More on the Tesla electric car

[Chuckanut]

I have no idea if the Tesla company will be a success or suffer the fate of many pioneers. But, I do admire them for attempting something that is difficult.

Note this quote from Teddy Roosevelt: http://www.goodreads.com/author/quotes/44567.Theodore_Roosevelt

 

[Nords]

Sure:

Thanks.

 

[samclem]

Actually, I'm not so sure the mortgage deduction really is a 'subsidy'. If I rent, the owner deducts interest as a business expense, and in a competitive market, the owner's costs affect what they need to charge for rent. So lower costs translate to lower rents - the renters get this advantage. So maybe the deduction for home-owners just levels the field? But go ahead - phase it out, fine with me.

I think the mortgage deduction subsidizes/supports residential real estate spending in general, and prices of same. It's hard to make the case that the government should be increasing the price of housing and encouraging people to spend more on this particular thing in preference to, say, food, clothing, education and health care for one's children, etc.

 

[kumquat]

The next great need: a competitive low-pollution source of electricity to power these vehicles.

You don't have to be smart enough to split the atom to think of at least one.

 

[Midpack]

The next great need: a competitive low-pollution source of electricity to power these vehicles.

You don't have to be smart enough to split the atom to think of at least one.

Go on, give us one or two?

 

[ERD50]

I have no idea if the Tesla company will be a success or suffer the fate of many pioneers. But, I do admire them for attempting something that is difficult.

Note this quote from Teddy Roosevelt: Theodore Roosevelt Quotes (Author of The Rough Riders)

I have to agree with that. While other companies were trying to figure out how to make an 'affordable' EV, Tesla connected the dots...


Dot 1) People would really like their EV to have a 200+ mile range.

Dot 2) (make some calculations....) Whoah! That takes a $$$$-load of batteries!!!

Dot 3) Hmmmm, enough batteries for a 200+ mile range, combined with the torque curve of an electric motor, will provide enough energy for a short while to make that EV accelerate like a bat-outa-hell!!!

Dot 4) Some people will happily pay a $$$$-load of money for a car that will accelerate like a bat-outa-hell! Enough to pay for all those $$$$ batteries!

Dot 5) A world-class performance EV is unique, and will get lots of press, and it will attract 'greenies'.

And then they pulled it off, no easy task. I gotta hand it to them.

Whether any of that translates to anything approaching mass market in the US is very questionable IMO. As I've said before, I'd expect to see them in Europe first, with their high petrol prices and denser population. If they don't make it there, I can't see anything but niche applications here.

-ERD50

 

[Midpack]

While other companies were trying to figure out how to make an 'affordable' EV, Tesla connected the dots...

And then they pulled it off, no easy task. I gotta hand it to them.

You may be a little ahead of yourself. Have they turned a profit yet, or even had a breakeven quarter. Don't get me wrong, they seem to be headed in the right direction and I'm a fan of Elon Musk, so I wouldn't bet against him. I really hope SpaceX is successful, and it's good that there are folks developing EV's even though the pure economics aren't all that helpful just yet. But it may be premature to declare victory...

Tesla: Profit Point - Seeking Alpha among tons of analysis/articles out there.

 

[rodi]

We've decided our next car will be an EV. Probably the more affordable Leaf, rather than the Tesla, but it will be an EV. But Hubby's gas-hog '95 Dodge PU keeps running strong and we can't justify buying a new car when that one is still reliable and solid.

My car is a hybrid highlander. I got it June '05 and it's still drives like new. All the talk about the batteries dying seems to be the hype of haters. Since it's a hybrid, we'll still be able to take it on longer trips, when we get the EV, which will be range limited.

When we get the EV, we'll put on solar panels. We live in sunny San Diego, so there's no lack of sunshine. We're low electrical users, (no AC) so solar hasn't penciled out. When we get an EV - our usage will increase, making the solar make financial sense.

The interesting thing about driving in Southern Cal. The road is split 50/50 between BMW's and Prius's. OK - that's an exaggeration... but not by much. They are definitely the majority of cars on the freeways.

 

[ERD50]

You may be a little ahead of yourself. Have they turned a profit yet, or even had a breakeven quarter. Don't get me wrong, they seem to be headed in the right direction and I'm a fan of Elon Musk, so I wouldn't bet against him. I really hope SpaceX is successful, and it's good that there are folks developing EV's even though the pure economics aren't all that helpful just yet. But it may be premature to declare victory...

Tesla: Profit Point - Seeking Alpha among tons of analysis/articles out there.

Right, too soon to tell for profitability, etc. I just meant in terms of actually delivering some significant number of product to customers. It's out of the proto stage, and an actual shipping product. Or to quote Steve Jobs " Real artists ship!"

And considering all the hoops you need to go through to get a new car to market, with a new technology no less, I am impressed - both engineering-wise and business-wise.

