Tesla Reports Earnings

Tesla reported good progress in their quest to become profitable.   They certainly have sold more cars than the analysts expected and they sold these cars with a decent gross margin.   The average car sold for $90,000 and the gross margin was in the $20,000 range.   They also sold approximately 6,500 cars in fourth quarter worldwide.

Guys like Dr. P and Mr. J are very happy with their Teslas and it seems that despite thermodynamics the Tesla is still considered as a green car by more affluent folks who simply do not care about thermodynamics but care about their image and the image the car they drive projects.   Tesla is brilliant at cultivating that image and their customers are very satisfied.  Tesla is the Aston Martin of Electric Vehicles.  I have to hand it to Elon Musk who is a marketing genius.    He keeps on delaying his people’s EV as he knows that thermodynamics does not allow him to price a luxury EV with any real range at anything near $50,000.  There is even talk of larger battery packs for the Model S so the rich can have more range in their subsidized vehicles.

Fisker may come back to life with new Chinese ownership.  It has been reported that besides the US DOE debt that we took a bath on, the unsecured creditors are owed over $950 million and they will be getting about a dime on a dollar.  The equity investors in Fiskers got blown away.

So far Tesla has had cumulative losses of approximately $1 billion but they are now starting to become profitable, and I do believe they will have an economically sustainable business as a luxury brand catering to affluent customers who wish to be green.  The press is full of news that Tesla intends to have its own captive giga battery factory and that within three years they will drive down the cost of batteries by half.

http://money.cnn.com/2014/02/22/autos/tesla-gigafactory/

I do think Tesla will have a giga battery factory but I do not believe the people’s TESLA with 300 miles of range on batteries and a cost of $30,000 will appear.   The CNN article above talks of the Model S being a $69,000 car yet in the 4^th quarter the average price of a Tesla sold is more like $90,000.  Tesla will be smart to stick to the very high end niche market and let others break their backs selling low margin or negative margin $30,000 electric vehicles.   Remember Coda Blue!!

Maybe the EPA will come clean and provide consumers with real data on the equivalent MPGs of electric cars and maybe Tesla will have a profitable business selling a $30,000 EV with 300 miles of range but I don’t think either will happen.  The EPA will simply hype the MPGe of EVs for political purposes and Elon will hype his future $30,000 car for the purpose of tantalizing the masses that they too can drive in style.  

The carbon dioxide concentration in the atmosphere will continue to increase, and I will continue to write boring blogs that try to get the average person to comprehend that thermodynamics constrains useful work and the cost of stored energy in EVs.  CNN, CNBC, ABC, and other media outlets will continue to report that the people’s EV from Tesla with a cost of $30,000 and a range of 300 miles is just around the corner.  Sometimes I wish I could forget Thermo and simply drink the green cool aid as ignorance is bliss.  

Update: 2/23/14  I received several emails that my thermo blogs are not boring, and that I should not drink the green cool aid, and that ignorance is not bliss.   I will therefore continue to plod on and try make Dr. Moniz obey the second law before he hands out billions of dollars to Elon for the new mega battery factory.

Real Data on A Tesla in New Jersey

Mr. J has provided me with real data on a Tesla Model S that he owns and drives in New Jersey.  Mr. J reports it has been in the 20 degrees F most days and his car sits in the parking lot for approximately 10 hours at his office while he works.  He has limited power and no battery regeneration on his short trip home after the Model S has sat in the cold air outside.   His commute is only 5 minutes but the car would need 20 minutes to gain full power and the ability to regen from braking as the batteries are simply too cold.   Mr. J says for the last 30 miles in this cold weather and his short commute he has averaged 514 watt hours of battery power per mile.   For all of his 1,005.3 miles since he bought this car this winter he has averaged 441 watt hours per mile from his batteries.   Mr. J has a simple wall plug at home and the car only gets a trickle charge of about 30 miles of range on 10 hours of charge.  Mr. J knows that he also has vampire losses while his car sits in the parking lot during the day as well as his unheated garage overnight.  Mr. J thinks his actual energy use from his plug is 3 times the watt hours of the computer stated watt hours of the batteries and about 1.5 kwh per mile.  Mr. J knows he is not green this winter and hopes that as the weather becomes warmer his Model S will green up.

