If you can't tell from this week's video, I've become something of an Elon Musk/Tesla fanboy. We kind of stole a largish portion of their video for today's show. Unfortunately it had some Beat of the Butterfly Wings" music in it that caused us to be banned on YouTube. We have a scant thousand YouTube viewers anyway - mostly those with technical problems with the JWPlayer we use or Apple in general. But the YouTube thing is a constant pain in my battery box. If HTML5 ever gets fully deployed, YouTube will go away at EVTV.
I found the presentation fascinating on a number of levels. Musk was clearly having fun and enjoying the day, and why not? He was delivering early with a car he is clearly pleased with. Of course, there are many questions, but he seems to have better visibility of them than before.
A couple of points I picked up on:
SAFETY: Not my hot button frankly. But of course the key element of the deliveries on June 5 and 6th were that the cars were legally production deliverable. This was because they had passed ALL the regulatory hurdles to reaching that state.
You might recall that the Tesla Roadster caused a Federal fine of $244,000 that Tesla was forced to pay for not having an EMISSIONS CERTIFICATION CERTIFICATE. They had, rightly I think, assumed that since they did not HAVE any emissions, they did not need certification. In fact, to get certified, you have to go on a dynamometer and do an exhaust system sniff test. This isn't even possible to accomplish with a Tesla Roadster. It has no exhaust.
DOesn't matter said the government. You don't really have to pass an emissions test, but you DO have to have the certificate - ergo the fine. What a kuntry.
Musk of course has several very small children and pictures the car as a car HE will drive. Busy with the whole new daddy thing, safety is an issue. They had just completed the crash testing and he was clearly gratified with the results. His issue, not mine. But being against safety is kind of like being against puppies and kittens. Not much future there particularly if you ever want to get laid again.
SALES AND HANDLING. These do not appear to be related. I do relate them. And Musk clearly does as well. One of the things we have learned over and over is that there is a huge disconnect in electric car discussions. It involves a disconnect between those that have driven a good one, and those that have not. And never the twain shall meet.
There is something indefinable in driving an electric car. I have variously and at various times ascribed this to the lack of noise. Or the continuous feeling of acceleration. Or to the very low center of gravity. Or to the sound it DOES make while continuously accelerating. Or....
In truth, I don't know what it is. It is the center and soul of the EV grin. You can't help but smile the first time you feel it. It's a thing your face does automatically and you have no control over it really. What actually causes it I don't know.
In designing the Model S, they did several things that starting with a blank sheet of paper you CAN do with electric drive and you CANNOT do with an ICE car - so no one does.
They put the entire drive train where it belonged, where it drives the wheels. The rear axle and motor and controller all got strangely confused in this car. It is basically a fat rear axle.
That one feat leads to a very unusual car. It has no engine up front. Worse, it has none in the rear either. Polar moment of inertia of mass, or the angular mass, is a measure of an object's resistance to changes to its rotation. The moment of inertia of an object about a given axis describes how difficult it is to change its angular motion about that axis. Therefore, it encompasses not just how much mass the object has overall, but how far each bit of mass is from the axis. The further out the object's mass is, the more rotational inertia the object has, and the more rotational force (torque, the force multiplied by its distance from the axis of rotation) is required to change its rotation rate.
Hmmm. Wikispeak. What this means is that the rotational stability of a car about a central axis roof to floor in the center, is a function of the DISTANCE of the proportions of mass from that center. The car will handle better with the mass in the center than it will at the two ends. With a front engine car, a lot of mass is far forward and with a rear engine car, of course to the rear. This is why MID ENGINE sports cars handle better. And it's why the usual strategy of putting batteries WAY up front and WAY in the rear do not help your vehicle's handling characteristics. IT becomes much less stable and more likely to spin out in a turn.
With the Model S, there is no big mass in the front, and no big mass in the rear. And in fact, most of the mass is in the center. People and Batteries are both in the center between the wheels and in fact the batteries are BENEATH the floor of the car. This contributes a movement of the CENTER OF GRAVITY as well to a very low point, probably beneath your ass level.
The combination of these two have simply not ever BEEN seen in an automobile - lacking perhaps the milk lorries in the United Kingdom during the 1930's. Nobody can design a car with THAT low a center of gravity and that minimal a polar moment - until now.
If you couple that handling characteristic with the usual elements of an EV grin, you have a driving experience that you cannot describe because there is no analogue to it. You've either felt it or you haven't.
So far extremely few have. And therein lies a tale. Tesla did a very smart thing several years ago. They started taking deposits to gage interest in the car. But unlike Nissan with their $99 salutary refundable deposit, Teslas wa a pretty handsome$5000. I'm number 2873. But they now have 10,000 reservations in hand or 50 million in deposits.
Those serious enough to put down a $5000 deposit a year or more in advance all share one thing in common. NONE of them have ever driven the car. Musk of course has. And so he has a kind of double EVgrin.
He gets to grin from driving it. And then he gets another grin when he contemplates that he has $50 million in deposits for the car from people who have never driven or felt it. If 10,000 people will plunk down $5000 for a chance to drive a car that looks a lot like what modern European sedans look like these days, what would people who actually got to test drive the vehicle do? And so he's pretty confident he can sell 20,000 of these next year. His only concern is can he PRODUCE 20,000 of them next year.
I don't know that it will be THAT easy. In Missouri we say that it takes a mighty big dog to weigh a ton. And 20,000 is a BIG number when you get into the stratified air of the premium auto market - particularly at the $87,000 level. That's the number that keeps surfacing on an attractively equipped 300 mile range version. I was kind of hoping those would come in at $77,500, which I predicted two years ago would be the price of their $50,000 Model S.