Long term? It will be interesting. There is certainly a bigger market for the BMW/Mercedes range than for the super-high performance sports car area. Can they compete? We will see.

I have a harder time picturing EVs in the median price range though. I suspect that by the time batteries get to a sweet spot, the other tech will have progressed enough to make it very tough. But as batteries improve, hybrids will be more common. I keep envisioning something like the Chevy Volt with an engine far more efficient than the current ICE - maybe a small constant-speed diesel, or a turbine, with a Sterling engine or something to recover the waste heat?

-ERD50

 

[Chuckanut]

Dot 4) Some people will happily pay a $$$$-load of money for a car that will accelerate like a bat-outa-hell! Enough to pay for all those $$$$ batteries!

IIRC, the head of Tesla has implemented his plan based upon this conclusion. The first Tesla was a very limited production, extremely expensive roadster. The next car is the Model S, just a 'normally' priced expensive car made in much higher quantities. Next up, is a more affordable (note: I did not say inexpensive) electric car that can be mass produced in much larger quantities. This will be the toughest challenge.

 

[Animorph]

Go on, give us one or two?

You don't like solar cells? The Tesla Supercharger network is solar based. Wind and hydro are low pollution, if not necessarily low-impact.

 

[GrayHare]

The main problem with EVs is the rare earth elements in the batteries. With current EV battery technology, the known supply of the elements cannot replace more than a small fraction of the ICE cars currently in operation. For EVs to rule, either battery technology must change or large, new supplies of the rare earth elements must be discovered.

 

[M Paquette]

The main problem with EVs is the rare earth elements in the batteries. With current EV battery technology, the known supply of the elements cannot replace more than a small fraction of the ICE cars currently in operation. For EVs to rule, either battery technology must change or large, new supplies of the rare earth elements must be discovered.

It turns out that the rare earth elements aren't really rare, just... Diffuse. They don't tend to occur in concentrated veins, but in deposits where lots of ore has to be moved and chemically processed. Rare earth mining operations are expensive to start up and run.

Until recently, Chinese companies were supplying large amounts of rare earth elements worldwide very cheaply. There was a change in policy where China wanted to hold more of the product for internal use. The resulting spike in prices made it worthwhile to open new mines and reopen older, closed facilities. There are some 35 mining operations starting up, from Malaysia to Mountain Pass, California.

Don't forget that the materials in a battery are not consumed. Old vehicle batteries can be recycled (they are really rich ores...).

 

[Zathras]

The main problem with EVs is the rare earth elements in the batteries.

The main problem is people hear this misinformation and them consider it true

DC electric motors use permanent magnets which use rare earth metals. The Model S, Roadster, and I am pretty sure at least some of. The others use induction motors which use no rare earth's.
The nickel batteries used in hybrids also used rare earth metals. However they are starting to move away from nickel to far lighter and smaller lithium ion batteries.

 

[Zathras]

You may be a little ahead of yourself. Have they turned a profit yet, or even had a breakeven quarter. Don't get me wrong, they seem to be headed in the right direction and I'm a fan of Elon Musk, so I wouldn't bet against him. I really hope SpaceX is successful, and it's good that there are folks developing EV's even though the pure economics aren't all that helpful just yet. But it may be premature to declare victory...

Tesla: Profit Point - Seeking Alpha among tons of analysis/articles out there.

Oh they are definately still in the start up stage of a business. Victory can't be declared yet on a business sense.
However, breakeven is projected to be by the end of this year. They have also started making payments on the DOE loan they received, 5 months early.

Edit – Removed totally incorrect information on my part

 

[ERD50]

As for the seeking alpha link, you should know John Petersen is rabidly anti EV.

I'm confused - the link that Midpack posted was an article by Nick Butcher, who appears to be pro-EV (though I would not say 'rabidly').

-ERD50

 

[Zathras]

I'm confused - the link that Midpack posted was an article by Nick Butcher, who appears to be pro-EV (though I would not say 'rabidly').

-ERD50

DOH!
Total screw up on my part.
I agree mostly with the article. And yes, I am sure that the 8000/year is just when the Model S line breaks even.
They are actually past that point in terms of quantity, however, I suspect they aren't quite at break even quite yet (pure guess here) as they are wrapping up some quality issues with a supplier or two.
Within a few more weeks they are expected to reach 400/week or 20,000/year which will be a great landmark. And should bring the entire company into positive cash flow.

 

[jerome len]

Yes, it is priced much higher than the average car.
However, it is priced competitively with other luxury cars which is what it is shooting for.
For our family, it is our primary car. In the last 6 weeks about 85% of both m wife and my driving miles has been in the Model S. the most we have put on it in a single day has been about 130 miles (this is not in the base model). It very well could be our only car if push came to shove

I do agree though that electric cars in general don't work for everyone. I just think the number of people it does work for is enough to support a business plan.

