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I don't think this is a revelation to anyone who has been paying attention? This seems to have been the dominant hypothesis for a long, long time, and is alway

I don't think this is a revelation to anyone who has been paying attention? This seems to have been the dominant hypothesis for a long, long time, and is always what justified Tesla's early (very) red activities. They were a battery company using luxury automobiles to fund battery R&D.

spb 12y ago
> I don't think this is a revelation to anyone who has been paying attention? Maybe so, but for casual observers, this lays out the argument very concisely, in a way that might not have been apparent before. (To the average American, "battery company" means Energizer and Duracell, and doesn't seem like a very future-facing sector, so characterizing Tesla as such seems diminutive and hyperbolic.)
- jeremyrwelch 12y ago
  Exactly my goal. Many on Wall street understand it, but many on Main street (and even many in the Bay area) don't quite get the picture yet.
DeBraid 12y ago
Indeed, money managers have been expounding on this thesis for years. "Bond King" Jeff Gundlach remarked to this effect some with Barry Ritholtz on July 2014. https://soundcloud.com/bloombergview/barry-ritholtz-interviews https://soundcloud.com/bloombergview/barry-ritholtz-intervie... Great to see that other are catching on.
serve_yay 12y ago
Yes, this has the tone of something revelatory but I agree.
digitalzombie 12y ago
It's a revelation to me. I thought Telsa was a car company and I followed them since the beginning until their initial IPO. From there and sorta lost interest in follow any automotive news. Plus it is very easy to see them as a car company, they started out as a car company and Elon came to Tesla, a car company, and took over.
vidarh 12y ago
Especially given that they have been selling batteries to Solar City for use by their customers for a while already, and have publicly talked about larger scale production of that. E.g. here's an article from MIT Technology Review from 2013 that touches on Tesla's battery sales to Solar City: http://www.technologyreview.com/news/522226/solarcity-using-tesla-batteries-aims-to-bring-solar-power-to-the-masses/ http://www.technologyreview.com/news/522226/solarcity-using-...
mstachowiak 12y ago
Agreed. CTO JB has referred to Tesla as an energy storage company for a while now.
drzaiusapelord 12y ago
>They were a battery company using luxury automobiles to fund battery R&D. This seems questionable to me. I just don't see lithium-ion powering electric cars in an affordable or usable fashion. The density isn't great and after 4-5 years the battery pack wears out, making your $30-50k battery investment disappear. There's no resale value on a battery that can't even hold 30% of its original charge. Musk's solar city shenanigans are cute, but not a lot of people are moving to solar when electricity is so cheap. Tesla just never got the battery breakthrough it needed and it will probably never become a hybrid engine company. All this talk of "just wait until Musk does this or does that" has been the same excuse we've been hearing for years. It hasn't materialized, at least for Tesla. $300m losses in 12 months is scary. $100m loss in the past quarter is just bad. Musk can build this factory, but he can't improve lithium-ion tech nor can he raise the price of gas. If gas is under $6 or so, there's very little incentive to buy a pure electric. Fanboyism aside, Tesla just looks like a mess and making excuses about how its really not a car company stinks of desperation. Tesla is pretty much a failed company. Unless they pivot to hybrid engines and start selling a lower cost car, they'll just continue to be the toy of the idle rich.
- reportingsjr 12y ago
  Wow, you're pulling out some numbers that seem very unfounded here. You also seem to be VERY anti-tesla as seen in your other posts in this thread. Can you show me where you have seen hard evidence of battery packs "wearing out" after 4-5 years? Also, please define wearing out as there are different meanings to that. Contrary to what you have said in this thread the battery life has actually been significantly better than expected (http://www.csmonitor.com/Business/In-Gear/2015/0219/How-much-will-Tesla-Model-S-battery-life-decrease-over-time http://www.csmonitor.com/Business/In-Gear/2015/0219/How-much...) Also, saying the only incentive of buying an electric car to save money is ignoring a lot of other factors in the word.
  - drzaiusapelord 12y ago
    In practice we're seeing ~25% loss of capacity at 40k miles in LEAF real world testing. 30% loss at 50k miles is the accepted norm. Capacity goes down annually after that. It seems that some cars are doing better, but play cars owned by the rich that get very few miles like the early Tesla sportscars. Real world daily-drivers like the LEAF experience the exact decay that was predicted. Lithium-ion isnt some new hot tech we don't understand. We understand it very well. http://www.torquenews.com/2250/how-long-will-electric-vehicle-batteries-last-tesla-s-roadster-could-be-guide http://www.torquenews.com/2250/how-long-will-electric-vehicl... Americans replace their car every 6 years now. You may have 30-50% capacity at year 6, depending on a lot of factors. This is unacceptable considering the anemic range of a new battery. EV means losing almost all your car's value after 3-5 years. High trade-in values we enjoy now will be lost as the majority of the cost of the vehicle will be its battery. These batteries will fill landfills and be an environmental disaster. The current "fix" is just to build the battery replacement cost into the warranty. So now your car is more expensive. Warranty claims now become a legal struggle over what is faulty or not. Nissan claims 70% battery power is non-faulty. That means your 75m LEAF range is now ~50m. My gas car gets that in a gallon and a half. >You also seem to be VERY anti-tesla as seen in your other posts in this thread. Its a 12 year old company that has done nothing but burn money. They have no mature product on the horizon and their promises of making a middle-class cheap EV with great range and durability are just not in the realm of technology. The stock has been on a decline since mid last year and they have a celebrity CEO who is good at PR and gimmicks but not delivering affordable vehicles. >Also, saying the only incentive of buying an electric car to save money This is the only motivator for mass market acceptance. The idle rich love the acceleration of that $100k car, but that doesn't matter to someone who makes half or a third that in a year.
torbit 12y ago
True. I've already seen an article like this. This also gave a reason why they wanted their supercharging stations everywhere, at cheap price, and open patents. I'm not sure, but I doubt he opened his patents on the battery.

spb 12y ago

> I don't think this is a revelation to anyone who has been paying attention? Maybe so, but for casual observers, this lays out the argument very concisely, in a way that might not have been apparent before. (To the average American, "battery company" means Energizer and Duracell, and doesn't seem like a very future-facing sector, so characterizing Tesla as such seems diminutive and hyperbolic.)

jeremyrwelch 12y ago
Exactly my goal. Many on Wall street understand it, but many on Main street (and even many in the Bay area) don't quite get the picture yet.

