Elon Musk: "I am terminating the interview." | Hacker News Reader

Elon Musk: "I am terminating the interview."

online.barrons.com

30 pointsRockyMcNuts29 comments

Tldr;

"As a result, Tesla's balance sheet will sprout a contingent liability for the "residual value" of those cars, and analysts worry that the amount will quickly rise to hundreds of millions of dollars -- on the order of half of the company's book value. The deferred impact of all those used batteries will become clearer in coming years, after Tesla also starts running low on the government-legislated zero-emission-vehicle credits that offset $68 million in expenses in the March 2013 quarter. We had hoped Musk would advise us on these points, but our scheduled interview with him ended abruptly on Friday, when he hung up on us."

His ending of the interview is pretty critical and lays out the proposition that appears will make or break Tesla given the above (I will for this comment ignore the very real problem of loads on grids that weren't designed for this, e.g. blowing transformers by using them at night when they need to cool down):

"I have no interest in an article that debates what we consider to be an obvious point -- which is that there is a dramatic reduction in battery costs," Musk said, after a few questions. "You clearly do not understand the business. My apologies. I am terminating the interview."

I don't follow this field; is it that obvious costs will go down (ADDED:) enough for these high performance (at least as claimed in the article) battery packs?

As they note immediately after, "Elon Musk is not a guy you like to bet against.", and I note he has a bachelor's degree in physics, he is very much not a "suit" divorced from hard reality, e.g. his comments on the Dreamliner battery pack issues sounded like they had a good grounding. And I know more about "rocket science" and SpaceX really impresses.

Note also this is not exactly Moore's Law envy; current size/energy density seems to be OK, he's just talking about cost.

> I will for this comment ignore the very real problem of loads on grids that weren't designed for this, e.g. blowing transformers by using them at night when they need to cool down

I know this isn't part of your central thesis, but this comment really doesn't pass the sniff test. Yes, transformers generate massive amounts of heat, but I've never heard of the need for a cool down period at night. Do you have any additional information?

> I don't follow this field; is it that obvious costs will go down for these high performance (at least as claimed in the article) battery packs?

Well, certainly no one is talking about increasing prices. If you look in to the projected costs of LiIon batteries over time, the majority of the analysis suggests that the prices will continue to go down. The disagreement is over how much. Some say they're going to plummet, but most agree that cost reductions will fall in a moderately-significant range. McKinsey & Co published a decent report that disaggregated LIB pricing in to 40 components, and analyzed each of them for potential future savings. That's a pretty thorough breakdown.

http://www.mckinsey.com/insights/energy_resources_materials/...

I've read the transformer problem is one that California utilities are already addressing, as in as few as one or two charging at night could blow out a neighborhood transformer.

Do a search such as https://www.google.com/search?q=electric+vehicles+california...; that eventually got me to the article I remember reading, appropriately published in IEEE's Spectrum http://spectrum.ieee.org/green-tech/advanced-cars/speed-bump...:

"Speed Bumps Ahead for Electric-Vehicle Charging

"Plugging in cars, even overnight, will strain local grids and could boost pollution

"Turning on two or three Level 2 chargers could burn out the street-level transformers that are the distribution grid's weakest link. Most utilities employ undersized transformers, which are designed to cool overnight. Without time to cool, sustained excess current will eventually cook a transformer's copper windings, causing a short and blacking out the local loads it serves."

Note that the usual suspects have made it impossible to run one of California's two nuclear power plants: https://news.ycombinator.com/item?id=5846188

> I've read the transformer problem is one that California utilities are already addressing, as in as few as one or two charging at night could blow out a neighborhood transformer.

Be very careful who you trust on these issues. A typical level 2 charger is 30 amps by 220 VDC. That's 6600 watts. That's the equivalent of four standard 120 VDC, 15 amp household circuits. If two people using level 2 chargers would blow out a neighborhood transformer, there are significant design flaws with the local infrastructure, and the utility company has set themselves up for failure.

I'm not saying the increase in the number of EVs charging at night won't cause any problems at all, but utilities are heavily regulated. They have to provide reasons for rate increases, and this looks like a honey pot for them. Expect them to shout about it at the top of their lungs.

* Correction, 110 VDC, 15 amp household circuits

More than just having bachelor's degree, Musk dropped out of a PhD program in Applied Physics and Materials Science at Stanford to start his first company.

I'd forgotten about that.

I assume the program was competitive, given Stanford's stature in science and engineering (ADDED: and this is bleeping Silicon Valley, this should be a very hot field for the school); if so, getting into tells us even more.

One thing that stands out on the buy-back scheme is that Telsa might be in a good position to recycle/recondition the battery units for far cheaper than it costs to manufacture them initially.

I'm not all that well-versed on the chemistry of the LiIon tech they use, but other battery chemistries (lead-acid, especially) are reasonably easy to recondition.

Anyone who knows more want to chime in?

Stupid article. Within the first two paragraphs, they make a massive factual error, misstating the entry price of Tesla's car by $40,000. This error is repeated later in the article. Nowhere is it stated that the "Grand Canyon leap that Tesla must make", according to the article, of reducing the price, has already been made.

Don't count on mainstream US business magazines to be accurate about an electric car company.

