Tesla's ingenious strategy
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maximise.dk
In terms of value returned for investment, present storage batteries are almost the single worst modern technology. The storage battery on the Tesla Roadster weighs 990 pounds, stores 56 kWh (about 202 MJ) and discharges in 244 miles (393 km) in normal conditions (vehicle speed and environmental temperature). This is a stellar example of applied science and engineering (it's much better performance than that of similar batteries) but it still represents a big obstacle to wide adoption of electric vehicle technology.
As a seasoned former NASA engineer who struggled with these same issues on spacecraft for years, I offer this advice: young people who are trying to decide what do with their lives should seriously consider a career in battery science and engineering. There is room for huge improvement -- huge.
There are sectors of the economy that dearly need electrical storage and are willing to pay for it, primarily electric vehicles and renewable energy. Over the last few years it has become obvious that this is a huge market, and that there are enormous amounts of money involved for whoever improves the technology. This, hopefully, means that it will be the focus of research, grants, startups, and business.
There are sectors of the economy that dearly need
electrical storage and are willing to pay for it,
primarily electric vehicles and renewable energy.
If you have actual evidence to support your argument, provide it, but "we need one" certainly isn't it. We've always needed better batteries.
* http://www.treehugger.com/green-investments/tesla-ceo-elon-m...
But then you end up your post saying that the room for improvement is -- huge [sic].
So which is it?
If it's that huge, why should they be worried? Especially seen that they're apparently going to be profitable with "only" 20 000 cars this year...
Yes, for Tesla Motors, not a scientific research organization, it's out of their control. They are not a science laboratory, they are a car manufacturing company. They must wait for developments made by others.
> But then you end up your post saying that the room for improvement is -- huge [sic].
That's true, it's huge, and the improvements will be made by scientists doing applied research, not building cars.
> So which is it?
You've posed a false dichotomy.
> If it's that huge, why should they be worried?
I don't think they're worried, and I didn't say there were. I think Mr. Musk is betting that battery technology will improve in a timely way, and his record for such judgments is rather good.
The battery pack in the Tesla Roadster is the result of
innovative systems engineering and 20 years of advances in
Lithium-ion cell technology. Tesla's ingenious battery
pack architecture enables world-class acceleration,
safety, range, and reliability. The non-toxic pack is
built at Tesla’s Headquarters in Northern California.
If the kinks can be worked out, this seems clearly preferable to a fully electric car. The wave disc motor is (claimed to be) extremely light, compact, and efficient. (It's only suitable for a series hybrid, though; it doesn't have the RPM range necessary to power a drive train directly.)
[1] http://www.nature.com/nnano/journal/v3/n1/abs/nnano.2007.411...
Sorry -- my experience in this area is rather outdated. I was most active in in the Space Shuttle design phase (the 1970s):
http://en.wikipedia.org/wiki/Paul_Lutus
That was why I directed my earlier comments to young people. :)
If someone was interested in battery science how would they get started?
I would start by acquiring a deep education in physics and materials science.
If you're not going to college there are two things you'll need to do as an initial step; read a book & get exposure to the technology.
Book: DeGarmo's Materials and Processes in Manufacturing [1] is practically the introductory bible for Engineering students, find a second hand copy and fast skim over all the chapters and then start drilling deeper. It's a good first step as if you can't find any parts of DeGarmo that interest you and spur you to learn further then this is not the path for you.
Exposure: Without a degree your path in is to pretty much become a field cog in a larger organisation; Army / Navy / Airforce / Mining Fleet Operations / Telcoms company that spans at least a state, etc. Once you've done your time lugging batteries / installing batteries / appeasing customers / dogs bodying you need to leverage your way closer in to where development takes place.
It will be hard at times seem well nigh impossible to make any in roads in a field like this without a degree - rare individuals with the right practical background and an obsessive interest in material properties do sneak through now and again.
Companies or organisations that offer assisted study / in house training can help. Moving to other locations in the world with cheaper education or more job opportunities may help. Having a relevant trade skill (outstanding electrician) coupled with metallurgy skills (home plating baths & furnaces & meters) could help you along.
Obsessively read anything that relates to electron flows and chemical solutions and metal interactions . . .
[1] http://www.amazon.com/DeGarmos-Materials-Processes-Manufactu...
