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Randy Carlson

 
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  • There Is Something In The 'D' Which Might Prompt Direct Competition [View article]
    And, those who keep trying to value a hyper-growth startup in the process of disrupting the two biggest industries on earth as though it was a deadender cash-cow automaker have no idea who they are dealing with...
    Nov 23, 2014. 10:56 AM | 1 Like Like |Link to Comment
  • Albemarle Is Well Diversified To Capture Growth [View article]
    Battery cost, for both BEVs and for grid storage will be driven by, or toward the "consumer" Li-ion battery cost curve because this is where the volume manufacturing is done, and because the relatively small, cylindrical cell offers both performance and manufacturing yield advantages compared with larger cell configurations. Use of very many, small cells to form large batteries is also fundamentally safer because cells can be thermally isolated from each other and individually fused. One need only compare Boeing's Li-ion battery experience with that of Tesla...

    Grid storage will be dominated by automotive batteries because BEV manufacturers - Tesla in particular - will have overwhelming volume manufacturing capability, all the way from the cells, to the battery, the environmental controls, safety systems and even power electronics. Tesla already has automotive based, industrial size grid connected battery storage systems deployed and in operation. With lithium batteries in both BEVs and grid storage systems, Tesla will be needing a lot of lithium cells.

    This is where things start to get very interesting for Albemarle. Tesla is planning to bring upstream suppliers into their GigaFactory in addition to Panasonic. Their intent seems to be vertically integrated manufacturing, including processing of the specialized anode and cathode materials - all within their GigaFactory complex.

    Albemarle is nicely positioned to meet Tesla's needs, not just for lithium, but for the specialized anode and cathode materials. The cathode material in particular contains most of the lithium (as manufactured) and this material is the primary determinant of the battery's specific energy (Wh/kg). More advanced cathode materials with precisely controlled nano-strucutured grains are the primary key to increasing lithium battery performance, lowering cost (by storing more energy in less weight of battery) and making electric vehicles fully competitive. Li-ion cathode materials are in many ways similar to --- catalysts... And, who do you suppose knows how to make large quantities of this class of material, and oh by the way, has just acquired a big, captive supply of lithium?

    It will be interesting to watch carefully should Albemarle partner with Tesla at the Nevada battery factory.
    Nov 16, 2014. 11:10 AM | 2 Likes Like |Link to Comment
  • Report: Markdown time for some 2014 Model S vehicles [View news story]
    If we look at this situation as it is probably seen from "inside" Tesla, it looks a lot different.

    Tesla has, at Galleries, Showrooms, Stores, Service Centers, a goodly number of cars that are now all obsolete - in the sense that they do not represent the current production configurations.

    Cars that don't have autopilot hardware.

    All those RWD S85D loaners.

    Tesla needs to 'flush' all these cars from their display / demo / loaner fleet because it is silly to be showing prospective customers vehicles that they can no longer buy.

    To drive this change-over, Tesla is offering the same discount schedule they have been offering on loaner cars - 1%/month, $1/mile. This is hardly fire-sale pricing. If one can negotiate for 2%/month discount on a somewhat 'banged-up" car, this probably is what one could have done for a similarly worn loaner car, anyway.

    Tesla is doing exactly what is sensible, reasonable, practical and there should be no "arched eyebrows" whatever about this. Besides, it's the end of the year and for any Tesla investors cashing in on their gains, this may be a great time to avail themselves of the tax credit. Some investors may need to buy more than one...
    Nov 15, 2014. 02:48 PM | 5 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davemart,

    I don't get what is so exciting with a "new" battery chemistry that, at best, delivers less specific energy than what Tesla already uses. The ANL NMC chemistry, I think they call in HCMR, has been demonstrated by CALiB at 525 Wh/kg. But my understanding is that nobody thus far has successfully addressed the voltage fade issue with that layered-layered cathode material.

    Panasonic has historically tried to have proprietary chemistry and have not, to my knowledge, publicly acknowledged pursuing NMC cathodes. They did abandon their NCA / silicon-carbon alloy anode approach (the mythical 4 Ahr 18650 cell) about the time ANLs chemistry came along. I cannot other than imagine they went back to the lab to come up with something as good as ANLs work... How successful such work may / may not have been we of course don't know.