Thank you. It is only on the second page in the article do they obliquely clarify where the $90,000 figure comes from. The article was filled with snark, such as "ELON MUSK IS NOT A GUY ...." after he hung up on them. Pretty sad.

You mean where it says, "Elon Musk is not a guy you like to bet against" ?

It's a positive article on the company. It says the stock is high priced and there are technical and business challenges if it's going to justify the price.

Musk and the fanboys don't take it very well if anyone falls short of unconditional adulation. To me this is a source of great amusement.

You got me wrong - I am no fanboy. I was merely pointing out that shouting the not-a-guy comment in all-caps before going on to say "...you like to bet against" is sensationalism. Edit: For example, you would probably find the following print slightly less amusing: "ROCKYMCNUTS LOVES MUSK fanboys' attempts to defend him" :).

just a typesetting convention, the way they capitalize the first clause in a section, wouldn't read anything into it at all, even though it can look silly. I'd be unamused if I wrote something and it was called sensational or the meaning was misconstrued due to the way it was typeset.

The point I was making is that the wording and capitalization could have been different to minimize the snark. I also think you were kind of hasty to label me a fanboy just because I expressed an opinion that you happen to disagree with. The world is not black and white - if I see snark in an article, that does not make me a fanboy.

The whole time they're talking about a car that does 200 miles on a charge. The cheaper Model S does not do this.

Personally, I don't think a 200-mile range is necessary. I'd rather have a 100-mile range and be able to recharge in 15 minutes.

"Folks who buy $90,000 cars tend to replace them every few years, and the bid for a four-year-old Model S may prove disappointing if it's going to need an expensive new battery in a few more years."

Seems odd that there are three different models/pricing options in the model s but they only mention the $90k price (85 kWh)....smaller battery (65 kWh) = smaller cost, not sure why this is so difficult to understand.....the Nissan Leaf is a 24 kWh battery and it is under $30k now

Also the battery has an '8 years, unlimited miles' warranty, idk I could say a few years or I could say almost a decade.....poor framing of the basic facts

Despite Barron's scare tactics, there is new tech on the horizon for high energy density/low power density metal air batteries, but somehow that discussion got left out.

Seems like cheap high performance batteries will make or break Tesla. Musk is underwriting the resale value of the model S and planning a move towards the volume market. Both depend on a cheap battery.

I am certainly no expert on batteries, but I'd bet that Musk is correct. Now that we are seeing EVs selling 10k/year it makes sense that economies of scale would start reducing costs. Additionally the smartphone/tablet industries are also driving battery production.

I love what Musk does, but this is another case where he does not get journalism.

"I'm not going to make an argument because I already believe it to be true." That is pretty childish.

Frankly, I believe Tesla will accomplish what they aim for. But hanging up on someone that dare challenge Tesla's assertions? Not defensible.

Likely he's hedging on supercapacitors as well as battery technology both playing a role in Tesla's future.

He's publicly stated that he believes that supercapacitors will eventually replace batteries long-term, and there is already some interesting progress being made, e.g. http://vimeo.com/51873011

A supercapacitor + battery hybrid would be interesting given the difference in charge profile. Similar to the concept behind Apple's Fusion Drive: http://en.wikipedia.org/wiki/Fusion_Drive

supercaps need waaaaay more energy density before they are going displace batteries.....there is a lot of published research into battery/supercapacitor hybrids, the benefit is primarily seen in short transient charge/discharge moments

In a car the use case would be driving with a lot of hills or a ton of start/stop (urban city) driving

Once you get out on the highway where there are long transients discharge moments, you won't see much benefit from the supercapacitors. Depending on the circuit topology it could also be a drain on the overall efficiency of the circuit.

Also, supercapacitors are very expensive....plus you need the high efficiency power converter ($$) between the two to manage the different power sources

Re the "residual value" balance sheet problem:

If anyone is interested in selling their Model S in decent condition at the Tesla buyback price in 3-4 years, plus epsilon, please contact me (I'd prefer P85, black, with the glass moonroof, and 21" tires, and every other option except the stupid child seats, but am flexible.)

The buyback price is pretty clearly below what the car will be worth (at least to Tesla); the worst case for them is that some magic new battery tech happens and the Model S is obsolete, but I'm both pretty sure that won't happen (sadly), and more confident that if it does happen, Tesla could retrofit the new magic battery into the old chassis.

The long-term success of Tesla seems to turn mostly on the improvement pace of batteries, so hanging up because of a debate on that subject seems a bit unfair.

A 10k-12k$ battery with current ranges would be a miracle.

If you consider what Musk's time is worth between his roles at SolarCity, SpaceX, and Tesla, it seems that he is just prioritizing his time by ending an interview like that.

Batteries improve at about 8% per year. Otherwise cell phones would still be the size of bricks and very expensive, like they were in the 80s.

http://seriouslackofdirection.blogspot.com/2013/06/barrons-r...

Headline tampering--this is from deep within the article, and is not the headline published.

Where is that quote from?! Someone switch the links? Can't find it in the article

2nd page

"The more affordable Gen III, available in three years, will have a less expensive battery, but at the cost of a shorter per-charge range."

[citation needed]

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