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Tesla Motors – I Love You, But What the Hell?

I do like the Model S.  I think Tesla is doing terrific things to the car industry, direct to consumer, aggressive EV range, great looking car.  My friends who have one love it.  The company is proving it has legs.  But, as to the recent market run-up, not to be catty, but are you SERIOUS?

Tesla $20 Bil market capitalization

Nissan $42 Bil market capitalization

GM $46 Bil market capitalization

2013 Electric Vehicle total unit sales
GM Volt 9,855
Nissan Leaf 9,839
Tesla Model S 10,650

June Sales
Volt 2,698
Leaf 2,225
Model S 1,800

GM non EV revenues $150+ Billion
Nissan non EV revenues $120+ Billion
Tesla non EV revenues $0

There is something very, very wrong here.  Unfortunately this looks like the best short since 2001.  It is outselling the Leaf and Volt in some months, but just barely.  Let alone the $100 Billion plus in other revenues for GM and and Nissan.  How does that warrant Tesla trading at almost half their market cap?  I could buy Nissan, sell everything but the Leaf, and have a car business the same size as Tesla and $40 Billion + in the bank.

What’s Beyond Zero Emissions Vehicles?

by Paul Hirsch

The automotive industry has invested billions in alternative fuel technology since that first Prius rolled off its assembly line. And these days a growing portion of that investment has been focused on zero emission technologies, such as battery electric vehicles (EVs) and hydrogen fuel cells.

Yet as a professional tasked with commercializing the next generation of alternative fuel vehicles, I can’t help but feel like zero just isn’t good enough. Pushing emissions off board and upstream to a dirty power plant may solve the automaker’s problems, but it doesn’t solve the Earth’s.

Which is why I was truly excited when, last week at the Los Angeles Auto Show, Honda introduced their “total energy management system.” The system consists of an EV, like the electric Fit they debuted at the show, as well as a Honda-developed solar charging station. An experimental solar hydrogen station is already being used to power the company’s FCX Clarity fuel cell vehicle. Honda is not only thinking about how many EVs they can put on the streets, but how to guarantee their customers a clean energy commute day after day.

This is not the first attempt by an automaker to offer its customers a clean energy solution. Tesla Motors has promoted a Solar City charging station for its electric Roadster, demonstrating Elon Musk’s strategic interest in providing the clean electrons to power his clean car (Musk is CEO of Tesla and led the initial funding of Solar City). The Tesla-Solar City project and Honda’s recent announcement highlight a new opportunity for the auto industry – end-to-end sustainable personal mobility.

Where the industry goes from here is anyone’s guess, but the possibilities are promising. Toyota already operates a housing development subsidiary in Japan that offers homes equipped with solar panels and rainwater recycling systems. Imagine the experience if this business were integrated with Toyota’s automotive operations: when you buy into an “ecommunity” of carbon-neutral dwellings, selecting the battery range of your plug-in vehicle could become as routine as picking out your home’s paint color or bathroom tile. Or better yet, you could select to participate in a community car share program to accommodate a less frequent need for your own car.

This vertical integration of energy generation stations with the vehicles that demand their energy would go a long way toward aligning auto industry objectives with the needs of the planet. If automakers were also fueling their vehicles, they would have a strong incentive to make cars as efficient as possible. And that vertical integration would bring us much closer to a future of sustainable personal mobility.

Paul Hirsch is a Senior Product Planner at Toyota.

How P2P car sharing could impact Zipcar IPO

Its CEO received an accolade last week. Yet, with 7,000 vehicles and more than 400,000 members, car sharing service Zipcar has struggled to reach profitability.

A slump in average revenue per member over the last year and mounting fleet costs spelled a net loss for Zipcar of $4.67 million in 2009. And according to recent company filings, it’s now losing $4M-$5M a quarter with no guarantee of achieving profitability in 2010 or even 2011 … a familiar story from another large recent clean transportation IPO: Tesla.

Now, a handful of so-called peer-to-peer (P2P) car-sharing startups think they have a solution that could let them become profitable faster, while bringing car sharing to more markets and more potential users. Are they friend or foe to car sharing companies like Zipcar?

