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
Otherwise, I'll take my chances with internal combustion (gasoline) engined vehicles.
These morons sound like the idiots in Ann Arbor who say “Bicycles are the future of transportation”.
But if you can afford it and your qualification is based on your AGI, will you make too much to get the tax credit?
I figure with 500,000 electric vehicles on the road, the gas guzzlers will have to get off road to get around the stalled EVs waiting for a charge.
I figure with 500,000 electric vehicles on the road, the gas guzzlers will have to get off road to get around the stalled EVs waiting for a charge, at least at the choke points.
“Hmmm. Maybe time to rethink that.”
I wouldn’t be too quick concerning flipping your thinker to rethink. I looked at the map of current and future superstations and there is/ will be a huge dearth of these stations out in the middle of the country aka fly over country by libs. The Tesla is and will continue to be a toy of the affluent until it dies - which will be in the next few years. EV’s will not become main stream until to issues are solved; those being cost and range. And, a breakthrough is not on the horizon for either anytime soon.
As with Willie Green’s high speed rail fantasy it always comes down to getting those filthy cars off the roads and if they can’t afford the toy cars they’ll just have to move to the city and take public transportation.
I haven’t forgotten the A123 Systems debacle where taxpayers both nationally and here in Michigan dumped millions into the factory that never produced a single battery and paid people to sit in break rooms for some 2 years.
OK, then. No sale. No problem. Good grief. Do you drive a time-bomb by any chance?
Tesla, to the extent they sell a large number of cars, will be single-handedly responsible for congestion and traffic jams with drivers consistently driving 5-10MPH below the speed limit. For some reason Musk has made that “OK”.
While Tesla drivers won’t be breaking speed limit laws they also will not be breaking any laws of Thermodynamics either.
The lowliest of sub-subcompacts will always outperform the Tesla in every meaningful way that one measures an automobiles performance.
Musk’s genius is in packaging (It looks cool so it must go fast, and indeed “can” as long as you recharge it frequently). In the end these cars will be pricey annoyances to the folks that drive them with any frequency, and also to the long line of cars behind them just trying to get past them and down the road to where they are going.
Tesla, to the extent they sell a large number of cars, will be single-handedly responsible for congestion and traffic jams with drivers consistently driving 5-10MPH below the speed limit. For some reason Musk has made that “OK”.
While Tesla drivers won’t be breaking speed limit laws they also will not be breaking any laws of Thermodynamics either.
The lowliest of sub-subcompacts will always outperform the Tesla in every meaningful way that one measures an automobiles performance.
Musk’s genius is in packaging (It looks cool so it must go fast, and indeed “can” as long as you recharge it frequently). In the end these cars will be pricey annoyances to the folks that drive them with any frequency, and also to the long line of cars behind them just trying to get past them and down the road to where they are going.
Are you trying to tell me that the solar farms in Ca. are not doing well? Why are they continuing to grow? I know of a man that is the brain of a big one being built and he is not doing it because it doesn’t make sense. Does it make more sense to keep on with old tech? Of course not. A combo of both is excellent, keeps prices down for the consumer.
Without fed funding? Nope.
I will once again, in a futile attempt to bring this thread to the original topic under discussion (I'm not responding to any more off-topic posts): The Tesla will not take one "gas-guzzler" car off the road in the foreseeable future. Not one. If you haven't read what I've already been writing on this thread that's on-topic, I'll be glad to explain that. I'm tired of this "Electric cars = wonderful" fanbois talk. It's O/T.
There is a pretty good speed penalty. The way I read the charts, a 30 minute 200 mile supercharger fill up may only get 100 miles or so driving 70 mph into a 20 mph wind.
“There is a pretty good speed penalty. “
Further, I want to see it’s performance at 70mph with 4 x 250 lbs of good old American lardass on a summer day with the AC blasting.
Let’s add a small boat in tow and a cooler full of beer in the trunk.
Yeah, I know........
Another thing I’m curious about is the suspension. With the “high efficiency tires” that means they’ll be hard as rocks so the suspension will have to be able to take ever bump with no help from the tires, otherwise that thing will ride like a Radio Flyer with tubeless tires.
“If they continue to operate anywhere close to this going forward, they will beat their competition hands down “
They can’t. It’s simply physics impossibility. They will never beat their competition in creating a means of transportation that is cheap, convenient, flexible, and accessible. Never. It simply is not possible.
Now, if you put a load of batteries on hard plastic tires and see how far you can go, yeah, you can, under certain conditions get the range that they suggest.
They have less than two gallons of gas worth of energy on board. They cannot possibly compete - head-to-head on a full spectrum of real-world automobile uses with even the cheapest of internal combustion engine powered vehicles.
They can’t. They never will. They’ve created a curiosity, marketed it brilliantly, milked subsidies, gotten priority placement of charging stations and all of this - all of this is impressive, by the way, but in the end, they have a product that will never live up to the performance of a subcompact car.
Never.
“various industry experts” have no idea how to compare the energy budget of a “traditional car” and a Tesla. If they did, they’d give an honest assessment. They are simply convenient ignoramuses - again, kudos to Musk for recognizing this and capitalizing on it. Still, it won’t make a Tesla somehow become a reasonable substitute for an actual car for the overwhelming majority of it’s customers.
Physics and Thermodynamics will not be overcome by PR, subsidies, marketing, and social engineering.
They’ll be putting internal combustion engines on these things before it’s over.
From what I can tell, they use standard OEM tires. The low end S model comes with all season tires while the high performance model has high performance summer tires. The suspension appears to to be computerized, with manual over rides for snow drifts and steep inclines.
If you mean tax breaks...that’s not fed funding
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