Long-Term Fundamentals of Tesla Motors (TSLA)

[hockeythug]

Can we talk long-term costs of the Supercharger Network with all these new cars?

Energy provision, only.

$50/car/year with the following assumptions:

15,000 miles per year
10% of miles Supercharged
3 miles/kWh
$0.10/kWh

Current Costs:
~50,000 cars using Supercharger Network
$2.5M/year

End of 2015 (Projected)
130,000 MS/MX using Supercharger Network
$6.5M/year

End of 2016 (Projected)
270,000 MS/MX using Supercharger Network
$13.5M/year

End of 2017 (Projected)
770,000 MS/MX/M3
$38.5M/year

I think I saw a SA article(take it with a grain of salt) saying that it was pretty profitable for them.

 

[FANGO]

Model S is in a sweet spot, as evidenced by it outselling its gas equivalents in most markets where it's offered, and its numerous car-of-the-year awards it snatched from its gasoline rivals. People want the car because it's better, not because it's electric, and Tesla makes a large profit on it.

Then I suppose the Leaf is also in a sweet spot because of its numerous car-of-the-year awards.

Among other awards and recognition, the Nissan Leaf won the 2010 Green Car Vision Award, the 2011 European Car of the Year, the 2011 World Car of the Year, and the 2011–2012 Car of the Year Japan.

Notable awards include the inclusion by Time magazine as one of the 50 best inventions of 2009. EV.com’s 2011 EV of the Year,[SUP][421][/SUP] 2011 Eco-Friendly Car of the Year by Cars.com,[SUP][422][/SUP] 2011 Green Fleet Electric Vehicle of the Year,[SUP][423][/SUP] it was listed among the 2011 Greenest Vehicles of the Year by the American Council for an Energy-Efficient Economy,[SUP][424][/SUP][SUP][425][/SUP] also listed by Mother Earth News among its "Best Green Cars" of 2011,[SUP][426][/SUP] and also was ranked first in Kelley Blue Book Top 10 Green Cars for 2011.[SUP][427] [/SUP]Ward's Auto listed the Leaf's 80 kW electric motor in Ward's 10 Best Engines for 2011.

People buy it not because it's better, but because it's electric.

These are the same thing.

The buyers know that, which is why the Leaf doesn't have a waiting list of 4 months; even though it satisfies many people, it doesn't satisfy a majority. And investors know that, which is why many, myself included, are going all in with Tesla stock, as opposed to Nissan.

Nissan didn't start from zero with the Leaf, nor does it only make the Leaf. That's why it doesn't have a waiting list (which it did have before it came out, and soon after), and that's why people aren't going all-in with the stock, because it's not a pure play. Obviously. Also, if Nissan has a waiting list on the Leaf, they just sell consumers another car. This is a problem with the dealership model, not with the car. The dealership model is not a sweet spot, of course.

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Yes, it's important to remember that any "range" we are talking about can easily be cut by 40% or so by different conditions. People want to be able to rely on their range in the worst of conditions, when it's probably the absolute worst time to run out of a charge. That's why 400-500 mile range vehicles are important for many.

Regarding the importance of range vs weight, I just did a quick search on the forum. "range" returned over 23,000 results, "weight" returned 5,400. Range is obviously more important, even among experienced EV owners.
And yes, we are way off topic for this thread :redface:

So you've moved the goalposts away from polling, to mentions on the forum, after being shown polls that countered your thesis. After, of course, having it explained many times that the consumer doesn't know that he wants low weight, but does want low weight, because it improves everything about his car. But go ahead, keep arguing for the faster horse. It's not like we're talking about a paradigm shift in technology or anything.

Bjorn got what was it, 230 miles in horrible conditions? I guess that means the Model S has 575 miles range, given your 40% number.

 

[dalalsid]

The way Elon thinks about it is this: Tesla installs a lot of solar panels and either uses that power in the SuperChargers directly or sells the solar power to offset its purchased power costs. That approach puts the annual SC cashflow near zero.

As an economist, I think he's engaged in flawed accounting. If he spends, say, $250M installing solar panels everywhere, they would generate positive cash flow regardless of whether Tesla also has SCs. The SCs are still cashflow negative. And, Tesla will have tied up $250M in capex that could be used for other things, like expanded factory capacity, new service centers, etc. that contribute more directly to the bottom line.

This isn't to say that the SCs aren't a good investment: they clearly accelerate the adoption of Tesla's cars.

SCs are only cash flow negative if you assume that they don't have revenue when you buy the car. e.g. $2000 for the 60kWh or part of the $10k to upgrade from 60->85.

