force OEMs to make EVs and hybrids. Thus, VW’s first true EV, the ID.3, will not be sold in the U.S. VW has roughly half of its sales in the EU and the other half in China. VW finds it far more financially sensible to focus its EV production on the EU or China.

Which underlines a key point. VW may well only break even or, indeed, lose money on its EV sales in the EU and China. However, producing the low-margin or no-margin EVs enables VW to continue to profit from its internal combustion line. Tesla, with only an EV line, is forced to compete against other OEMs who find it economically sensible to, at best, break even on EVs. Tesla will continue to have the U.S. market largely to itself. However, in the U.S., Tesla’s sales have flattened and its revenues are declining. The obvious solution would be a significant refresh or full-model change.

Most carmakers conduct full-model changes every four to five years (and, if they aren’t doing full-makeovers, they launch new products). Full-model changes are costly, at roughly $500 million per model, but if executed properly, can reinvigorate demand for an old model. A prime example is Porsche’s Panamera, which saw global sales sink down to 15,240 units in its seventh year, but more than doubled to 38,443 units two years after its 2016 full-model change.

In 2021, Tesla’s Model S will be nine years old, its Model X will be in its sixth year, and the Model 3 (80% of global sales over the past four quarters) will be five years old. Yet Tesla has planned no full-model changes for the 3/S/X. It will be no surprise if Tesla continues to cut prices on these models in order to keep the factories running. Price cuts lead to lower residual values, and lower residual values cheapen a carmaker’s brand (Nissan, with its high incentive spending, is the perfect example).

While some might say that the Model Y should lead Tesla’s global sales growth, this too seems doubtful. Not only does the Model Y cannibalize sales of the Model 3 and Model X, but at least four of the EVs being launched in Q4 2020 and early next year are new models specifically aimed at competing with Tesla’s Model Y. The first will be VW’s ID.4, which is now on order in Europe, and will begin deliveries before the Model Y ever reaches Europe’s shores. Because of this, 2021 could be a year where Tesla returns to burning mountains of cash and is viewed as a struggling competitor rather than a market leader.

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Further Reading

Ford CEO on the EV Mustang

Tesla Ranks LAST on JD Power Quality Survey