I think I will save the bears some trouble. Here is your all-purpose negative motley fool article. Substitute your date and byline and scramble the order a bit and you can publish it every month!
And it took me 20 minutes to write, so it is a bit better crafted than most.
Is Tesla [out of juice|out of charge|zapped |other electricity pun here]?
By Bear McGrumpy:
Disclosure: I have no position in this company, really.
Tesla has had an amazing 2013 so far, with an astonishingly fast rise in the stock price after announcing Q1 earnings that barely made a tiny bit of profit, mainly due to Obama redistributing wealth from hard working oil companies. Everyone agrees the stock is hugely overvalued and will return to the proper value of $0.01/share giving it a PE of 10 like the rest of the auto industry. The question is when, so I will try to lay out when that will be.
The amazing Model S car:
Tesla’s flagship product, the Model S (starting price $100,000) has recently gotten some good reviews, including Motor Trend’s car of the year and was scored a 99 by Consumer Reports. It is suspect that that happened, given that the range is only 17 miles per charge (see Fox news). The car isn’t very impressive, lacking cupholders and many owners have complained about issues. Also I have not driven one, so I assume it is slow and has a top speed of 60 mph. It is clearly a toy for the very wealthy, and when rich people spend money on electric cars it is immoral and foolish. Spending $100,000 on loaded BMW’s and Audi’s is normal.
Lithium Ion Battery outlook:
It is possible that small cars could someday use Li Ion batteries, but the time has not arrived. Tesla uses the same types of batteries used in laptops, and also the same type of batteries made by A123 supplied to Fiskar and used in the Chevy volt. As the recent Boeing 777 issues have shown (which Grounded the fleet earlier this year) all Li Ion batteries are the same and are prone to failure. Tesla cars probably have lots of problems with their batteries too since they are all the same. Also, it is well known that the cost per kilowatt hour is at least $500, meaning that their 85kWh offering has a $42,500 battery. Since the battery must be replaced every few years, this represents an enormous expense, not to mention a huge environmental problem. Has Tesla figured out which landfill they will send all these battery packs to?
True energy usage/carbon footprint:
The real irony, is that Tesla’s electric cars are not even really environmental. For instance, while the car does not have a tailpipe producing partially combusted hydrocarbons in city centers, the electricity it uses may well have come from burning coal! Since coal is also a fossil fuel it makes no difference if you drive a Tesla or a conventional ICE car. In fact, since the power plant is probably located far from where the car will charge, you have to figure power line losses along the way, as well as the inefficiency of the power plant, car charger etc. This is a lot of lost energy. This can be compared to an ICE and you can see that EV’s are worse. Also, if the electricity is generated in a whale-oil burning power plant you are harming whales.
Suspect business practices:
Tesla makes most of its money raking in $7500 credits for each car it sells. It also forces other automakers to buy ZEV credits on the open market, which represented most of Tesla’s revenue in Q1. Worse, they used lobbying power to get preferential tax credits and an expensive DOE loan (for which the DOE only made $12M in profit, another scandal worth exploring). Finally, they are also using heavy-handed tactics to drive local dealerships out of business. Many of these are local businesses that have been reselling cars for decades. You should write your local representative to support them in their legal battles.
Forward projections:
The demand for cars has been exhausted, given that only a handful of early adopters (rich eco-conscious types) bought them, leading the factory to idle the 2[SUP]nd[/SUP] and 3[SUP]rd[/SUP] production shifts. Lithium supplies are dwindling, and laptop manufacturers are snapping up batteries leading to a global battery crisis. The company is wildly overvalued compared to its other auto industry peers like GM (which did not get a government loan that it paid back like Tesla). Tesla bulls believe that they can produce an affordable “Gen III” car in 2016 that will be priced comparable to a BWM 3 series, or about $35-40k. But, as we have seen the batteries alone are $42k, and set to rise no doubt. Finally CEO and visionary Elon Musk is stretched thin running several companies (solar City, SpaceX) and one has to wonder how he can really do that. I know I could not!
In summary, since this is a Motley Fool article, I will not write a summary at all and segue gracelessly into an advertisement for more well-researched information about this and other companies. At this point you are trying to pick out the threads of the various points raised here and make a coherent message on your own, but really are left flat and vaguely regretting you clicked the link. When will you learn?