 

[JRP3]

So you've moved the goalposts away from polling, to mentions on the forum, after being shown polls that countered your thesis.

I've seen no polls on this forum that counter my thesis. My search results move no goal posts, they simply reflect an obvious reality, range is more important than weight. The search results are completely free of bias or self selective poll results. The same reality is reflected in the far greater sales of 85kWh cars over 60 kWh cars, and the even greater selection of both over the 40kWh cars.

After, of course, having it explained many times that the consumer doesn't know that he wants low weight, but does want low weight, because it improves everything about his car.

You can keep explaining it but that doesn't make it true. The "lighter" 60 is not better in all things than the heavier 85 car. If your thesis were true the 60kWh car should far outsell the 85kWh car, yet the opposite is true. People don't seem to be "learning" the lesson you think they should.

Bjorn got what was it, 230 miles in horrible conditions? I guess that means the Model S has 575 miles range, given your 40% number.

I don't know what the conditions were to which you are referring to, but I'm sure Bjorn has a better idea than most as to how to mitigate those conditions. Sure you can go without heat/AC, slow down, and hypermile, but if the average person is going into a headwind in the rain or snow they will take a significant range hit. Also as many of our German friends point out the autobahn can suck the life out of a pack.

 

[AlMc]

The good news in all this range/weight discussion is everyone should be happy with having more choices about battery size/range and weight as more models from Tesla and other manufacturers come to market.
There is no perfect vehicle for every situation, if there were we would all be driving the same vehicle. Eventually the debate will be settled by consumer choice.

 

[jerry33]

Yeah, and for those people they can buy an S or they will have to wait until the 3 - which will be an improvement in price, rather than longer range. But for you, if it's 80 miles two-way, if you can charge at work (since you're there for hours anyway), you would be fine with a Leaf.

So basically your saying that a car should only be able to get you to work, where you have to fight for one of the two chargers that cost $$ to use, hope they aren't out of service, and then you have to interrupt your day to move the car when it's done or risk it getting towed. And if you have a power outage overnight, you have to call the boss and tell him you can't come in because the car didn't charge. You also better hope that you aren't called back into work because the car won't be charged. Sorry, but that doesn't seem like it would make for a good EV experience.

As far as the average trip distance per capita goes--well it's an average. A lot of people in Texas don't drive (migrant workers mainly), and there are a lot of small towns where the maximum distance across town isn't very far. Averages just don't cut it for those who are likely to purchase a Tesla.

 

[FANGO]

I've seen no polls on this forum that counter my thesis

Well, I highlighted two of them in response to you.

If your thesis were true the 60kWh car should far outsell the 85kWh car, yet the opposite is true. People don't seem to be "learning" the lesson you think they should.

I'm not convinced you know what my thesis is, because I'm not convinced you're reading the things I post. And the 24kWh model (Leaf) outsells the 85kWh model, so I suppose you're wrong by that metric, just like with the polls. But then, you aren't reading, and you've moved the goalposts, so why did you even bother replying to me to begin with?

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So basically your saying that a car should only be able to get you to work, where you have to fight for one of the two chargers that cost $$ to use, hope they aren't out of service, and then you have to interrupt your day to move the car when it's done or risk it getting towed. And if you have a power outage overnight, you have to call the boss and tell him you can't come in because the car didn't charge. You also better hope that you aren't called back into work because the car won't be charged. Sorry, but that doesn't seem like it would make for a good EV experience.

See, there's the same argument again. The car is more than capable of going 100 miles on a charge, and rated for over 80. You drive 40 miles one way to work (or maybe it's even less than that), and you think that a car which is capable of 100 and rated for over 80 couldn't possibly get you there even one-way. You are constructing fantasy scenarios in the most negative possible way, without being attached at all to the reality of the situation, in order to prove that 300 miles of range is the absolute minimum for your 40 mile drive. It's absurd, and behavior like this is exactly what slows adoption, and what the auto companies want you to do, because that's exactly what they're doing, with their ads about how far they can go in the perfect possible conditions, which exist for the sole purpose of making EVs look subpar even though there is no comparison between electric range and gas range, particularly when you try to minimize one and maximize the other with fuzzy math. They want consumers to think range is important, when it's simply not. And they *love* when you make up these contrived stories about the terrible trials of owning an EV. Surely that will help adoption, won't it?

As far as the average trip distance per capita goes--well it's an average. A lot of people in Texas don't drive (migrant workers mainly), and there are a lot of small towns where the maximum distance across town isn't very far. Averages just don't cut it for those who are likely to purchase a Tesla.

