Posted on 08/18/2013 10:38:44 AM PDT by ckilmer
Last quarter, Tesla (NASDAQ: TSLA ) delivered 5,150 cars, which was well above its expectations of 4,500 deliveries. The company did so by boosting its production rate by 25% to 500 per week. If everything goes according to plan, the company's deliveries for its award-winning Model S could reach an annualized rate of 40,000 by the end next year, which is nearly double this year's expected rate. That's simply stunning growth. However, it's only the tip of the iceberg for where this company plans to be in the future.
The company has a very long road ahead of it to reach its goal to produce 500,000 vehicles annually, which is the rate CEO Elon Musk believes it can eventually reach. To get there, the company needs to capture lightning in a bottle again and produce a car that can be a mass-market success. That will happen only if consumers can drive a car off the lot in the $35,000 range -- something Tesla believes will be possible in as little as four years. While that's a bold dream, if Tesla has taught us anything, it's that it's OK to dream. So let's dream together of a world were Tesla can sell half a million cars each year.
No more pain at the pump? Americans as a whole are driving less, but we still drive a lot. Last year alone, the average American drove 9,363 miles, which is 7.5% down from the peak in 2004. While there's no telling how much we'll be driving by the time Tesla takes 500,000 gas-guzzlers off the road, we could conservatively assume that each one of those cars would have driven 10,000 miles per year. Even with using 2025 CAFE standards of 54.5 MPG as the average gas mileage of the cars being taken off the road, that's 183.5 gallons of gas being saved per car.
Overall, that's a savings of nearly 92 million gallons of gas each year. For perspective, that's just about a quarter of the 367.08 million gallons of gas Americans use per day. Thought of another way, if gas was $4 per gallon, it would save Tesla owners a collective $367 million, or about $733.94 per year. Swapping in a more gas-guzzling car would certainly boost the savings, so just think of these numbers as ballpark figures.
In fact, let's just say that Tesla was able to replace 500,000 true gas-guzzlers and knock off one day's worth of America's annual fuel consumption, or roughly shave the demand for a million gallons of fuel per day. Let's take a look at those numbers. anImage
*Based on an average of 10,000 miles driven and $4 gasoline
How much of a pinch would that be for refiners such as Phillips 66 (NYSE: PSX ) or Valero (NYSE: VLO ) ? In 2012, Phillips 66's refining and marketing segment produced $4.5 billion in earnings on $173.3 billion in revenue. Similarly, Valero's total revenue last year was $139.3 billion and its operating income was $4 billion. Clearly, the $1.47 billion in gasoline that Tesla could save each year won't put either out of business.
Oh, by the way Further, while taking a million gallons of gasoline per day out of the equation would still have some impact, odds are it would find somewhere else to disappear. In fact, just last quarter, Phillips 66 highlighted that it had increased its refined product exports to 181,000 barrels per day, or more than 760,000 gallons. By the end of this year it should have the capacity to export 370,000 barrels of refined product per day, or more than 1.5 million gallons. That additional capacity means Phillips 66 alone could easily export the amount of gasoline per day that 500,000 Teslas would save.
In fact, the U.S. has now become a net exporter of refined petroleum products because of lower U.S. demand and our competitive advantage in the marketplace. This situation is putting U.S. refiners with a strong Gulf Coast presence like Valero in a key competitive position to take advantage of future demand outside the United States. Tesla might actually be doing these companies a favor, as refined petroleum product exports are more valuable than those sold in the domestic marketplace.
Final Foolish thoughts Tesla's bold goal to sell 500,000 cars per year is a great dream, but it won't put gasoline refiners out of business anytime soon. Instead, these companies will simply have more gasoline available for the export market, which is a real positive for our economy. That's not to say half a million Teslas won't affect the energy markets, so tune in next week for a look at how that many Teslas could affect the electricity marketplace.
The only problem as far as investors are concerned is that Tesla is currently priced almost as richly as its Model S. That means investors looking to profit from the revolution in the energy markets need to look elsewhere
Again ask a first responder what their thoughts on Model S is.
Their next model will tow.
- Of course, there’s one on every corner right next to those archaic fosil fuel service stations!
Currently, there is one in every home. It does not materialize overnight, and they are rolling out the supercharger stations.
Assuming the 300 mile claim is accurate, how long will it maintain that? Rechargeable batteries are notorius for decreasing capacity. My liquid gas tank does not shrink.
400,000 miles test has been done with non-significant reduction, more than a life of a regular car.
Well it’s an electric car so their first response will likely be, “Shit, let’s make sure nobody gets electrocuted getting this guy’s body out!”