    I don't see the economic charm in the GigaFactory - no matter how great a deal they got from Nevada - id the only objective is economic improvements from scale. They could probably have got a better deal from China. On the other hand, if there is a proprietary chemistry (I am presuming from Panasonic + perhaps something like CALiB's silicon-graphene anode material) then gaining control by putting everything from material processing, to cell assembly, to pack manufacture in one, US facility starts to make sense. And, I just don't see Musk doing things like this that don't make sense...
    Nov 4, 2014. 06:15 PM | 3 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    solucky,

    Whether Tesla makes their price point depends on whether or not they get a high specific energy cell, IMO. With 500 Wh/kg, Model III should come in 200 - 250kg lighter than the 2L, manual transmission BMW 3 sedan. That should give them a good shot at beating BMW's costs... I would agree with you pricing estimate if Tesla doesn't achieve higher specific energy cells than in their current Model S.
    Nov 4, 2014. 03:01 PM | 1 Like Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davemart,

    I don't for a moment expect it is Tesla who will come up with improved battery chemistry. The GigaFactory isn't about inventing chemistry, or battery format, etc. This isn't an R&D problem IMO, so much as one of scaling something already working in the lab (probably at Panasonic) up to very large scale, very quickly. Remember, Tesla has said they intend to bring in material suppliers to operate within the GigaFactory.

    The advantage of taking the financial risk to scale quickly is that Tesla gets that 'lead time' of a jump on competitors. Having a great chemistry in the lab is altogether different than having it in a complete supply chain, delivering several hundred thousand battery packs a year. The battery venture for Tesla isn't one requiring (for Tesla) great chemistry chops in the lab, just a sufficient testosterone level and enough money to put an existing lab-level chemistry into rapid, volume production.

    VW and other large ICE companies have the financial resources, and may even have some chemistry working in the lab. My sense however is that they have hormonal deficiency in this area...
    Nov 4, 2014. 02:57 PM | 2 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davemart,

    My take on Tesla is a bit different. Back in the late -70s, I worked with a couple of organizations and some very bright people working on electric cars. At that time, we said to ourselves that if batteries ever got good enough, you could build a much better BEV than ICE car. Tesla is doing exactly the kinds of things we thought through in considerable detail over 30+ years ago.

    Tesla's finances are those of a Silicon Valley venture capital start-up. Most such start-ups fail, and to compensate, those that do make it must aim for very high rates of return on investment. Twenty or 30% per year doesn't do it in that business environment, something more like 100 - 200% annual return on early investment is where these companies have to aim... This of course means that they try very hard to have as much of their cash working as hard as possible all the time, and their financial 'reserve', from a practical perspective, comes from their ability to call up incremental investment based on their 'story' if need or opportunity arise. It does, naturally, drive their finances and financial risk distant from conservative business principle.

    The 'story' of a start-up begins to erode in fact when they have a 'stable' financial situation because it indicates they may have run out of ideas for putting resources to work. (One need only look at Apple to see an extreme case of exactly this...)

    When I look at Tesla's GigaFactory, I see the financial risks and issues with securing capital to be insignificant. If they can 'make it work', there will be no problem funding it. Where I do see risk is on the technology side. But here, I also see tremendous upside potential for Tesla and their shareholders.

    There are several potentially near-term variants of Li-ion battery chemistry in development. The cells coming out of the GigaFactory for Model III might have specific energy ranging from the ~265 Wh/kg of Panasonic's current NCA cells, all the way up to ~700 Wh/kg. Tesla's choice of small cylindrical cells based essentially on the cell packaging technology of 18650s is the low risk part of the equation because this cell manufacturing technology is very very mature and Tesla, with Panasonic, has probably the best team in the business to support this aspect of battery making. But the specific energy / chemistry part is key.

    If you start to look at the knock-on effects of increasing specific energy you find that these dominate all other considerations. With 265 WH/kg NCA cells, Model III will be heavier, and probably more expensive to make than the corresponding BMW 3 Series. With 500 Wh/kg cells, Model III becomes several hundred pounds lighter than corresponding BMWs, and Tesla will not only meet their $35k target pricing (entry), they will be 'printing money' along the way. The knock-on effects also apply to the GigaFactory. If the factory is sized for 500,000 cars using 265 Wh/kg cells, it will be able to produce cells for well over a million cars if it is making 500 Wh/kg cells... (Remember, with higher specific energy cells, not only are fewer cells needed for the same capacity, the car gets lighter, so less battery capacity is needed.) There is a similar knock-on effect that ripples up Tesla's battery supply chain. Less battery material (though perhaps not less lithium) will be needed if specific energy increases. Finally, because the weight, energy consumption and battery capacity of Model III go down as specific energy increases, the recharging time at SuperCharger stations goes down very significantly as cell specific energy increases. This in turn improves road-trip performance AND significantly improves SuperCharger economics - fewer charging slots, less energy dispensed, etc.

