Nathan Weiss

Long/short equity, value, special situations, contrarian
Nathan Weiss
Long/short equity, value, special situations, contrarian
Contributor since: 2008
REad the original article: There are chargins losses and idle losses for a Model S. If the energy grid is generating 501g of CO2 per kWh produced, 25% total chargins and idle losses (read my original article) result in 626g of CO2 per kWh of usable charge to move the vehicle. I was kind and not including other transmission and grid losses as well.
I dont you get your 2014 CO2 projections (funny no link after you criticize me for not linking the 25% bump you failed to read about). CO2 emissions per kWh of electricity generation actually increased in 2013 and likel did in 2014. The EIA is forcaseting that CO2 emissions from electricity generation will actually INCREASE through 2040 (http://1.usa.gov/1KiouxB) despite declining overall electricity demand.
U.S. deliveries in September were most likely boosted by the factory shutdown and slow ramp when it came back online during the month in August, which certainly resulted in very weak August deliveries, rather than an increase in demand!
The $12 average gas price for the Iowa plants is largely due to several days with $20+ gas prices. Green Plains would stop drying DDGS and reduce operations on those days, assuming their gas supply contracts could even pass along those charges to GPRE.
If GPRE has hedged first quarter margins at $.30 per gallon (a rough estimate), a $10/Mmbtu natural gas price spike (assuming .03 Mmbtu/gallon produced) would wipe out their margins and they would shut down. They would not run with massive negative margins. If anything, GPRE has lost 6-10 days production at three plants.
The quarter to date average for the Northern Iowa Ventura Hub is $11.54/Mmbtu, but if a plant was shut down for the nine days that natural gas was above $20/Mmbtu at the Ventura hub, their first quarter natural gas costs would average $5.93/Mmbtu, up from $3.98/Mmbtu at Ventura in the fourth quarter.
I didnt want to get into this discussion as it is even more controversial, but excluding areas where wind power is a large component of the generation mix (primarily Texas and Iowa), the grid is much 'dirtier' overnight as coal plants require 24 hours to meaningfully change output, making giving them a much higher percentage of the total generation grid overnight as overall demand falls. Send me a pm here and I can forward a couple of studies your way.
Well, technically Tesla has 50 to 100 loaners and more than 500 cars en-route to Europe, so I would call that inventory (units built but not yet sold).
Got to love the "do as I say not as I do" mentality of environmentalists... A NASCAR driver kicks off Tesla live, saying she only drives EVs but just ordered her first one, then Elon, who probably flew to the meeting in his private jet, sits at the podium drinking a Fiji water. Ever see the articles on Al Gore's carbon footprint?
http://bit.ly/13Muhrm
SCTY and TSLA are temporary winners in a losing group. How about SOSU, GEGI, KNSC, ERIP, GSLO, PPRW and SOEN. All down more than 50% YTD.
Your statement was: " investments in solar and EVs is more rewarding than investments in fossil fuel."
The Guggenheim/MAC Global Solar Energy Index ETF (TAN) is up 63% YTD, but was down 37% in 2012, 66% in 2011 and 28% in 2010.
The Green Energy Index Fund (QCLN), which has a 10% weight in TSLA, is up 65% YTD, but declined by 3% in 2012 and 41% in 2011.
The largest energy ETF, the XLE, is up 16% YTD and was up in nine of the past ten years.
Keep in mind that TAN is a $143 mln ETF and QCLN in a $58 mln ETF, so being up 65% has created a whopping $78 mln gain for investors, while the 16% gain on the $8.64 bln XLE created $1.38 bln of investor wealth. That sounds more rewarding to me...
I assure you, the investment gains from the oil and gas sectors dwarf that of solar and EVs, making them 'More rewarding.'
Some of us are trying to find solutions in the real world, not play with toy helicopters on common sense island.
By investments in EVS being more rewarding, you are talking about the share price of Tesla, rather than the total value created or lost from each sector, right?
The argument that a cleaner grid helps EVs is pretty misguided. Lets create a mythical island where there are 10 cars that use a total of 10 units of energy each year (one each), emitting a total of 10 total units of CO2 (one each). If there are also power plants that produce 10 units of energy each year and emit 12 units of CO2 per year to produce it, there are 20 units of energy created on the island each year producing 22 units of CO2 to do so.
if one of the ten gasoline-powered cars gets destroyed and replaced with an EV, the island's CO2 emissions increase from a total of 22 units to 22.2 units, 9 from gasoline and 13.2 from power plants (ie, the EV results in 20% more CO2 emissions than the gasoline car, not unlike EVs do here in the U.S. - hence the Norwegian study).
If a solar panel system is then installed generating power equal to what the EV uses, the power plant CO2 emissions fall by 1.2 units of CO2, back to 12.0 units - but CO2 emissions from gasoline are now 9 units and thus total CO2 generated by the island is 21 units, down from 22 prior to the EV and solar panels being put into service. The EV is now 'green' right?
