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... Straight From The Horse's Mouth

|Includes:AXPW, Tesla Motors (TSLA)

Just wanted to share an interesting posting on an SA article against Tesla.

Perennial Tesla short John Peterson, wrote a highly controversial article about the safety of Tesla's batteries. And he relied almost entirely on the contents of a NREL report to support his position that Tesla was putting the passengers of a Model S at risk when they made their decision to use small format (18650) Lithium-Ion (NYSE:NCA) batteries: seekingalpha.com/article/1856711-underst...-26596251

Some time after that posting, the original co-author to that NREL report responded with this:

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I am the author of the NREL document Mr. Peterson cites and uses a basis of his posting on 22Nov13, "Understanding Tesla's Life Threatening Battery Decisions". I wish he had contacted me before he wrote his posting, because he got several very important things wrong.

First, Mr. Peterson confuses field failure and the response of batteries to "off normal" abusive events. The statistics such as "1 in 10 million failures" in my NREL report apply to field failure, not crash statistics. The accepted definition of Field Failure is "…Li-ion safety incidents in the field [that] are not preceded by any obvious external abuse. We refer to these spontaneous safety incidents as 'field failures'". My understanding is that there was substantial mechanical damage to the battery packs in all three Tesla fire incidents. Thus, if the battery failure was preceded by external abuse, using the term "field failure" is not appropriate. To my knowledge, Tesla has no experienced any "field failures", and if they did, it was a 'non-event'.

The second argument that "[Tesla's] second risky battery choice was ignoring the laws of large numbers" is totally flawed. Field failure statistics developed for 18650-size lithium ion rechargeable cells. There are no confirmed studies failure rates on other size cells or how to extrapolate the 18650 cell statistics to other cell sizes. Field failure rates any other size cells used an automobile are unknown. Comparison is meaningless.

If he had studied my report more closely, he would have read. "Small versus large format cells: which is better? Which is safer? There is a divergence of opinion on the topic. The decision needs to be evaluated with respect to module and pack design. Electrical interactions and current flow need to be studied, tested, and modeled. However, most opinions favor small cells for safety." This is exactly the path that Tesla has chosen.

All of the other quotations taken from my report apply equally to every cell chemistry and every battery powered vehicle, and implying that Tesla is at some special risk is strictly his personal opinion, and not supported by my analysis that was published in the NREL report.

Suggestion that thermite reactions participate in cell runaway is totally speculative and not supported by any evidence that I have ever seen.

In conclusion there are serious errors in Mr. Peterson's document. I do not know his motives, but this number of errors shows ignorance or disregard of published information. The conclusion that "Tesla's battery decisions significantly increased battery risks for both the customer and the company" is not supported by the facts. It is simply Mr. Peterson's personal opinion.

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Which completely destroy's JP's article, yet he didn't relent, nor admit fault.

What is amazing is that this isn't the first time John has distorted a reference material for his own purposes. As soon as I find it, I'll update this blog.

Disclosure: I am long TSLA.

Stocks: TSLA, AXPW