The Teslas Take A Vacation

| About: Tesla, Inc. (TSLA)
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The battery electric vehicle is an impractical means of conveyance for the majority of Americans.

The problem with the BEV is battery technology itself, and no solution is on the horizon.

The BEV is compared to the ICE-V in the most important metric: utility.

Last week, TipRanks wrote an article, It's Not A Car, It's A Tesla, where the firm imagines a world where Tesla Motors (NASDAQ:TSLA) will become the next Apple (NASDAQ:AAPL), assuming "a Tesla car really will be the new iPhone of transportation" and trillion-dollar revenues are on the horizon.

I believe the very idea is hogwash because the premise is fatally flawed. Human beings, especially we Americans, are fundamentally lazy. The iPhone was a huge success because it allowed people to consolidate devices and make their lives more convenient. The iPhone was a phone, a PDA and a computer all in one and sold like hotcakes because the device simplified people's lives in an aesthetically pleasing package.

Contrast this to a Tesla, where the end user pays a big price premium to make their lives more fundamentally challenging as everyday tasks become more time-consuming and logistically difficult. This is due to the following undeniable fact:

The greatest headwind facing the BEV is the battery itself. Due to the limited range, lengthy recharge times and lack of a nationwide recharging infrastructure when compared to the ICE-V, the user is forced to operate with "both hands tied behind their back." Once-simple tasks now become cumbersome and time-consuming as the user is forced to plan their schedule around their vehicle's remaining charge. No fix to this problem is on the horizon as battery technology itself continues to struggle.

But how big of an inconvenience is this, really?

The Teslas Take A Vacation

Two neighbors decide to take a 7-day vacation to Disney World (NYSE:DIS).

The Johnsons, along with their two children, load up their new 2016 BMW (BAMXY) 535i full of enough drinks and snacks to make the trip as quickly as possible. This will be their first trip in their BMW 535i, but it promises to be a good one. The turbo 6-cylinder puts out a solid 300 horsepower and 300 ft-lbs of torque, but gets a surprisingly good 31 mpg highway considering its size and luxury accommodations. With a rating of 20 mpg city, the sedan overall gets 24 mpg combined. Given we are taking a highway excursion, the 18.5 gallon tank should take the family 573.5 miles on a single fill-up.

The Teslas are the next door neighbor of The Johnsons. They too have a new ride - a shiny, new 2015 Tesla Model S 85 with an 85 kWh battery. Fully loaded up with snacks and drinks to make the trip as quickly as possible, this will be their first long car ride in their new Model S as well. At speeds of 70 miles power hour, this Model S has an estimated range of 250 miles before a recharge is needed.

After loading up both their vehicles, both families hit the road early at 6:30AM from their suburban homes in Wake Forest, NC, a suburb outside Raleigh, coordinates (35.944538, -78.401425). Destination: The Radisson Hotel Orlando, 12799 S Apopka Vineland Rd, Orlando, FL 32836, conveniently located right off I-4 near Walt Disney World.

Trip Assumptions

  1. The EPA limits gasoline pumps to a maximum dispensing rate of 10 gallons per minute. The 2016 BMW 535i has an 18.5 gallon tank, and can be filled from completely empty to completely full in under 2 minutes at the maximum legal flow rate. Going through the motions - getting out of the vehicle, paying for the gasoline, beginning to pump, finishing and getting back into the vehicle - can easily be performed in under five minutes. We will assume each fill-up takes five minutes flat.
  2. The Tesla Supercharger claims the following charging capabilities:

    Given our Model S has an 85 kWh battery, 5.6% less capacity than the 90 kWh Model S, charge times will be reduced from 75 minutes to 71 minutes. Similar to the ICE refueling, "going through the motions" adds another three minutes, bringing our total time spent at each Supercharger to 74 minutes flat for a full charge.

    Likewise, a partial charge from 0%-80% takes 38 minutes of charging for a grand total of 41 minutes when "going through the motions."

    We will use the graph above to calculate recharge times as a percentage of remaining charge.

  3. The Route.

    Mostly a straight shot down I-95 Southbound, the 630-mile drive can be completed in about 8 hours 50 minutes, assuming a perfect world where there are no refuelings, no traffic jams and no food or bathroom breaks. This will be our baseline travel time estimate.