It has been a year since John Broder of the New York Times took his ill-fated trip in the Model S that caused Mr. Broder to lose his job at the Times.   I did a google search on what Mr. Broder has published at the Times lately and his work there ceased in July 2013.  I guess Elon managed to get the Times to make Mr. Broder silent.

http://topics.nytimes.com/top/reference/timestopics/people/b/john_m_broder/

Mr. Broder actually had a point about the poor performance of the Model S in the winter in the Northeast.   Mr. J certainly has experienced a very cold winter this year and this is probably the most severe test of his Tesla and things will improve as the arctic blast dissipates.  

Dr. P in Orange County California is doing fine in his Tesla with his 100 mile daily roundtrip commute to his medical practice.  Dr. P is planning on adding PV cells to his roof on his home and will generate power for use in his Model S.   The real question for Dr. P who took his Tesla and his wife on a 700 mile road trip last weekend is will his batteries last and how many miles will he get on the batteries Elon has guaranteed?  Dr. P told us all he used Elon’s free electricity superchargers for all of his miles on his long road trip last weekend.

Dr. reports he has traveled 24,000 miles and has averaged 343 watt hours per mile since he bought his car.  His 700 mile road trip using Elon's free electrons averaged 320 watt hours per mile in glorious Southern California weather.

I can only say that between Mr. J. and Dr. P we have the two extremes of how a Model S is being used.  I will report further updates.

Fisker Gets Bought

The Bankruptcy judge in Delaware did wonders for the unsecured creditors in holding an auction for the control of the bankrupt company Fisker.  Judge Kevin Gross forced the auction over the objections of Hybrid Technology  the firm that bought the secured US DOE loans with face value of $169 million for only $25 million.   Hybrid thought they had $169 million of leverage but the judge ruled they only had leverage equal to amount they bought the loans, the $25 million.

Wanxiang could and did impute more value to Fisker as Wanxiang already owns Fisker’s once bankrupt battery supplier A 123.  A 123 is another case where Obama’s DOE took a bath on a green energy loan.    Wanxiang bid $149.2 million in cash and other considerations for Fisker and the judge will rule on Tuesday whether he approves his own handy work of getting significantly more for the unsecured creditors.   The Judge did a great job handling the bankruptcy and this should be a case study in how to get the most money for those who were screwed by Fisker and its board of directors and management.

http://news.yahoo.com/wanxiang-increases-bid-win-fisker-asset-sale-002445075.html

What is also a case study is how inept Mr. Obama, Dr. Moniz, and the DOE were in only getting $25 million for $169 million of secured loans we the tax payers paid for by giving Fisker (Al Gore et al) our money.   The DOE should have got $149.2 million back not the paltry $25 million.   The auction proved the market value of Fisker.   The DOE had all the leverage as the secured lender but folded so bloody fast for next to nothing with a loss to taxpayers of $144 million.   This is no different than Obama and his USDA secretary Vilsack selling hundreds of millions of pounds of sugar that cost taxpayers 21 cents a pound for less than 4 cents a pound to make “green” ethanol for fuel.  The whole green story of the administration is one of incompetence and giveaway.

I actually think Wanxiang can resurrect Fisker and may still produce a car in the USA that is similar to the Chev Volt that sells for around $50,000.   They have the patents to do this.  When Leslie Stahl did her 60 Minutes piece on the clean-tech bust she interviewed the head of Wanxiang in the USA and I was impressed that he told her to stop asking nonsense about his Chinese company and that he was simply being a capitalist.   It is amazing how he as a man who grew up under communism gets the profit motive while Obama who grew up under capitalism gets the loss motive.   I guess it all depends on who is smart in business and who is not.   Obama, Chu, Moniz, Vilsack the DOE, and the USDA should all be sent to China for some reeducation in economics 101.  Perhaps Judge Judy is right about Obama's legacy that Beauty Fades Dumb is Foerever.

The Green Machine’s Top Ten

David a brilliant architect and sculptor asked me to list my top ten green inventions other than a human walking.  David wants me to be more positive about human's attempts to be be more eco efficient.  Davis is correct we have developed some devices that are deserving of the Green Machine's Seal of Approval.

These have not been put in order but are the following:

The LED light.   Loved this one back in 2003 and LEDs are going to be universally adopted.  CO2 savings will be ginormous.  China will dominate their production, however, a US company called Cree has done some amazing things with LEDs.

The LCD display.  Loved this one back in 2003 as well and forecast the demise of tube and plasma displays.  CO2 savings also ginormous.  Plasmas will be gone like the tube and we may get OLEDs to replace the glass LCD backlit by LEDs.  But OLED's are still very expensive.

