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Randy Carlson  

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  • Tesla Will Need To Restructure [View article]

    I didn't say anything about 'hacking it'... Sometimes good people can believe strongly that the company should head in different directions, and a start-up trying to go two ways at once is doomed.
    Jul 31, 2015. 03:03 AM | 1 Like Like |Link to Comment
  • Positive read on used Model S demand [View news story]
    Hate auto-correct...
    Jul 31, 2015. 02:58 AM | Likes Like |Link to Comment
  • Positive read on used Model S demand [View news story]

    Maybe this will help.

    It looks like the Model S battery, for many owners, is likely to maintain satisfactory capacity for the practical life of the car. The Dutch study, if extrapolated, would suggest >70% capacity past 15 years / 200,000 miles. There is some antidotal evidence of some owners experiencing greater capacity loss.
    Jul 30, 2015. 08:56 PM | 1 Like Like |Link to Comment
  • Tesla Will Need To Restructure [View article]

    I've been through a start-up or two, or three... I have also worked for 'people who don't get along with others' in these situations more than once.

    I have seen very bright, very hard working, very dedicated people 'let go' from such organizations when they 'got crosswise' to the course set by the CEO / board. It can be ugly and it's almost always unpleasant. But, it is essential for a startup that the whole team be pulling in the same direction, and that those who cannot grow with the rapidly expanding organization, and those intent (for reasons however 'good', 'wise'...) would divert the organization from it's target objective(s), leave.

    I have ben both the person 'fired' and the person doing the 'firing'. I've lived this, and Musk is doing what has to be done. He has very very successfully built teams at PayPal, SpaceX and Tesla that have done things and created value on exceptional scale. There are lots of startups around Silicon Valley and elsewhere. These Musk run startups are among the best examples out there, every bit as good as Intel, Apple, Oracle, Google...

    I have also worked with some really great niche 'entrepreneurial' companies that grew into 'nice' organizations that nurtured and protected dedicated staffs and supported individuals even when that imposed 'costs' on the organization. This is often very laudable behavior on the part of the company, the CEO, etc. But such companies generally don't achieve the size and sustained growth to very large scale of more 'ruthlessly managed' (or if you prefer, more 'focused') start-ups.
    Jul 30, 2015. 11:19 AM | 2 Likes Like |Link to Comment
  • Positive read on used Model S demand [View news story],

    Car dealers in general and many dealer associations in particular (see
    Texas, Michigan...) are very 'excited' (violently unhappy) that Tesla doesn't sell through dealers.

    Typically, the dealer profit on used (CPO) cars is HIGHER than it is on new vehicles. In as much as it now appears car dealers will largely be shut out of not only new Tesla sales, but sales of used (CPO) Teslas, too, I believe they will be even more 'excited' (unhappy) than they have been thus far.
    Jul 29, 2015. 02:42 PM | 10 Likes Like |Link to Comment
  • Tesla Will Need To Restructure [View article]
    The turnover of the original Tesla management is something frequently seen in startups. The original founders have a great idea. They build the first few units fine, but when they attempt to 'go to scale' they run into trouble because at scale, as management, you have to do everything 'by remote control', that is by delegation.

    Delegation is something that is both very hard to do, and something that not all creative 'founders' can successfully accomplish. Tesla very nearly went bankrupt over the founders inability to deliver Roadsters in modest volumes while fixing initial teething problems. And, in rather brutal Silicon Valley fashion, they had to go.
    Jul 29, 2015. 10:13 AM | 2 Likes Like |Link to Comment
  • Positive read on used Model S demand [View news story]
    Tesla selling CPO cars is sure to further excite the car dealers...
    Jul 29, 2015. 09:27 AM | 13 Likes Like |Link to Comment
  • Why Free And Unlimited Supercharger Access Can Potentially Devastate Tesla [View article]
    With an ICE car, you can go to any gas station and fill up in 5 minutes.

    With a Tesla, you don't have to go to the gas station at all.
    Jul 28, 2015. 08:59 PM | 4 Likes Like |Link to Comment
  • Tesla Motors lands small battery storage deal with California schools [View news story]
    You may be able to fill your ICE car at the gas station in 5 minutes, but if you have a Tesla, you never visit the gas station at all...

    ICE cars are exactly like horses. You pay to feed them. And they pollute...
    Jul 28, 2015. 08:45 PM | 3 Likes Like |Link to Comment
  • Why Free And Unlimited Supercharger Access Can Potentially Devastate Tesla [View article]
    The 'abusive' use of SuperChargers is not a problem nearly so much as it is an opportunity for Tesla. Terms of SuperCharger use can be easily modified for future Tesla car sales (e.g. for Model 3) such that the user is simply charged (at cost) for use that isn't inter-city travel. After all, Tesla knows where you live and the car knows when, where and how much it has been charged, an what trips it has made...

    An arrangement whereby 'local use' is simply charged to the owner (required credit card on file...) not only goes a long way toward solving the 'charging problem' for apartment dwellers / street parkers, it puts Tesla in the 'gas station business', ready to take another bite out of Exxon.

    An analysis done a couple of years ago indicated that SuperCharging that generated ~$18 whenever s SuperCharger visit occurs will be wildly profitable for Tesla once the fleet size reaches a few million vehicles.

    A flat charge of say $15 for charging to 80% and $20 for charging to >80% would more than cover Tesla's costs and the pricing step would discourage owners form always charging to 100% just to get 'the most energy' while, over the long term and many repetitions, diminish their battery capacity.

