Long And Bumpy Road Ahead For Tesla [View article]
John Bingham, there will remain a niche of buyers such as yourself that may not mind the limitations of an EV-only automobile and may even be willing to pay tens of thousands of dollars more for a design that suffers from these limitations.
However, there are many more pragmatic car buyers that would prefer a more versatile alternative, especially if it can be achieved through technological advances whose costs can be driven down, unlike the wasteful approach of equipping the car with a battery much larger, heavier, and expensive than what drivers will normally need to achieve their occasional longer-distance driving needs--or to provide them with a buffer in the event of power outages.
Outside of the inherent shortcomings of its EV-only design, the Tesla S has been executed very well, so I too would consider one in the future if it satisfied a different wish list than yours.
Since a lower price seems to be on both of our wish lists, I think my wish list can be achieved much more easily than yours: GM has already demonstrated the ability to engineer a dual-configured propulsion system at a much lower price point. The only way your price point is likely to be achieved within the next several years, at least, is if the car was equipped with a smaller battery that would make its EV-only limitations that much more glaring.
Long And Bumpy Road Ahead For Tesla [View article]
BlueDiamonds, Tesla's stock price is clearly overpriced even if Tesla doesn't confront competition, but the car itself is the envy of the block, so to say. I have questions about the company's growth potential if they don't incorporate some technological changes that I think would broaden its appeal, but for the moment I don't think there are any hidden problems regarding demand for the car. It's appeal will be limited to a niche market, but Tesla has done a good job of identifying the niche market for electrified vehicles and has executed the delivery of a car that will fulfill this niche market demand very well.
I personally prefer the Volt's technology, but it is positioned between the upper and lower tiers of potential buyers so doesn't quite fit the wants and needs of either tier.
The Cadillac ELR may attract some interest from upper scale buyers, but a two-door coupe that still won't be built on a dedicated platform is not going to go head-to-head with the Tesla S.
The Fisker Karma is a beautiful automobile, but was executed poorly. It is much too heavy, was overpriced even for upscale buyers, suffered from quality problems, backseat headroom and trunk space were atrocious, and the engine was designed to provide direct mechanical propulsion rather than serving only as a generator to provide electricity for the electric drive that this segment of buyers prefer.
If Fisker is purchased by a buyer that understands this, or an upscale manufacturer of luxury sports sedans introduces a car with the styling, performance / handling, and fit / finish of the Tesla S [or an AWD SUV] with a properly designed dual-propulsion configuration, then the Tesla S will encounter stiff competition. But, in the meantime, I think the car and the company will survive. I can't say the same for Tesla's stock price [if you're looking for warts that's where you'll find them and you don't have to look very hard], but for now I think the company will survive.
Long And Bumpy Road Ahead For Tesla [View article]
JRP3, I understand that some "purists" would prefer this. You need to understand that many others are more pragmatic, and that Tesla sales would lose steam if essentially the same car could be purchased for $25,000 less if it was equipped with an onboard generator providing an extended range of say 400+ miles while still providing a 100 mile range in EV-only mode for normal driving needs.
You also need to question whether Tesla will be successful in attracting potential buyers to a lower priced X model if they attempt to achieve this lower price point by equipping the X model with the smaller lower priced battery that Model S buyers flat out rejected. As Elon Musk explained, the base model Tesla S equipped with a smaller battery was like a "lame horse" (e.g., like a Nissan Leaf). Equipping the car with an onboard generator to provide extended range when it is occasionally needed would enable Tesla to overcome this hurdle. Developing a more innovative advanced engineering design would require an initial R&D outlay, but once the cost of developing this technology was incurred, future production costs would be far lower.
Tesla may find it more challenging to fund this initial R&D outlay than a well-heeled competitor, or a heavily subsidized Chinese company, but I don't think they can afford not to unless they don't think that higher sales levels are possible.
Long And Bumpy Road Ahead For Tesla [View article]
JRP3, I'm not trying to make a direct comparison between the Volt and the Tesla S. I'm saying that if you take the best of what each car has to offer, you get a car that is better than both. Consider, for example, a Porsche Panamera that could provide a 100 mile EV-only range, after which an onboard generator could provide extended range when it is occasionally needed.