Your suggestion was that I was wrong because I'm from California and you're from Texas and I don't know how far people drive in Texas. People in Texas drive less than the national average, and not far off from what people in California drive, that's what the stats show. You can see in the other stats posted by someone else that the numbers are basically the same on a per-vehicle basis. As if California doesn't have migrant workers or small towns (which, by the way, don't affect the stats much, because they're small, which means nobody lives in them, by definition...because over half of Texas' population lives in two metropolitan areas).

Your last sentence, though, is exactly my point. Tesla owners, who have enough money to afford one, will overpay for a huge battery they don't need, get anxious if their range ever gets near 2 digits, and overestimate how many miles they drive or think that their situation is different from everyone else's because they're special. This happens too often. And they do this because it's their first EV, and they don't know that they don't need 300 miles of range, but they have the money for it, and they want the performance model anyway, because that's the buyer we're dealing with, the type who gets the top of the line. And then showing that attitude to the general public simply confirms that electric cars are too expensive, that they will make you too anxious, and that you drive too many miles because the averages don't matter and apparently everyone commutes 200 miles a day, and that you should get a gas car until a "better" electric car with 2,000 miles worth of range comes out. Which is completely absurd, and harms adoption.

So what I want us Tesla owners to do, again, is stop harming adoption. You have lungs and so do I. I'd like us both to try to improve adoption, not stop it by telling people they need to wait until cars with 2,000 miles of range come out, which will never happen anyway, because that would be stupid. And which still won't fit all their needs, apparently, according to that table someone posted a page or two back. Which is why you don't trust consumers when they say what they want when the paradigm is changing and they don't know what they want. They don't know that standby/talk time doesn't matter as long as it's over the threshold of one day of use, they don't know that there's something better than a faster horse, and they don't know that the iPod's storage is plenty big enough.

 

[JRP3]

Your polls weren't representative of the EV market as a whole, since Roadster owners are more likely to be concerned with handling and performance than range. Plus the fact that your Pack upgrade poll showed the majority of people would take a heavier pack with more range, in direct conflict with your claims, and the other poll isn't even relevant to the topic, though does show the majority are interested in more range. Your own linked polls do not even back you up.

 

[FANGO]

Your polls weren't representative of the EV market as a whole, since Roadster owners are more likely to be concerned with handling and performance than range. Plus the fact that your Pack upgrade poll showed the majority of people would take a heavier pack with more range, in direct conflict with your claims, and the other poll isn't even relevant to the topic, though does show the majority are interested in more range. Your own linked polls do not even back you up.

I would not consider 24.53% of people a majority. That's the percentage who picked a heavier pack with more range. 5.6% picked an equal weight pack, everyone else picked a lighter one, including the most popular option, which was the lightest one. The other poll showed that, in contrast to your claim that everyone wants more range and that cost won't stop them from doing so, very few people actually hold that belief.

Also, we could alternately use this interpretation: The polls aren't representative of the EV market as a whole, since Roadster owners are more likely to have lots of money to spend on expensive range upgrades, and the cars are not capable of quick charging which makes onboard range more valuable. Therefore, Roadster owners would be more likely to want lots of range, and yet they still don't.

I happen to think that that interpretation is too one-sided and wouldn't be fair, which is why I didn't include it with my original mention of the polls. Because to make your conclusion before seeing data, as you've done, is not rational. My point of mentioning the polls was that they are not nearly as one-sided as you theorized them to be, since you seem to think that "everyone" wants more range, and that's just not the case. Not to mention that what they think they want may not matter (faster horse, iPod storage, talk/standby time).

 

[NigelM]

Mod Note: couple of posts went to snippiness. Play nice now.

 

[JRP3]

I would not consider 24.53% of people a majority. That's the percentage who picked a heavier pack with more range. 5.6% picked an equal weight pack, everyone else picked a lighter one, including the most popular option, which was the lightest one.

Did you really ignore the fact that 81% wanted longer range? If weight were so important, even to Roadster owners, would not the majority actually choose the current range, or less, for greater weight savings? Instead, 81% picked more range.

 

[FANGO]

Did you really ignore the fact that 81% wanted longer range? If weight were so important, even to Roadster owners, would not the majority actually choose the current range, or less, for greater weight savings? Instead, 81% picked more range.

You said a majority picked a "heavier pack with more range." This did not happen. Now you're moving the goalposts, again. And I have no idea where you're getting 81%. The only way I can see you getting that number is by adding 13.21 and 5.66, but I don't know why you would do that considering what those choices stand for. Also, it seems as if you're trying to say that the votes for the "lower weight" pack prove your point (which has heretofore been that weight doesn't matter) because lower weight makes for more range, even though my point from the beginning has included that weight savings are important because they make for greater efficiency. Which all of a sudden you're arguing for, I guess? In which case, great, I'm glad you finally agree and we can be done with this. I certainly am. Bye.

