Blogger Claims Tesla's Battery Swap a Scam

[Johan]

So ASC: how many ZEV credits do you claim Tesla has earned from the swapping "scam" (your term) and how many million dollars have they pocketed selling these? You put the claims out there now please back it up with some facts.

 

[RiverBrick]

There is no NDA. Confirmed by Ricardo Reyes to Daily Kanban.
Tesla Battery Swap Unused Over Busy Holiday Weekend - Daily Kanban

By the way: the title uses a conservative estimate ($100M) of how much Tesla has made off the battery swap. It doesn't imply all ZEV credits are thanks to the swap (obviously those credits have made a lot more than $100M).

Thanks for the clarification, though perhaps Mr. Reyes is mistaken. After all, Mr. Niedermeyer says he doesn't trust what Tesla Motors says.

If I recall correctly, many of the early swap invitees were frequent business travelers between LA and San Francisco. This is a different demographic than holiday travelers. Would it not then have been better to look for battery swaps during the week?

Is this your blog? http://doubtingisthinking.blogspot.ca/

If so, reconsider doubting that the 85 kWh Model S fulfills CARBès 300-mile range requirement for extra ZEV credits. CARB uses the UDDC cycle. As you know, this test involves driving at low speed in warm weather with no wind and no HVAC use, conditions which are perfect for EV range. This is why the LEAF, i3, Focus EV, VW eGolf, etc. all are considered 100-mile vehicles by CARB, even though their EPA ranges are much less.

True, the decelerations and the engine running during the stops in the cycle are bad for the efficiency of pure ICE vehicles. However, regeneration and the motor shutting off automatically at stops makes this less of an issue for EVs.

You can argue that CARB should use a stricter test, but to doubt that the Model S doesn't meet the 300-mile UDDC threshold is laughable.

 

[trils0n]

From Q1'15 Shareholder Letter:
Total non-GAAP revenue: $1.10 billion
GAAP revenue: $940 million

Total company gross margin: 28.2% on a non-GAAP basis, 27.7% on a GAAP basis.

ZEV Credit Sales: $51 million

Automotive gross margin excluding ZEV credits: 26.0% on a non-GAAP basis, and 25.0% on a GAAP

51 million on about a billion in revenue is hardly essential. Changes GM a few points, but nothing to make or break the company. They are nice, but not essential.

 

[ItsNotAboutTheMoney]

I think every vehicle owner wants the ability to 'charge' very fast. It is fair to give credit to a system that recharges in 10 min vs 60 min.

Sure, faster is better. But 10 minutes? Even assuming a range of 500 miles, 10 minutes would be 50 miles per minute. Gasoline vehicles fill around 5 gallons per minute. A conventional car the size of the Mirai should be getting around 30mpg or more. 30mpg, 5 gallons per minute would mean 150 miles per minute. 10 minutes is way too slow.

Plus, HFCV depends on public refueling.

My 2013 Volt, getting 12k miles per year in an EV-unfriendly environment, with an EV-unfriendly usage pattern now averages around 50% EV and I have never used a public charger.
My Prius is now only driven around 6k miles per year.
Now replace my Prius with a Gen 1 Leaf and you'd almost certainly turn that into 6k EV per year without using a public charger.
Replace my Prius with the rumored Gen 1.5 Leaf and you'd EV another 1k miles per year without using a public charger.
Replace my Prius with an S60 and you'd EV yet another 4k miles per year without using a public charger.
So, with a household 18k miles per year total, give me a long-distance BEV and an EREV and we'd be able to do at least 17k of 18k miles without using a public charger.
That's no more than 1/18 of miles traveled using public charging, which means that as long as a half hour charge can give me 83 1/3 miles I'd spend less time using the public refueling stations then with a car that CARB credits as having fast refueling. Tesla's Superchargers are already faster than 83 1/3 miles per half hour.

That's just one of the stupidities of the CARB refueling credits: it doesn't properly recognize the power of distributed slow refueling to reduce the need for the centralized fast refueling, which then allows owners to accept occasional centralized, unattended quite-fast refueling.

 

[stopcrazypp]

So ASC: how many ZEV credits do you claim Tesla has earned from the swapping "scam" (your term) and how many million dollars have they pocketed selling these? You put the claims out there now please back it up with some facts.

I challenge that he calculates that too. Tesla gets a baseline credit of 4 credits per EV (Type 3). With swap it can qualify either for 7 or 9 credits (type 4 or 5).
http://www.arb.ca.gov/msprog/zevprog/zevregs/1962.1_Clean.pdf

Before, the policy was only that Tesla needed to have a swap capable vehicle to qualify (no need for any swap events), so there was no scam there.

Starting in July 2014, the policy changed such that Tesla must also document every swap event (and records must be provided to CARB within 3 business days upon request), and the amount of qualified bonus they get is based on how many swap events are done in a year vs sales that year. If they do as many swaps as sales, then they get the full amount, otherwise they get it proportional.