The 100 mile range would satisfy most driver's normal driving needs, but they could also take longer trips without worrying about making it to the next charging station unless you turn off the a/c or the heater, and they would be able to fill-up very quickly.
They would also not have to worry about power outages.
Not everyone would prefer this more flexible alternative, but many would. And this alternative also better lends itself to cost reductions since it is achieved through technology rather than the waste of an expensive battery that is much larger than what is normally needed. This will become especially important when Tesla attempts to introduce less expensive models such as the Tesla X. If Tesla continues to rely solely upon a battery, the X will either offer a range that Tesla S buyers indicated to be unacceptable, or they will not succeed in achieving their lower price point objective.
Long And Bumpy Road Ahead For Tesla [View article]
Relayer75, if you're so sure the stock price will reach $124.52, why aren't you buying shares at $90 rather than hoping that they will fall to the $70's.
Long And Bumpy Road Ahead For Tesla [View article]
JackB125, I've done all those things. That's why I bought a Chevrolet Volt. Someday, if Tesla introduced a car with an onboard generator, and the price came down by about $25,000, I might consider that alternative. But, I also read "Retirement Planning 101" so it would be foolish to buy a Tesla at this time.
I think many others have reached this same conclusion: most own the stock, but not the automobile. They're just hoping to profit from other people spending a boat load of money for an expensive second-car. This worked for Tesla director Ira Ehrenpreis: he just cashed-in his shares for $90/share, to rake in $72 million. Were you a buyer at that price?
Long And Bumpy Road Ahead For Tesla [View article]
Julian, please explain what flaws you think exist in my analysis. Also, do you own a Tesla? In addition to conducting traditional research, I purchased a Chevrolet Volt and have driven it for two years now. So, I can tell you from first hand experience that:
I have put 22,387miles on the Volt, with 18,316 of those in electric mode, so I have used only 133 gallons of gas. Those were typically for long-distance trips that I didn't have to carefully plan around the availability of a charging station. My most critical driving needs can generally be completed with using a drop of gasoline and that's enough to reduce the strategic importance of oil, address concerns about pollution being created in heavily populated areas, and to provide a very enjoyable driving experience.
At this rate, when the 100,000 mile warranty on the battery expires, I will have 18,185 miles on the engine so it should be good for many more years at that point. Although it probably shouldn't be necessary to replace the battery just because the warranty has expired, the cost to do so would be about $8,000 (only a small fraction of what it would cost to replace the batteries in a Tesla).
During power outages, (including the weeks long power outage caused by Hurricane Sandy), I am still able to drive my Volt.
During the cold winter months, the onboard generator sometimes kicks in to protect the battery from extreme cold. I could also remotely start the engine to warm the battery if I left the car at the airport during the winter. (Would you feel more comfortable leaving a laptop computer outside when the temperature falls below 32 degrees with or without a heating source?)
These are just a few examples of why a dual configuration propulsion system based upon advanced technology and engineering is superior to wasting a lot of resources to equip a car with a huge battery costing tens of thousands of dollars more to satisfy, with less convenience, a car owner's infrequent longer-distance driving needs.
Having said this, I will be the first to admit that the Volt lacks the fit and finish of the Tesla. The Volt is extremely pleasant to drive, and it's hatch back design is very practical, but it will never be confused with a BMW 5 Series, a Porsche Panamera, or a Jaguar. That's where Tesla shines. They have built a standard automobile better than what most major automakers produce, but they have not excelled when it comes to innovating new technology. The Tesla S is popular primarily because of its sleek design and because it accelerates rapidly and handles very well. All of this, plus added versatility, could be achieved for tens of thousands less if Tesla had invested in an innovative engineering design rather than just tethering a nothing-new electric motor with a nothing-new army of laptop batteries.
This approach may work for some, but I'm sure that many more would flock to a car with the styling, fit and finish of a Tesla S but the added versatility of an onboard generator that would allow the price point to be reduced by tens of thousands of dollars. That day may not be long away, as Bob Lutz and Wanxiang are competing with billionaire Hong Kong investor John Li and some European investors to acquire Fisker. Porsche is also capable of modifying their Panamera to provide 50 to 100 miles of EV-only mode capability.