The Prius.  Loved this one as far back as 1997 when I saw the first one in Japan.   This car is optimized based on thermodynamics and is certainly not a fake or hyped.  CO2 savings are ginormous when compared to plain cars using gasoline.

The Nissan Leaf in Seattle.   Mr. Marsh proved he is green with a 100,000 miles charging from a green grid in a moderate climate that will give maximum battery life.  Mr. Marsh did his part to lower his CO2 footprint.  The Leaf has enjoyed moderate success in the USA and is certainly greener than a Tesla and also more affordable.   But the Tsla seems to have gained the spotlight.   Most Tesla owners do not enjoy reduced carbon footprints.  Most Leaf owners do enjoy some lowering of carbon footprint.

The IPad.   Sure uses a lot less energy than a desktop.  Only 5% of the energy of a desktop.  Bye bye desktop hello pads and smart phones.

Shale Natural Gas.  Sure beats coal and has done much to reduce CO2 emissions.  Hundreds of millions of tons a year of CO2 being saved in the US alone.  The folks who hate shale are now fibbing about leaking methane but when wells are installed properly leaking methane is negligible and drinking water is not contaminated.  Of course some inept company may mess up but the underlying technology can be deployed without dire eco consequences.

Grid scale PV power farms in the Atacama Desert.   Our 100 MW project generates 270 gigawatt hours of power a year.   Three times as much as placing the same solar modules in Germany.  This project saves the emissions of 30,000 cars.

Electric assist bicycles.   Best use of lithium ion batteries by far.  Good for me as I am too lazy to cycle.

Diesel engines.   Modern diesel cars are greener than hydrogen fuel cell cars on a well to wheels basis.  Bring on those diesels in the USA.

Tofu and Falafel.  Great tasting nutritious food with lowest carbon footprint for soy beans and chick peas that are legumes that fix their own nitrogen without the aid of fertilizers.

Carnot And The Motive Power Of Fire

Update:  Many people emailed to ask me if I had accounted for the CO2 emissions related to the extraction transport and refining of crude oil as well as the CO2 emissions from transporting the gasoline from the refinery to the service station.   Yes I have.   Burning a gallon of gasoline emits 19 pounds of CO2.   I used 25 pounds of CO2 per gallon to account for these other activities associated with crude oil

A French physicist  Sati Carnot published a book in 1824 titled:

“Reflections on the Motive Power of Fire and on Machines Fitted to Develop that Power”

The book was the prelude of the second law of thermodynamics.  Here is a brief Wiki link to the book.

http://en.wikipedia.org/wiki/Reflections_on_the_Motive_Power_of_Fire

Here is the wiki link to Carnot a brilliant man who died young and of Cholera.

http://en.wikipedia.org/wiki/Nicolas_L%C3%A9onard_Sadi_Carnot

190 years later I am still trying to explain to the US EPA and a couple of Tesla Model S owners that the EPA’s figure for equivalent MPGs of the Model S are thermodynamic lies.

The Environmental Defense Fund had a town-hall conference call with Gina McCarthy the Administrator of the EPA as a guest.   I listened to the conference call and I tried to pose a question but the question was never asked.    Here is the question I posed.  I also sent the question as an email to the office of investigation of the US EPA.   We will see if I ever hear back from them.  I did hear back from the EDF who claim they are not in cahoots with the EPA to lie to us about MPGe of EVs.

My Question

Last night I called in a question that was never asked and I was not placed on air.   This question is a critical question for the EPA to answer the American people.

The question was as follows:

The EPA determines the MPG of vehicles.  The EPA has determined the MPG equivalent of electric vehicles and plug in hybrids.   In doing so the EPA uses a figure based on the kilowatt hour chemical energy content of gasoline and then derives the "equivalent" MPGs for example a Tesla Model S.   In the case of the Model S the EPA has rated the vehicle at 89 MPGe.

I am an award winning chemical engineer and my graduate studies were in fundamental thermodynamics.   The 89 MPGe imply the generation of electricity to the grid was at 100% efficiency and there are no losses in transmission, distribution, low voltage transformation and the AC to DC rectification of the electricity when charging the batteries in the subject Model S.   We all know that power is not generated , transmitted, distributed, voltage transformed, and rectified with 100% efficiency and the EPA MPGe figures are thermodynamically false.   

