The Tesla Put

[thriftyandboringinohio]

Re: The Tesla Put - Fukuta - Engine specs for Tesla - Taiwanese made

Here are the specs for what looks like Tesla's AC Induction electric motor which is built by Fukuta (a supplier valued at $50 Million).

Elon Musk has selected suppliers like he is building and selling a Smartphone. Doesn't the genius Musk understand the reliability factor for Autos is the major determinate in selecting suppliers.

Search for Tesla and you'll find Fukuta brags about their TSLA relationship.

http://www.nwtlimited.com/images/dow...rs_Catalog.pdf



Perhaps poor vendor selection is why Elon Musk is having problems in Norway?

http://insideevs.com/tesla-replace-d...odel-s-norway/

The motor itself is where Musk has the least worries.
AC induction motors are a very mature technology, with untold millions in service around the planet in heavy industry right now.
So much good engineering has been done on them for so long (over a hundred years) that any standard catalog motor will be pretty reliable.
Industry technical organizations like NEMA and IEEE have researched and specified every aspect of them.
Companies like General Electric, Westinghouse, Siemens, Toshiba, and ABB set the highest quality standards decades ago.


The circuitry that handles the high power between the motor and battery, usually called the controller or the inverter, is where the big technical risk lives.
And the high customer reliability expectations you mention are for everything, top-to-bottom, bumper-to-bumper.
A quick Google showed Tesla annoying its customers with things like poor door handles and battery charging plugs.

[GRG55]

Re: The Tesla Put - Fukuta - Engine specs for Tesla - Taiwanese made

...And the high customer reliability expectations you mention are for everything, top-to-bottom, bumper-to-bumper.
A quick Google showed Tesla annoying its customers with things like poor door handles and battery charging plugs.

And this is the main issue Tesla faces. The company simply does not have the volume or cashflow to perform competitive product development. The novelty of "owning the car of the future" will not be enough to overcome disappointment with reliability and the satisfyingly perfect experience most buyers of high end, expensive vehicles demand. If they cannot get the tactile experience with the door handles correct Tesla will find few repeat buyers.

With only few exceptions (Aston Martin is the only exception I can think of), every low volume specialty automotive brand is an affiliate of a volume manfacturer such as Fiat, VW and BMW.

[thriftyandboringinohio]

Re: The Tesla Put - Fukuta - Engine specs for Tesla - Taiwanese made

And this is the main issue Tesla faces. The company simply does not have the volume or cashflow to perform competitive product development...

Spot-on, GRG55.
The average person would be astonished to learn how much work goes into developing and constantly refining automobiles and mass-produced consumer products for the smallest aspects of "look and feel" and "customer experience".

[Polish_Silver]

reliability of electrics

Saturday night I'm at a cocktail party in a friend's condo on Boylston Street in Boston, the front door less than a block from the Boston Marathon bombing.

.... . .

Complicating the decision he'd recently driven a Tesla S because his wife Trisha had driven one and wanted one.

They live in Weston, an upscale Boston suburb. It's the only town locally where I've spotted multiple Tesla S cars.

Here we observe the Tesla S purchase decision in progress.

Paul tells me that the sales guy talked about how the car rarely needs maintenance because the electric drive train is so simple compared to gasoline cars. I explained that that is not in reality a benefit of electric vehicles¹.

. . . .

1. My 2012 Zero S electric motorcycle is in the shop with a dead battery management system (BMS) board and a defective motor. Until 2013 these were effectively "commercialized prototypes" for early adopters. Today these machines are mature commercial products. The Tesla S in a tweener at best.

The electric motor and drive train has far fewer moving parts than an ICE car. That is a huge edge in reducing maintenance. As you say, the technology is much less mature, so not everything is in Tesla's favor. By this time, there should be empirical measures of maintenance frequency. The Tesla may have zero "scheduled maintenance" , but what about the much more pricey "unscheduled maintenance".

Some maintenance issues, like brakes, may not differ much. But people are not buying Tesla for practical reasons.