P2P models
While “traditional” car-sharing companies such as Zipcar acquire a fleet of vehicles that they then distribute, maintain, fuel, insure, and rent to drivers, P2P car-share companies like Whipcar (UK), RelayRides (Boston) and Spride (San Francisco) skip the ownership step. Instead, they aim to manage the relationship between car owners and drivers, much in the way that vacation rental services like VRBO connect vacationers with home and apartment owners.

The model isn’t just about cutting operating costs, though. P2P car sharing aims to capture two segments of the market left out of traditional car sharing:

  • Commuters who use a vehicle to get to and from work; whose vehicles sit in an office parking lot all day and in the garage all weekend, and
  • Drivers in less-dense areas who haven’t had access to car-sharing services at all

Little innovation needed
The ecosystem surrounding P2P car sharing is nearly identical to that for fleet-based car sharing, and relatively mature. The software and hardware components are largely in place—system operators need only make tweaks to off-the-shelf products from manufacturers and service providers. From in-car devices that operate vehicle permissions over cell networks to the data pricing plans carriers charge fleet operators to the online reservation systems for users, most of the plumbing exists.

An exception, however, is insurance. While homeowners can purchase insurance products that allow them to maintain coverage on a personal property when it is rented out to a vacationer, car owners can not. Lloyd’s of London currently offers car sharing insurance to WhipCar and RelayRides where they operate, but many states allow insurers to invalidate personal auto insurance if the vehicle is used for commercial purposes (such as a car sharing program).

How P2P companies could benefit Zipcar
The better known fleet-owning car share companies like Zipcar could become formidable allies and exit partners for the smaller P2P startups. As one CEO pointed out to us recently, the market for P2P car sharing has a strong bias toward a single, trusted brand. Cars are costly personal investments; the company that is able to garner users’ trust will be well positioned to capture a sizeable share of the market. Startups like RelayRides and Spride hope to capitalize on this kind of first-mover advantage. On the other hand, Zipcar already has a known brand.

In many ways, P2P sharing is a natural extension of traditional car sharing services, as it could allow them to offer their service in less dense areas than the urban cores and college campuses they currently serve. Unused vehicles are a financial albatross for car-sharing companies, making vehicle utilization rates a limiting factor for expansion; leveraging privately owned vehicles in markets with low utilization rates could be one solution. Similarly, privately-owned commuter vehicles could be used to expand the fleet during business hours in commercial districts, or on the weekends in residential neighborhoods.

P2P could also help speed returns on car sharing companies’ non-vehicle investments. Zipcar’s IPO filing revealed fleet operations costs of $93.36 million in 2009—nearly 70% of its total operating costs. Expanding revenue-generating services without a proportional increase in vehicle costs could be an attractive option. (Similarly, Zipcar recently began offering its reservation software to fleet operators as a way to boost revenue without accruing additional vehicle costs.) While Zipcar hasn’t publicly expressed interest in offering a P2P component to its service, others have. CityCar Share in the San Francisco Bay Area, for example, is partnering with Spride in an effort to bring P2P car-sharing to its members.

WhipCar RelayRides Spride
Location London Boston San Francisco
Car owners Free to join. Vehicles are screened by VIN for make/model/year and accident history. No safety checks are performed, and WhipCar relies heavily on self-reporting by vehicle owners. Free to join. Vehicles must pass and maintain a current safety screening (within two years from approved mechanic). N/A – service does not currently exist.
Drivers Free to join. Drivers must have a clean driving record in order to book a vehicle. $25 annual membership fee. Drivers must have a clean driving record in order to join the service. N/A — service does not currently exist.
Insurance Included. Commercial insurance provided by Lloyd’s covers drivers. Included. Commercial insurance provided by Lloyd’s covers drivers. Last month, California passed AB 1871, allowing commercial insurance coverage of private vehicles without invalidating private insurance coverage. First bill of its kind in the U.S.
Fuel Not included in rental price. Vehicles must have at least ¼ tank at pickup, and drivers must return cars with same amount of fuel as at pickup. Included in rental price. Fuel cards are included in all vehicles, and gas charges are deducted from owners monthly earnings. N/A
Rental rates Rates set by owner, based on location, make and model, as well as maintenance costs. Rates set by owner, based on location, make and model, as well as fuel and maintenance costs. N/A
Key exchange In person. Drivers and owners meet at a pre-arranged location to exchange keys for pickup and drop-off. Remote: RelayRides installs a digital controller in each vehicle (like that used by Zipcar and other traditional car sharing providers) that authorizes keycard access to vehicles during specified reservation periods. N/A, but likely to use remote system.
Partners N/A N/A City CarShare
Revenue model 15% commission on rentals, plus  users pay a £2.50 booking fee. 15% commission on rentals, plus drivers pay an annual $25 membership fee, waived during pilot. N/A

Source: Kachan & Co.