But then again, I've never driven the car.
Just a few months ago I faulted Tesla for announcing a proprietary charging plug. I hadn't quite thought that through I'm afraid. If you are going to do a fast charge in less than an hour on an 85 kWh battery pack, and we had that number then, you are pretty much talking about at least 85 kWh of power through the cord by definition. Musk urges us to think 100 kW. Makes sense.
Neither ChaDemo or the hugely ungainly SAE combi plug proposal can do that level of power, more like half. So our existing combating fast charge standards, will quickly NOT only not be standardized, but won't even charge our cars of just a few years hence if we do get better batteries. How many charge standards do we have to go through here?
Musk claims they have a small attractively engineered plug that can do 100kW of power. That would be an engineering design win all by itself.
Once the 9600 bps modem was released and available, nobody really cared about the 2400 bps standard again. Similarly at 19,200. New technology that offers a significant perceived advantage wipes out standards where they stand. If there's one thing better than a 100 mile range car that can charge in an hour, it's a 300 mile range car that charges in an hour.
In our last episode we talked about what it might take to put a fast charge station every 40 miles on all 47,300 miles of U.S. interstate and came up with a figure of $59 million at $50K per station. I found this an epiphany for me personally.
Now here is Musk, smugly alluding to the Supercharge Network he doesn't want to talk about, but is dying to talk about because he is so excited he's almost jumping up and down.
One of Musks other companies is Solar City. They basically have broken the mold on solar installations by financing the installation and tacking it onto your home mortgage. Your mortgage payment goes up, your utility payment goes down, and you put nothing into it at all. Really ever. The next buyer then pays off the mortgage at the sale.
This little financial innovation has caused Solar City to grow about as fast as they can hire people and buy trucks. They will be doing an IPO I'm told later this summer if the markets are favorable. I really thought Feed In Tarriffs were the way to go to get the solar thing off the ground. Solar City kind of made up their own and are doing well anyway.
Legacy legislation continues to confound and amaze new technologies. In California, it is actually illegal to sell electricity. This is part of the monopoly afforded the utility companies. So you can't take your electricity, mark it up, and sell it to your neighbor. This all kind of made sense in 1918. But doing charge stations for profit becomes a little problematical. The charge station manufacturers have invoked a theory that you are simply charging for access to the station - not the electric grid. That's a little bit thin if not outright dubious. I can see a battle in the future that could be really ugly.
But if you make your OWN electricity and sell it from your own grid, I'm not sure how that all reads. If you made electricity from solar, and stored it in batteries, and sold that to cars, I guess I'm not seeing a problem here. Who can object to what?
California has 8600 miles of "primary" highway out of their 16,800 miles of roads. If you put one every 100 miles, and sprinkled a handful in San Francisco, San Jose, Los Angeles, and San Diego, you could probably come up with about 100 charge stations. They would be a little more expensive with solar and batteries. But at a half a million apiece, that would be $50 million and at $1 million apiece that would be $100 million. And that's not necessarily money down a hole like free public charging stations. Let's say it was $20 to "fillup." I'd pay it. Say the average fillup was 60kWh. In California that's about $18 worth of electricity anyway from the grid. So paying a flat fee of $20 isn't' even an inconvenience.
Good work if you can get it. You're selling sunshine for 30 cents a kilowatt-hour. If 20,000 cars fill up twice a week, we are looking at $38.5 million a year income from an initial investment of $100 million. Each station has to charge 57 cars per day at that 60 kWh. That's 3420 kWh from 4.5 hours of sunshine or a 760 kW array. That's pretty big frankly. I don't know you can do that with batteries for $1 million. But with 38.5 million per year and a more realistic 10 year cap rate, we probably can for $3.85 million per station.
This can scale anywhere you want it to. If Musk just did it in California, and with Solar City's ability to purchase large amounts of solar panels, their costs have to be down around 85 cents per kWh, would this business model catch on nationally? I wouldn't' actually mind some of that action.
This ignores COMPLETELY that gasoline stations don't make squat on gasoline at all. ALL their income comes from Twinkies and cokes. We ARE talking about people charging for an hour. What do you have for them to do? Drink coffee and soda. Go to the rest room. Eat. Get online.
Suddenly, the necessary infrastructure looks like a business opportunity instead of a charity event or a place for our government to spend more money.
And the ability to swap batteries in one minute? Oh yes. For those in a hurry. At a bit of up charge. But that's not what that's really about.
What if we sell you an $87,500 Tesla Model S for $67,500 (less $7500), and you can join our SuperCharge network and let us worry about the batteries on the monthly plan. You were going to spend $600 per month on gasoline? Well, how about $400 per month with us for so many miles. Kind of like a cell phone plan.
Solar City is thriving by making the pain go away from installing solar. If we take that lesson and apply it to the electric vehicles, would we be looking somehow for a DIFFERENT outcome?
Guys it is true that Tesla is NOT going to franchise the sale of their automobiles. They are going to own outright all of their own stores and control the sales process totally.
Why then wouldn't' they want to own all of the gas stations that fuel them as well? Solar powered gas stations. Delivering electricity. To Electric cars. Without the pain. Ding dongs and Ho-Hos akimbo.
This thing grows into a huge, vertically integrated recurring revenue engine of unimaginable proportions. Actually unfathomable. The vision is breathtaking both in scope and detail and I am in awe.
Starting to feel the squeeze? He said he was going to make it hurt.
Wanna play "who is smart enough to be an OEM?" and other games for children and the geriatrically feeble minded? I'm talking about you Bob.
We've UPPED our game. Now up yours!