( Can you get it cheaper? - A challenge )
Not a stupid question at all. I would listen to Mark Twain, who said, "I have never let my schooling interfere with my education."
Also consider the astonishing number of education-dropout billionaires:
http://en.wikipedia.org/wiki/List_of_college_dropout_billion...
I'm a former NASA engineer responsible for much man-rated spaceflight hardware, I wrote software that helped get Viking to Mars, I wrote some best-seller programs in the 1980s and retired at the age of 35, and I'm a seventh-grade dropout.
This doesn't mean anyone can drop out and become successful. It means success and schooling aren't strongly correlated.
It's the other way around -- absent direct contact with a conductor, higher frequencies are more likely to cause harm. Just one example:
The software is world class and feels like it was written by Apple. In fact, it seems eerily similar to how Apple launching the iPhone reset the bar for the "right" way to do smart phone UI. I wonder if Tesla has considered licensing the center console software to other companies.
They probably won't license it out to other manufacturers, considering it's such a competitive advantage.
What I do find interesting, is the apparent failure of the wisdom of crowds in this specific instance. While it has proven to be a useful construct in certain contexts, it's by no means a universal truism.
Searching for Tesla articles circa 2007/2008, one notices a stark contrast. The voice of the majority, as evidenced in the comments, echoes a pessimistic outlook with going so far as to strongly assert arrogance/foolishness on Musk's part.
It's almost too easy to praise a success, looking backwards through time.
A simple Google search isn't returning anything backing that up unfortunately so take it with a grain of salt for now. I think I remember it from a Model S release video I once watched on YouTube which means I can't look it up right now. If I remember when I get home I'll try to dig it up and link it.
Though I'm not sure what position he had here, but it does line up with your claim.
1. https://twitter.com/joeracer
2. http://javaposse.com/
3. http://www.linkedin.com/in/joenuxollI'd prefer a diesel pickup and a 50k 3-series sized high performance bluestar, but may just get a model s once my Audi dies.
Now Tesla is entering a phase where they will have perhaps tens of thousands of heavy, battery-powered pieces of transportation hardware deployed, and user support might be a bitch. Nobody's done this before. Ever.
Don't get me wrong. They have done a tremendously fine job so far, but they are nowhere near out of the woods yet, as I'm sure Musk knows. Here's wishing them the best of luck through the hump over the next five years or so.
(Interesting how with startups you do one impossible thing only to be given another, and another. Each time it's like "And now comes the really tough part...")
Imagine a sign on auto service centers that says "TESLA Serviced Here" or something similar. This would build public awareness and confidence and create an entire new class of Tesla advocates.
by law Tesla won't be able to exclude them but from what I have read they seem to think they can change all facets of current automobile marketing and support.
However laws prevent traditional auto manufacturers from requiring buyers to only obtain service from the dealers. I do not see how Tesla is going to circumvent that nor do I believe they should.
As for the article's premise, I don't see the genius. I simply see it as a requirement to break into the market. I also do not think battery powered cars will be the end all, the major automakers are going down many different paths, Tesla is betting the farm on one.
Plus, 400 hundred cars a day? Its going to be a long long time at that pace before they have any noticeable effect. Before then someone is going to craft an environmental impact law to make these battery powered cars more expensive.
The Ford Model T sold for $850 in 1909 ($2012 21,390), $550 in 1913 (12,580), and $440 in 1915 (9,640) [1].
Also, noting that the Ford Model T was on sale in 1909 (t=31) I revise my original estimate down to 2025 (t=22). Assuming 2% CPI inflation that means {$2025: 27,670; 16,270; 12,720}.
The same plants which make a million gas-powered Honda Accords per year can be used to make an incremental 100,000 electrics, then 200,000 a year later, then 500,000, as sales grow and technology matures. Ford is using this strategy to great effect with their Focus and C-MAX EVs which are fairly affordable and accessible to the average consumer.
The question is whether electric technology is so revolutionary as to require a complete redesign of the car, (e.g. body panels and frame) in which case Tesla's approach may win out. BMW, for example, is pursuing this route for at least one of their models; they're building a carbon fiber manufacturing facility in Washington State for their new i3 electric, which will use carbon fiber body panels for decreased mass.