It's a shame to see technology developed in the US fall into the hands of foreign companies, so I hope that Tesla, unlike Fisker and A123, will succeed. But, investors in Tesla need to be aware that the stock price is priced as if Tesla will never face competition, and that a lower-priced, battery-onlyTesla X model is unlikely to be achievable unless it is equipped with the smaller battery that was rejected by most potential Tesla S buyers. Incorporating a more advanced, dual-configuration propulsion system could solve this since technology costs can be driven down, unlike resource costs which are rising as a growing share of the 7 billion people on this planet are vying for them.
Long And Bumpy Road Ahead For Tesla [View article]
If the Panamera offered 50 miles or so of range in EV-only mode, than it would be a more viable alternative to the Tesla. That should be achievable by a company such as Porsche so stay tuned. But, in the meantime, the Tesla S is more appealing to some, despite its fundamental flaw which they chosen to overcome through waste rather than innovation -- knowing that affluent car buyers would be willing to pay the extra cost of their wasteful solution, i.e., huge, expensive batteries rather than a more sophisticated engineering design that couples the electric motor with an onboard generator to provide extended range when it is occasionally needed.
Long And Bumpy Road Ahead For Tesla [View article]
The Fisker Karma is directionally a better design, but flawed in it's execution on a number of fronts. Fisker also suffered from the demise of A123, a battery manufacturer with very interesting and promising battery designs but some of its batteries had to be recalled because there was a flaw in one of the machines A123 purchased from a third party to manufacture its batteries.
If better executed, the Fisker Karma would, at a minimum, significantly reduce Tesla's market share.
Long And Bumpy Road Ahead For Tesla [View article]
Yogionthebeach, the Nissan Leaf similarly lacks an onboard generator that would provide an extended range when it is occasionally needed. So, it shares the same achilles heel that afflicts the Tesla, and the limited interest in the Leaf should be a wake-up call for investors in Tesla.
Tesla has sold better than the Leaf because the Leaf is an ugly car that lacks the styling, fit and finish of the Tesla. That's where the Tesla shines. But, when it comes to the Tesla's technology, there is very little under the hood.
Rather than developing a much more sophisticated system that integrates an electric motor with an onboard generator to provide extended range and more convenient refilling when away from the home or office charging stations most EV drivers rely upon and prefer to use, Tesla has simply tethered a simple electric motor (nothing new or innovative there) with a huge quantity of laptop batteries (nothing new there either). In other words, Tesla has relied upon waste rather than innovation because this was the fastest and cheapest way to get an electrified vehicle to market. By offering an $8,000 iPad as an available option, i.e., something drivers can see and touch, Tesla has provided the sensation of advanced technology.
At this time, EV's are more expensive than cars equipped solely with traditional Internal combustion engines, so Tesla has wisely designed a car that will be more appealing to affluent car buyers than a Nissan Leaf or the more technologically advanced Chevrolet Volt because of its sleek design, quality fit and finish, handling and rapid acceleration. The Fisker Karma is directionally a better design but flawed in it's execution on a number of fronts. Fix those execution flaws and affluent car buyers would flock to that vehicle instead. In other words, offer a Tesla S with an onboard generator that offers a more flexible range extending capability and buyers would prefer that just like Tesla buyers preferred the Tesla S models with batteries larger than the base model that Tesla decided to cancel because it was like a "lame horse." All of the Tesla S models are like a "lame horse" due to their lack of an onboard generator that can extend range, protect the battery under more extreme temperature conditions, and heat the passenger compartment to more comfortable levels without creating fear that this will jeopardize the driver's ability to make it to the next charging station.
There would also be greater opportunities to drive down the costs for such a car because it is based on technology rather than waste. The importance of this will soon be apparent when Tesla attempts to offer new vehicles at lower price points. Batteries are enormously expensive, so an X model either will not be available at the price targets many expect, or it will have a very limited range that will cause it to suffer from the same lack of demand that doomed the base model Tesla S with it's smaller battery.
