Short-Term TSLA Price Movements - 2016

[30seconds]

Look, if the analyst doesn't come out and say if they have or haven't driven the Model S for a few days then their report is trash. Especially when they talk about competitive pressure. It's pretty much as if they all live in Manhatten and have never bought a car, or find the Camry/ f-150/ Highlander combo the right choice for 99.99% of the car buying public because that is what their spreadsheet model on attribute ranking tells them.

Oh and I also assume that they all buy $10 bottles of Red wine (not that I don't on occasion) from Trader Joes for parties because studies have shown that people cannot tell the difference between a nice bottle of wine and the $10 one.

Right.

 

[Xpert]

I'm trying to understand why powerpack is better than peaker plants and the business case for the high priced powerpacks. I found an old 2010 article about cost of lead acid batteries vs peaker plants - can someone help explain $492/MWh vs $377?
Also theres a gragh of lithium batteries cost which is much higher than lead acid - Li is cheaper now but natural gas is also cheaper. peaker consumes natural gas vs batteries need to be charged. Are powerpacks really cheaper for utilities companies at this price?

How Storage Can Help Get Rid of Peaker Plants

"Using assumptions taken from a recent California Energy Commission (CEC) study, our analysis found a levelized cost of generation for the simple cycle gas-fired peaker plant of $492 per megawatt-hour (MWh), or $203 per kilowatt-year (kW-yr). In comparison, the energy storage plant demonstrated significant savings, with a levelized cost of generation of $377 per MWh ($155/kw-yr). A detailed version of this analysis, including all assumptions, is available in the full white paper."

 

[Xpert]

Found 2015 article claims avg peaker plant price of $845/KWh.
Why Energy Storage is About to Get Big – and Cheap

Will the powerpacks be the winner at $470KWh?

- POwerpacks cheaper by $845 - $470 = $375KWh or 44% - huge win for powerpacks
- natural gas cost avg $.90 per therm or 100k BTU (29.3KWh) or $0.03/KWh for peaker plants. that's roughly 2 times less than batteries charging cost (assuming $0.06/KWh at nonpeak time.) - peaker plants win
- cost of battery being degraded after a number of cycles vs. peaker plants maintenance cost. -peaker plants win
What do you think?

 

[Johan]

Found 2015 article claims avg peaker plant price of $845/KWh.
Why Energy Storage is About to Get Big – and Cheap
If true, Looks like powerpack will indeed be the winner at even this price.

Three Reasons Oncor's Energy Storage Proposal Is a Game Changer

The study commissioned by Oncor showed "significant benefits" for storage if priced at $350/kWh. I don't remember exactly what was found to be the break even, as high as $800/kWh if I recall correctly.

http://www.brattle.com/system/news/..._Distributed_Electricity_Storage_in_Texas.pdf

 

[Zhelko Dimic]

Three Reasons Oncor's Energy Storage Proposal Is a Game Changer

The study commissioned by Oncor showed "significant benefits" for storage if priced at $350/kWh. I don't remember exactly what was found to be the break even, as high as $800/kWh if I recall correctly.

http://www.brattle.com/system/news/..._Distributed_Electricity_Storage_in_Texas.pdf

Feels to me no one is making real comparison. Cost for 1MWh of Tesla storage (not for consumed 1MWh) with 500KW power is $607,000 (10 powerpacks and 2x250KW inverters Build your Powerpack Energy Storage Solution | Tesla Motors)

Remember, 1MWh of Tesla storage will over its lifespan of 10 years produce at least 1MWhx365x10 = 3650MWh

This combo will charge or empty out in 2 hrs, which is probably as fast you want it for daily use, i.e. maybe you don't need this many invertors per storage, so you can save few bucks.

Now amortized over expected 10 years life, assuming daily charge and discharge of storage, you get:

$607,000/365/10 = $166.3 is price of 1 consumed MWh of Tesla storage. Add 10-20% for losses, add installation cost, this is still more than competitive, so you can see why Tesla was comfortable going with higher price ($470 per KWh, instead of $250Kwh). And any life left over 10 years is pure bonus for buyer, so math is probably even more enticing

 

[30seconds]

They don't need the economics to serve every use, just enough use cases to sell out their production. I'd be more curious to see what back up generation costs at corporate sites or small server farms for example.

 

[30seconds]

Well written article regarding the overall emission problems of major auto manufacturers

Of course author too committed to ICE to actually talk about the solution

VW's Diesel Crisis Is Now a Global Threat

 

[Johan]

They don't need the economics to serve every use, just enough use cases to sell out their production. I'd be more curious to see what back up generation costs at corporate sites or small server farms for example.

Exactly! You start by picking the low hanging fruit! Then you expand the scope of your operation, and maybe eventually to do that you need to come down in price. But by then you've also come down in cost, thanks to economies of scale (think multiple Gigafactories -- the Gigafactory as a product) and thanks to better battery technology.