    We should look very closely at the weight of Model III, as soon as that can be discerned. The weight will tell us, almost immediately the kind of specific energy Tesla is expecting from GigaFactory cells. And that will make all the difference...
    Nov 4, 2014. 01:56 PM | 2 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davemart,

    That's a pretty fair approach to the world.

    I still am taken by the fact that all the consensus thinkers, who are sure they have things right, continue to trail Tesla in both performance and cost. This will hardly be the first time one teem has got it right whilst the consensus thinkers are wrong.

    The idea of a 1,500 Wh/kg fuel cell system is exciting. The fuel cell cars I have seen specs for are so heavy, have such short range, etc., it is difficult to imagine they are fitted with systems anywhere close to this specific energy. Maybe someday, of course... But then again there are "super advanced" batteries that best a kWh/kg, too.

    I know that I tend to 'get down in the weeds' analyzing this stuff, but building a BEV is very much a systems problem wherein every part of the design tends to interact with the other parts. For example, the pack level specific energy of Tesla's design is often criticized because they apparently suffer such a huge weight penalty compared with their high cell level specific energy. The Tesla pack design - thin and flat - is inherently weight inefficient due to the high surface area to volume ratio. This view however ignores the strength and stiffness the thin, flat pack contributes to the Tesla's chassis (it is one part of an especially crashworthy design) and the weight that would otherwise have been needed for additional chassis structure. So, how should we go about comparing the overall weight / cost of Tesla's battery pack to that of say, the LEAF, or the i3?

    In trying to understand the thinking behind the differing approaches to BEV design we may gain insight into where Tesla may be headed compared with their potential competitors. This in turn may help us guess at the future stock price.
    Nov 4, 2014. 11:14 AM | 1 Like Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davemart,

    The Argonne calculator is interesting in that it makes no allowance for the specific energy of the chosen chemistry - and particularly for the knock-on effect specific energy has on vehicle weight, energy requirement and battery size. For a long range BEV, this knock-on effect is very significant. It matters less of course as the range of the vehicle and the 'battery fraction' of vehicle weight goes down...
    Nov 3, 2014. 06:03 PM | Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Anton,

    I don't think profitability is what is driving automotive manufacturers to the large automotive format cells. The small, cylindrical cells have had a 2X or greater cost advantage at the cell level for a long, long time, and as automotive cells have got cheaper, the 18650s have easily kept ahead on the cost curve. Tesla's pack level costs seem from every indication to be lower on a kWh basis by roughly the same 2X.

    The reason I mentioned the Mercedes AMG SLS ev is because this half million dollar, 2-seat , AWD sports car - which doesn't look to be all that "cost constrained" - still doesn't come close to the RWD S85P. The AWD P85D is in another class altogether, for a quarter of the price - a difference far too large to be explained by any small disparity in gross margin between Tesla and Mercedes.... Even in an unconstrained cost environment, with all the experts Mercedes can muster, automotive format cells are not technically competitive.

    I believe the big carmakers are constrained in their thinking by their car building experience. An 18650 cell costs a couple of dollars. It is an electric part about the size and cost (very roughly) of a spark plug. I think they are horrified at the thought of building a car with 7,000 "spark plugs".

    The attitude toward complexity found in the electronics industry (Silicon Valley) is, and has been for decades, very, very different. Way back in the 1960s, computer companies were building megabyte memory systems from magnetic cores - one tinny ferrite donut, threaded (often by hand!) with three separate wires for each bit of information stored. Today's iPhone processor contains ~3billion transistors, every one of which, in every processor shipped has to be manufactured and tested. Apple took orders for 10,000,000 iPhones over the introduction weekend - that's 30,000,000,000,000,000 (30 quadrillion) transistors to be manufactured, tested and assembled into iPhones to satisfy market demand over 72 hours. The notion of assembling 7,000 batteries into a car merits little more than a shrug, I'm sure, in Silicon Valley.