[Polish_Silver]

induction motors

EJ,


EV using a single speed transmission is a very primative design and likely to fail because of torque/heat.etc. I'd love for a real mechanical engineer to chime in on my theory.

Zero motorbike competitors are trying multi-speed transmission to give the feel of a real motorcycle and is it possible the over drive gear may take pressure off the drive train (reducing break downs)?

Regards.

I don't think a single speed transmission is the problem. I think the induction motor is efficient over a wide range of angular velocity, eliminating the need for multispeed transmission. If that is correct, we need to ask why Zero has a multispeed transmission. (Is zero using an induction motor?)

[BK]

Re: induction motors

I think Zero Motorcycle uses a single speed and it sounds like competitors are coming out with multi-speed.

Tesla originally had a two speed transmission and was very problematic. The single speed transmission was a last ditch alternative to the dream of two speed or multi-speed.

Norway has had at least 1100 drive units fail out of 5000 total Tesla Model S on the road in Norway. Consider the torque on a electric car motor as it goes up a Mountain, plus passengers, and then add a wintery wind of added stress (all while the car moves along at 55-70 mph).

;-)

[don]

Re: induction motors

The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets. Eventually these bubbles splatter, as they have twice this century. The resulting carnage, needless to say, is not small. Combined financial and real estate asset markdowns totaled about $7 trillion after the dotcom bust and $15 trillion during the 2008-2009 financial crisis.


Yes, the Fed has managed to reflate this cheap money bubble for the third time now, but the certainty that it will splatter once again is not the issue at hand. What gets lost in the serial bubble-making process of modern central banking is that vast real resources—labor,capital and materials—- are misallocated owing to mispricing of stock, bonds and real estate during the bubble inflation phase.


During the bust phase, of course, these excesses are written-down on financial statements and often liquidated entirely on an operational basis. But that’s just the problem. These bust-phase corrections amount to deadweight losses to the economy—-a permanent setback to growth and societal prosperity.


The Wall Street casino is now festooned with giant deadweight losses waiting to happen. But perhaps none is more egregious than Tesla—–a crony capitalist con job that has long been insolvent, and has survived only by dint of prodigious taxpayer subsidies and billions of free money from the Fed’s Wall Street casino.


Not surprisingly, the speculative mania on Wall Street has reached such absurd lengths that Telsa is being heralded and valued as the second coming of Apple and its circus barker CEO, Elon Musk, as the next Henry Ford. Indeed, so raptured were the day traders and gamblers that in the short span of 33 months between early 2012 and September 2014 they ramped up Tesla’s market cap from $2.5 billion to a peak of $35 billion.


That’s a 14X gain in virtually no time—-and its not due to the invention of a revolutionary new product like the I-Pad. Instead, we’re talking about 3,000 pounds of sheet metal, plastic, rubber and glass equipped with an electric battery power pack that has been around for decades, and which is not remotely economic without deep government subsidies.


Beyond that, the various Tesla models currently in the market carry price tags of $75k to more than $100k. So they are essentially vanity toys for the wealthy—–a form of conspicuous consumption for the “all things green” crowd.








During the LTM period coinciding with Telsa’s $35 billion peak market cap, its financials certainly didn’t warrant all the excitement in the casino. Net sales amounted to $2.9 billion, meaning that speculators were putting a silicon valley style multiple of 12X sales on a 100-year old industrial product; and one sold by a fly-by-night company distinguished from its auto company peers, which trade at 0.5X sales, only by marketing hype and a high cost power plant that could be made by any of two dozen global car companies if there was actually a mass market demand for it.



Needless to say, Tesla’s meager LTM sales were not accompanied by any sign of profits or positive cash flow. Net income clocked in at negative $200 million, and operating cash flow of $150 million was dwarfed by CapEx of $700 million.


Unless you are imbibing in the hallucination-inducing Cool Aid dispensed by Goldman Sachs, which took this red-ink machine public in 2009 and has milked it via underwritings, advisories and early stage investments for billions, Tesla’s valuation was patently absurd. Yet the gamblers piled on based on the utterly improbable assumption that oil would remain at $115 per barrel for ever; that a mass market for electric battery autos would soon develop; and that none of the powerhouse marketing and engineering companies like BMW, Toyota or even Ford would contest Tesla for market share at standard industry profit margins.