ASC is saying Tesla fabricated all that swap event documentation, which is a pretty serious allegation that needs some facts to back it.

First thing is there needs to be an analysis of Tesla's car sales in ZEV states vs ZEV credit account (reporting on this is delayed for a year though just like taxes are done) vs ZEV credit revenue (may not be in step with credit account and car sales) to see if this claim is even plausible. However, given the credit reporting is delayed (right now it is still at the 2013 sales year, 2014 sales year will be released in October this year), we won't see the results until the end of the year at the earliest.
http://www.arb.ca.gov/msprog/zevprog/zevcredits/2013zevcredits.htm

Depending on how CARB did it, the policy might only apply to sales after July 2014 or they might allow Tesla to take the whole year and start enforcing in 2015.

 

[Kalud]

Is this your blog? http://doubtingisthinking.blogspot.ca/

You can argue that CARB should use a stricter test, but to doubt that the Model S doesn't meet the 300-mile UDDC threshold is laughable.

Actually, this AZC (alberto-zaragoza-comendador) guy pretends that Tesla Motors all together is a scam... I think its says enough...

From his very own "blog":

WHAT IS THIS? WHO ARE YOU?
I'm a common citizen who has realized Tesla Motors is a scam. I started this blog to cover the battery swap specifically, and then expanded it to include the different frauds perpetrated by the company

 

[Johan]

Those of us who follow all things Tesla have one way or the other come across some of the writings of this guy. So yes, we know what his stance is.

On one hand: don't feed the trolls.

On the other hand: if you're going to register on TMC and come here to make unsubstantiated libelous claims about Tesla then you better come prepared to support your claims with more than personal opinion. This community knows and understands most aspects of Tesla, anything from the technology to the organization and business. So if your claims are untrue, exaggerated or speculative you're going to be called out.

 

[AZC]

Tesla registrations in California have been:
2012Q4: 1,113
2013Q1: 2,406
2013Q2: 2,308
2013Q3: 1,823
2013Q4: 1,793
Total: 9,443

Numbers from the PDF CNCDA publishes every quarter.

The Model S became a Type V ZEV on October 12, 2012; almost all of the quarter's deliveries must have happened after that date. It became a Type III again on December 16, 2013. The 60kWh version remained a Type IV from inception to December 2014.

Assuming 3 extra credits per car, we're at 28,329. Of course a small portion of sales were 60kWh, which only got 1 credit instead of 3, plus a few hundred cars in December 2013 probably were sold as Type IIIs instead of Type Vs. But on the other hand I'm excluding all Tesla sales in other ZEV states, and the handful of 60s sold in 2014. In any case, to be conservative we can round it down to 9,000 cars, or 27,000 credits. (The 60 only amounted to 2% of sales in 2014, and while the 2013 share hasn't been disclosed it's obviously a small part of overall sales).

According to CARB's website, from October 12 to September 13 Tesla transferred to other OEMs 37,472 credits. With revenue of $164.8 million, that's nearly $4,000 per credit.

So, yes, I feel it's safe to say Tesla got over $100 million worth of ZEV credits thanks to the swap. Perhaps an audit will later determine they really got $98.5 million; fine by me. To say how many of these credits they have sold, or for how much, you'd need more granular data than what's publicly available. In any case, Tesla can keep the credits essentially forever, so how many have been sold so far is besides the point.

Did Tesla get swap-generated credits after December 2013? I don't know, and don't claim to. In the past I assumed Tesla had gotten the credits until the end of 2014, but apparently it did not.

Is Tesla getting swap-generated credits right now? According to CARB its cars now are Type IIIs, so they shouldn't. But when they were asked this question straight-on in the last call ('are you getting 4 or 9 credits per car'), they claimed they didn't know. Funny, because it's just two numbers, 4 or 9, representing a difference of hundreds of millions for the company.

Does or did Tesla intend to use the swap station to claim extra credits, perhaps not now but later? Well, why would you bother building a swap station and running this 'program'?

 

[Johan]

Does or did Tesla intend to use the swap station to claim extra credits, perhaps not now but later? Well, why would you bother building a swap station and running this 'program'?

Well this is the golden question, isn't it?

First of all, nice to see that you have actually taken the time to compile the data. There are some really big assumptions in there, that will only be properly answered in about a year if ever, especially if Tesla are in fact getting as many extra credits as you believe thanks to swapping and how much those possible credits actually end up adding to Tesla's profits (or to use Elon's words: how many cents on the dollar are they getting?).

Anyway, back to the whole swapping program. Your claim is essentially that the only reason Tesla are going through with the swap program is to claim ZEV credits, rights? This is the reason your conclusion is that it is "a scam". In fact, from reading your blog, it seems that you think the entire business of Tesla is in the same way "a scam" to take advantage of subsidies.

