Predicting the tipping points

Tipping point TeslaMondoInteresting thread here about Tesla’s tipping point. That’s the theoretical point at which a Tesla product becomes such a strong value proposition over ICE that buyers run out of objections. Yes, the high-end sedan segment has already “tipped” in Tesla’s favor, but few can breathe at that price altitude. The Model X may well repeat that feat in the high-end SUV market, but that’s another area where only eagles dare. Model 3 will fight the battle of Midway, with all the significance and bloodshed of that WWII conquest. Tipping in that segment means a massive strategic victory over the Axis of Oil. But that’s been discussed.

What about the $20k range — Camry/Accord territory? Does Tesla want to enter that theater of war? Is it even tippable? Perhaps we can learn by looking carefully at the “Tesla” of the last 15 years, a vehicle that established a beachhead in the $20k-ish segment despite a constant shower of bullets, much akin to the D-Day invasion of Normandy.

That’s the Prius. Born in 1997 in Japan, it was a bland, skinny head-scratcher of a sedan with unbelievable gas mileage but little else to offer. Compromises kept it from “tipping.” Too little trunk space. Too little winter traction. Too anemic a package. Too high a price for what you got. Too little known about this newfangled “hybrid” technology. Compared with EVs nowadays, which enjoy a certain cachet thanks to Tesla, hybrids in 1997 had no aspirational context whatsoever. Or, following this war analogy, no cover fire.

Toyota went back to the war room and emerged with a second-generation Prius that had little in common with the first, besides a hybrid powerplant. It had a more people room and a lot more cargo room, better winter performance thanks to real tires, and better summer performance thanks to an electric A/C that would run even when the engine shut off at traffic lights. The new EPA fuel economy rating was 60 city, 52 highway — a stretch for sure, but that’s what the sticker said. And the price wasn’t far north of Camry. You’d get that extra money back in fuel savings in just a year or two, and you’d still be driving a real car, not an MIT homework project. And you’d be green. How green? You’d be bouncing gaily with bunnies and deer through dew-covered meadows with a double-rainbow in the background, or something.

SOLD!

The Prius waiting list at one point stretched to two years before Toyota finally was able to fatten production. Like the iPhone that would arrive years later, the Prius was the ultimate gadget that everyone, not just eccentrics, could appreciate for a host of reasons. Driving one made you environmentally and politically aware . . . of, um, something. Hollywood celebrities bought Priuses to show they were aware of it too. South Park did an episode about the car’s “smug” image, but ah well. The Prius has since wiped the floor with all hybrid competitors and grown into a family of cars in three sizes. And all this with lowly NiMH technology.*

In hindsight, what did it take for the Prius to go from near-zero to superhero overnight? A long list of little things. More room for your stuff, as George Carlin might say, and a few years of proven reliability, and a “right thing to do” image, and a better EPA rating. In short, a package that barely overcame objections instead of succumbing to them, and just often enough. That’s all it takes to “tip.”

OK, so fast-forward to, say, 2022.

Household solar has tipped. That’s important. It means people have an interest in plugging in a car, and it means Tesla is making coin by selling battery systems to myriad industries. The Model 3 has tipped, making Tesla a household name, and making a full EV less-scary. But $35k is still too rich for many, who simply cannot abide spending more than CamCord money on an automobile no matter what their household income. The $20k market is all about value, reliability, safety and comfort. Tesla’s one-two-punch of performance and looks, potent thus far, is welcome but not essential in this arena. It’s more about the math. Will Tesla unveil a relatively humble car whose operating cost and “right thing to do” image are so compelling that it’s worth cutting ties with old, trusty CamCord, even Prius, and buying into a youngish car brand that ties seamlessly into your new solar/battery system? Would these people bid farewell to Big Oil, Big Grid and Big Car Dealer in one bodacious gesture? It’s a little scary. But think of the $$ savings and the sense of one-upsmanship. It’s enough to make one a little smug.

* Yes, the Plug-In Prius has a li’l Lithium aux unit.

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