The truth is, there is massive excess capacity in the global auto industry owing to government subsidies and bailouts and to union protectionism that keep uncompetitive capacity alive; and that is now especially the case due to the wildly soaring growth of unused production capacity in China. This means that the global economy is literally saturated with expert resources for auto engineering, design, assembly, machining and component supply.

Consequently, if a mass market were to develop for battery powered vehicles these incumbent industry resources would literally swarm into Tesla’s backyard. So doing, they would eventually drive margins to normal levels, sending Elon Musk’s razzmatazz up in the same cloud of smoke that has afflicted many of his vehicles.

These is no reason to think that any long-term mass market player in the auto industry could beat Toyota’s sustained performance metrics. In the most recent period, its net profits amounted to 7.5% of sales and it traded at 11X LTM net income. So even if you take as granted the far-fetched notion that in a world of $2-3 per gallon gasoline——-which is likely here for a sustained duration—-that a mass market will develop for electric battery vehicles, Telsa would still need upwards of $50 billion of sales at Toyota profit rates and valuation multiples to justify last September’s peak market cap.

So let’s see. Tesla’ LTM sales totaled $3.2 billion, meaning that you would need to bet on a 16X gain in sales over the next few years and that today’s rag tag start-up manufacturing operation could achieve levels of efficiency, quality and reliability that it has taken Toyota 60 years to perfect. Yet take one hard look at Tesla’s historical financials and it is blindingly evident that there is no reason for such an assumption whatsoever.

In fact, Tesla is not a Toyota in the making; it is a Wall Street scam in plain sight. It has been a public filer for seven years now, and here are the horrific figures from its financial statements.

Since 2007 it has booked cumulative sales of just $6.1 billion, and that ain’t much in autoland; it amounts to about one week of sales by Toyota and two weeks by Ford. Its cumulative bottom line has been a net loss of $1.4 billion, and the losses are not shrinking—-having totaled nearly $300 million for 2014 alone.

More significantly, during its entire seven years as a public filer, Tesla has failed to generate any net operating cash flow (OCF) at all, and has, in fact, posted red ink of $500 million on the OCF line. During the same 7-year span ending in 2014, its CapEx amounted to a cumulative $ 1.8 billion.

So go figure. Combining OCF and CapEx you get a balance sheet hemorrhage of nearly $2.4 billion. Why wasn’t Telsa bankrupt long ago?
The answer is that it was and should be now. Tesla would not have even made it to its Goldman-led IPO without a $500 million bailout by Uncle Sam. That the hard-pressed taxpayers of America were called upon to underwrite a vanity toy for the wealthy—–and one peddled by a serial milker of the public till—is surely a measure of how deeply crony capitalist corruption has penetrated into the business system of America.

But even these egregious windfalls do not begin to compare with the gifts showered on Elon Musk by the money printers in the Eccles building. Tesla has stayed alive only because it has been able to raise billions of convertible debt in the Wall Street casino at yields which are the next best thing to free. In short, it has been burning cash for years and replenishing itself periodically in capital markets which are rife with momo speculators.

During the spring of 2014, for instance, it raised $2.3 billion of 5- and 7-year money at interest rates ranging between 25bps and 125bps. On an after tax basis, that’s virtually free money for the Telsa bonfire of the vanities.

True enough, these miniscule interest rates were attached to convertible bonds—-so supposedly the “upside” justified giving a proven red ink machine free money. Yes, and the strike price on those converts implied a market cap of about $50 billion!

In truth, Tesla’s true losses are even greater than its accounting statement suggests. For instance, it has booked upwards of $500 million of revenue and profits owing to ZEV credits. The latter were invented by Al Gore after he finished inventing the internet, and amounted to nothing more than bottled air—-clean or not.

Also, Tesla affluent customers pocket about $10,000 per vehicle of Federal and state tax credits, meaning that taxpayers have fronted another $500 million or so to stimulate Tesla sales.