Long And Bumpy Road Ahead For Tesla [View article]
Stockriters, putting aside the challenges you have described in your article, and the additional challenge that Tesla would face if it was confronted by potential competition from a similarly styled car offering much greater flexibility at a much lower cost, what do you believe to be an appropriate share price for Tesla?
Even under very optimistic scenarios, the stock price seems to be in bubble territory, which may explain why one of Tesla's directors, Ira Ehrenpreis, just sold 793,290 shares for $72 million (that's about $90 per share) as BlueDiamonds has also indicated in his comment above.
It's one thing to love the car, despite its shortcomings that would be better recognized when it faces competition from more advanced cars with similar styling. But, it's quite another thing to fall in love with a $90 stock price, up from slightly more than $30 just a couple of months ago!
Long And Bumpy Road Ahead For Tesla [View article]
Given the current state of battery technology and level of infrastructure development, an electrified vehicle with an incredibly expensive battery in lieu of an onboard generator to provide range in excess of that which is normally required makes very little sense.
EVangelicals insist that the battery technology will improve so that the Tesla's huge battery soon won't cost $40,000, but if that's true, for now wouldn't it make much more sense to equip the car with a $10,000 battery capable of providing a range of around 50 miles (most people drive less than 50 miles per day), and then rely upon an onboard generator that can provide an additional range of about 300 miles when that additional range is occasionally needed? Not only would potential car buyers save $30,000, they would also be able to take advantage of the existing infrastructure of gas stations enabling drivers to fill-up in just a few minutes.
If Ford, GM or another major automobile manufacturer with an established network of conveniently located dealerships throughout the country was to produce a car similar to the Fisker Karma with this dual configuration, or perhaps even buy Fisker and then better execute the design and production of the Fisker Karma, I believe buyers would greatly prefer such a car over the Tesla since it would share the fit, finish and style, but should be available at a lower price point (thanks to the $30,000 savings from a smaller battery) and drivers wouldn't have to painstakingly plan their longer distance trips to avoid being stranded miles away from the nearest charging station.
Epilogue To TREM '11 -- Cyberspace, The Friend Or Foe Of Technology And Western Civilization? [View instapost]
The US Dept of Defense issued its Annual Report to Congress yesterday titled, "Military and Security Developments involving the People's Republic of China 2013.
The following excerpt from page 36 of the Report is of particular interest:
Cyber Activities Directed Against the Department of Defense.
In 2012, numerous computer systems around the world, including those owned by the U.S. government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military. These intrusions were focused on exfiltrating information. China is using its computer network exploitation [CNE] capability to support intelligence collection against the U.S. diplomatic, economic, and defense industrial base sectors that support U.S. national defense programs. The information targeted could potentially be used to benefit China's defense industry, high technology industries, policymaker interest in US leadership thinking on key China issues, and military planners building a picture of U.S. network defense networks, logistics, and related military capabilities that could be exploited during a crisis.
In the following section on that same page, the report goes on to explain:
Cyberwarfare in China's Military.
Cyberwarfare capabilities could serve Chinese military operations in three key areas. First and foremost, they allow data collection for intelligence and computer network attack purposes.
Second, they can be employed to constrain an adversary's actions or slow response time by targeting network-based logistics, communications, and commercial activities.
Third, they can serve as a force multiplier when coupled with kinetic attacks during times of crisis or conflict.
A callout section on Page 37 further explains:
Role of Electronic Warfare [EW] in Future Conflict
An integral component of warfare, the PLA identifies EW as a way to reduce or eliminate US technological advantages. Chinese EW doctrine emphasizes using electromagnetic spectrum weapons to suppress or deceive enemy electronic equipment. PLA EW strategy focuses on radio, radar, optical, infrared, and microwave frequencies, in addition to adversarial computer and information systems.
Chinese EW strategy stresses that it is a vital fourth dimension to combat and should be considered equally and traditionally with traditional ground, sea, and air forces. Effective EW is seen as a decisive aid during military operations and consequently the key to determining the outcome of war. The Chinese see EW as an important force multiplier and would likely employ it in support of all combat arms and services during a conflict.
