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Making Tesla pt. 2

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Actual Profitability of Tesla

Unread postby ennui2 » Thu 25 Jun 2015, 22:30:37

Recently Greer took a pot-shot at Tesla to say that the company can't survive without huge government kickbacks. I remember the bail-outs of the automakers which faced a similar critique (although motivated for different reasons) only to have the automakers actually pay the government back, which kind of took the wind out of the sails of the critics.

Well, here's a recent news item about Panasonic buying into the gigafactory.

http://www.teslamotors.com/blog/panason ... igafactory

This info actually goes back at least since October.

http://www.wsj.com/articles/panasonic-p ... 1412656008

Here's the most salient datapoint.

http://ecomento.com/2015/06/11/panasoni ... gafactory/

[Panasonic] will shoulder up to 40% of the cost of that endeavor


That's a pretty huge win for Tesla. And I seriously doubt that's the only big deal of its type we'll see Tesla make going forward.

It's curious that Greer fails to mention positive news like this, only to declare Tesla nothing but smoke and mirrors.

This is why I don't like treating doom bloggers who have obvious axes to grind (both Greer and Orlov do) as experts. They are biased.
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Re: Actual Profitability of Tesla

Unread postby Keith_McClary » Fri 26 Jun 2015, 00:46:48

ennui2 wrote:I remember the bail-outs of the automakers which faced a similar critique (although motivated for different reasons) only to have the automakers actually pay the government back, which kind of took the wind out of the sails of the critics.
Really? Didn't the gubmints pay warranty costs for old GM and Chrysler vehicles, not repaid?
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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 07:08:15

Quick google search says GM at least paid it back with interest. Feel free to offer your own sources.

http://wardsauto.com/blog/dear-taxpayer ... d-interest
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Re: Actual Profitability of Tesla

Unread postby GHung » Fri 26 Jun 2015, 08:10:57

Firstly, would Panasonic have been at all interested without prior and ongoing Federal (and State) subsidies to Tesla?

Secondly, regarding GM:

The Story No One Tells About One of America's Biggest Bankruptcies


The GM situation is a microcosm of what's gone wrong in our country.

In the June issue of my Investment Advisory, I argued that the bankruptcy process resolved none of GM's core problems. The process was subverted by the political establishment, which sought to protect one class of citizen at the expense of the regional economy, GM's bondholders, and its customers.

If we can't apply the rule of law and sound economics to fixing one of the world's most important manufacturing concerns... it doesn't bode well for anyone else being afforded these privileges, either.

That's why it's so important for you to understand what happened.

Most people simply don't realize that the bailout of GM wasn't a bailout of the company. It wasn't a bailout of its shareholders, who lost everything... or its bondholders, who lost almost everything. Where did the money go? To the union. The United Auto Workers (UAW) ended up with all the money.

Let me show you how...

http://www.dailywealth.com/2125/gm-amer ... bankruptcy


My well-off neighbor took about a half-million dollar hit on GM bonds and some stocks. Still waiting to get a fraction of that back. The idea that the bankruptcy (such as it was) was a success, and that GM repaid everyone in its return to 'profitability' is hogwash (pure propaganda) from what I can see. Simply another case of wealth redistribution.
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Re: Actual Profitability of Tesla

Unread postby Timo » Fri 26 Jun 2015, 08:22:40

To no small degree, Tesla is quite literally changing the equation by which the profitibility of auto-manufacturing companies are judged. Apply the same formula to GM, or Ford, or any other auto-maker back when they were start-ups (100 years ago), and then the same mathematics might apply. However, the application of modern metrics, quite easily applied to modern, established motor companies simply cannot be equally applied to a company as radically different as Tesla. Tesla is breaking the mold by which autos are produced. They are succeeding against all odds, and an institutional intertia that would otherwise prevent such a start-up from getting off the ground. To just get a sense of the manners in which Tesla is changing the game, notice that every single large auto-maker in the world is following their lead, and is investing billions (collectively) in research the match the product capabilities of Tesla. BMW has gone so far as to promise that every single car they produce will be a plug-in by the year 2020. Ford doesn't worry Elon Musk very much. Ford really ins't into the pure EV game. Ford is still heavily invested and committed to the ICE market, and to a limited degree, to the PIHV market. These types of cars are not the competition for Tesla. BMW is the competition because they are going FSA with EVs. Tesla has even gone so far as to develop their own nation-wide charging grid. Volkswagon has respnded in-kind in Europe, and is pledging to do the same here in the US. I think that simply measuring the "profitibility" of Tesla is missing the larger point of the success and impact that Tesla is having on the rest of the automotive industry. Look at the current directions of every sinlge automaker on the planet, and they are all responding to the model that Tesla has established. That is precisely because the model that Tesla has produced works, and it works better than anyone could have thought possible for a new automotive start-up. Tesla leads the world in EV technologies, and EV production. The rest of the world is scrambling to stay in the game.