No - you could then scrap the EV and buy a new gasoline-powered car but leave the solar panels online, reducing power plant CO2 emissions from 12.0 to to 10.8, but increasing gasoline CO2 emissions from 9 to 10. Total CO2 emissions of the island would be 20.8 - lower than all other scenarios. The reductions in CO2 output come from the solar panel, not the EV!
Thats not a bad idea Kiwi_Guy. I am a climate change skeptic...
While 100,000 signatures sounds impressive, that only happened after Tesla got involved by sending out an e-mail to everyone on their distribution...
Also keep in mind the petition ended up with 112,050 signatures, just behind the 129,620 signatures garnered by the “Provide necessary assistance to prevent Taiwanese people from being murdered by Philippines and rebuild friendship” petition. Rather than a show of strength, the Tesla petition shows just how limited their reach truly is.
Julian, I am talking about the Euro NCAP pedestrian safety requirements for vehicle-pedestrian collisions. It appears Tesla had to introduce a new, larger chin lip spoiler as well as soften the hood for compliance.
EU deliveries have been delayed multiple times:
June 6, 2012 shareholder meeting - "in about six months, we'll bring Model S cars to Europe"
Q1 2012 - "Model S sales in Europe will begin in early 2013"
Q3 2012 - "We could start production of those units sooner than kind of the March, April timeframe next year. But there is not really a need to do that"
December 2012, Model S European Pricing Blog - "We look forward to our first Model S Signature cars arriving in Europe. European left hand drive deliveries are scheduled to begin in late Spring of 2013."
Geneva Auto Show, March 2013 - "European deliveries of Model S electric sedans will start "no later than July" with cars that will be manufactured in June."
Now read the Tesla forum posts by European buyers, being promised August/September deliveries and Tesla's own comments that it takes six weeks to ship and deliver European vehicles.
I wont disclose all my sources (EU crash test info and import/export data), however... But come on Julian, you probably work for Tesla. You should know this stuff! 14 comments on TSLA before noon today, 26 comments yesterday and 36 the day before? Sounds like a full time job to me. It takes me 10 to 15 min to write and edit a good post... 30 posts X 12 min = 6 hours a day...
HMGD - Clearly if Elon said so, they will sell a lot more.
Q4 2011 - "Based on delivery of 5,000 Model S sedans, we anticipate full year [2012] revenues of $550 mln to $600 mln.
Actual results: 2,663 sedans and revenues of $386 mln
Q1 2012 - 'We will deliver in the tens in terms of the number of units in Q2' and 'still guiding for 5,000 deliveries in 2012'
Actual Results - 10 Model S sedans sold in Q2
Q2 2012 - "Production on plan for 2012 goal of 5,000 deliveries" and "Maintaining revenue guidance of $550 mln to $600 mln" in 2012
Actual Results - Elon stated this was a 'soft goal' as Tesla delivers 2,670 sedans in 2012 and revenues of $386 mln
Q2 2012 - "We will not be raising money as... we are fully funded through the Model X"
Actual Results - Tesla has since raised >$1.2 bln from stock and convertible bonds
Q3 2012 - "we produced over 200 cars in the past week" and "confident of delivering 2,500 to 3,000 Model S sedans in Q4"
Actual Results - Delivered 2,400 Model S sedans in Q4
Q4 2012 - 'will deliver 4,500 Model S sedans in Q1 due to employees having the first week of the year off'
Actual Results - Tesla actually delivered 4,900 sedans in Q1
Q1 2012 - 'Plan to build about 5,000 Model S sedans during the second quarter... deliveries will be slightly more than 4,500 to to vehicles expected to be in transit to Europe" and Tesla "feel comfortable raising [2013] guidance to about 21,000 deliveries"
Actual Results - TBD
HMGD - Clearly if Elon said so, they will sell a lot more. LEts look at his track record.
Q4 2011 - "Based on delivery of 5,000 Model S sedans, we anticipate full year [2012] revenues of $550 mln to $600 mln.