The report drew some controversy as well as criticism by certain Chinese Communist Party representatives, as described in this article in CIO magazine:
1. whether China will have gained a stronger foothold in various downstream industries when new applications for rare earths create the stronger than expected surge in demand that you suspect. Cyber theft emanating from China for the purpose of acquiring valuable intellectual property rights has been rampant for years, and these activities, together with dominance in various high tech industries, pose even greater risks than China's near monopoly over rare earths.
2. whether China will have gained access to further rare earth supplies sufficient to fuel that demand. Very significant rare earth resources can be found in Greenland, but it will require a lot of capital to develop these resources and the infrastructure necessary to bring them to market. This may explain former Chinese President Hu Jintao's unexpected visit to Denmark last year, the first of its kind in 62 years.
Shock Exchange, with rare earth prices down, and shares of the many, many junior mining companies down with them, attention to our dependence on China for these critical metals and downstream components has significantly waned.
To many, the now absent euphoria surrounding investments in rare earth mining companies suggests that they are not so critical after all, and that all the attention given to rare earths a few years ago was unfounded.
Nothing could be further from the truth. The decline in rare earth prices, which makes it more challenging for potential new entrants into this market to achieve profitability, serves to increase the risk associated with China's near monopoly over these critical materials and their huge lead in the development of downstream industries.
The real story was about risk, with important geopolitical and geoeconomic implications that could have a significant impact on the US military and high tech industries in particular. But, due to misguided expectations that these risks would translate into huge investment profits from investments in junior mining companies, many investors were likely burned and there now seems to be much less appreciation for the significance of the risks that remain.
Long And Bumpy Road Ahead For Tesla [View article]
However, there are many more pragmatic car buyers that would prefer a more versatile alternative, especially if it can be achieved through technological advances whose costs can be driven down, unlike the wasteful approach of equipping the car with a battery much larger, heavier, and expensive than what drivers will normally need to achieve their occasional longer-distance driving needs--or to provide them with a buffer in the event of power outages.
Outside of the inherent shortcomings of its EV-only design, the Tesla S has been executed very well, so I too would consider one in the future if it satisfied a different wish list than yours.
Since a lower price seems to be on both of our wish lists, I think my wish list can be achieved much more easily than yours: GM has already demonstrated the ability to engineer a dual-configured propulsion system at a much lower price point. The only way your price point is likely to be achieved within the next several years, at least, is if the car was equipped with a smaller battery that would make its EV-only limitations that much more glaring.
Long And Bumpy Road Ahead For Tesla [View article]
I personally prefer the Volt's technology, but it is positioned between the upper and lower tiers of potential buyers so doesn't quite fit the wants and needs of either tier.
The Cadillac ELR may attract some interest from upper scale buyers, but a two-door coupe that still won't be built on a dedicated platform is not going to go head-to-head with the Tesla S.
The Fisker Karma is a beautiful automobile, but was executed poorly. It is much too heavy, was overpriced even for upscale buyers, suffered from quality problems, backseat headroom and trunk space were atrocious, and the engine was designed to provide direct mechanical propulsion rather than serving only as a generator to provide electricity for the electric drive that this segment of buyers prefer.
If Fisker is purchased by a buyer that understands this, or an upscale manufacturer of luxury sports sedans introduces a car with the styling, performance / handling, and fit / finish of the Tesla S [or an AWD SUV] with a properly designed dual-propulsion configuration, then the Tesla S will encounter stiff competition. But, in the meantime, I think the car and the company will survive. I can't say the same for Tesla's stock price [if you're looking for warts that's where you'll find them and you don't have to look very hard], but for now I think the company will survive.
Long And Bumpy Road Ahead For Tesla [View article]
You also need to question whether Tesla will be successful in attracting potential buyers to a lower priced X model if they attempt to achieve this lower price point by equipping the X model with the smaller lower priced battery that Model S buyers flat out rejected. As Elon Musk explained, the base model Tesla S equipped with a smaller battery was like a "lame horse" (e.g., like a Nissan Leaf). Equipping the car with an onboard generator to provide extended range when it is occasionally needed would enable Tesla to overcome this hurdle. Developing a more innovative advanced engineering design would require an initial R&D outlay, but once the cost of developing this technology was incurred, future production costs would be far lower.