    I presented one aspect of the first-principles argument that favors small cylindrical cells - the part pertaining to the weight and material cost savings from thinner current collector foils. There are somewhat more arcane first principles arguments relating to manufacturing yield, pack level reliability and the design margins needed to attain necessarily higher cell level reliability, that also favor smaller, cylindrical cells.

    The advantages favoring the automotive cell format are two. There are fewer cells to wire up. The cells can be crammed closer together. I have yet to see a reasoned argument showing how either of these advantages has significant impact on vehicle cost or design to the extent necessary to overcome Tesla's existing ~2X pack level cost advantage.

    Tesla's JB Straubel has said they are sticking with cylindrical cells BECAUSE based on their first-principles analysis this is the best cost / performance solution. Panasonic makes both cylindrical 18650 cells and larger prismatic cells, including "automotive" cells for other carmaker's BEVs. When Tesla set out to make Model III, and to build the largest battery factory in the world to provide batteries for Model III, they and Panasonic chose to optimize the design based on their combined experience. They could have certainly picked a prismatic, automotive cell design, but instead they settled - according to Straubel - on a cylindrical cell only slightly larger than the 18650.

    Even if automotive cells using the same high energy chemistry used in the Panasonic / Tesla cells were used today, the cells would be heavier (because the current collecting foils would necessarily be thicker). And, looking at the LEAF battery disassembly videos posted by molli, it is hard to imagine these large cells achieving lower cost at the pack level.
    Nov 1, 2014. 09:35 PM | 2 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davewmart,

    So far, all those ever-so-smart engineers at the ICE car companies trying to build great BEVs with automotive cells have failed to equal, let alone exceed Tesla's range and performance. Even the hyper expensive AMG SLS offers dismal range and acceleration compared to the S85P, to say nothing of the P85D. I will have rather more respect for these players from runner-up teams after they get on the scoreboard against Tesla, even once.

    Till then, if they appear to be wrong, they probably are wrong.
    Oct 31, 2014. 10:48 PM | 3 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Anton & Davewmart,

    The big automakers have been pounding away on "automotive" cells for the better part of a decade. The argument has always been that with higher energy density cell chemistry, the presumed lower cell manufacturing and packaging costs will carry the day. The many claims of automotive cells approaching the energy density of Tesla's approach seem universally to assume that cell chemistry for automotive cells is progressing while the chemistry used in 18650 cells stands still. Really? Panasonic and Sanyo, which Panasonic acquired, are leaders in high-energy Li-ion chemistry and have been for many years. It seems unreasonable to me that the leaders in this area are simply sitting on their hands, waiting for the rest of the world to catch up...

    There is something about the geometry of Li-ion cells that seems to be completely unappreciated by those pursuing automotive cell formats. The active material layers in these cells are extremely thin. This is true for current Li-ion cell chemistries and for foreseeable new Li-ion chemistries for the fundamental reason that organic rather than aqueous electrolytes MUST be used with lithium - otherwise smoke, fire and loud noises tend to occur.

    Li-ion cells - regardless of the specific chemistry - consist of an anode, cathode and separator plus an electrolyte. (the "polymer" cells pretty much make the separator and the electrolyte of the same 'stuff') Because the organic electrolyte isn't very conductive, a very large electrode area is needed to achieve rapid charge / discharge - that is power - from the cells. At the same time, the absolute amount of active electrode material determines how much energy can be stored.

    If we observe that

    Material_ Thickness X Electrode_Area = Material_Volume => Range

    and

    Electrode_Area => Power => acceleration rate

    it is obvious that once the desired range [energy] and 0-60 time [power] is chosen for your BEV, the absolute thickness of the active materials (anode / cathode) in the battery is set. This optimum electrode material thickness to achieve desired range / acceleration will be the same, whether you use automotive cells or 18650s. And here is where cell format starts to matter.

    The active anode and cathode materials are spread on thin foils, aluminum for the cathode, copper for the anode. These foils are rolled up, with a thin, porous separator between, into a 'jelly roll'. For the 18650 this jelly roll is cylindrical; for 'automotive' cells, it is 'squished' flat. In either case, the electrical connection to the anode and cathode current collecting foils are made at opposing ends of the 'jelly roll'. This means that current flowing across the entire area of the electrodes must be carried out through the edges of the aluminum [cathode] and copper [anode] foils. As the electrodes are made wider - as they are in the larger automotive cell formats - more current must be carried out of the cell along each centimeter of foil edge and the foils must become thicker to handle this current. Note: the current collector foils must be thicker in larger format cells, but the active materials layers do NOT also get thicker. The larger the format, the greater the proportion of electrode foil to active material in the cell, and the lower the specific energy and specific power.

