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One of the Biggest Anti-EV Memes is One of the Most Ridiculous

Discussion in 'Tesla Motors' started by ZachShahan, Jul 30, 2016.

  1. ZachShahan

    ZachShahan Member

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    Sarasota, FL / Wroclaw, Poland
    Thanks to some good people here for sharing some of the key notes that inspired this piece:

    One of the Biggest Anti-EV Memes is One of the Most Ridiculous

    [​IMG]

    I’ll be honest: we have a superb community of thousands of electric vehicle fans and experts. Many just read, some of you share (come on, share more!), and a handful of you comment on articles (which is massively appreciated and helpful — even when the comments go into the hundreds and steal my night). But this is not a normal community.

    When we happen to have EV articles get popular on sites like Google News, we tend to get the naysayers, pessimists, and perhaps even paid trolls doing whatever they can to soil the aura of the EV revolution. (Check out “22 Ways To Delay The Electric Car Revolution” for some “tips” on how to be a blockade to progress.) But it’s not just naysayers, pessimists, and trolls. The problem is that a large number of people have been misinformed. If I wasn’t working in this industry, I’d probably be one of those people.

    One of the most persistent and inane claims concerns batteries. We’ve already published a superb response to a popular and completely misleading lithium vs oil meme. But even that article skipped the gem of the story, which is this:

    Batteries can be recycled — thoroughly!

    [​IMG]Tesla Gigafactory 1 is expected to produce 1.5 million cars a year once it is completed. That’s 15 million cars in a decade. That’s far more batteries than the entire world produced in 2014. And that’s just one Gigafactory — Tesla plans to build many of these.

    Naysayers and paid trolls (they really are documented to be out there in large numbers) want you to think this means total environmental ruin, equivalent to burning oil for transport.

    Aside from electric cars being considerably greener and lithium extraction being akin to sea salt extraction, batteries can be reused for stationary storage and/or recycled almost in their entirety.

    From the Gigafactory festivities this week, I think these are a few of the biggest and most under-reported statements from Elon Musk (h/t to Casmacelf and Chuq for some of these):

    • The Gigafactory will recycle batteries, using 100% clean, renewable electricity. (We knew that, btw, but Elon realized that a lot of people seem to have missed this point.)
    • 100% of the lithium in Tesla’s lithium-ion batteries can be recycled.
    • The majority of the cost of a battery is the materials. Recycling most of those materials will dramatically cut the cost of batteries.
    Everything here could be put in bold, but that last point is so absolutely huge that I am often at a loss for why it isn’t discussed more. With that now highlighted, let’s transition for a moment from the environmental side of things to the economic benefits of battery recycling.

    The top technical factors holding back electric car adoption are the production capacity of batteries and the cost of batteries. (Note that I think the top overall barriers to EV adoption are simply lack of awareness and lack of experience, but those are topics for another article.) If you can recycle most of the materials in millions of batteries in a few years in order to make millions more batteries, man, you are set to destroy OPEC. Who the heck needs OPEC? Who needs to ensure that oil prices aren’t “too high” for society? Oil prices are irrelevant. Oil can’t compete.

    With battery recycling on a massive scale, the cost of batteries all of a sudden drops off of a cliff (… a cliff that happens to be hanging over the heads of oil companies and countries dependent on oil sales).

    Let’s put it in simpler terms: Imagine you can magically regain $8,000 for every $10,000 you spend several years down the road (I don’t know the exact math, so this is just an example). Maybe you spend $700,000 over the course of 7 years, but then you start getting back 80% of that, and regain $560,000 over the subsequent 10 years. You just bought a condo in Silicon Valley and soon got back 80% of the cost to buy another one in Florida.

    Now, imagine that your “competitors” don’t have this benefit. Once they spend money, it’s gone. Well, you’re on your way to becoming a rich son of (… kind and loving parents).

    It’s hard to overstate how big of a deal this is. On the environmental side, the groundwork being laid today will enable much, much greener electric cars (even far beyond the fact that they are already much, much greener than fossil-burning cars); but it will also enable quicker destruction of the gasmobile market than all but a handful of futurists seem to realize.

    You can hate the fact that people love him so much, but you have to give some props to Elon for working to save society from itself.

    That’s the future, but just as a reminder, here’s a look at the surprisingly fast drop of Tesla batteries before Gigafactory 1 and before battery recycling:

    [​IMG]

    And here’s a McKinsey chart on the competitiveness of fully electric cars, plug-in hybrids, and conventional hybrids that balances battery prices and gasoline prices (with an arrow and text added by me to show where Tesla is according to its last public statement on battery prices):

    [​IMG]

    As hinted in the chart, also recognize that this “competitiveness” analysis from McKinsey doesn’t take into account huge consumer benefits of electric cars, such as fun and helpful instant torque, super-convenient home charging, and industry-leading autonomous driving features — which may explain why ~400,000 people put down reservations for a Tesla Model 3 over 1 year before the car will go into production, and why more than 100,000 reservations were place before the car was shown and before almost any information regarding the car was released to the public (essentially, just price and minimum range were public).

    Naturally, this doesn’t even take into account the consumer revenue potential of Tesla self-driving cars and the conventional auto industry’s financial insecurity….

    Add 1+ 2 + 3 +4 up, and you get: “wake the freak up — the future is electric cars, and the future is now!”

    Related:

    Tesla, IBM, Stanford, & PNNL Lead Obama’s Battery500 EV Battery Initiative

    Tesla Gigafactory 1 — Honestly, What’s The Big Deal? (At Essence, It’s Not The Numbers)

    11 Key Tesla Gigafactory, Model 3, Solar, & Elon Romance Takeaways From Today’s Statements

    22 Ways To Delay The Electric Car Revolution

    Importance of Tesla Superchargers, Battery Upgrades, Electric Car Benefits… (My EV Summit Presentation)

    Cleantech Disruption — My Presentation At Institutional Investment Conference In India (Video)

    Tesla Model 3 photo by Kyle Field | CleanTechnica (CC BY-SA 4.0); Tesla Roadster “LOL OIL” source unknown, retrieved from Extravaganzi; battery price trend chart by Nykvist et al. (2015), with modification by me to add the latest Tesla battery price statement.
     
    • Informative x 8
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  2. erthquake

    erthquake Member

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    But if there's that much value in a used battery, won't there be a secondary market for selling them back to Tesla? If a used battery pack saves Tesla, say $5,000, then whoever owns the battery is going to try get something like $4,000 for recycling the battery, right?
     
  3. ecarfan

    ecarfan Well-Known Member

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    Zach, awesome post, outstanding analysis! I too noticed that at the Gigafactory event, Elon and JB made a point of reiterating that Tesla will be recycling batteries (using sustainable energy!), that all the raw material components can be recovered and reused, and that means battery costs will continue to fall. It's a self-reinforcing cycle. Few people have thought that through. Your article makes the point very clearly. Again, Elon is thinking long term, as usual, putting Tesla way ahead of the competition, as usual.

    @erthquake, it seems to me that when a Tesla vehicle battery has reached the end of its useful life (which is likely to take over a decade), the vehicle owner will simply take their car to Tesla, Tesla will remove the old battery and install a new one and credit the owner the value of the old battery against the cost of the new one. Tesla will want to buy the old battery because it can be recycled and used to produce new batteries. I don't see a secondary market developing because that would insert a middleman into the process which could not compete on price against Tesla buying the battery back directly from the vehicle owner. Tesla will not pay more for the used battery than a middleman would pay the vehicle owner, that would make no economic sense.
     

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