Tesla may find it more challenging to fund this initial R&D outlay than a well-heeled competitor, or a heavily subsidized Chinese company, but I don't think they can afford not to unless they don't think that higher sales levels are possible.
Long And Bumpy Road Ahead For Tesla [View article]
The 100 mile range would satisfy most driver's normal driving needs, but they could also take longer trips without worrying about making it to the next charging station unless you turn off the a/c or the heater, and they would be able to fill-up very quickly.
They would also not have to worry about power outages.
Not everyone would prefer this more flexible alternative, but many would. And this alternative also better lends itself to cost reductions since it is achieved through technology rather than the waste of an expensive battery that is much larger than what is normally needed. This will become especially important when Tesla attempts to introduce less expensive models such as the Tesla X. If Tesla continues to rely solely upon a battery, the X will either offer a range that Tesla S buyers indicated to be unacceptable, or they will not succeed in achieving their lower price point objective.
So, beware of competitors who understand this.
Long And Bumpy Road Ahead For Tesla [View article]
Long And Bumpy Road Ahead For Tesla [View article]
I think many others have reached this same conclusion: most own the stock, but not the automobile. They're just hoping to profit from other people spending a boat load of money for an expensive second-car. This worked for Tesla director Ira Ehrenpreis: he just cashed-in his shares for $90/share, to rake in $72 million. Were you a buyer at that price?
Long And Bumpy Road Ahead For Tesla [View article]
I have put 22,387miles on the Volt, with 18,316 of those in electric mode, so I have used only 133 gallons of gas. Those were typically for long-distance trips that I didn't have to carefully plan around the availability of a charging station. My most critical driving needs can generally be completed with using a drop of gasoline and that's enough to reduce the strategic importance of oil, address concerns about pollution being created in heavily populated areas, and to provide a very enjoyable driving experience.
At this rate, when the 100,000 mile warranty on the battery expires, I will have 18,185 miles on the engine so it should be good for many more years at that point. Although it probably shouldn't be necessary to replace the battery just because the warranty has expired, the cost to do so would be about $8,000 (only a small fraction of what it would cost to replace the batteries in a Tesla).
During power outages, (including the weeks long power outage caused by Hurricane Sandy), I am still able to drive my Volt.
During the cold winter months, the onboard generator sometimes kicks in to protect the battery from extreme cold. I could also remotely start the engine to warm the battery if I left the car at the airport during the winter. (Would you feel more comfortable leaving a laptop computer outside when the temperature falls below 32 degrees with or without a heating source?)
These are just a few examples of why a dual configuration propulsion system based upon advanced technology and engineering is superior to wasting a lot of resources to equip a car with a huge battery costing tens of thousands of dollars more to satisfy, with less convenience, a car owner's infrequent longer-distance driving needs.
Having said this, I will be the first to admit that the Volt lacks the fit and finish of the Tesla. The Volt is extremely pleasant to drive, and it's hatch back design is very practical, but it will never be confused with a BMW 5 Series, a Porsche Panamera, or a Jaguar. That's where Tesla shines. They have built a standard automobile better than what most major automakers produce, but they have not excelled when it comes to innovating new technology. The Tesla S is popular primarily because of its sleek design and because it accelerates rapidly and handles very well. All of this, plus added versatility, could be achieved for tens of thousands less if Tesla had invested in an innovative engineering design rather than just tethering a nothing-new electric motor with a nothing-new army of laptop batteries.
This approach may work for some, but I'm sure that many more would flock to a car with the styling, fit and finish of a Tesla S but the added versatility of an onboard generator that would allow the price point to be reduced by tens of thousands of dollars. That day may not be long away, as Bob Lutz and Wanxiang are competing with billionaire Hong Kong investor John Li and some European investors to acquire Fisker. Porsche is also capable of modifying their Panamera to provide 50 to 100 miles of EV-only mode capability.