 

[Julian Cox]

Found 2015 article claims avg peaker plant price of $845/KWh.
Why Energy Storage is About to Get Big – and Cheap

Will the powerpacks be the winner at $470KWh?

- POwerpacks cheaper by $845 - $470 = $375KWh or 44% - huge win for powerpacks
- natural gas cost avg $.90 per therm or 100k BTU (29.3KWh) or $0.03/KWh for peaker plants. that's roughly 2 times less than batteries charging cost (assuming $0.06/KWh at nonpeak time.) - peaker plants win
- cost of battery being degraded after a number of cycles vs. peaker plants maintenance cost. -peaker plants win
What do you think?

There are two Root Cause Answers to all of this.

1. The only class of customer that does not care about total cost of ownership (levelized cost x lifetime of use) of anything he buys is the one that has been mugged by advertising and / or perceives luxury in economic waste. Note, economic waste can be legitimately luxurious for example when high value is placed on security of random access to a barely used asset - there is a market for beach houses - but curiously not for impressive electricity bills unless we're talking debt collectors. Note also that energy or money to burn is not necessarily a bad thing either - my dog loves to burn off energy and clearly thinks of it as play time. What he does not think is fun is a gross loss of net input energy efficiency benefits by sharing his food bowl with a cat and it's a rare business person that sees luxury in inefficient materials energy and labor costs. Wasting energy, materials and labor when the product you are trying to make and sell is net useful energy always sits on the cost side of the equation. Big difference, not playtime and no luxury in that form of waste.

2. The energy density of energy itself is so immense that you can drive a Model S or an S Class Mercedes both for 300,000 miles on significantly less energy than the mass of the tiniest fleck of paint from a stone chip. The only difference being that for the Mercedes that sub paint-fleck's worth of energy is bound to 50 metric tons of gasoline and the Model S just the sub-paint flek's worth is added directly. Electricity is not a carrier of energy it is Energy and it only weighs itself divided by MC Squared and C (the speed of light) is a really big number. Any time you can use electricity without processing matter you win the cost savings of dealing with weight and bulk and motion. A battery is not a fuel like natural gas IT I s a solid state machine for converting energy inputs into energy outputs every bit analogous to a gas turbine or a piston engine except without the mechanical conversion of one form of energy to another and better still it puts out and accepts Energy itself without processing any matter - Energy in exactly the same currency when it comes out as it went in: Electricity.

It would be entirely possible to power a car on a battery pack experiencing thermal runaway by routing the energy of combustion through an engine or indeed run a steam turbine utility generation plant by tossing fully charged batteries into the burner instead of coal or natural gas. But why would you do any of those things - throw mining products if any sort into a burner if you didn't have to?

The only answer that is actually true is that this is what we have always done since we didn't know much better and many of the large assets to commit that kind of egregious stupidity (of digging up, transporting, handling and destroying massive tonnage of mining products for energy) are already bought and paid for and owned by people that have gained a sense of entitlement to keep earning at everyone else's expense.

In any economy that has access to electricity and a desire to use it on demand the battery is a stunningly useful machine. It can be deeply and marketably luxurious to have the security of random access to a battery's worth of electricity and if you use it day in day out it's a fully recyclable low maintenance ridiculisly efficient workhorse.

 

[Fallenone]

Cross posting from the China thread.

---------------------------------------------------------------------
Very interesting info from this post... Claimed to be information gained from the interaction with Tesla management at the reveal event.

【图】发布会落实几个大家关注的问题！信息量很大哦……_MODEL X论坛_汽车之家论坛

Takeaways:

1. Model X will get new energy vehicle licence plate in Beijing in July, unlike the Model S that waited 1.5 years.
2. Elon Musk is living on Model X production line and QCing every car now. He sent several email blasts to other employees to push production rate.
3. 75D is using a new battery so need further tests in China so X75D will not be available until then.
4. Some dispute among customer and Tesla about charging extra for the home high amperage charger.
5. One white and blue Model X will be on display for tomorrow's Beijing Motor Show.

 

[Xpert]

Feels to me no one is making real comparison. Cost for 1MWh of Tesla storage (not for consumed 1MWh) with 500KW power is $607,000 (10 powerpacks and 2x250KW inverters Build your Powerpack Energy Storage Solution | Tesla Motors)

Remember, 1MWh of Tesla storage will over its lifespan of 10 years produce at least 1MWhx365x10 = 3650MWh

This combo will charge or empty out in 2 hrs, which is probably as fast you want it for daily use, i.e. maybe you don't need this many invertors per storage, so you can save few bucks.