And if you're intent on bringing the gubmint assistance that Tesla has received to get going, i'd just remind you that the other Big Three US automakers all collectively bought out, and dismantled nearly 100% of the electric streetcar industry in the 1st quarter of the 20th Century to ensure that every last American family had no choice but to buy one of their cars. They did this with gubmint assistance. And yet, when the Big Three almost went belly up, two of those three were bailed out by that Big Bad Gubmint. Sure, they paid it back. Ditto for Tesla. Every criticism that can be applied to Tesla can equally be applied to any other US automaker, and yet Tesla is leading the way to a new auto-technology paradigm. If people want the gubmint to do something to address AGW, WTF is wrong with supporting the direction that Tesla is forging? The entire industry is following. Actions speak much louder than words.
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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 08:33:51

There are many doomers who have advocated a Manhattan or Apollo moonshot project to transition us off of FF. Naturally, that would be funded by taxpayer money. The difference (and the sense of impropriety) is that the government has picked favorites in the private sector. And that doesn't always work out (hence Solyndria). But it doesn't mean that it will never work out.

The thing about Tesla is that in some respects it operates like a public company. The opening up of its patents and its willingness to collaborate with other automakers helps answer critics that accuse Tesla of attempting to form a monopoly. The one thing Tesla has for itself, though, is the Supercharger network. Free charging at those stations is exclusive to Tesla owners. Presumably, other EVs could use them, but for a fee.

I don't think normal market forces favor moving off of fossil fuels, especially in the fracking era. Musk has a genuine interest in killing the internal combustion engine, and so he's tried to go at this problem in a way others who are just looking for a quick buck never would. And that's why he's gotten assistance, because he's one of the only ones out there really pushing this.

Remember that Lutz (father of the Chevy Volt) famously said "Global warming is a crock!". There's a very thin level of buy-in with the automakers on EVs. They'd like nothing more than to throw up their hands and give up like they did during the EV-1 era. They're doing this because they're scared, not because they really want to.
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Re: Actual Profitability of Tesla

Unread postby Timo » Fri 26 Jun 2015, 08:46:14

ennui2 wrote: The one thing Tesla has for itself, though, is the Supercharger network. Free charging at those stations is exclusive to Tesla owners. Presumably, other EVs could use them, but for a fee.

Nope. No other EV can use a Tesla charger. The connection mechanism is different. Tesla doesn't use CHADMO. This is the one area where Tesla is following the Apple Computer model to ensure that no-one can use their infrastructure for free, or even at a cost. If you own a Tesla, you're in very exclusive company. This exclusivity, BTW, is my only major complaint about Tesla.
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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 08:56:39

Timo wrote:The connection mechanism is different. Tesla doesn't use CHADMO. This is the one area where Tesla is following the Apple Computer model to ensure that no-one can use their infrastructure for free, or even at a cost.


I don't expect that situation to persist. It's not a big deal now because there are too few EVs, but this will work itself out.
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Re: Actual Profitability of Tesla

Unread postby GHung » Fri 26 Jun 2015, 09:01:40

... which is why I've advocated for standardisation of not only charging stations, but batteries as well. Question is; who's model becomes the standard? If batteries were standardised, a move could be made towards swappable batteries for all EV's. Pull into a battery station and have a fully charged (and tested) battery swapped in.
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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 09:12:15

Tesla experimented with battery swaps and recently abandoned it. I think that whole approach is a dead-end.