 

[JRP3]

You keep saying weight is more important than range, what percentage picked less range and less weight, for the lightest possible choice? Or even the same range but less weight? Every choice that offered more range at less weight would have saved even more weight with some range sacrifice. Only 30% picked the lightest configuration, and even that came with a slight range boost. Any way you run the numbers your point is unsupported.

 

[Robert.Boston]

This thread has taken a rather lengthy tangent that's not really focused on long-term fundamentals of Tesla. Let's try to get back on-topic.

Thanks.

 

[Cattledog]

Since most people on here make great posts with technical data, every once in awhile I get to contribute without having to show my technical ignorance. An anecdote:

My wife goes to mail something at the local UPS store every few months. It always takes her 15 extra minutes because the two guys who are always there want to talk to her about her Tesla (red one). They even have asked her if she's married to the guy with the blue one (thankfully that's me, but there may be another...) Today was no exception, and when she came home she said, "They know everything about the car, they know more than you!".

We laughed, but then I thought that these are two asst. store managers at a UPS store. Random guys, totally in love with the car, probably looking forward three years, thinking about their own Model 3. Gotta be hundreds of thousands of people like 'em.

 

[pz1975]

Since most people on here make great posts with technical data, every once in awhile I get to contribute without having to show my technical ignorance. An anecdote:

My wife goes to mail something at the local UPS store every few months. It always takes her 15 extra minutes because the two guys who are always there want to talk to her about her Tesla (red one). They even have asked her if she's married to the guy with the blue one (thankfully that's me, but there may be another...) Today was no exception, and when she came home she said, "They know everything about the car, they know more than you!".

We laughed, but then I thought that these are two asst. store managers at a UPS store. Random guys, totally in love with the car, probably looking forward three years, thinking about their own Model 3. Gotta be hundreds of thousands of people like 'em.

Completely agree with this! Almost everyone I show my car to (take the time to explain it, let them drive it, etc.) either wants an S or X and since the majority can't afford it, they almost all say they want a 3 when it comes out. I have so many people I will need to contact when Model 3 reservations become available. If/when Tesla ever decides to properly advertise, I think the demand will eventually be in the range of 60-70%+ of cars in that price/style class. The only reason they won't be able to get that market share will be due to supply constraints. And then imagine an economy model eventually - wow.

 

[Auzie]

The way Elon thinks about it is this: Tesla installs a lot of solar panels and either uses that power in the SuperChargers directly or sells the solar power to offset its purchased power costs. That approach puts the annual SC cashflow near zero.

As an economist, I think he's engaged in flawed accounting. If he spends, say, $250M installing solar panels everywhere, they would generate positive cash flow regardless of whether Tesla also has SCs. The SCs are still cashflow negative. And, Tesla will have tied up $250M in capex that could be used for other things, like expanded factory capacity, new service centers, etc. that contribute more directly to the bottom line.

This isn't to say that the SCs aren't a good investment: they clearly accelerate the adoption of Tesla's cars.

My wild guess is that the main reason driving solar panels installations on Super Charging locations is moral (green) consistency. Economic motives could be secondary to being congruent.

Moral consistency and congruency is critical to Tesla brand. Any incongruency might lead to devaluing their brand, mission statement and loss of credibility.

 

[MartinAustin]

SCs are only cash flow negative if you assume that they don't have revenue when you buy the car. e.g. $2000 for the 60kWh or part of the $10k to upgrade from 60->85.

Good point. Assuming there are 55,000 Model S's produced thus far, plus confirmations/payments for another 5000 (extremely rough math), and assuming 90% of those cars comes with S capability, that would add up to $108million (54,000 x $2,000). If each SC costs $400,000 to make (I have seen indications ranging from $300,000 to $500,000), that money would have paid for 270 Superchargers. Since there are an indicated 160 operational Superchargers around the world, and my estimate of 50 additional Superchargers under some level of construction (where Tesla has already had to outlay for some parts and labor), I think they're in a pretty good spot in terms of cash flow on the Superchargers.

 

[FANGO]

I believe Superchargers are less than that...unless costs have gone up recently due to different tech or they're installing more bays or something. Original estimates were 150-300k. I forget where that was stated but Elon or JB said it in some interview or something

 

[austinEV]

I remember it was 2x for the theoretical solar panel canopy SC. So like 150k for regular and 300k for solar canopy. Since 99% are non-solar I think its about 150k each.