And it took me 20 minutes to write, so it is a bit better crafted than most.
Is Tesla [out of juice|out of charge|zapped |other electricity pun here]?
By Bear McGrumpy:
Disclosure: I have no position in this company, really.
Tesla has had an amazing 2013 so far, with an astonishingly fast rise in the stock price after announcing Q1 earnings that barely made a tiny bit of profit, mainly due to Obama redistributing wealth from hard working oil companies. Everyone agrees the stock is hugely overvalued and will return to the proper value of $0.01/share giving it a PE of 10 like the rest of the auto industry. The question is when, so I will try to lay out when that will be.
The amazing Model S car:
Tesla’s flagship product, the Model S (starting price $100,000) has recently gotten some good reviews, including Motor Trend’s car of the year and was scored a 99 by Consumer Reports. It is suspect that that happened, given that the range is only 17 miles per charge (see Fox news). The car isn’t very impressive, lacking cupholders and many owners have complained about issues. Also I have not driven one, so I assume it is slow and has a top speed of 60 mph. It is clearly a toy for the very wealthy, and when rich people spend money on electric cars it is immoral and foolish. Spending $100,000 on loaded BMW’s and Audi’s is normal.
Lithium Ion Battery outlook:
It is possible that small cars could someday use Li Ion batteries, but the time has not arrived. Tesla uses the same types of batteries used in laptops, and also the same type of batteries made by A123 supplied to Fiskar and used in the Chevy volt. As the recent Boeing 777 issues have shown (which Grounded the fleet earlier this year) all Li Ion batteries are the same and are prone to failure. Tesla cars probably have lots of problems with their batteries too since they are all the same. Also, it is well known that the cost per kilowatt hour is at least $500, meaning that their 85kWh offering has a $42,500 battery. Since the battery must be replaced every few years, this represents an enormous expense, not to mention a huge environmental problem. Has Tesla figured out which landfill they will send all these battery packs to?
True energy usage/carbon footprint:
The real irony, is that Tesla’s electric cars are not even really environmental. For instance, while the car does not have a tailpipe producing partially combusted hydrocarbons in city centers, the electricity it uses may well have come from burning coal! Since coal is also a fossil fuel it makes no difference if you drive a Tesla or a conventional ICE car. In fact, since the power plant is probably located far from where the car will charge, you have to figure power line losses along the way, as well as the inefficiency of the power plant, car charger etc. This is a lot of lost energy. This can be compared to an ICE and you can see that EV’s are worse. Also, if the electricity is generated in a whale-oil burning power plant you are harming whales.
Suspect business practices:
Tesla makes most of its money raking in $7500 credits for each car it sells. It also forces other automakers to buy ZEV credits on the open market, which represented most of Tesla’s revenue in Q1. Worse, they used lobbying power to get preferential tax credits and an expensive DOE loan (for which the DOE only made $12M in profit, another scandal worth exploring). Finally, they are also using heavy-handed tactics to drive local dealerships out of business. Many of these are local businesses that have been reselling cars for decades. You should write your local representative to support them in their legal battles.
Forward projections:
The demand for cars has been exhausted, given that only a handful of early adopters (rich eco-conscious types) bought them, leading the factory to idle the 2[SUP]nd[/SUP] and 3[SUP]rd[/SUP] production shifts. Lithium supplies are dwindling, and laptop manufacturers are snapping up batteries leading to a global battery crisis. The company is wildly overvalued compared to its other auto industry peers like GM (which did not get a government loan that it paid back like Tesla). Tesla bulls believe that they can produce an affordable “Gen III” car in 2016 that will be priced comparable to a BWM 3 series, or about $35-40k. But, as we have seen the batteries alone are $42k, and set to rise no doubt. Finally CEO and visionary Elon Musk is stretched thin running several companies (solar City, SpaceX) and one has to wonder how he can really do that. I know I could not!
In summary, since this is a Motley Fool article, I will not write a summary at all and segue gracelessly into an advertisement for more well-researched information about this and other companies. At this point you are trying to pick out the threads of the various points raised here and make a coherent message on your own, but really are left flat and vaguely regretting you clicked the link. When will you learn?
So, sorry for getting the plane wrong and if you are looking for this article to educate you on the news of the day, you are barking up the wrong tree. I think I will leave it; its "meta".