    The notion of simply placing SuperChargers 'out in the country' where only long distance travelers will have access will work well in some situations (e.g. at 'service facilities' along toll roads catering to long distance travelers.) In other cases, this probably doesn't work. To facilitate travel between say, Santa Barbara and San Diego, one or more SuperChargers are required and there is no location along that corridor where said SuperChargers would not be accessible by many local residents. A similar situation exists in other regions, the East Coast in particular.
    Jul 26, 2015. 07:42 PM | 3 Likes Like |Link to Comment
  • Tesla's Model S Announcement: No Comfort On X Ramp Or 2015 Sales [View article]
    Actually the 'full renewable' option is the lower cost solution.

    For new-build Wind has the lowest LCOE, substantially lower than Natural Gas plants.

    The only reason we still use coal and natural gas to generate electricity is that the plants are already paid for, sunk cost. Nuclear, safety issues aside, is not remotely economic for new-build generation in comparison to wind and solar.

    In a scenario where nearly all generation (99.9%) is renewable, the lowest cost combination of excess generation and grid storage that 'meets load' is one in which large amounts (>100% of average load!) of exceed electricity is generated. This excess electricity is more than sufficient to power all of the nation's cars, and by 'opportunistically' charging the fleet (i.e. using charging to 'soak up the otherwise unusable peaks) the cost of this energy is very very low. Here is a fairly detailed study of this issue.
    Jul 26, 2015. 07:04 PM | 3 Likes Like |Link to Comment
  • Tesla's Model S Announcement: No Comfort On X Ramp Or 2015 Sales [View article]
    Not really. The Terrapass solution eliminates the net CO2 production of your ICE vehicle every bit, or even more effectively than switching to a BEV - and at tremendously lower cost.

    If all that matters to you is the CO2 footprint associated with your personal transportation TerraPass is a free market solution with compelling economics. The only folks who might object are be those who do not truly believe in the functioning of the market mechanism.
    Jul 26, 2015. 12:39 PM | 1 Like Like |Link to Comment
  • Tesla's Model S Announcement: No Comfort On X Ramp Or 2015 Sales [View article]
    Peter, Dubious,

    I think you are both right. BEV technology is 'ready' for making high-end cars today as Model S clearly shows. At the same time, legacy ICE carmakers aren't going to chuck the ICE until BEV economics are compelling *for them*.

    BEV economics work today for high-end product, but not for the low end of the market where margins are tight and price/TCO dominate purchase decisions. Tesla's high SG&A (which is related to SuperChargers, sales and service buildout / overcapacity to support growth, etc.) aside, Tesla is making Model S for substantially less than customers are paying for these cars. But this doesn't necessarily mean BEV economics are compelling for legacy ICE carmakers with 1) huge 'sunk costs' in ICE manufacturing facilities, designs, supply chain, distribution, field support, etc. and 2) a need to defend market share that precludes shutting down their ICE production. Legacy ICE carmakers will be FORCED to remain in the ICE business during a transition to BEVs which will take many years, perhaps a decade or more.

    Because legacy ICE carmakers MUST continue making ICE cars or suffer catastrophic loss of market share until BEV (and battery) production ramps up (years and years) BEV economics are fundamentally different for them than they are for a new entrant like Tesla. Tesla has no legacy assets and they do not have to defend existing market share currently fed by ICE product.

    For a legacy ICE carmaker, the marginal cost / economics of converting a given model to a BEV are much worse than continuing to make the ICE version because all the ICE 'pieces' - the drivetrain manufacturing, distribution, field support, fueling infrastructure - already exist, and will necessarily continue to exist because the legacy manufacture MUST continue making ICE product or face collapse of their market share (and business).

    From an economic perspective, legacy ICE carmakers transitioning to BEVs have strong incentive to maintain production of their highest margin product for as much of the transition period as possible. Since the larger, higher performance, high-end ICE products tend to have the highest margins, this drives legacy ICE carmakers to introduce BEVs in the lower end of their product mix. Unfortunately, this is precisely the part of their product mix where margins are lowest, price and TCO matter greatly to the market, and where BEVs offer the least performance advantage.

    The only other strategy available to legacy ICE carmakers that makes any sense economically is hybrids and PHEVs (and to a lesser extent HFCVs). By adding 'electricity' to existing ICE product, the legacy ICE carmaker remains in the ICE car business. Hybrid and PHEV versions of existing models can be sold side-by-side because the the relative efficiency, performance and price of the hybrid / PHEV version can be adjusted so as to differentiate the 'electric' and 'conventional' versions of the ICE product. There is however a difficulty with this approach.

    A hybrid / PHEV car is necessarily also an ICE car (or in the limit perhaps an HFC car). This forces compromises on the designer that prevent such cars from obtaining the combination of performance, cost, simplicity, interior volume, etc. obtained in a ground-up BEV such as Model S. One need look no further than BMW's i8 for an example of this fact. The i8 is at once smaller, slower, less efficient and costlier than Model S.

    All of this suggests that Tesla's strategy of targeting the highest performance, highest margin ICE product within segment will continue to be effectively unchallenged for years to come.
    Jul 26, 2015. 12:34 PM | 2 Likes Like |Link to Comment
  • Tesla Will Need To Restructure [View article]

    Porsche and MB are ICE carmakers, chained to the oil industry, carbon emissions, etc. Why would anyone expect a company pursuing what is obviously a long-term losing strategy to sustain CAGR of 50% over the long term?
    Jul 26, 2015. 03:33 AM | 8 Likes Like |Link to Comment
  • Tesla's Model S Announcement: No Comfort On X Ramp Or 2015 Sales [View article]
    You can get total moral superiority for way, way less than $80k. All you need do is get a Terrapass sticker for whatever ICE car you are already driving.
    Jul 26, 2015. 03:26 AM | 2 Likes Like |Link to Comment