To be followed by OBAMA-Mobile for the peasants
(Yes...for those in Rio Linda .....it works on poop)
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
Exactly.
Instead, we will have to build natural gas generators to charge up the electric cars!
Wouldn't it make more economic sense for Tesla to build natural gas fueled cars and put the natural gas DIRECTLY into the car instead?
Or, in someone’s dream world, solar panels and windmills will provide the electricity we need.
Sure - too bad we can't generate or store “Green” electricity at any price even close to break even.
Too bad we will need to build just as many natural gas generators as before to handle peak demand, and cloudy days, and night time, and windless days.
What complete insanity.
One third of Americans have a college education or higher, and THIS is what passes for serious thinking?
And what if pigs had wings? Then what?
To be followed by OBAMA-Mobile for the peasants
(Yes...for those in Rio Linda .....it works on poop)
What government handout? Do you mean that load that was paid back 9 years before it was due? Do you know every other car company got this loan and has not repaid any as of today? The $7,500 is a tax break to the consumer, not to Tesla Motors. It is $7,500 lower tax someone driving a Tesla pays. Are you against lower taxes?
Batteries degrade over time, too. Not suddenly. So, that means that the car, like your electric shaver, will start to run out of “juice” up to the 10 years. Distance will drop off.
Also, you would not drive this type of car across the country or to grandmas house a couple of hours away.
It is only capable of getting you from charging station to charging station which may only be to and from work.
SO... YOU STILL NEED A GASOLINE POWERED CAR FOR THE HARD WORK AND ONLY MODERATELY LONGER TRIPS!!!
“Tesla didn’t generate a profit by selling sexy cars, but rather by selling sleazy emissions “credits,” mandated by the state of California’s electric vehicle requirements.
” The competition, like Honda, doesn’t have a mass market plug-in to meet the mandate and therefore must buy the credits from Tesla, the only company that does. The bill for last quarter was $68 million.
“Absent this shakedown of potential car buyers, Tesla would have lost $57 million, or $11,400 per car.
“As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to buyers of their products.”
Great insight.
I'd like to see that sentence on several thousand roadside billboards during the 2014 election.
Great insight.
I'd like to see that sentence on several thousand roadside billboards during the 2014 election.
Find a recent grad with a masters degree and ask him simple technical, political, economic and scientific questions. You will quickly see that the 2013 masters is like a 1950 4th grade student.
I have. Unless the masters in question is in a hard science field, you are talking to an indoctrinated idiot in all likelihood.
Find a recent grad with a masters degree and ask him simple technical, political, economic and scientific questions. You will quickly see that the 2013 masters is like a 1950 4th grade student.
I have. Unless the masters in question is in a hard science field, you are talking to an indoctrinated idiot in all likelihood.
Traffic comes to a halt again as snow plow's are unable to get roads cleared due to the high number of abandoned electric cars on the highways.....
.....it is reported that the continuous brown outs prevent electric vehicle charging to full capacity.....
....in other news the torching of electric cars has been traced to an under ground resistance movement called the Wolverines
.....analysis of shell casings found at a recent Obamacare office invasion is believed to be manufactured on an illicit 3D printing device.
This will be happening regardless.
People are buying these cars and Tesla has produced one a lot of folks would like to own. Tax incentives will probably disappear in the next couple years, by then the cost on the cars will come down, and more manufacturers get on board, like BMW is now.
A real Horatio Alger story there at Tesla. 250 million in government money and they turn out a 70,000 dollar Solyndra on wheels. If it was actually a smart investment, California billionaires should have wanted to get in on the ground floor and finance it without the government,,,, wouldn’t they?
Actual investors know the score here.
True. By the end of this year, when they scale their production and optimize their supply chain, expected gross margins are 25%, that is ~$25,000 per car sold. They are using the emissions credits to bridge them over to more profitable days, which definitely is a good business decision.
They started in 3Q to sell in international markets. That should double or triple the current demand. In the next three years, they are planning to produce a $35,000 car to sell in larger volume. An all American car build without any union labor that is years ahead of it's competition (both domestic and foreign) - a true American success story in the making.
The article is out to lunch. The only way Tesla could be competitive is if they produce a car for around $20,000, roughly the price of a new Honda Civic. Also, the gas companies will respond to decreased demand by raising prices to maintain the current level of profit.
It doesn’t make sense to me, this argument that Teslas and Volts are/should be “replacing” low fuel-efficiency vehicles (”gas-guzzlers). Volts and Teslas are high-priced, way too high for the lower-income folks driving the “guzzlers.” They cost >$50K, while older, used cars are <$10K. In marketing terms, the two types of cars aren’t even in the same sales demographic.
People buy the car they can afford. People who can afford a Tesla are also looking at high-end Lexus, Mercedes and Infinity products (which get very good mileage), not Ford Crown Victorias from the 90’s. Meanwhile, the people who are buying the Crown Vics can’t even hope to buy either electric car. And they have to fight with the DMV every year because it’s difficult getting older cars to pass emissions.
The last time the government tried to bridge the gap and “take guzzlers off the road” was the Cash for Clunkers program, which had a lot of unintended consequences that made things worse.
It takes a lot of $$$ to keep freebilly free. Just ask my bailbondsman....
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