A little additional googling shows that there's a growing interest in just settling for Tesla's connector/protocol because it's just a better technology.

https://transportevolved.com/2014/06/16 ... -standard/

I think Tesla is going to set the standard and the rest will eventually fall in line.
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Re: Actual Profitability of Tesla

Unread postby GHung » Fri 26 Jun 2015, 09:18:42

My (BAU mode) thinking is that until the average EV owner can get a fully charged battery in minutes instead of hours, EVs will continue to be a niche market (and expensive). Drivers are inherently impatient creatures; the whole point of driving is to get there faster. I think this is fundamental to EV's success at scale. That said, this whole discussion may be moot soon (so says my doomer id).
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Re: Actual Profitability of Tesla

Unread postby Keith_McClary » Fri 26 Jun 2015, 10:25:10

ennui2 wrote:Quick google search says GM at least paid it back with interest. Feel free to offer your own sources.

http://wardsauto.com/blog/dear-taxpayer ... d-interest

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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 10:57:25

GHung wrote:My (BAU mode) thinking is that until the average EV owner can get a fully charged battery in minutes instead of hours, EVs will continue to be a niche market (and expensive).


That's what the supercharger network is for, and why they're located at rest-stops, and why the supercharger protocol has the fastest charge-rates of them all. You might not get 100% charged at the same speed as filling up a gas car, but you might get enough to reach your destination before you start to get really impatient over the wait.

I took a look at the Chevy Spark/Bolt and that thing is one of the ugliest cars ever. The Nissan Leaf is just tolerable to look at. The Model-3 is really going to make or break things. Tesla has the best designers and the best engineers.
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Re: Actual Profitability of Tesla

Unread postby Timo » Fri 26 Jun 2015, 11:14:03

GHung wrote:My (BAU mode) thinking is that until the average EV owner can get a fully charged battery in minutes instead of hours, EVs will continue to be a niche market (and expensive). Drivers are inherently impatient creatures; the whole point of driving is to get there faster. I think this is fundamental to EV's success at scale. That said, this whole discussion may be moot soon (so says my doomer id).

I don't think the idea or purpose of battery swapping was to achieve a new, 100% 5-minute recharge for your EV. Much more probable is that the purpose and function of battery swapping is more akin to an oil change in an ICE. Batteries inherently decline in their capacity over time. Need a new battery after 3 or 4 years? Swap it in 30 minutes. That's a longer time-period between swaps than an oil change, and it's also about the same time requirement to accomplish the task. That's also about the same time-frame for a supercharge at one of Tesla's supercharging stations. The reason their swapping effort fell flat is because their's no net gain to the customer, yet. The cars are all too young to have depreciated in their batery power very much, so there's simply no need to swap it for a new one.

As for universal standardization of batteries for all cars, it's too soon to do that. At present, nearly every automaker is developing their own technologies for batteries, and the those technologies are quire literally in their infancy. If we developed a universal standard now, that would preclude further research into better batteries, and would also very quickly render existing batteries obsolete when new technologies are developed. This is why the EV market is extremely competitive. That competition drives innovation, and that innovation drives progress for everyone. Maybe someday when EVs have become so common that they outnumber ICE vehicles, several automakers might all agree to use a single type of batter technology, thus making their batteries accessible to everyone, regardless of the brand of car they drive. This adaptation will be completely voluntary, though. Right now, there are too many players in the game, all developing different models of similar technologies, and developing new marterials for ion cathodes, and cooling systems, and liquid v solid, and yad-yada. The industry is too young for a standardized one-size-fits-all approach. Give it 15 or 20 years.
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Re: Actual Profitability of Tesla

Unread postby KaiserJeep » Fri 26 Jun 2015, 11:41:19

Does everyone so enamored with Tesla understand that they cannot produce automobiles after cheap oil is gone? The cars are chock full of petrochemical plastics, remotely-manufactured components, and embodied energy in the fabrication processes, and they still cost $85K and up during the age of oil.

In a post-crash economy, it is estimated that a Tesla would cost over $1 million per car, if it could be manufactured at all, because of transportation costs for the components which are produced in many places from China to the EU and San Salvador.

In a post-crash economy, it may be possible to build a low tech NEV/LSV (i.e. golf cart type vehicle) for the $85K price of a Tesla.

Either way, best to acquire such vehicles before the crash.
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Re: Actual Profitability of Tesla

Unread postby pstarr » Fri 26 Jun 2015, 11:53:42

ennui2 wrote:
GHung wrote:My (BAU mode) thinking is that until the average EV owner can get a fully charged battery in minutes instead of hours, EVs will continue to be a niche market (and expensive).


That's what the supercharger network is for, and why they're located at rest-stops, and why the supercharger protocol has the fastest charge-rates of them all. You might not get 100% charged at the same speed as filling up a gas car, but you might get enough to reach your destination before you start to get really impatient over the wait.
There is no super-charger network. It remains a figment of some fevered weenie's virtual reality. The cost to install thee-phase 500 volt service to homes, business, rural areas (where food and materials actually exist) and cross-country transport corridors is overwhelmingly impossible.

