Tuesday, July 4, 2017

Elongate and July 4, 2017


 

Happy birthday America.  I have not opined much on Tesla but feel compelled to do so today.  Elon and his team have come up with a fantastic car in the Model S, a mediocre SUV in the Model X, and maybe a dud in the Model 3.

Sales of the Model S and X combined have petered out in the US (see the chart above).  The Model 3 cannot be sold for the price stated with any profit to Tesla.  Hence the Model 3 will have to be sold for a lot more than the mid thirty thousand dollars folks are hyping.

 My real analysis based on Thermodynamics and facts shows that the batteries are still costing between $200 and $225 per kilowatt hour for the cells only.  Real data show that the learning rate in the past 7.5 years since I wrote my testimony to the US Senate on lithium ion batteries is only around 5% a year at best and 2% at worst.  Panasonic has a learning rate of approximately 5.2% per year and the manufacturers of lithium ferro phosphate batteries only have enjoyed a learning rate of 2%.  Forget the double digit learning rates the hypers of these battery chemistries have published.

By my estimation Tesla will have to sell the Model 3 at an average price of $58,000 before rebate to stand a chance of being profitable.    They may do this but will they be able to sell a million model 3s in 3 years???  I really doubt this. 

 If Elon and Tesla are stretched too thin we will experience Elongate.  This will make Watergate seem like only a petty crime as according to the majority of people the future of the world depends on Tesla's (EV's) success. 
My bet is that Tesla remains a high priced niche player in the automotive industry and the Model 3 will sell 300,000 vehicles in total in the US in 3 years and the average price of these will be $55,000 or higher.    Tesla stock price will reduce and when the dust all settles Tesla will have a market cap of approximately $20 billion not $200 billion.

Of course I could be completely wrong but like the founding fathers I am willing to declare my thoughts in writing.  Time will tell if I am right or wrong.  We will know the answer by America’s 244th Birthday in 2020.  Happy July 4 to all and long live Government For, Of, & By The People.

6 comments:

  1. الكثير من سكان مدينة القصيم والمناطق التابعه لها يحتاج والى شركة متخصصة فى خدمات التنظيف والخدمات المنزلية لرفع العناء الذى يشتكو منه الكثير من سكانة المدينة لذالك تاتى شركة فارس الخليج بالحل السريع وه توفر افضل الخدمات المنزلية وذالك من خلالة عمالة فنية مدربة على اعلى مستوى من الخبرة والكفائة ايضا تمتلك الشركة افضل واحدث المعدات التى تجعل الشركة الافضل والاسرف فى مجال الخدمات المنزلية بالمملكة العربية السعودية شركة رش مبيدات ببريدة
    شركة تنظيف خزانات ببريدة
    شركة تنظيف مكيافات بالقصيم
    شركة تسليك مجارى بالقصيم
    شركة مكافحة حشرات بالقصيم
    شركة عزل بالقصيم
    شركة نقل عفش بالقصيم
    شركة تنظيف بالطائف
    شركة تنظيف خزانات بالطائف
    شركة نقل عفش بالطائف

    ReplyDelete
  2. تقدم لك شركتنا افضل الخدمات المنزليه في جميع الاعمال كا التنظيف ومكافحة الحشرات وونقل العفش وتنظيف الخزانات وتنظيف المكت وتسليك البيارات وعزل خزانات وعزل اسطح وتنظيف حمامات سباحه وتخزين عفش وجميع الخدمات المنزليه التي يحتاج اليه العميل وبكل راحه وتحت اشرافه وباسعار مناسبه فشركتنا اقوي شركه علي انحاء المملكة في جميع الاعمال المنزليه شركة فارس العرب..
    شركة تنظيف بالرياض
    شركة نقل عفش بالرياض
    شركة مكافحة حشرات بالرياض
    شركة تنظيف خزانات بالرياض


    شركة نقل عفش بالرياض
    شركة تسليك مجاري
    بالرياض

    شركة تنظيف منازل بالرياض
    شركة تنظيف بالرياض
    شركة تنظيف خزانات بالرياض


    ReplyDelete
  3. Sir,
    Could you please publish more data regarding battery cost learning curve? It seems the world has been kept in dark with double digits nos. Please elaborate your data on battery costs, I'm very curious to know more about it. There's a huge disparity here. It'd be great if you could share your nos.
    Thanks

    ReplyDelete
    Replies
    1. Rohit

      In Feb 2010 I wrote testimony for the US Senate on the thermodynamics of lithium ion batteries. A company called ping batterues sells lithium iron phosphate batteries. In 2010 their battery cost just over $800 for 960 watt hours. Today the same battery delivered to a customer in the US is just ovet $700 for 960 watt hours. 12% reduction in 7.5 years. 1% per year learning

      Delete
    2. Lindsay,

      Thanks for the detailed insight. We have been coming across nos. such as 14-16% through literature. Also, Mr. Tony Seba of Stanford has written a book about the same and has many video lectures too. All of his solar and EV disruption prediction heavily relies on battery costs. So why's there such huge disparity? Where's that high double digit prediction is coming from? It seems the world is fooled big time.

      Delete
  4. Rohit in February 2010 the Panasonic NCR 18650 lithium ion cell could be bought in bulk for $5.29. It had 3.7 vols and 2200 miliamphours. Now one can buy a Panasonic NCR 18650 for $5.35 in bulk but it has 3400 miliamphours and is still 3.7 volts. Per watt hour the cost has experienced a learning rate over the 7.5 years of 6%.

    These are real data and real costs. Dr Chu who was US Sec of Energy published a paper 5 years ago that the cost per kwh of a tesla EV car battery pack with all the thermal and battery management systems was $650 per kwh. My guess that is is at least $450 per kwh today and that Tesla has a cost of $45,000 for each 100 kwh battery pack

    ReplyDelete