Aren't the body panels and frame of a Tesla basically just an off-the-shelf Lotus roadster?
We'll see a $30,000 model from them in 2015, and then a sub $20,000 model by 2018, with reasonable mileage. By then the country should also be covered with their solar-powered superchargers, that charge the cars for free. All of these factors should help them, and EV's in general, to become mainstream by 2020.
In regards to the author's last statement, when Tesla started pushing for Tesla Roadster I also thought they would eventually become the "GM of the new electric car industry". Tesla is the Apple of EV's, and GM is Nokia. And both incumbents were gigantic at first in their own markets, compared to the new entrants, but that quickly changed in a few years.
If a large chunk of the delivered cost of a battery is attributable to fixed costs, like R&D, rather than the process of turning the raw materials into a finished battery, then maybe it isn't too implausible that the price could drop by a factor of two (or four). You might be able to glean some that information about that from carefully reading the SEC reports from public battery manufacturers.
And yet oil probably won't get too much more expensive for decades, while solar is ridiculously expensive without any clear prospect of becoming cheaper (currently parts are only as cheap as they are because the Chinese government is subsidizing their production, which can't last forever). Burning gasoline is not going to stop being economical and reliable any time soon.
Also, given the expensive reality of solar and the way we generate electricity, electric cars would still be getting their electricity from plants which burn coal. Perhaps in 20 years we will be using more natural gas than coal, which at least means we're not depending on the Saudis - but still we'll be using hydrocarbons, fracking, etc.
The only way electric vehicles will become mainstream is if the government mandates this. Seeing the way the Obama administration's "clean energy" agenda has tanked (even among the liberal base preoccupied with drones and Manning), there isn't going to be anybody to support this kind of action when it makes all transportation more expensive and thus makes everything more expensive. In a country which is physically very large, with an economy driven by domestic spending.
Fossil fuels can last a very long time. America's largest shale oil reserve isn't in North Dakota, it's in California in the Monterey Shale formation, currently unexploited.
Emissions, cost & the environmental impact of tar sand mining are better arguments for electric cars.
Any promoter of renewable energy really has to be aware of this or they will not be able to target their interventions effectively.
Denmark has a plan of getting rid of fossils over the next decades, and we're well on our way. It's not a research plan, it's an investment/building plan.
Furthermore, while some subsidies are currently needed to cover risks and capital expenditures, the studies I've seen predict that we're probably going to end up with an infrastructure that's not more expensive, it may even be cheaper. Like energy from an old nuclear power plant is really cheap today because the capital expenditures have been covered many years ago (discounting insurance and other thorny nuclear issues).
But replace that coal with nuclear...
This is different from the impression I previously had, which was more along these lines:
http://www.economist.com/blogs/graphicdetail/2012/12/daily-c...
Where do you get your impression from?
Most of the reduction in that Economist graph is after Obama takes office, before that the changes are not all that dramatic to really support a comparison to Moore's law (which has itself shown pretty flawed as a way of predicting the computing future).
So I just don't see any substantive, fundamental reason (i.e.: clear prospect) to suppose that solar generation will get so much cheaper that it will reach striking distance of natural gas, of which we have quite a supply. But I'm not saying it's impossible to have another opinion.
> The point isn’t to sell a lot of roadsters, it’s creating a brand.
> The low production volume also gives the company a chance to learn how to run a car factory on a small scale.
So the article claims that the primary reason to start with an expensive sports car is to build a brand, and that technical and practical concerns are less important. This is absolutely 100% wrong. There's absolutely no way Tesla could have started with a mass production car for the general consumer, exactly for the reasons everybody already knows. You have to build a factory. You have to learn from mistakes. You have work out the kinks in the design, and so on. This takes time.
The first Tesla model was mostly hand-assembled because that was the only option. As a consequence of that the car model is very expensive and low volume. And as a consequence of that the car has to be a sports car, because the high price low volume model doesn't make sense otherwise.
Creating a sports car also makes building a brand easier -- but that's just a nice side benefit. Nothing more. So the article gets the causality wrong.
My argument is, condensed, that in order to build a mass produced car you need a brand and a factory that will churn out cheap working cars. Since you can't realistically go from 0 to fully working mass production you need to take it in steps. So you start on a small scale with the roadster, step it up with the model S. and so on. Of course the first models were hand assembled, but that's the first step on the long road to mass production.