The Johnsons' Trip

The Johnsons depart their home on schedule at 6:30AM on May 1st. With a highway fuel range of 573.5 miles, their vehicle can take them nearly the whole way without stopping for fuel. While passing through Daytona Beach, FL, the Johnsons' low fuel indicator light starts flashing a stern warning.

Refuel #1

The Johnsons get off on Exit 260 of I-95S and fill up at the Kangaroo Express gas station in Daytona Beach, FL (29.157052, -81.070587).

After a five-minute fill-up, they are back on the road again. All said and done, with the additional mileage of driving off the exit to the gas station and a 5 minute refuel, the Johnsons completed the itinerary below in 9 hours 5 minutes.

The Johnsons arrived at their final destination, The Radisson Hotel Orlando, on May 1st at 3:35PM. With still plenty of the afternoon left, the Johnsons head out to go sightseeing and begin their vacation.

The Teslas' Trip

The Teslas' trip took considerably more planning. Because they do not have the convenience of a massive nationwide refueling network built over the course of a century, each move had to be meticulously calculated to ensure their BEV does not run out of fuel on the highway, requiring expensive towing and jeopardizing the entire vacation. Luckily, Tesla Motors has taken the time to map out their Supercharger Network for just such an occasion.

Because the Teslas only have seven days scheduled off from work and school, "Destination Charging" is completely out of the question. At 4-6+ hours per recharge, nearly the entire vacation would be lost by refueling round-trip. Only Supercharging stations will do.

Recharge #1

The Tesla Model S has the capability to take them 250 miles on a full charge on the highway. However, the Model S does not have the convenience of pulling off the exit and refueling like an ICE-V. The furthest available Supercharger the Teslas could use is in Lumberton, NC (34.667602, -79.002399).

With their first charge taking place 113 miles into the trip, the Teslas' battery is at 55% capacity. Charging from 55% to 80% takes 12 minutes, which provides 200 miles of total range. We calculate this using the following method:

A 0-80% charge takes 38 minutes as extrapolated from Tesla's charging graphic. Charging from 55-80% is 31.25% of the rapid-charge capacity. 31.25% of 38 minutes is 11.875 minutes. Because the BEV's charging capacity begins to slow as it approaches full, we can round up to 12 minutes. We will use this method of approximating charge times moving forward.

This is enough to get them to the Tesla Supercharger in Santee, SC (33.485926, -80.475762). Going through motions adds another assumed 3 minutes, and Teslas are back on the road in 15 minutes.

Recharge #2

The Teslas must once again make a stop off of I-95S Exit 98 in Santee, SC, for a recharge.

123 miles further into their trip, they now have 77 miles of range remaining, or 30% battery. Here, the Teslas have two options:

  1. Charge from 30-80% over 24 minutes, giving them 200 miles of range. This will be enough range to make it to the Supercharger in Savannah, GA, 109 miles away.
  2. Charge to a full 100% over 57 minutes, skip the stop in Savannah, GA, and traverse 208 miles to Kingsland, GA.

Because the 33 minutes it takes to charge from 80-100% is so cumbersome, it is actually faster to make two charging stops than a single charging stop.

To maximize their limited vacation time, the Teslas elect for the fastest option, option #1. Charging from 30-80% takes 24 minutes, giving them 200 miles total range. Full time spent at the charging station - 27 minutes. Next stop, the Tesla Supercharger in Savannah, GA (32.135881, -81.212823).

Recharge #3

109 miles later, the Teslas pull off Exit 104 of I-95S for another recharge.

With 91 miles remaining on their charge, their battery is at 36% capacity. Again, the Teslas are left with options.

  1. Travel 102 miles to the Supercharger in Kingsland, GA (30.790690, -81.663477).
  2. Travel 171 miles to the Supercharger in St. Augustine, FL (29.924000, -81.417168).

Because 80% capacity is enough juice to travel to St. Augustine, FL, the Teslas elect to roll the dice, pray for no traffic stoppages of any kind, turn off the A/C and head to St. Augustine. Charging from 36-80% takes 21 minutes total, yielding a grand total of 24 minutes spent at the charging station in Savannah.

Recharge #4

The Teslas arrive in St. Augustine, FL, with 29 miles remaining on their battery, or <12% charge.

With The Radisson Hotel Orlando only 122 miles away, an 80% charge allows enough mileage to reach their final destination! 36 minutes later, the Teslas are back on the road.

The Teslas' final trip is mapped below.

In addition to the travel time, we must also include 102 minutes of recharging time. All said and done, the Teslas traveled for a total of 11 hours 3 minutes and reached their destination on May 1st at 5:33 PM.