You’re seriously on FR touting federal crash test rating? Government inspired standards? These are the same bureaucracies that brought us global warming science is settled, a fetus isn’t a baby, and stimulus funded shrimp on treadmills. You really think I’m going to put a lot of faith in Big Gov’s standards (on a car that they used my money to back) versus what everyday Americans see and know? No thank you.
Is this guy on someone’s payroll?
Is this guy on someone’s payroll?
My eight-ball says “Probably.”
I have learnt a lot from FR and I think this is an opportunity for me to give back. Yes, someone is paying me big money to convince five Freepers about an EV that they will never be in the market for. Way to go Sherlock Holmes.
Yeah, everything reads like advertisers copy. Then again it could be a serious case of kool-aid overdose.
Well it’s an electric car so their first response will likely be, “Shit, let’s make sure nobody gets electrocuted getting this guy’s body out!”
In most of these glorified slot cars the batteries are in the back. In some they’re in the front. Either the passenger will get a massive amount of dense electrically charged mass slamming into them from behind or they’ll have a massive amount of electrically charged mass breach the firewall (if there is a “firewall”) and slam into them from the front.
Either way, the remaining charge will seek the nearest conductor, possibly through their tender broken little body. Meanwhile, the batteries are likely leaking all kinds of funky toxic substances.
Don’t worry. If the tricked out golf cart trend keeps up I forsee a lot of hospitals setting up semi-hardened outdoor hazmat sites so they don’t endanger others when they transport the odd survivor to the emergency room.
Wanna sell me? Offer the car with unlimited lifetime battery (and peripherals) warranty, I’ll probably nibble at the bait. Really. I’m in the market in a year or so.
You should then have a conversation with the company and schedule a test drive, I cannot help you with either.
“What If Tesla Took 500,000 Gas-Guzzlers Off the Road?”
There would be a dramatic increase in fights and other violence at public charging stations as Teslas line up to charge and realize they have a 24-hour wait before they can plug in and charge up for the rest of their trip.
Tesla plans to greatly expand the number of SuperCharger stations over the course of the next several years. If you go to the Tesla website you can see an map of the country which shows exactly where they will be building these charging stations.
A few years ago I was a Tesla skeptic as well. Then I did further research on the company and I went from being bearish on the company to being quite bullish. The company has a very detailed and intelligent plan to succeed and I hope they do.
The Tesla plant in Fremont, CA employs 3,000 people. I think it would be great if they ultimately build 5 or 10 more plants just like that.
Tesla plans to greatly expand the number of SuperCharger stations over the course of the next several years. If you go to the Tesla website you can see an map of the country which shows exactly where they will be building these charging stations.
A few years ago I was a Tesla skeptic as well. Then I did further research on the company and I went from being bearish on the company to being quite bullish. The company has a very detailed and intelligent plan to succeed and I hope they do.
The Tesla plant in Fremont, CA employs 3,000 people. I think it would be great if they ultimately build 5 or 10 more plants just like that.
Tesla plans to greatly expand the number of SuperCharger stations over the course of the next several years. If you go to the Tesla website you can see an map of the country which shows exactly where they will be building these charging stations.
A few years ago I was a Tesla skeptic as well. Then I did further research on the company and I went from being bearish on the company to being quite bullish. The company has a very detailed and intelligent plan to succeed and I hope they do.
The Tesla plant in Fremont, CA employs 3,000 people. I think it would be great if they ultimately build 5 or 10 more plants just like that.
Ooopps, Sorry to all about the duped post. FR is very buggy tonight.
I live about 100 miles feom the Nevada plant and what’s left of Barstow’s. “Well’ isn’t a word I’d use. Money pit maintainance hog would be closer.
And were you aware the land for Nevadas and much surrounding it was closed because if the endangered desert tortise? But somehow the acres of construction disturbed it not at all once it was decided to put a solar plant on it.
The tech ain’t there. Putting a solar panel facility in an area prone to massive dust storms has problems when you gotta clean them non stop.
And Barstow? Read the history of that one. There’s a reason it remained ‘experiential’.
And then there are the thousands of wind towers spinning idly...well the ones not seized or burning...
LMAO! That’s one of the funniest posts I’ve read in a while. Thanks. I needed a good laugh.
How many other have lifetime warranties on all their parts including battery and peripherals? Heck, lifetime warranty on any single part? Good grief...
Good post. I’d be willing to bet that people slamming the company here haven’t done hardly any research. It is pretty fascinating to me how a “conservative” website is just slamming a truly innovative American company simply because it is “electric” and that’s associated with “green” and therefore “Democrats.”
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.