Did it ever occur to you that Elon and Tesla may be telling the truth when they say that they honestly do not plan their business and their future vehicles around subsidies and ZEV credits? And that the reason they are going through with the swapping program is to see if there is demand, if it's feasible and scalable and that whatever they learn from it can be used in a future battery upgrade/exchange business model?

 

[Todd Burch]

I vote for "don't feed the troll". Why argue with him? Stupid is as stupid does.

 

[Johan]

You're tight Todd. We'll leave this post for posterity and revisit in a few years. By then it will be abundantly clear the whole ZEV thing was of no importance to Tesla's success.

 

[Drucifer]

Actually, this AZC (alberto-zaragoza-comendador) guy pretends that Tesla Motors all together is a scam... I think its says enough...

From his very own "blog":

I have to say that I have one of the greatest driving, most comfortable and stylish "frauds" I have ever owned. Better than the "frauds" I got from M. Benz, Acura, Saab and others.

 

[dsm363]

Did a blogger get something wrong? Say it ain't so

 

[AZC]

Well this is the golden question, isn't it?
Did it ever occur to you that Elon and Tesla may be telling the truth when they say that they honestly do not plan their business and their future vehicles around subsidies and ZEV credits? And that the reason they are going through with the swapping program is to see if there is demand, if it's feasible and scalable and that whatever they learn from it can be used in a future battery upgrade/exchange business model?

If Tesla had been transparent, honest and forthcoming in other aspects, well, at a minimum I'd have my doubts. But at this point there are too many cockroaches.

Obviously we're not going to agree on this so it's perhaps better to let it go.

 

[Johan]

If Tesla had been transparent, honest and forthcoming in other aspects, well, at a minimum I'd have my doubts. But at this point there are too many cockroaches.

Obviously we're not going to agree on this so it's perhaps better to let it go.

Again with the shrouded accusations and insinuations without any substance.

Yeah, let's let it go.

 

[RiverBrick]

If Tesla had been transparent, honest and forthcoming in other aspects, well, at a minimum I'd have my doubts. But at this point there are too many cockroaches.

I'd have my doubts too about the Tesla haters who have been saying to short the stock ever since it was at $20. Isn't Mr. Niedermeyer from truthaboutcars, the site that was running a countdown to Tesla death blog back in 2008?

Since you talk about transparency, do you derive any income from your anti-Tesla articles? Do using terms like "scam" generate hits and revenue? Do you offer any advice on TSLA, and have people been taking a beating folliowing it?

 

[AZC]

Since you talk about transparency, do you derive any income from your anti-Tesla articles? Do using terms like "scam" generate hits and revenue? Do you offer any advice on TSLA, and have people been taking a beating folliowing it?

As I told a journalist:

I'm not short TSLA (or anything else - I don't own shares). Also, the only payment I receive related to my Tesla work is that from Seeking Alpha (about $300 a quarter). I've made contact with some people who are short but they haven't promised to pay me in case the swap issue explodes, and I haven't asked (in fact the money topic hasn't even come up).

Any other disclosure detail, I have no problem giving it.


Johan: the case against Tesla is too long to explain here. Check this out and if you feel like it, tell me where I'm wrong.
Doubting is thinking: Whopperpedia: the Ultimate Guide to Teslagate

 

[smac]

I have to say that I have one of the greatest driving, most comfortable and stylish "frauds" I have ever owned. Better than the "frauds" I got from M. Benz, Acura, Saab and others.

I actually agree with you. (And lets be honest Mercedes have been recipients of government largesse during their years in business too)

In some ways though, I do wish Tesla were more honest and open. What harm would it make if the SEC filings actually stated how much was in ZEV credits, or exactly how much is set aside for Supercharging out of each vehicle, or quite how not generally accepted their non- generally accepted accounting is....

...my personal view is there is too much obfuscation in the public filings, and I won't invest on that basis. But let's be honest it also acts as a breeding ground for rampant negative speculation.

DISCLAIMER: Not living in the US, if TMC is operating a ZEV scam, it came out of the US taxpayers pocket not mine! So the more US subsidy goes into one, the cheaper my replacement will be

 

[dsm363]

As I told a journalist:

I'm not short TSLA (or anything else - I don't own shares). Also, the only payment I receive related to my Tesla work is that from Seeking Alpha (about $300 a quarter). I've made contact with some people who are short but they haven't promised to pay me in case the swap issue explodes, and I haven't asked (in fact the money topic hasn't even come up).

Any other disclosure detail, I have no problem giving it.


Johan: the case against Tesla is too long to explain here. Check this out and if you feel like it, tell me where I'm wrong.
Doubting is thinking: Whopperpedia: the Ultimate Guide to Teslagate

Are you a journalist who is paid to be a journalist for a living or a blogger?

 

[AZC]

I'm an English language teacher. I blog in my free time.