Now amortized over expected 10 years life, assuming daily charge and discharge of storage, you get:

$607,000/365/10 = $166.3 is price of 1 consumed MWh of Tesla storage. Add 10-20% for losses, add installation cost, this is still more than competitive, so you can see why Tesla was comfortable going with higher price ($470 per KWh, instead of $250Kwh). And any life left over 10 years is pure bonus for buyer, so math is probably even more enticing

Assuming 85% efficiency (15% loss) and 5% utility scale installation cost:
$0.166/KWh / 80% = $0.207/KWh.
This compres to The average US electricity cost for first 3 months of 2016 ($.134/KWh), still cheaper than peak hours rate at many places.

 

[Fallenone]

Feels to me no one is making real comparison. Cost for 1MWh of Tesla storage (not for consumed 1MWh) with 500KW power is $607,000 (10 powerpacks and 2x250KW inverters Build your Powerpack Energy Storage Solution | Tesla Motors)

Remember, 1MWh of Tesla storage will over its lifespan of 10 years produce at least 1MWhx365x10 = 3650MWh

This combo will charge or empty out in 2 hrs, which is probably as fast you want it for daily use, i.e. maybe you don't need this many invertors per storage, so you can save few bucks.

Now amortized over expected 10 years life, assuming daily charge and discharge of storage, you get:

$607,000/365/10 = $166.3 is price of 1 consumed MWh of Tesla storage. Add 10-20% for losses, add installation cost, this is still more than competitive, so you can see why Tesla was comfortable going with higher price ($470 per KWh, instead of $250Kwh). And any life left over 10 years is pure bonus for buyer, so math is probably even more enticing

PowerPack efficiency is a little over 80% for round-trips. So even if they live up to this efficiency for users using it to the max everyday for 10 years, the total energy delivered would be 3650MWh * 80% = 2920 MWh. The price you deducted would then be about $0.207/kWh.

But again, peak hour (12:00 noon to 6 pm) price by PG&E is about $0.25/kWh for summer

 

[Fallenone]

Assuming 85% efficiency (15% loss) and 5% utility scale installation cost:
$0.166/KWh * 80% = $0.133/KWh.
This is exactly 1 cent below The average US electricity cost for first 3 months of 2016 ($.134/KWh). It seems too good to be true. Does anyone see anything wrong with the calculations?

You should divide 0.166 by 80% instead of multiplying it.

 

[Xpert]

Exactly! You start by picking the low hanging fruit! Then you expand the scope of your operation, and maybe eventually to do that you need to come down in price. But by then you've also come down in cost, thanks to economies of scale (think multiple Gigafactories -- the Gigafactory as a product) and thanks to better battery technology.

Agreed. Although it seems Breakeven point for Oncor was $350KWh per this article (Why Tesla Batteries Are Cheap Enough To Prevent New Power Plants) so count utility companies out for a while.
By the way i have not seen a real use case cost analysis for those low hanging fruits, feel free to enlighten us.

 

[Xpert]

You should divide 0.166 by 80% instead of multiplying it.

I think you are correct

 

[Julian Cox]

PowerPack efficiency is a little over 80% for round-trips

Your claim for such low efficiency at only 80% round trip is extremely unlikely and I would be shocked if it isn't wildly inaccurate.

Source?

 

[Fallenone]

Nope. Multiply 80% or 0.80 is correct.

Suppose you are buying 10 apples (kWh) for $100 you are paying $10/apple. In reality two got rotten (battery efficiency not 100%) and you need to buy another two meet your demand of 10 apples. You're total price per usable apple in the end is $10/0.8 = $12.5, not $10*0.8 = $8.

 

[Johan]

Agreed. Although it seems Breakeven point for Oncor was $350KWh per this article (Why Tesla Batteries Are Cheap Enough To Prevent New Power Plants) so count utility companies out for a while.
By the way i have not seen a real use case cost analysis for those low hanging fruits, feel free to enlighten us.

Look, forget the arbitrage game just yet. Just envision taking the EXISTING stationary storage market which is a lot of expensive, heavy, voluminous and maintenance demanding PbAcid batteries. Datacenters, backup power for banks etc, existing grid balancing setups.

 

[Xpert]

Suppose you are buying 10 apples (kWh) for $100 you are paying $10/apple. In reality two got rotten (battery efficiency not 100%) and you need to buy another two meet your demand of 10 apples. You're total price per usable apple in the end is $10/0.8 = $12.5, not $10*0.8 = $8.

I stand corrected, You are too fast! I'll revise it but i think its still wrong

 

[Fallenone]

Look, forget the arbitrage game just yet. Just envision taking the EXISTING stationary storage market which is a lot of expensive, heavy, voluminous and maintenance demanding PbAcid batteries. Datacenters, backup power for banks etc, existing grid balancing setups.

Replacing existing storage market would take some time. Those already have storage have invested in their system and won't switch right now due to the $ already invested.