You say: "It very well could be our only family car if push comes to shove", my question, how would you take it on vacation? Why not save some money and buy a chev Volt that can run on either gas or electric. And, if you want a luxury version, next year a similar powertrain will be in a Cadillac....but it won't be cheap I'm sure. And, it isn't all about money....you do save a lot of time avoiding gas stations, if you drive 1000 miles a month and charge it at night.

Most families have a couple of cars.....I'm sure the Tesla works well in combination with another car......but if you can only have one and want electric.....my vote is for the Volt.

 

[ERD50]

Within a few more weeks they are expected to reach 400/week or 20,000/year which will be a great landmark. And should bring the entire company into positive cash flow.

I'm curious - do have any numbers on what the overall market is for cars in that price range? Just wondering what kind of market share of that segment they need to hit to sell 20,000 annually.

There will be the early adopters who wouldn't part with the $100K for the Roadster (and a few who will want both!), most of those would be in the first year, I'd guess. I wonder after that.

-ERD50

 

[Zathras]

You say: "It very well could be our only family car if push comes to shove", my question, how would you take it on vacation?

Our vacations tend to be within 150 miles. Those that are further are mostly more than 500 miles, some overseas. We don't take the car on those anyway, so requiring a car to be able to make that trip is rather silly in our case.

If push did come to shove though, we would check ahead of time that our vacation spot either had a 110 or 220 outlet available, or that there were RV parks or superchargers along the way. Right ow the superchargers are rare, but over the next few years I expect them to cover 85% or more of the USA.
A number of couples already take cross country trips in EVs. Yes, it takes some planning but it is possible if push comes to shove.
If our Volt were out of the picture, and we had to take a vacation by car, beyond the range of our EVs we would rent a car.

Why not save some money and buy a chev Volt that can run on either gas or electric. And, if you want a luxury version, next year a similar powertrain will be in a Cadillac....but it won't be cheap I'm sure. And, it isn't all about money....you do save a lot of time avoiding gas stations, if you drive 1000 miles a month and charge it at night.

Because driving the Volt after driving the Model S is little better than riding a horse drawn carriage;-P. I know because our second vehicle is a Volt. I love the Volt for its smooth ride and acceleration under electric power. But I refuse to contribute to our trade deficit if I can help it.
I have no interest in the luxury aspect, although it is nice. I will be looking at the Cadillac ELR only if it has a greater EV range than the Volt when it comes out.
However, the Volt and Caddy are incredibly complicated machines. I prefer the elegant simplicity of a pure EV. And the additional cargo capacity is phenomenal!

Most families have a couple of cars.....I'm sure the Tesla works well in combination with another car......but if you can only have one and want electric.....my vote is for the Volt.

Agreed that EVs work best in two car households. My driving patterns are such that one 200 mile range vehicle would suffice as my only vehicle and serves well as our primary vehicle.

 

[Zathras]

I'm curious - do have any numbers on what the overall market is for cars in that price range? Just wondering what kind of market share of that segment they need to hit to sell 20,000 annually.

There will be the early adopters who wouldn't part with the $100K for the Roadster (and a few who will want both!), most of those would be in the first year, I'd guess. I wonder after that.

-ERD50

Great questions! I did some digging and the first somewhat decent information I found was at Auto Sales - Markets Data Center - WSJ.com.

They list YTD luxury car sales at a bit over 800,000. Annual sales should hit at least 900,000. However, I don't find their definition of 'luxury'.
We also don't get a picture of how much of a market there is outside the country.
Even if we are very conservative and assume a total world-wide market of 500,000 worldwide, 20,000 is only 4% of that.

I completely agree that initial adopters are giving a very big bump to sales. Of course, many people not being able to see one and the 7-10 month wait for the car, and the 'I'm nervous about buying new technology' aspect aware all depressing sales.

It should be a very interesting year for Tesla. I thin the next 12 months will be extremely interesting to watch.

 

[Chuckanut]

According to Consumer Reports the Tesla model S is the best car they have ever tested. Not the best electric car, but the best car of all. They do add that given the need to recharge it every 200 miles or so it is probably not the best car for cross country trip. Still, since it was designed from the ground up as an electric car, the designers were able to take advantage of that fact to make it right.

Video: The Tesla Model S is our top-scoring car

 

[Chuckanut]

The news seems to have triggered a jump in the stock price of Tesla. I a guessing that people are hopping a bigger car company will buy them out.

 

[Zathras]

While I am sure this didn't hurt the stock price, the 1st quarter financials had more to do with it. There may also be some short squeeze action going on.

Tesla announced their first quarterly positive quarter ever in the first quarter (both GAAP and non-GAAP). Beating expectation, and raising production numbers for the year.

Aftermarket action was already up around $68-$70 before the news of the CR review came out.

 

[rbmrtn]

Bit of contrast to the NYT times article from back in Feb,

http://www.nytimes.com/2013/02/10/automobiles/stalled-on-the-ev-highway.html?pagewanted=all&_r=0