So sad we can't weenie our way out of disaster. :lol:
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Re: Actual Profitability of Tesla

Unread postby Outcast_Searcher » Fri 26 Jun 2015, 12:02:45

ennui2 wrote:
GHung wrote:My (BAU mode) thinking is that until the average EV owner can get a fully charged battery in minutes instead of hours, EVs will continue to be a niche market (and expensive).


That's what the supercharger network is for, and why they're located at rest-stops, and why the supercharger protocol has the fastest charge-rates of them all. You might not get 100% charged at the same speed as filling up a gas car, but you might get enough to reach your destination before you start to get really impatient over the wait.


Why not use something factual, instead of "might" and "get really impatient" which are pure opinion, if you're going to argue that Tesla superchargers are fast enough?

http://www.teslamotors.com/supercharger

In fact, per Tesla's own marketing claims on its supercharger page (with clear red and green graphs below the main map):

1). It takes "as little as" 30 minutes to get 170 miles of range.

2). Like with all lithium ion batteries, the charging rate slows down a lot as you charge. (So charging much beyond halfway is impractical/undesirable for people waiting at a supercharging station).

I took a look at the Chevy Spark/Bolt and that thing is one of the ugliest cars ever. The Nissan Leaf is just tolerable to look at. The Model-3 is really going to make or break things. Tesla has the best designers and the best engineers.

Looks aren't the critical point. The poor mileage, poor real world performance/range, and high price/performance ratio of today's electric cars is the real issue, if BEV's are to become mainstream. If company X can actually make a reliable, reasonably priced, long range electric car that the middle class can afford, coming up with a reasonable body style will be child's play in comparison.
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Re: Actual Profitability of Tesla

Unread postby ennui2 » Fri 26 Jun 2015, 15:09:09

pstarr wrote:There is no super-charger network. It remains a figment of some fevered weenie's virtual reality.


You're telling me this is imaginary?

https://www.youtube.com/watch?v=2YFjydCiiNQ

Image

What planet do you think you're living on? Get out from behind the redwood curtain now and then, OK?
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Re: Actual Profitability of Tesla

Unread postby pstarr » Fri 26 Jun 2015, 15:41:44

Pretty pictures don't lie. I see a lot of red dots, even a hundred. Impressive.

Use your enormous intellect Mos, glace at the map and hazard a rough count of charging stations in the 30 million New York Metro area. A simple mathematical trip will generate average charger density/mile and density/auto. With that you might calculate the average distance one would to need to push their bricked Tesla down the rode for that pitiful little charge.

Next you might want to figure the number of installation (and costs) of those Super-Duper Charging stations to replace a meaningful sample of current installed gas stations. This would do much to mitigate the tsunami of EV's expected to flood the roads and inundate our fragile highway system once Tesla gets his Super-Duper battery factory up and running. Hurry I can here the rumble and rush of incoming EV's :razz:
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Re: Actual Profitability of Tesla

Unread postby Timo » Fri 26 Jun 2015, 16:10:57

There are a number of private charger companies rapidly developing EV charging stations all over the western world. Not all of them are Tesla, but Tesla does have the most expansive system developed to date. Any owner of a Tesla can drive coast to coast, and pass through all 50 states FOR FREE!

Also, a prime reason that charging stations are being built at such a rapid pace across the US and Europe is because they are far cheaper to build than any gas station, and they do not require any attendant to take anyone's money, either. We have two charging stations on our main street, and a Tesla supercharger out by our interstate highway. Lots of chain retailers, like Target, and Walmart, and Sears, and Best Buy are also putting charging stations in their parking lots to encourage EV drivers to come to their stores to purchase goods. The only business building gas stations are Kwik Shops, and grocery stores teaming up with those Kwik Shops. Ask any fuel station owner, and they will tell you thnat there is no money to be made in the sale of gasoline. That's why every gas station in the country has converted into a convenience store. Come for the gas, and purchase a Big Gulp while you're here.

Tesla isn't the only game in town. There are a lot of other charging networks out there, all competing and completing a nationwide, easily accessible infrastructure for EVs.

Lastly, EVs do not rumble. They're very, very quiet. They'll run you down while you're not looking! You never even hear them coming! And they are coming! For YOU!!!

But, not everyone likes the idea of EVs, and so they'll continue to discount any progress that's made that's contrary to their personal feelings. Ce la vie.
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