For more analysis of the expected impacts of P2P car sharing, or of other developments in the wider clean transportation sector, contact us.

(This article was originally published here. Reposted by permission.)

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Its staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology. Details at www.kachan.com.

Toyota Prius PHV Fights Chevy Volt

By John Addison (from original post in the Clean Fleet Report 7/6/10)

As the world leader in hybrid cars, Toyota is fighting to extend that leadership in both plug-in hybrids and battery electric cars. In plug-in hybrids, GM plans on first mover advantage with the Chevy Volt. In electric cars, the Nissan LEAF has a sizable lead over the . But Toyota has more cars on the road with electric motors, advanced batteries, and electric drive systems than all competitors put together. Toyota does not like second place.

In talking today with Toyota’s Cindy Knight, she assures me that Toyota is on track on all fronts. A number of U.S. fleets are already driving the new 2010 Toyota Prius PHV including the following:

San Diego Gas and Electric
Zipcar Washington DC
Ports of New York and New Jersey
Silicon Valley Leadership Group
Portland State University
Qualcomm
Southern California Air Quality Management District

By year-end, 600 Prius PHV will be on the road including 150 in the United States. A number will be in 18 month lease programs. In one prefecture in Japan, the Prius PHV can be rented by the hour. Ten of the Prius PHV will be part of Xcel Energy’s SmartGridCity program in Boulder, CO. Boulder residents will participate in an interdisciplinary research project coordinated by the University of Colorado at Boulder Renewable and Sustainable Energy Institute (RASEI), a new joint venture between the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the University of Colorado at Boulder.

During the test of 600 plug-in hybrids, Toyota will be receiving extensive wireless data from each vehicle, giving a near realtime profile of electric range, frequency and speed of charge, mileage, use, and reliability of the cars. Aggregated data will be posted on Toyota’s EQS Website

By 2012, Toyota will offer customers with a wide-range of vehicles with fuel efficient drive systems. The Prius will be the best seller, but the 2012 Toyota Prius PHV will be in demand from those who want to be greener with a 14 mile electric range. A compact hybrid will help the more price conscious buyers. The Toyota Camry Hybrid will continue to be offered. Lexus hybrids will continue to deliver at least 35 mpg along with their host of luxury appointments.
Ford will also offer customers a wide-range of fuel efficient and electric cars, starting with a Ford Focus that customers can buy as with ecoboost fuel economy, or as a hybrid, or as a plug-in hybrid, or as a pure battery electric. Ford will expand this range of offerings to other lines in the years past 2012.

Toyota’s Transition to Lithium Batteries

The 2010 Prius PHV has three lithium-ion battery packs, one main and two additional packs (pack one and pack two) with a combined weight of 330 pounds. In contrast, the Prius NiMH battery pack weighs 110 pounds. Each battery pack contains 96 individual 3.6 V cells wired in series with a nominal voltage of 345.6 V DC.

When the PHV is fully charged the two additional battery packs supply power to the electric motor. Pack one and pack two operate in tandem with main battery pack but only one at a time on the individual circuit. When pack one’s battery’s charge is depleted, it will disconnect from the circuit and pack two will engage and supply electrical energy to the drive line. When pack two has depleted it will disconnect from the circuit and the vehicle will operate like a regular hybrid. Pack one and pack two will not reengage in tandem with the main battery pack until the vehicle is plugged in and charged.

The Prius PHV’s larger HV battery assembly requires additional cooling. The vehicle is equipped with three battery-cooling blowers, one for each of the three battery packs. Each battery pack also has an exclusive intake air duct. One cooling blower cools the DC/DC converter.