Actual results: 2,670 sedans in 2012 and revenues of $386 mln
Q1 2012 - 'We will deliver in the tens in terms of the number of units in Q2' and 'still guiding for 5,000 deliveries in 2012'
Actual Results - 10 Model S sedans sold in Q2
Q2 2012 - "Production on plan for 2012 goal of 5,000 deliveries" and "Maintaining revenue guidance of $550 mln to $600 mln" in 2012
Actual Results - Elon stated this was a 'soft goal' as Tesla delivers 2,670 sedans in 2012 and revenues of $386 mln
Q2 2012 - "We will not be raising money as... we are fully funded through the Model X"
Actual Results - Tesla has since raised >$1.2 bln from stock and convertible bond offerings
Q3 2012 - "we produced over 200 cars in the past week" and "confident of delivering 2,500 to 3,000 Model S sedans in Q4"
Actual Results - Delivered 2,400 Model S sedans in Q4
Q4 2012 - 'will deliver 4,500 Model S sedans in Q1 due to employees having the first week of the year off'
Actual Results - Tesla actually delivered 4,900 sedans in Q1
Q1 2012 - 'Plan to build about 5,000 Model S sedans during the second quarter... deliveries will be slightly more than 4,500 to vehicles expected to be in transit to Europe" and Tesla "feel comfortable raising [2013] guidance to about 21,000 deliveries"
Actual Results - TBD
It appears the EU customer cars did not ship in June due to pedestrian crash test concerns, which allowed Tesla to focus more on North America... This should allow them to deliver more then 4,500 sedans (4,750?), but the 21,000 goal... Time will tell.
Would this man, Elon Musk, claim that a Model S can be leased for "about $500 a month" or that the Model S can now be "recharged in about 20 minutes" - leaving the fine print to say that this isnt a full charge. Perhaps he would even call a 120 kWh charger "the fastest charging station on the planet" despite the 400 kWh bus charging stations in use in China (http://bit.ly/17kcAzG).
So each station has a total of 100 (5 X 20) 100 watt panels? Shouldn't each panel yield about .5 kWh on a bright day in a good climate, or just 50 kWh per day for the station? That wouldn't be enough to charge a single Model S.
If 2 Model S sedans are at each Supercharger for 12 hours per day, this would consume 1,440 kWh prior to charging losses and likely 1,694 kWh with charging losses. This would require roughly a 400 kWh solar array. Look at the size of a 100 kWh array...
http://bit.ly/17jzLKh
Something is fishy here.... Are the 'green' superchargers yet another misleading ploy of Tesla's?
I think you may need to double your yield estimate for the next 12 months, but good article!
So what's your analysis, Julian? The Tesla gets what, 265 miles per 85 kWh, or uses .321 kWh per mile? The U.S. power grid is at 570g CO2 per kWh, making the effective CO2 emissions of the Model S 182g per kWh? Add a 15% charging efficiency loss and you are at 215g per mile before idle losses... Not very green...
Add 1,277 kWh per year of idle power losses, which take 1,502 kWh of power to recharge at 85% charging efficiency, and allocate over 8,000 miles per year and you get another 107g per mile of CO2 emissions, for a total of 322g per mile. Not Green...
Put some numbers on the board rather than just stating "you are wrong."
Or would you rather claim that you can install a solar cell and drive completely green? What percentage of Model S owners buy solar panels when they purchase their cars (or just before/after)? 2%? 5%? I would be shocked if it was 5%, or 1:20, but hey - cut my CO2 calculation of 322g per mile by 5%. You get 306g a mile. And we are ignoring NOx and SOx, which are multiples higher with a Model S than an ICE.
And don't say green doesnt matter.. That is why the subsidies are there and 70% of 148 Tesla forum members polled said Environmental Factors impacted their buying a Model S: http://bit.ly/1026DzK
Or that the Model S is not a national car so national grid emissions dont matter... Based on a the following 404 car sample, 6.7% of Model S sedans are in Texas (48% natural gas, 35% coal), 6.2% are in Florida (54% natural gas, 25% coal), 5.2% in Illinois (46% coal), and 4.4% in MD (55% coal). A total of 29% are in California (55% natural gas).
http://bit.ly/13xVwTq
Feel free to 'easily rebuff' my argument...
Well, white is defined by the viewer and you have no way of knowing if, in fact, white is black to another person... The basic facts of the Model S are clear, but some see white and others black. There is hardly a more polarized discussion that Tesla and EVs in general.
Ummm.. I used the two most popular vehicles as an example from the source you provided after you claimed it disputed my work. You get the same results using the top ten vehicles.
After I showed that YOUR SOURCE confirms my work, I am cherry picking and have a bias? Interesting.
In the U.S. less than 1% of gas production is typically flared (although it is double that today due to infrastructure issues in Texas and North Dakota). The flaring is actually less harmful than releasing the gas into the atmosphere as natural gas is mostly methane, 20X to 25X the GHG potential of CO2.
That said, flaring is an incredible waste and both states (Texas and North Dakota) are working on programs to stop flaring.
Don't worry, Neil - as an oil shill I crafted the state exemptions that allowed the flaring to take place - so you can blame me! (this is a joke, to be perfectly clear!)
Prior to the sale, Toyota was suing GM for $360 mln for their half of the shutdown costs for the NUUMI plant - much of it environmental. When GM shuttered 16 plants in 2009, they stated "GM in July estimated that “wind-down” costs for 16 discarded facilities would exceed $1.25 billion because of environmental clean-up and legal fees." None were as large as NUUMI (and few as old). Old plants cost massive amounts of money to clean, but are allowed to stay open without cleanup if they continue with the same use.