It's a shame to see technology developed in the US fall into the hands of foreign companies, so I hope that Tesla, unlike Fisker and A123, will succeed. But, investors in Tesla need to be aware that the stock price is priced as if Tesla will never face competition, and that a lower-priced, battery-onlyTesla X model is unlikely to be achievable unless it is equipped with the smaller battery that was rejected by most potential Tesla S buyers. Incorporating a more advanced, dual-configuration propulsion system could solve this since technology costs can be driven down, unlike resource costs which are rising as a growing share of the 7 billion people on this planet are vying for them.
Long And Bumpy Road Ahead For Tesla [View article]
Long And Bumpy Road Ahead For Tesla [View article]
If better executed, the Fisker Karma would, at a minimum, significantly reduce Tesla's market share.
Long And Bumpy Road Ahead For Tesla [View article]
Tesla has sold better than the Leaf because the Leaf is an ugly car that lacks the styling, fit and finish of the Tesla. That's where the Tesla shines. But, when it comes to the Tesla's technology, there is very little under the hood.
Rather than developing a much more sophisticated system that integrates an electric motor with an onboard generator to provide extended range and more convenient refilling when away from the home or office charging stations most EV drivers rely upon and prefer to use, Tesla has simply tethered a simple electric motor (nothing new or innovative there) with a huge quantity of laptop batteries (nothing new there either). In other words, Tesla has relied upon waste rather than innovation because this was the fastest and cheapest way to get an electrified vehicle to market. By offering an $8,000 iPad as an available option, i.e., something drivers can see and touch, Tesla has provided the sensation of advanced technology.
At this time, EV's are more expensive than cars equipped solely with traditional Internal combustion engines, so Tesla has wisely designed a car that will be more appealing to affluent car buyers than a Nissan Leaf or the more technologically advanced Chevrolet Volt because of its sleek design, quality fit and finish, handling and rapid acceleration. The Fisker Karma is directionally a better design but flawed in it's execution on a number of fronts. Fix those execution flaws and affluent car buyers would flock to that vehicle instead. In other words, offer a Tesla S with an onboard generator that offers a more flexible range extending capability and buyers would prefer that just like Tesla buyers preferred the Tesla S models with batteries larger than the base model that Tesla decided to cancel because it was like a "lame horse." All of the Tesla S models are like a "lame horse" due to their lack of an onboard generator that can extend range, protect the battery under more extreme temperature conditions, and heat the passenger compartment to more comfortable levels without creating fear that this will jeopardize the driver's ability to make it to the next charging station.
There would also be greater opportunities to drive down the costs for such a car because it is based on technology rather than waste. The importance of this will soon be apparent when Tesla attempts to offer new vehicles at lower price points. Batteries are enormously expensive, so an X model either will not be available at the price targets many expect, or it will have a very limited range that will cause it to suffer from the same lack of demand that doomed the base model Tesla S with it's smaller battery.
Long And Bumpy Road Ahead For Tesla [View article]
Even under very optimistic scenarios, the stock price seems to be in bubble territory, which may explain why one of Tesla's directors, Ira Ehrenpreis, just sold 793,290 shares for $72 million (that's about $90 per share) as BlueDiamonds has also indicated in his comment above.
It's one thing to love the car, despite its shortcomings that would be better recognized when it faces competition from more advanced cars with similar styling. But, it's quite another thing to fall in love with a $90 stock price, up from slightly more than $30 just a couple of months ago!
Long And Bumpy Road Ahead For Tesla [View article]
EVangelicals insist that the battery technology will improve so that the Tesla's huge battery soon won't cost $40,000, but if that's true, for now wouldn't it make much more sense to equip the car with a $10,000 battery capable of providing a range of around 50 miles (most people drive less than 50 miles per day), and then rely upon an onboard generator that can provide an additional range of about 300 miles when that additional range is occasionally needed? Not only would potential car buyers save $30,000, they would also be able to take advantage of the existing infrastructure of gas stations enabling drivers to fill-up in just a few minutes.