Finally, Tesla’s marketing machine has even converted itself into a repo man for the wealthy. That is, Tesla guarantees a large share of its customers that it will buy back their vehicles at no loss after three years.

So how does it possibly make a profit deploying this blatant free rent-a-car gimmick? Ask its accountants. In their wisdom and clairvoyance, the have undoubtedly assumed that the residual value of these vehicles will be levitated by the same juice which fuels Tesla’s stock price.

Yes, Tesla is a bonfire of the vanities. In due course, the bubble will collapse and billions will have been wasted—-much of it with taxpayer money—on things like its imaginary gigafactory in Nevada. But that’s what happens when central bankers destroy honest price discovery and turn capital markets into a gambling casino.

Oh, yes, and the whole “green” story is a crock, too.

(see below)
David Stockman

[don]

Re: induction motors

This is a company that bleeds money like a machine-gunned hemophiliac, yet doesn’t die because fresh transfusions are always available. Just last week it was announced the company lost another $100 million and change while delivering fewer than 10,000 cars. Tesla has yet to earn – properly speaking – a single honest dollar. The money it takes in (a very different thing) is obtained chiefly via carbon tax credits ($130 million from the state of California alone; that is to say, from the pockets of the taxpayers of the state of California) and everyone knows all about the $7,500 per car subsidy Uncle dangles in front of prospects to lure them into buying one of these flashy, yet functionally useless, electric Edsels. There are in addition state-level subsidies (in 23 states) ranging from $1,000 to $5,000 per “sale.”



Do you know what a “carbon tax credit” is? It’s a tax, first of all – only one paid to an entity (I won’t call it a company, as companies are businesses and Tesla is neither) like Tesla rather than to the government. Here’s how it works. I own a business that makes things people are actually willing to buy without being coerced or subsidized. But, alas, my manufacture of this product results in “greenhouse gasses” – carbon dioxide having been decreed the primary one (even though it far less of one than several other gasses, such as methane and also water vapor; but we’ll leave that aside for now).



Well, I want to make the thing and you want to buy the thing, but in order for me to be allowed to make it, I must send money to an entity like Tesla as a kind of (no, an actual) kickback. Because Tesla is “green” while I am not – except of course as regards the color of the money that’s been transferred to Elon Musk’s ever-growing bank account – which is very green indeed.

The argument is that each Tesla built with these kickback dollars amounts to “x” quantity of carbon dioxide negated overall. I’m allowed to build my economically viable product, so long as I “help” Tesla manufacture his not-economically viable products.
But they are “green,” right?



Certainly. In the same way that an outhouse is clean… before you use it. Only with Tesla, it’s the reverse. The finished car may not produce any noxious emissions, but it took a lot of noxious emissions to build the thing. Do American haters of internal combustion ever stop to wonder why Tesla is building its “Gigafactory” in… China?

Where there is no EPA?

Do you know what goes into making a Tesla’s lithium-ion electric battery pack? Caustic, highly reactive solvents and cobalt oxide, a nasty compound that is uber poisonous and carcinogenic. Carbon dioxide and water vapor have been accused of triggering “global warming” (oops, “climate change” now) but breathing either will not give you cancer or neurological problems.

Cobalt, on the other hand… .



And how do you get cobalt? By mining other materials such as nickel and copper. Then, using various noxious processes to separate out the cobalt, such as “froth flotation,” “roasting” and “leaching” with sulfuric acid.

Mmmm mmmmm good!

This form of Gaia-rape is ok, though, because it does not occur within sight of Al Gore’s house. Most of the cobalt needed to make Tesla and other electric batteries is located in places like China, Afghanistan and Africa. Those parts of the earth are ok to fist and finger.