DeBraid 12y ago

Indeed, money managers have been expounding on this thesis for years. "Bond King" Jeff Gundlach remarked to this effect some with Barry Ritholtz on July 2014. https://soundcloud.com/bloombergview/barry-ritholtz-interviews https://soundcloud.com/bloombergview/barry-ritholtz-intervie... Great to see that other are catching on.

serve_yay 12y ago

Yes, this has the tone of something revelatory but I agree.

digitalzombie 12y ago

It's a revelation to me. I thought Telsa was a car company and I followed them since the beginning until their initial IPO. From there and sorta lost interest in follow any automotive news. Plus it is very easy to see them as a car company, they started out as a car company and Elon came to Tesla, a car company, and took over.

vidarh 12y ago

Especially given that they have been selling batteries to Solar City for use by their customers for a while already, and have publicly talked about larger scale production of that. E.g. here's an article from MIT Technology Review from 2013 that touches on Tesla's battery sales to Solar City: http://www.technologyreview.com/news/522226/solarcity-using-tesla-batteries-aims-to-bring-solar-power-to-the-masses/ http://www.technologyreview.com/news/522226/solarcity-using-...

mstachowiak 12y ago

Agreed. CTO JB has referred to Tesla as an energy storage company for a while now.

drzaiusapelord 12y ago

>They were a battery company using luxury automobiles to fund battery R&D. This seems questionable to me. I just don't see lithium-ion powering electric cars in an affordable or usable fashion. The density isn't great and after 4-5 years the battery pack wears out, making your $30-50k battery investment disappear. There's no resale value on a battery that can't even hold 30% of its original charge. Musk's solar city shenanigans are cute, but not a lot of people are moving to solar when electricity is so cheap. Tesla just never got the battery breakthrough it needed and it will probably never become a hybrid engine company. All this talk of "just wait until Musk does this or does that" has been the same excuse we've been hearing for years. It hasn't materialized, at least for Tesla. $300m losses in 12 months is scary. $100m loss in the past quarter is just bad. Musk can build this factory, but he can't improve lithium-ion tech nor can he raise the price of gas. If gas is under $6 or so, there's very little incentive to buy a pure electric. Fanboyism aside, Tesla just looks like a mess and making excuses about how its really not a car company stinks of desperation. Tesla is pretty much a failed company. Unless they pivot to hybrid engines and start selling a lower cost car, they'll just continue to be the toy of the idle rich.

reportingsjr 12y ago
Wow, you're pulling out some numbers that seem very unfounded here. You also seem to be VERY anti-tesla as seen in your other posts in this thread. Can you show me where you have seen hard evidence of battery packs "wearing out" after 4-5 years? Also, please define wearing out as there are different meanings to that. Contrary to what you have said in this thread the battery life has actually been significantly better than expected (http://www.csmonitor.com/Business/In-Gear/2015/0219/How-much-will-Tesla-Model-S-battery-life-decrease-over-time http://www.csmonitor.com/Business/In-Gear/2015/0219/How-much...) Also, saying the only incentive of buying an electric car to save money is ignoring a lot of other factors in the word.
- drzaiusapelord 12y ago
  In practice we're seeing ~25% loss of capacity at 40k miles in LEAF real world testing. 30% loss at 50k miles is the accepted norm. Capacity goes down annually after that. It seems that some cars are doing better, but play cars owned by the rich that get very few miles like the early Tesla sportscars. Real world daily-drivers like the LEAF experience the exact decay that was predicted. Lithium-ion isnt some new hot tech we don't understand. We understand it very well. http://www.torquenews.com/2250/how-long-will-electric-vehicle-batteries-last-tesla-s-roadster-could-be-guide http://www.torquenews.com/2250/how-long-will-electric-vehicl... Americans replace their car every 6 years now. You may have 30-50% capacity at year 6, depending on a lot of factors. This is unacceptable considering the anemic range of a new battery. EV means losing almost all your car's value after 3-5 years. High trade-in values we enjoy now will be lost as the majority of the cost of the vehicle will be its battery. These batteries will fill landfills and be an environmental disaster. The current "fix" is just to build the battery replacement cost into the warranty. So now your car is more expensive. Warranty claims now become a legal struggle over what is faulty or not. Nissan claims 70% battery power is non-faulty. That means your 75m LEAF range is now ~50m. My gas car gets that in a gallon and a half. >You also seem to be VERY anti-tesla as seen in your other posts in this thread. Its a 12 year old company that has done nothing but burn money. They have no mature product on the horizon and their promises of making a middle-class cheap EV with great range and durability are just not in the realm of technology. The stock has been on a decline since mid last year and they have a celebrity CEO who is good at PR and gimmicks but not delivering affordable vehicles. >Also, saying the only incentive of buying an electric car to save money This is the only motivator for mass market acceptance. The idle rich love the acceleration of that $100k car, but that doesn't matter to someone who makes half or a third that in a year.

torbit 12y ago

True. I've already seen an article like this. This also gave a reason why they wanted their supercharging stations everywhere, at cheap price, and open patents. I'm not sure, but I doubt he opened his patents on the battery.