In Summary, The Tesla Model S Is A Dirty Car

| About: Tesla Motors (TSLA)

On Thursday, I published an article about the environmental merits of the the Tesla Model S, highlighting that I believe it is effectively one of the most heavily polluting vehicles on the road. The article was met by a barrage of attacks, the vast majority of which were by people who clearly did not read the entire article. While we urge those with a sincere interest in our work to read our original analysis, we also felt a simplified article with fewer, more basic calculations would result in a more productive discussion about the environmental merits of the Tesla Model S.

The CO2 Generated Driving the Model S

Based on national average CO2 emissions calculations quoted by Tesla Motors (NASDAQ:TSLA), the Model S sedan effectively emits 176g of CO2 per mile driven (622g of CO2 per kWh generated). To answer our critics, we focus on the national average because Tesla is a mass-market car maker planning to sell hundreds of thousands of vehicles in the United States over the next few years.

According to the footnotes on Tesla's website, their CO2 calculations are based on a Model S consuming .283 kWh of electricity per mile driven - traveling 300 miles on a full charge of the 85 kWh battery. The reality is that in the 'real world,' drivers of the Tesla Model S have reported higher energy consumption than Tesla and the EPA ratings suggest: By far the largest single source of efficiency data from Model S owners is the 'Lifetime Average Wh/Mile' thread in the Tesla Motors forum, which reveals that the 48 owners of the 85 kWh Model S who posted to the thread realized average power consumption of .367 kWh per mile driven (232 miles per 85 kWh) over 175,629 total miles. Contrary to claims made in the comments about our previous article, we are not cherry-picking data! The 'Lifetime Average Wh/Mile' thread is the largest collection of reported energy consumption by Model S users and a fair representation of the vehicle's efficiency.

Using energy consumption of .367 kWh per mile driven rather than .283 kWh per mile driven, the Model S effectively emits 228g of CO2 per mile driven. This puts the effective CO2 emissions of the Model S just above that of the Honda Civic Hybrid (202g per mile) and the popular Prius V (212g per mile). Unfortunately, these calculations do not tell the whole story of the Tesla Model S.

Idle Losses

Unlike other automobiles, however, the nature of the Model S battery - which utilizes an estimated 9,000 type 8650 lithium-ion battery cells, most commonly used to power laptop computers - requires continuous monitoring and frequent thermal management (heating and cooling) to maintain both longevity and safety. This consumes a significant amount of power, even when the vehicle is not being driven.

Tesla owners affectionately call their idle power losses their "Vampire Load." Tesla's Power Drain While Idle (Vampire Load) forum thread has 460 posts and is filled with stories of lost driving range while Model S sedans sit idle. In warm weather (greater than 50 degrees F), the 85 kWh Model S consumes roughly 3.5 kWh of electricity for every 24 hours the sedan sits idle, or 9.3 miles of driving range per day. In cold weather, idles losses are significantly worse, as recorded by the infamous John Broder of the New York Times as well as by Consumer Reports.

Tesla has told Model S owners in the past that an 'idle sleep' state will be introduced into their software, but so far no software update released by Tesla has reduced idle power losses meaningfully. Another update is promised this Summer, and we will revise our calculations if it is effective, but history (and the mechanics of the battery) suggests it will not meaningfully reduce idle power consumption.

CO2 Emissions Based on Miles Driven

Although forums (and Tesla-provided total miles traveled data) suggest the average Model S is driving 7,560 miles per year, we will use 12,000 miles driven per Model S per year to provide a better comparison to traditional automobiles. At 12,000 miles driven per year and .367 kWh of electricity consumption per mile driven, the Model S uses 4,404 kWh per year (.367 X 12,000). If we add in a conservative idle power loss estimate of 3.5 kWh per day, the Model S consumes an additional 1,277 kWh per year (3.5 X 365) - for a total of 5,681 kWh per year. Unfortunately for Tesla, there are also charging losses.

Charging Inefficiencies

It is commonly accepted that lithium-ion batteries have 80% to 90% charge/discharge efficiencies, depending on the rate of charge and discharge (the higher the rate, the less efficient the process). These inefficiencies mean that the "per mile driven" power consumption rates touted by Tesla Motors and displayed by the Model S sedans themselves need to be inflated to account for power drawn from charging stations and electrical outlets, but consumed in the charging process and not available to power the Model S.

As we documented in our previous article, various Tesla forum users have documented the charging inefficiency of the Model S, generally calculating 78% to 85% charging efficiency. While we use an 85% charging efficiency for our Model S calculations, in the footnotes of their Electric Vehicles Overview page, the U.S. Department of Energy states "Battery and battery charger efficiency are assumed to total 81% (roughly 90% each) based in part on estimates from published studies (Chae et. al., 2011; Gautam et. al., 2011)."

If a typical Model S needs to consume 5,681 kWh per year, but charging losses amount to 15%, a total of 6,683 kWh are drawn from the wall to provide this amount of usable energy.

Total Effective CO2 Emissions per Mile

With 6,683 kWh of electricity being consumed each year and 622g of CO2 emitted per generated kWh of electricity (ignoring transmission and grid losses), the total effective annual CO2 emissions of the Model S are 4,156,826g (6,683 X 622). Dividing this by 12,000 miles driven per year and the effective CO2 emissions of the Model S are 346g per mile - more than the 312g per mile the EPA says the Toyota Highlander emits.

Other regulated emissions (SO2, SOx, NOx) make the Model S look even worse, as we detailed in our previous article. In many states, including California, if a smog testing center could measure the effective emissions of a Tesla Model S through a tailpipe, the owner would face fines, penalties or the sale of the vehicle under state "clunker buyback" programs.

The Government Subsidy Insanity

The Model S is pretty clearly not a 'green' car. Despite this, Tesla enjoys massive financial support from the Federal government, as well as various state and local governments: The Department of Energy (DOE) provided Tesla with $465 mln of low-interest loans under its Advanced Technology Vehicles Manufacturing Loan Program, buyers of the Tesla Model S luxury sedan gain $7,500 of Federal tax credits (at an annual cost to taxpayers of $150 mln at 'full output' of 20,000 Model S sedans per year) and state and local government incentives include a $2,500 rebate for Model S buyers in California, sales tax waivers, free parking, free charging and authorized travel in car pool lanes. Electric vehicle charging stations have also been subsidized, with Federal tax credits ranging from 30% of the cost of a home charger, up to a $1,000 tax credit, to $30,000 for the installation of commercial chargers. In addition, government environmental credit schemes forced other automakers to pay Tesla roughly $108 mln in over the past six months to "offset" the CO2 produced by their gasoline engine-equipped vehicles with credits generated by Model S sales. All of these incentives are designed to help promote Electric Vehicles (EVs) and reduce CO2 emissions, saving the planet from the devastating effects of Global Climate Change.

Article Comments

Many readers commented that 'my Model S is green because I use solar panels.' The reality is that the decision to drive a model S is independent of the decision to install solar panels. If you install solar panels and produce electricity without hydrocarbons, we congratulate you because you are in fact reducing hydrocarbon consumption at a far-away power plant - regardless of if you drive a Model S or not. If you install solar panels and then drive a Model S, the electricity you send into your Model S is no longer available to use at your house or sell back to the grid and is then replaced by the output of a utility company, resulting in additional hydrocarbons being consumed. Your total effective CO2 emissions would have been lower had you sold your solar-generated electricity back to the grid and instead drove a Honda Civic (or even a Toyota Highlander)!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Both myself and my firm advise clients on Tesla Motors and have recommended that they sell short or avoid shares of TSLA.

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