Tesla Doubting and Big Rigs

Tesla's original model, the Roadster

Tesla’s original model, the Roadster

Range Anxiety. It is the number 1 reason that fewer people own all-electric cars. I’ve heard comments like this for years:

Weight, cost, space are my only concerns. Versions/hybrids are currently running with success. I see a combination of a small diesel powered generator, battery and electric motors being the most viable and easiest to achieve in the near future. Having to charge every 600 miles? Getting infrastructure for CNG has been tough enough, imagine the banks of charging stations needed, drivers have a hard enough time finding parking for breaks. 34,000 lb. payloads might be a little skinny.

This response was from an article about Tesla’s upcoming semi rig.

I think a fundamental assumption was made that someone else has to build the charging infrastructure. Tesla doesn’t wait for that. Currently, there are over 2600 chargers in over 370 locations in the United States. There are plans to double those in 2017 alone. And I ain’t talking for semis. Or, at least I don’t think I am.

I live in the “black hole” of Tesla charging stations. Arkansas does not have a single one, nor are there any in western Tennessee. It is easy to be myopic regarding Tesla when an MSA of 300,000 plus has probably less than 10 Teslas on the road, and the nearest Supercharger is 100 miles away. Arkansas is also a black hole for other things, but even Mississippi has more superchargers.

But those in the rest of the country see them all the time. I counted 5 at a traffic light stop during a visit to San Jose. I’ve seen them used as Uber and pizza delivery cars. I heard that one is being used as a food truck in Portland. (Ok, I don’t know the food truck one is real, but it feels true.)

Hybrids Are Not Part of the Plan

I Googled “why didn’t tesla start with building hybrids?” and found this post on Quora. The takeaway from Ernie Dunbar is that “…they didn’t want to fuck around.” Indeed, that is precisely why. Hybrids are an interim solution to the all-electric, solar-powered future.

It is also why those in the transportation industry should take notice how quickly all of this has happened. It stems from failing to question generally accepted conventional wisdoms. Lockheed-Martin could not believe an individually financed company could unseat them at NASA. But SpaceX did.

Ford and GM (maybe not Ford, now) probably don’t think that Tesla can unseat them as the largest auto manufacturers in the United States. I know that Blackberry never saw Apple coming, then went through their denial stage until their death. Steve Ballmer at Microsoft ridiculed Apple for getting into the phone business. People told me in the Eighties that personal computers would never be in someone’s home. A whole slew of people thought letting Donald Trump run the country was a good idea.

True industry disruption occurs when someone questions conventional wisdom and starts with “first principles“. Why can’t we re-use rockets? Why do we have to wait for others to roll out infrastructure? Why can’t roofs be made from solar cells, instead of mounting them on top? Why do electric cars have to look like shit?

Electric power has gobs of torque. Battery technology is constantly improving.

Sure, the first ones may only go 600 miles and only have have a payload capacity of 34,000 pounds, but the Tesla roadster (a “hacked” Lotus) was released in 2006, but by 2012 – just 6 years later – Tesla released a new-from-the-ground-up 4-door legitimate all-electric card that outsells most full-size luxury sedans to this day.

Tesla went back to first principles to question design, engineering, manufacturing, everything. For the upcoming Model 3, they even skipped a build prototype stage that conventional manufacturers use to test actual manufacturing processes with disposable manufacturing lines and vehicles. Saved Tesla months in getting the Model 3 to market, and will probably revolutionize auto manufacturing.

The internal combustion engine is dying before our eyes. 20 years from now it will be a quaint thing that will be nostalgically remembered like rotary dial phones. Only car aficionados and collectors will be interested in ICE cars. Electric will be too mainstream and a “no brainer”.

Tesla’s Grandiose Plans

If a problem cannot be solved, enlarge it. – Dwight D. Eisenhower

In the Tesla analyst’s call yesterday, Musk spent time discussing future plans. Underpinning these plans, and something I have been pondering for quite some time, is Elon’s conviction of concentrating efforts on “building the machines that builds the machines”.

Teslerati’s Kyle has a good rundown on the plans. A few excerpts:

The addition of newly minted Tesla Solar production to the Gigafactory model means Tesla will be producing all three of its core product families – Motors, Energy and Solar – in a single factory footprint. Vetting this concept out in Gigafactory 2 will provide a nice blueprint for future Gigafactories as Tesla looks beyond the borders of the U.S. towards international expansion.

Can these devices be designed and built to be so flexible as to be able to build anything? Musk thinks there are orders of magnitude of improvement yet to come from automation and robotics.

Gigafactories 3, 4, and 5:

Tesla casually dropped news that the locations of Gigafactory 3, 4 and possibly 5 would be finalized later this year. The obvious location for #3 is Europe with strong Tesla vehicle sales in the region supported by an ever growing fleet of Superchargers in the area.

To put a final point on the ability to think big, Kyle sums up with this:

Building on just the core need for batteries, a modular Gigafactory allows Tesla to move its production into a region in a single step, establishing local supply chains for raw materials while also cutting costs on shipping batteries, vehicles and solar products at the same time. Batteries and cars are not cheap to ship and this move makes sense on many levels.

Great summary.

I’m thinking at this point, Elon Musk is the machine that builds the machines that builds the machines.

Analyst on Tesla Stock

teslalogoContinuing the “all Tesla, all the time” theme…

By way of Barrons’ Ben Levisohn:

Global Equities Research’s Trip Chowdhry contends that the Model 3 has been “designed for the iPhone generation”

Tesla has set a formidable world record of any Consumer Technology company, of booking orders of more than $11.6 Billion within the first 72 hours…

General Motors Bolt is DoD (Dead-on-Departure), and General Motors should just cancel this project; completely misses the mark with the iPhone generation consumer “It’s An Ugly Tiffin Box”

Tesla Model 3 has been designed for the iPhone generation consumer, whose lives are digitally super-centered … and competition is completely clueless .. somehow it seems that existing auto manufacturers believe that iPhones can be powered by Gasoline and not Batteries

Many of the same sentiments I expressed in this post. Notice the “Consumer Technology” reference to the company.

Judging from the following comments, I’m not sure that many investors get just how revolutionary this is:

tesla has proven with factory conducted cross country test drives that they are only able to get 45mph average speeds on a cross country trip. If you are ok with that in a $130,000 car, then good for you.But I can get an average speed of 70mph driving 12 hours in a 1970 VW beetle, on gasoline.

the fatal error that tesla is making is the decree that gasoline is evil and must be shunned at all costs (no matter how much more you must pay for their cars).that is false to the point of being religious delusion. Petroleum has been the foundation of modern civilization for the last 100 years, and will continue its role for the next 100 years.

And, this post must have been alcohol related:

this story proves that tesla has totally failed in its quest to make battery powered electric cars replace gas powered cars.

Seriously, do these people even know what a Tesla is?

Car and Driver on the 2017 Bugatti Chiron

Everything else seems so, well, second-rate…

When chasing top-speed honors, horsepower matters. Even so, there are diminishing returns in the fight against the atmosphere at higher speeds. The Chiron’s redesigned 8.0-liter quad-turbocharged W-16 engine produces 1500 horsepower, 300 more than the outgoing Veyron Super Sport—and yet it tacks only another 3 mph onto that car’s top speed, and only eight more atop the 1001-hp Veyron 16.4’s 253-mph max.