Toyota gave Tesla the 'good deal' to avoid shutdown costs. In reality - Tesla actually got the plant for free, with Toyota taking a $50 mln stake in Tesla as their IPO roadshow was struggling and then Tesla buying NUUMI for $42 mln and an additional $17 mln of equipment.
If Tesla stays open, they got an incredible deal. If they have to close, there costs of cleaning up the site will be massive.
I am all for regulation to push industries to develop toward cleaner and more efficient energy use. CAFE standards would do that, IF they take away the flex fuel multiplier on new vehicles.
The ZEV credit system is in place solely to push EVs into the market place. Nissan needs to sell just under 4,000 Leaf EVs in California each year to cover their entire 11,600 ZEV mandate. Rather than redesigning their ICE vehicles, they are cutting the Leaf price and selling it even further below production costs to capture more ZEVs.
Why do you think Toyota went ahead with their 2,600 RAV4 EV program with Tesla? They get 4 ZEV credits for each one sold - worth $20,000 last year (and nothing by the end of this year). Why is Daimler looking at Tesla powered vehicles? How much do you want to bet the Daimler program does not go into production now that ZEV credit prices are tanking - as most other 'green' and carbon credit prices have in the past once politicians put in loopholes like the EV credit multipliers.
The U.S. is a slight net exporter of coal - but very slight.
And volumetric increases do not necessarily translate into energy content increases.
My issue and point is that the Model S is not 'Green' and thus Tesla should not have received $87 mln from other automakers in the first quarter alone (which gets passed on to people who buy their cars), $36.8 mln of federal tax credits to buyers and some $4 mln or so in state tax credits. Thats $158 mln in one quarter - to 4,900 relatively wealthy car buyers.
Keep in mind that the controversial Amtrak operating subsidy was $466 mln in 2012. Whats a better use of funds?
Appreciate it. Good luck getting the sunroof and door handles to work. And dont mind the clunks and rattles. On the plus side, your local windshield/glass guy will come to your BBQs as you will put his kids through college.
Edmunds has a good running blog of the Model S, showing the good, the bad and the ugly:
http://edmu.in/12Aignq
Funny, pick the VW Jetta on fuelly.com and users are getting above EPA mileage. The EPA rates the gasoline-engine Jetta with a combined 28 MPG and users get 33.7 (http://bit.ly/13hkd2S)
The second most popular car, the Honda Civic, is rated by the EPA at a combined 32 MPG, but users get 34.6. http://bit.ly/17p78Ly
And again, pollution to deliver gasoline is less than transmission losses for electric power. How do you explain that a barrel of crude is $95 WTI at the well ($2.26 per gallon), where production and lifting costs are minimal, and gasoline at the wholesale level (pre-tax) is $2.80 a gallon, yet refineries are making $18 per Bbl margins ($.42 per gallon)... Hmmm...
From the EPA, for 'downstream' emissions (as can be seen when on the http://1.usa.gov/wlmWTa website:
These estimates include CO2, methane, and nitrous oxide emitted from all steps in the use of a fuel, from production and refining to distribution and final use—vehicle manufacture is excluded. Methane and nitrous oxide emissions are converted into a CO2 equivalent. Tailpipe emissions and upstream emissions—those that occur prior to the fuel being used in the vehicle—are displayed.
You can see on their graphs that they always use a 25% increase for upstream tailpipe emissions, and they state "If you want to compare total tailpipe plus fuel production GHG emissions for an electric or plug-in hybrid electric vehicle to those for a gasoline vehicle, you should multiply your gasoline vehicle tailpipe GHG emissions value on the Fuel Economy and Environment Label by 1.25 to reflect the fuel production GHG emissions for gasoline."
They then use the CO2-only numbers for E emissions, then CO2+GHG numbers for ICE vehicles. The EPA is very biased toward 'green' technologies and their data reflects this bias.
And I suppose you think VLCCs burning 24 gallons per nautical mile for the 7,206 NM trip to the U.S. are dirty too? Thats 172,944 gallons - big number, but only 4,117 barrels of fuel - .21% of the 2 mln barrels of crude on the vessel. Don't confuse big numbers with big percentages.
As we discuss below, refineries consume very little energy per gallon of fuel processed as well.
Math doesn't seem to be a strong point around here. At the actual estimated usage of 7,560 miles per year, the Model S consumes 2,774 kWh per year driving (.367 X 7560) plus idles losses of 1,227 kWh per year, for a total of 4,001 kWh per year. Add in 15% charging losses and the total effective usage is 4,708 kWh per year, resulting in total CO2 emissions of 2,928,171 kWh per year - or 387 g per mile. This is higher than the 346g per mile in the article.
And no, we do not receive any funds from oil companies and have actually recommended more E&P shorts than longs in our history.