BEV Headwinds

Overall, in a perfect world of no traffic jams, no A/C or heat usage, no food or bathroom breaks and perfect highway fuel economy, it would take an additional 118 minutes to complete the same highway excursion in a Tesla Model S versus a fairly average ICE-V in the fuel economy department. This is a 21.7% time premium a traveling family would have to tack onto their travel plans in each direction.

Ultimately, real-world conditions would further increase this margin of inefficiency.

  1. Almost any new ICE-V in production today could have made this trip while only stopping for a single fill-up. A Tesla driver likely would have stopped at every single Supercharger to ensure they do not break down on the side of a highway.
  2. The overwhelming availability of gas stations nationwide provide the ICE-V driver with little to no wait time at the pump. If a Tesla driver were to encounter another Tesla owner using a Supercharger, wait times would increase significantly.
  3. This example begins and ends in highly populated areas traveling on I-95, one of the nation's most traveled roadways. Taking a BEV on vacation through most of the US while only using Superchargers is utterly impossible in the majority of situations. Destination charging is required in most situations, which can easily transform a drive of several hours for an ICE-V into several days for a BEV. This example used is a best-case scenario for a BEV owner.

Tesla bulls will remind us that the Supercharger network is expanding, and each month that passes by will allow travel to more and more destinations. As long as Tesla can afford the expenditures, that is true. However, the Achilles' Heel of the BEV is in the battery technology itself. No matter how many Supercharger stations are added to the network, the ultimate problem with the BEV is the charge times are completely unacceptable. The biggest headwind to the Battery Electric Vehicle is the battery itself - battery technology is poor at best, and there is no known solution on the horizon.

Let's face it: we Americans are lazy. We hate waiting in line, and the only thing we value more than our time is our money. Tesla Motors is asking America to do three things:

  1. Buy a home with a garage. While a small handful of upscale communities have low-speed curbside chargers, the overwhelming majority of urban dwellers will have no way of charging their BEVs outside of driving out of their way to a public charging station and waiting, potentially the better part of a day, until the charge is complete.
  2. Spend more time waiting while refueling in any instance. <5 minute fuel-ups are a thing of the past. If you're fortunate enough to live near a Supercharger, begin dedicating 30-60 minutes every 2-3 days to refuel your car. It gets worse if one is not local, or if demand is high and lines are long.
  3. Spend more money on a much less capable vehicle that performs tasks more slowly. If you're going anywhere too far from home base, rent an ICE-V at your own expense.

I cannot see America being willing to do those three things. America has a love affair with automobiles, and Americans want vehicles that can take them where they want to go when they want to go. We want our vehicles to create solutions to problems and make our plans happen. With a BEV, we have to live our lives around the vehicle, constantly planning around our battery's charge for fear of long refueling times or being stranded due to a lack of a nationwide rapid refueling infrastructure. It will be a tough road to hoe convincing America to live their lives around their cars instead of using their cars to live their lives.

To further illustrate this point, wander over to Tesla Motors Club, which has a dedicated sticky titled, How to plan a road trip - how long will it take? There, you will see firsthand you need to be an expert in logistics to travel outside of your normal comfort zone. Specifically, you must know "how often to stop," "where to stop," "how much charge to replenish" and "how long charging will take" to travel beyond home base. Spontaneity goes out the window, and be prepared to get good at canceling plans if your vehicle's battery is low and you only have a 120V or 240V power source to charge. If a Tesla is your only vehicle, it can seriously impact your ability to get where you're going in a timely manner, if at all.

If Tesla Motors can get production costs low enough and become profitable, it can become a very successful small automobile manufacturer in a niche market, but these dreams of a BEV revolution are just that - dreams in the imagination of an idealist. Until there is a revolutionary new battery breakthrough that allows BEVs to be recharged from 0-100% as quickly as an ICE-V's gas tank can be refueled, provide 400+ miles of range per full recharge and can do it at equivalent cost while meeting equivalent demand, the dream will not become a reality. Eventually, the market will notice this and Tesla's stock will be valued as it should be - as a small, unprofitable startup with no way to seriously compete with the mainstream automobile manufacturers.

Disclosure: I/we 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: All information found herein, including any ideas, opinions, views, predictions, commentaries, forecasts, suggestions or stock picks, expressed or implied, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. I am not a licensed investment adviser.