A better method to measure the "greenness" of an EV such as the model S would be to list the grams of CO2 per mile the car emits based on the generation, transmission, distribution, transformation, and rectification of the average electricity in the US grid.   This can then be compared to the grams per mile a similar sized vehicle (The Audi A8 when comparing to the Model S) emits combusting gasoline.   Let us assume the A8 gets 25 MPG and uses gasoline.  the well to wheels CO2 of the A8 is approximately 454 grams CO2 per mile.   The model S needs 400 watt hours of DC energy per mile.   This implies approximately 500 watt hours of energy at the high voltage AC power generation station.   The grid average emissions is approximately 0.65 pounds of CO2 to generate 500 watt hours of electricity at high voltage AC.  This equals 295 grams of CO2 per mile for the Model S simply for the energy to charge the battery.

Now we all know the Model S has a huge battery pack that was fabricated in Japan by Panasonic.   Post Fukashima the Japanese grid emits 1.6 pounds of CO2 per kwh of electricity generated.   The battery pack needs 472 kwh of primary energy to yield 1 kwh of storage.   Let us assume the battery can be cycled 1,000 times before it no longer is good for the car.  This means in Japan 0.189 kwh of grid power is needed for each mile the Model S will travel in the USA over the 1,000 charge discharge cycles.   This means post Fukashima the CO2 emissions in Japan are an additional 137 grams of CO2 per mile travelled in the US.  The total CO2 per mile emitted into the global atmosphere by the Model S is 432 grams and almost identical to the Audi A8.

How on God's green earth can the EPA state the Tesla gets 89 MPGe and the Audi A8 gets 25 MPG when they emit almost identical mass of CO2 per mile.  The EPA needs to rectify this thermodynamic falsehood

I doubt the EPA will ever address their fake out.  I just wish Carnot could witness the decline of science in the USA.   This decline has come about for purely political and campaign contribution reasons and it disgusts me as a student of Carnot.  The EPA thinks an Electric Vehicle is a Car No and not subject to the second law of thermo that Carnot comprehended 130 years before Gina McCarthy was born.   Ms. McCarthy you earned a Masters of Science at Tufts, but did you study Thermodynamics 101???  I think that Ms. McCarthy excels in the Motive Power derived from Political Motives and simply forgets about heat, work, and entropy in setting policy to please the Environmental Defense Fund and the others who still believe a Tesla Model S gets 89 miles per gallon.

Keystone Cops and Pipeline

The Obama administration has been playing ping pong with the Keystone Pipeline to bring tar sand oil from Alberta Canada to the US gulf coast for refining.   The ping pong is not diplomacy like that of the Nixon era with China.  It is simply the passing of the buck in decision making whether the pipeline goes ahead or not.

The State Department is key to the decision but the President of the USA must make the final decision.   His energy policy so far has been a flop to put it mildly.   While he may claim he single handedly brought shale oil and gas to market, he and Chu and now Moniz are tainted with flops left, right, and center in the energy arena.   

Yesterday the state department determined that the amount of CO2 going into the global atmosphere will be the same whether the pipeline is built of not.   That is, they know the Chinese will take the tar sand oil if we do not.   Actually if the Chinese take the tar sand oil the CO2 emissions will be higher than if the Keystone Pipeline is built.   The reason being is that the refineries on the gulf coast are in place and the hydrogen supply needed to treat the heavy crude is already in place on the gulf.

Hydrogen on the gulf is produced by reforming of natural gas which the US has more than ample supply of natural gas based on the shale bonanza that Obama et al. had nothing to do with.   China is short of natural gas and would either have to produce hydrogen from imported LNG or from coal.  Both of these alternates have far higher carbon footprints than the hydrogen from natural gas in the US gulf.  Viola the Keystone Pipeline makes ecologic sense on this basis.

From an economics perspective even Obama the deer in the headlights of the first debate gets the arithmetic that jobs and GDP will be created by value adding to the heavy tar sand crude oil in the USA.  The New York Times put their slant on yesterday’s news that the State Department has found no worsening of global CO2 emissions if Keystone gets built.

http://www.nytimes.com/2014/02/01/us/politics/report-may-ease-way-to-approval-of-keystone-pipeline.html?_r=0

The real question for Mr. Obama is whether he wants to be remembered for being a Keystone Cop type President or a President whose only tangible accomplishments in the energy arena was to have funded Solyndra, A 123, Ener 1, Fisker, and all the other bust companies Leslie Stahl listed in her Sixty Minutes piece that outed cleantech.  I just hope that the President does not turn to Al Gore for advice on how to make the decision on the pipeline.  Mr. President even Bono does not believe Al Gore any more.  

Al Gore resembles the Keystone Cop on the very right of the photo.