Like all Toyota hybrids, the lithium-ion batteries are built to last for the life of the vehicle. Toyota is using lithium not NiMH batteries in its Auris hybrid. Mercedes, Nissan, Ford and others have announced hybrid plans using lithium. Will 2012 be the year that Toyota offers a hybrid Prius with lithium batteries? Toyota is not yet ready to say.

Toyota has a number of advanced battery R&D programs with nickel-metal, lithium-ion and “beyond lithium” for a wide variety of applications in conventional hybrids, PHVs, BEVs and FCHVs. Toyota uses Panasonic and Sanyo battery cells. When Panasonic acquired Sanyo, Toyota increased its ownership to over 80 percent in the Panasonic EV Energy Company which makes prismatic module nickel metal hydride and lithium-ion battery packs. Toyota also owns about 2 percent of Tesla, a major Panasonic partner.

an Urban Electric Car

In 2012, city drivers will have fun with the , a pure battery-electric car. Currently Smart car drivers are saving $20 per day squeezing into parking spaces too big for other cars. By 2012 Smart will have competition from the which is over 4.5 feet shorter than the Prius. For the microcompact space, Smart is introducing an electric version, as is Mitsubishi with the iMiEV. All these cars can squeeze in four people with skinny waists.

Toyota’s FT-EV is an electric vehicle with a 50-mile range and a maximum speed of 70 mpg. The lithium battery pack can be charged in 2.5 hours with a 220/240 volt charge and in less time if not fully discharged.

By John Addison. Publisher of the Clean Fleet Report and conference speaker.

Go Tesla! EVs just may carry the cleantech sector this year after all

Most of my friends know I’m not a huge fan of EV startups. They take massive amounts of capital, the end customer (i.e. you and I) tends to be very sophisticated, demanding, and a pain in the neck, the technology is extremely challenging and I don’t believe the startups understand their long term costs as well as they think they do. But worse than that, the competition is very, very good and well entrenched. So while I love the concept of EVs and more specifically Plug in Hybrid EVs, I’ve been a huge skeptic of EV venture deals.

But . . .

• Go Tesla! The Toyota tie up is an exciting move. Toyota gets access to the EV business as a hedge against the possibility that GM’s Chevrolet Volt and the Nissan Leaf cleaning its clock and take the mantle of most green car company away, plus they get a massive much needed dose of positive PR that’s worth their $50 mm investment all by its lonesome to counteract the legions of recent “Toyota’s quality just went to hell” articles and the latest “let’s grill the Toyota executives” push in Washington. This is good.

• Toyota gets a great use for the recently shut down NUMMI plant in California, making them look like the hero in that story without having to actually operate a high cost union plant again (apparently a large part of the reason they got out of it). For those that missed that story – NUMMI was a GM – Toyota JV in Fremont, the last auto plant west of the Mississippi, and apparently Toyota’s only union facility. When GM went bust (sorry when you and I decided we liked losing money in the car business), Toyota took the opportunity to back out of the JV, leaving a huge hole in the local economy (it was just about the only customer for a number of local manufacturers). California’s political bosses get a brief reprieve from their shellacking by helping with big tax breaks to ink a deal that may bring back 10% of the lost jobs (about 10 of the top legislators and administrators joined the Governator to announce it).  Part of the deal here is that Tesla Motors is buying the plant with heavy tax breaks and plans to build its still to be launched mass market sedan there.

• The venture capitalists who backed Tesla get a new investor to pony up a chunk of the massive cash that will be required at good valuations. Even better, the backing of Toyota in my mind drastically increases the chances that a Tesla IPO can get done, despite the huge questions analysts have had on their near term revenue prospects since they filed the prospectus earlier this year.

• You and I, who are funding a big chunk of Tesla anyway with the massive $400 mm+ DOE loan guarantee, now get a foreign auto company to invest underneath us. (Of note this will be our second multi-hundred million investment into that part of the San Francisco Bay Area, since we are doing the same thing for the solar start-up Solyndra a couple of miles down the road.)

• Tesla gets much needed cash, a cheap ready to go plant without union labor requirements, and access (if they are smart enough to leverage it) to the considerable manufacturing , marketing , and distribution talents of what has been up until recently the best run auto manufacturer in history. With it comes the automotive street cred that they are sorely lacking.

Filed under the “what’s the real story” side – a couple of questions have been raised by various analysts in the press.

