Tesla’s Musk (NASDAQ:TSLA) Latest Promises Break “The Laws of Batteries”

Tesla’s Musk (NASDAQ:TSLA) Latest Promises Break “The Laws of Batteries”

Tesla’s Musk (NASDAQ:TSLA) Latest Promises Break “The Laws of Batteries”

$TSLA

Elon Musk knows how to make promises and he know very well how not to deliver, smiling on the way to the bank.

Even by his own standards, the promises made last week are monuments of envelope pushing. To deliver, according to close observers of battery technology, Tesla would have to far exceed what is currently know possible.

His claims are so far beyond current industry standards for EV’s (electric vehicles) that they would require either advances in battery technology or a new understanding of how batteries are put to use.

In some cases, experts think Tesla might be banking on technological improvements between now and the time when new vehicles are actually ready for delivery.

Below at 4 of Tesla’s most provocative battery claims. as follows:

Truck Range: Haul 80,000 Pounds for 500 Miles

Last week when Elon Musk took the stage in an airport hanger in Hawthorne, California, his 1st proclamation was the Tesla Semi’s range: A fully-loaded truck would be able to travel at highway speeds for 500 miles.  The previous record-holder, unveiled by Daimler in October, is a truck that maxes out at 220 miles.

Mr. Musk may be banking on battery improvements between now to the early 2020’s in order for its truck to make financial sense. The 1st Tesla Semis will hit the road until late Y 2019; if then and even then, production would probably start slowly. Most fleet operators will want to test the trucks before considering going all-in. By the time Tesla gets large orders, batteries may cost less. Lot of Big If’s here.

Tesla Megachargers: 400 Miles in 30 Mins

Mr. Musk’s claim that the truck will be able to accumulate 400 miles of charge in 30 mins would allow the Semi to achieve the 1st true long-haul ranges in the industry. A driver might start the day with 500 miles of range, top off the battery at lunch, and be able to complete driving the US legal limit of 11 hours in a day with range to spare.

Doing this will require a charger unlike anything seen before.

Tesla’s current generation of high-speed Superchargers have a power output of 120 kilowatts and can add about 180 miles to the battery in a Model S sedan in 30 mins. But that’s for a passenger car, not a loaded truck.

To meet Tesla’s claim of 400 miles in 30 mins for a semi carrying 80,000 lbs would require its new Megachargers to achieve output of more than 1200 kW—or more than 10X better than Tesla’s fastest chargers available today.

If Tesla executes they have a very big opportunity. Another Very Big If.

Guaranteed Charging Rates of 7 Cents per kWh

The sticker price of any electric truck, regardless of size, is going to be higher than its diesel equivalent because of the batteries, which alone can cost as much as some standard diesel trucks.

The $180,000 Tesla Semi will compete with diesels that cost as little as $100,000. The trick is to offset those higher upfront costs through lower maintenance and fuel savings.

While the economics of such a plan vary by region, under any scenario Tesla will be heavily subsidizing those electricity rates for customers. He estimated that Tesla will pay a minimum of 40 cents per kilowatt hour, on average, for every 7 cents paid by a trucking company.

There’s no way you can reconcile 7 cents a kilowatt hour with anything on the grid that puts a megawatt hour of energy into a battery. That does not exist.

Tesla will likely go broke subsidizing ‘fuel’ to truckers.

That may sound like a disastrous financial plan, but it’s no different from what Tesla does for its current Supercharger network.

Tesla offers free electricity to most of its Model S and Model X customers while paying almost $1 per kilowatt hour to produce it.

That amounts to a subsidy of as much as $1,000 per car in Y 2017.

Many electric utilities base their commercial rates on the peak amount of electricity that a customer draws at one time, even if that peak occurs only for a brief period.

Tesla’s Megacharger stations would incur extremely high charges by drawing so much power so quickly. The best chance for mitigating those charges are to build Megachargers at existing truck terminals that already draw a lot of power, and by adding massive battery packs that can spread demand over time.

From another perspective, these subsidies to support Megachargers could be a boon to Tesla’s balance sheet as it wades into an entirely new industry. It allows the company to maximize its upfront revenue by charging a lot for the trucks while spreading out the cost of building and operating the charging network over time. But of course Musk will need billions more in investment cash and even more in government subsidies that would have to be legislated, and signed into law by President Trump, that is a Really Big If.

A small 2 Roadster With a 620-Mile Range

Tesla claims that its new $200,000 Roadster is the quickest production car ever made, clocking zero to 60 in 1.9 secs. But who really cares, Tesla cannot compete with Ferrari, Lamborghini, Aston Martin or Bugatti in that superfast, supercar market

The car’s unprecedented battery range: some 620 miles on a single charge is longer range than any battery-powered EV on the road, nearly 2X as long as Tesla’s Model S and Model X.

To achieve such power and range, Mr. Musk said the Roadster will need to pack a massive 200-kilowatt-hour battery.

That is 2X the size of any battery Tesla currently has on the road.

Mr. Musk has said he will not be making the packs bigger on the Model S and Model X because of space constraints.

The Big Q: So how can he double the pack size in a very small Roadster?

The Big A: The engineering problems for the battery-management system are virtually insurmountable, as the batteries required would be too large to fit in the small frame, it is not possible now.

And true to his hypmeister style Tesla began taking deposits on the Roadster immediately, $50,000 for the base model, the 1st vehicles will not be delivered until Y 2020 if then or ever.

The Semi Truck and Roadster promo last week raised many questions about Tesla’s battery capabilities and plans for expanding the markets in which electric vehicles are competitive.

There are lots of Really Big Ifs

HeffX-LTN Analysis for TSLA: Overall Short Intermediate Long
Bearish (-0.45) Bearish (-0.47) Bearish (-0.40) Very Bearish (-0.50)

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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