Battery production (like sausage making) is an aspect of EVs that is routinely overlooked – deliberately. Because the picture isn’t pretty. In addition to the environmental nastiness of the materials, it takes a great deal of un-green energy to transform those materials into the finished product (a battery). Nearly twice the energy that goes into making a conventional (internal combustion engined) car, as it turns out



Where does this energy come from? Like mountain oysters, you really don’t want to know. But maybe you should. Coal and oil. Which are used to run the heavy industry plants that make the damned things. And which also make most of the electricity that powers the damned things. Did you know that electric cars that depend on coal and electric utilities are actually 17-26 percent worse, in terms of their total “carbon footprint, than a gas or diesel-engined car? (Those interested in more will find this study worth a look.)
Captain Planet, phone your office.

Meanwhile, Elon Musk continues to suckle the teat of Uncle. Which he must, because his operation is fundamentally a con. Without the force of government backing him, he’d have to bankroll this epic failure himself – which a smart guy like Musk would be unlikely to do. If we had a free market, he’d have no choice but to do that… or shut down.





Instead, he does the corporatistthing.

Which would less obnoxious if he didn’t constantly preen about the virtues of lightening the wallets of millions of average people so as to further fatten the wallets of millionaires and billionaires, who are the only people buying Teslas and profiting from their existence.

Throw ‘em in the Woods.

By Eric Peters

[lakedaemonian]

Re: induction motors

Interesting(and rather blunt) article Don. Cheers for sharing.

[verdo]

Re: The Tesla Put

yes don, thanks for that. My last thread was about how poorly Tesla has been doing lately, so its possible that investors may be finally starting to catch on to the con.

[vt]

Re: The Tesla Put

The Tesla Bulls are getting desperate:

http://calacanis.com/2015/02/14/appl...-in-18-months/

[BK]

Re: The Tesla Put

I think EJ said don't try to talk dreamers out of their dream.

I just say a classic TESLA Roadster - a beautiful car. But, the Roadster was so small and light and didn't have room from 4 passengers + luggage.

What works as a novelty car for the rich interested in electric sports car doesn't meet the needs for the general public.

You cannot convince a Tesla company fan out of their beliefs because their belief system is built on PR (no logic or science is necessary).

[don]

Re: The Tesla Put

What sucks the hardest?

The public subsidy of this product.

[lektrode]

Re: The Tesla Put

What sucks the hardest?

The public subsidy of this product.

#2 on the suckfest that has been this admin's 'energy policy' ?

the ASSumption that subsidising the wealthy to purchase expensive toy cars - since thats all teslas are - will result in wider adoption of them by 'the masses'

when they havent addressed how to produce the MASSIVE qty of KWHs needed to replace gasahole - itself a degradation in efficiency of the ICE (another subsidy to the wealthy in the agribiz sector which should be eliminated NOW, since it sure as hell isnt the 'family farmer' who reaps the gains on this one and serves only to jack up table food prices)

or the fact that zero emissions from a tesla just means that much MORE coal/gas gets burnt = even MORE carbon emissions than simply burning gasoline in the first place (inefficiencies of combustion to mechanical energy to line losses over the vast distances from where the KWHs get produced to where the teslas get plugged in; read: CA )

unless of course the teslas are charged by PV on the rooftops of the owners (HAHAHAHAHA!!! shur...)

[Fiat Currency]

Re: The Tesla Put

... a lot of great comments on here

Imagine how this all looks to a foreigner - say a Canadian like myself.

So you (America) won't play nice (your prerogative) with your largest trading trading partner (Canada) and connect the Keystone pipeline, despite the 1,000s of miles of existing pipelines and increasing train derailments, due to eco/greenie/pipelines-bad/climate-change/carbon-taxes/blah-blah-blah because our oil is "dirty" (at least that's one of your key excuses) despite oily ground being difficult to grow crops upon, and that the pipeline won't actually benefit Americans economically, but giving billion$ to Tesla/Musk is good for American taxpayers ... meanwhile your politicians want to raise the price of gasoline, and tax it higher, and shiny! wants to trade her paid-for-great-on-gas car for a guzzling-safer-tank-with-a-sofa-inside that could probably be retrofitted to run on moonshine, in case there's a snow-storm in Arizona I guess.

And yes lektrode - eventually we'll end up on diesel-hybrids with solar-battery charging panels in both the roof & hood panels.

Living next to you guys is hard to figure out some days.

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