If Ford, GM or another major automobile manufacturer with an established network of conveniently located dealerships throughout the country was to produce a car similar to the Fisker Karma with this dual configuration, or perhaps even buy Fisker and then better execute the design and production of the Fisker Karma, I believe buyers would greatly prefer such a car over the Tesla since it would share the fit, finish and style, but should be available at a lower price point (thanks to the $30,000 savings from a smaller battery) and drivers wouldn't have to painstakingly plan their longer distance trips to avoid being stranded miles away from the nearest charging station.
Epilogue To TREM '11 -- Cyberspace, The Friend Or Foe Of Technology And Western Civilization? [View instapost]
http://1.usa.gov/17KMQdb
The following excerpt from page 36 of the Report is of particular interest:
Cyber Activities Directed Against the Department of Defense.
In 2012, numerous computer systems around the world, including those owned by the U.S. government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military. These intrusions were focused on exfiltrating information. China is using its computer network exploitation [CNE] capability to support intelligence collection against the U.S. diplomatic, economic, and defense industrial base sectors that support U.S. national defense programs. The information targeted could potentially be used to benefit China's defense industry, high technology industries, policymaker interest in US leadership thinking on key China issues, and military planners building a picture of U.S. network defense networks, logistics, and related military capabilities that could be exploited during a crisis.
In the following section on that same page, the report goes on to explain:
Cyberwarfare in China's Military.
Cyberwarfare capabilities could serve Chinese military operations in three key areas. First and foremost, they allow data collection for intelligence and computer network attack purposes.
Second, they can be employed to constrain an adversary's actions or slow response time by targeting network-based logistics, communications, and commercial activities.
Third, they can serve as a force multiplier when coupled with kinetic attacks during times of crisis or conflict.
A callout section on Page 37 further explains:
Role of Electronic Warfare [EW] in Future Conflict
An integral component of warfare, the PLA identifies EW as a way to reduce or eliminate US technological advantages. Chinese EW doctrine emphasizes using electromagnetic spectrum weapons to suppress or deceive enemy electronic equipment. PLA EW strategy focuses on radio, radar, optical, infrared, and microwave frequencies, in addition to adversarial computer and information systems.
Chinese EW strategy stresses that it is a vital fourth dimension to combat and should be considered equally and traditionally with traditional ground, sea, and air forces. Effective EW is seen as a decisive aid during military operations and consequently the key to determining the outcome of war. The Chinese see EW as an important force multiplier and would likely employ it in support of all combat arms and services during a conflict.
The report drew some controversy as well as criticism by certain Chinese Communist Party representatives, as described in this article in CIO magazine:
http://bit.ly/16VYhAN
Rare Earth Weekly [View article]
1. whether China will have gained a stronger foothold in various downstream industries when new applications for rare earths create the stronger than expected surge in demand that you suspect. Cyber theft emanating from China for the purpose of acquiring valuable intellectual property rights has been rampant for years, and these activities, together with dominance in various high tech industries, pose even greater risks than China's near monopoly over rare earths.
2. whether China will have gained access to further rare earth supplies sufficient to fuel that demand. Very significant rare earth resources can be found in Greenland, but it will require a lot of capital to develop these resources and the infrastructure necessary to bring them to market. This may explain former Chinese President Hu Jintao's unexpected visit to Denmark last year, the first of its kind in 62 years.
http://reut.rs/YeC3oF
Rare Earth Weekly [View article]
To many, the now absent euphoria surrounding investments in rare earth mining companies suggests that they are not so critical after all, and that all the attention given to rare earths a few years ago was unfounded.
Nothing could be further from the truth. The decline in rare earth prices, which makes it more challenging for potential new entrants into this market to achieve profitability, serves to increase the risk associated with China's near monopoly over these critical materials and their huge lead in the development of downstream industries.
The real story was about risk, with important geopolitical and geoeconomic implications that could have a significant impact on the US military and high tech industries in particular. But, due to misguided expectations that these risks would translate into huge investment profits from investments in junior mining companies, many investors were likely burned and there now seems to be much less appreciation for the significance of the risks that remain.