Also, I think you severely underestimate brand value. There's noway Joe average would choose a car he's never heard of instead of a brand he knows. If you look at the statistics it's amazing how many people stick to one brand in cars, without even considering the viable alternatives.
Secondly, you say that focusing on the brand like this is part of Tesla's "ingenious strategy". However, as I pointed out in the previous post, all of the strategy you covered follows directly from constraints Tesla had. So Tesla's strategy of building a Roadster first is completely straightforward.
Tesla does have an ingenious strategy, though. For instance they are working on Free Charging Stations, they have unique showrooms and they are willing to license their technology to some of their competitors. I don't think any of those things are straightforward. So there is a lot to say about Tesla's ingenious strategy, but their expensive-cars-first strategy is not the ingenious part.
I didn't read it that way at all.
The writer says it's more important than selling a lot, but it's hardly an exclusive statement. You seem to be reading an awful lot into it.
>And as a consequence of that the car has to be a sports car, because the high price low volume model doesn't make sense otherwise.
There are other high price/low volume segments in vehicles.
>Creating a sports car also makes building a brand easier -- but that's just a nice side benefit. Nothing more.
That seems like quite an understatement. They didn't just need to build Tesla as a brand, they needed to build the concept of fully electric vehicles beyond golf carts and buses.
>So the article gets the causality wrong.
Not really. The article spends 1162 words discussing a number of things, of which branding is just one. You chose to quote just 37 of them and provided your own assumptions to flesh out an argument that doesn't necessarily exist and certainly wasn't the focus of the piece.
http://www.torquenews.com/1075/plug-hybrids-chevy-volt-rapid...
Author: Missing a 0 in..."That’s more than 20.00 cars a year."
Kia - Founded in 1940s.
Also its not clear why US is the only country that is being considered?
<Quote> Tesla’s strategy for overcoming these obstacles is ingenious; Start at the top and work our way down. </Quote>
Thats how its been for many businesses. Cars in general had a similar history. It was only available for rich people initially!
<Quote> If I was General Motors I would be afraid. Very afraid. </Quote>
Statements like this are too generic. What time frame? No quantification? General Motors was about to be bankrupt a few years back. Their business is already being threatened by many things, I dont know if Telsa is their biggest concern!
Look at market signals and the faltering focus on electric, despite massive efforts to sell electric cars by the industry. Nissan, who has taken the biggest stab at electric, is already (publicly) licking its wounds from its $5B gamble.
That's just one example from “Electric cars head toward another dead end”: http://www.reuters.com/article/2013/02/04/us-autos-electric-...
Tesla’s making a brave and extremely innovative foray, I will certainly give them that. But with the lack of electric traction amidst $4+ gas (2x since 2008) and the promise of hydrogen...I’d say the odds are against them. Hybrids will probably be the bridge to something else.
Tesla could end up being Betamax.
At the moment the practical problems with hydrogen are worse than those involving electricity storage. There are many problems with the electric vehicle scheme, but on the plus side, there's already an electric infrastructure that can be used to charge the vehicles. There's no hydrogen infrastructure, it would have to be built.
This may all change in the long term, and hydrogen might end up being a much better solution, but the immediate problems are severe.
With the Roadster, they had essentially outsourced much of the 'car' engineering to Lotus which built the frames and many of the components for Tesla.
Just like computer companies don't manufacture computers anymore, I believe outsourcing the manufacturing of Tesla cars would have taken a large part of the financial risk off the table.
You can see this also in his desire to sell these cars directly instead of working through dealerships that is currently causing some legal battles.
http://green.autoblog.com/2012/02/21/battery-cost-dropping-b...
Which may happen, but AFAIK Tesla isn't involved in that kind of research.
http://en.wikipedia.org/wiki/File:Tesla_colorado_adjusted.jp...
:)
Or, I would be in talks to buy Tesla.
Tesla's huge ambitions are to sell electric cars to the mass market. Becoming a new car manufacturer from the ground up is unbelievably hard. They are using the classic Silicon Valley approach: start with early adopters that just want a cool new toy, then cross the chasm to mainstream customers... http://tldr.io/tldrs/51115df9de23f156580000a8/teslas-ingenio...