    To appreciate the significance of this effect, one needs to understand how very thin the layers in these Li-ion cells actually are. Current collector [aluminum and copper] foils are much thinner than the aluminum foil in your kitchen. The entire combination of anode and cathode active materials, current collector foils and separator is thinner than a piece of paper. Having to make the current collector foils thicker, even just a little thicker, because the cell is larger, has significant impact on energy density, weight and materials cost.

    With higher energy Li-ion chemistry, this problem is aggravated. Higher energy chemistry requires less volume of active material to store a given amount of energy - that after all is the whole point of the higher energy chemistry. Unless the conductivity of the electrolyte is somehow increased when changing to the higher energy chemistry, the total electrode area needed to achieve high rate charging and peak acceleration will remain the same, and from the relation presented earlier, the thickness of the active anode and cathode materials will go down while the thickness of the current collecting foils remains the same. The result is that the higher the energy of the chosen chemistry, the more a small format cell is favored on the basis of weight and cost for the current collector foils.

    Since the highest currently available cell chemistry used by Tesla is just barely high enough to enable long range BEVs, cells with still higher energy chemistry will necessarily be used in long range BEVs addressing the lower cost, mainstream market. And the higher the energy of the chosen chemistry, the more small cells are favored on the basis of lower weight and cost.

    The one 'advantage' automotive format cells have is the theoretical ability to fit in smaller volume. While this advantage may exist in theory, the very spacious interior of Model S, compared with other BEVs with 'automotive' cells suggests that this theoretical volumetric advantage is either not being achieved, or that it doesn't matter much from a practical standpoint.
    Oct 31, 2014. 03:55 PM | 3 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    Davewmart,

    I keep hearing from you and others that Tesla is selling at a very high price point. This is only true to the extent that Tesla sells high end, high performance luxury sedans, and such cars are expensive. It is completely untrue if one compares electric cars against similar ICE versions.

    In the latter case, it is the electric cars from established ICE manufacturers that are selling at exorbitant price points. Even Tesla's most recent, $120,000 P85D COSTS LESS than Mercedes, BMW sedans with similar acceleration and size. On the other hand, the LEAF, 500e, Volt, B-Class EV, etc. all COST A LOT MORE than the similar ICE cars from which they are derived. The data shows that either those "bright engineers" building electric cars for ICE companies are less clever than the engineers at Tesla, or these ICE companies are out to gouge the public.

    Engineers and companies pursuing large, flat automotive cells for BEVs have it wrong. The data clearly shows they have it wrong. First principles understanding of the difference between "big flat" and "little round" cells shows why automotive cells are wrong.

    No company using big, flat automotive cells has EVER delivered a BEV car -even an experimental prototype BEV car - with the combination of range and performance achieved by the production Model S. The big, flat automotive cell is nothing other than a dog that doesn't hunt.
    Oct 31, 2014. 08:30 AM | 4 Likes Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    molli,

    The welded wire connection technique is one that has been used for high reliability electronics for a hundred years or so - the guts of early vacuum tubes used the technique! More recently, a scaled down version using extremely fine aluminum wire is used to connect integrated circuit chips to the external package leads. Literally trillions of such bonds are made annually in the semiconductor packaging industry. It is automated, cheap, and probably one of the most reliable processes known.

    If you notice carefully, in the Tesla battery BOTH ends of each cell are connected with these wires. A single wire acting as a fuse would protect against a short circuit within the cell. Having a fuse at both ends, also protects against a cell that shorts to the cooling tube - a very robust design.
    Oct 31, 2014. 07:47 AM | 1 Like Like |Link to Comment
  • Tesla Motors, Hype Or Revolution? [View article]
    molli,

    Unbelievable! All the effort and complexity that goes into the LEAF pac, primarily to mechanically support the individual pouch cells.And when they get all done, the thermal design is terrible. This works for low power density, low energy cells that are tolerant of wide temperature range. For high power density, high energy chemistry, probably not so much.

    The Tesla design, with the battery 'guts' supported by individual cell cans and the cells themselves held in place by the current collector plates is soooo much simpler, and ideal for automated assembly.
    Oct 30, 2014. 01:16 PM | 2 Likes Like |Link to Comment
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