1) Why is Toyota not doing this as a JV or operating partner? Which would make even more perfect sense from both parties perspective. There’s been no mention of Toyota helping on marketing/distribution and service, areas that Tesla will sorely need if they get rolling. But maybe it’s just early days.

2) How many of the local jobs are actively coming back? Elon Musk, the CEO of Tesla was quoted as saying 1,000 jobs were planned (there were many, many, many times that many jobs lost when NUMMI shut down), and he was apparently very ambivalent on the subject of union or non-union.
But regardless, there is a lot to like about a Tesla Toyota Tie up.

Neal Dikeman is a partner at Jane Capital Partners LLC, a cleantech merchant bank, and the editor of Cleantechblog.com

A Beautiful Electric Blur

by Cristina Foung


My favorite green product of the week: Tesla Roadster

What is it?
As John Addison mentioned in a Cleantechblog post last year, there are quite a few electric cars on the horizon. The Tesla Roadster is one of them. Now, finally in its regular production page, the Tesla shows that the electric car can be one sexy ride. This little number isn’t just nice to look at, it’s fast too – it goes 0 to 60 MPH in under 4 seconds.

Why is it better?
According to one of Tesla Motors’ white papers, the Roadster has a well-to-wheel fuel efficiency of 1.15 km per megajoule (that considers the entire life cycle of the fuel, from its state as a raw fuel to the point when it rotates the wheel of the car). Those units might not make sense to you right off the bat, but when you compare that to the well-to-wheel efficiency of a conventionally run sports car (take the Porshe Turbo with a 6 cylinder gasoline engine) which comes in at 0.22 km per megajoule, it’s clear that the Tesla wins. If you prefer thinking in miles per gallon, try this one on for size. The Tesla gets the equivalent of 135 MPG.

What about the carbon dioxide? As with the Vectrix, I’m sure there are folks who know that electric cars that take electricity from coal-fired grids still have some emissions associated with them. Well, based on the typical electricity source mixture, the Tesla Roadster emits one seventh of the CO2 emissions from that little Porshe (again, that’s well-to-wheel).

But on top of that, I’ll tell you one of my favorite things about the Tesla. It’s not its sweet design (created with the help of Lotus). It’s not that great quiet electric whirr. It’s the car company’s relationship with SolarCity. SolarCity is working to offer Tesla customers photovoltaic panels for their roofs to power their vehicles.

The first time I saw a Tesla Roadster, I cried out with sheer joy (yep, out loud). And then I was a real nerd and took some pictures on my cell phone. But, oh, it was worth it.

Where can you find it?
After a few delays, the Tesla is finally in full production. Unless you’re already on the list, you’re out of luck for getting any of the 600-ish 2008 models, but Tesla Motors has started a wait list for the 2009 model year. If you want to get on that list (behind folks like the Google founders and George Clooney), be prepared to shell out $5,000 to start and end up with a final cost somewhere around $98,950.

If you’re in Europe, you’re in luck. Yesterday, Tesla announced that reservations are now being taken for European customers who want their Teslas delivered as early as the spring of 2009 (for more details, see the press release below).

Otherwise, if you’re like me, you can admire them from afar as soon as the showrooms open in Los Angeles and in the San Francisco Bay Area.

Besides her green products column on Cleantech Blog, Cristina is a passionate advocate for green living at the Green Home Huddle at Huddler.com, which focuses on electric cars, energy efficient appliances, and other green products. She is shamelessly self-promoting a contest in which a few product reviews could win you cool green stuff, not a Tesla, but still cool.

Press Release:
Tesla Motors Initiates European Sales

Source: Tesla Motors

Date: April 9th, 2008

The Tesla Roadster, a groundbreaking electric car that delivers super car performance with zero emissions and extreme energy efficiency, can now be reserved by European customers for delivery starting in the Spring of 2009.

Production of 250 special edition euro-spec Roadsters will be allocated for the entire EU region for 2009. This special edition, fully loaded car is priced at 99,000 Euro (excluding VAT) and will be offered on a first come, first served basis. Residents in the EU and UK can reserve a car by contacting Tesla at eurosales@teslamotors.com or calling +1 650-413-6200.

The Tesla Roadster went into production in the U.S. on March 17, 2008. Over 1000 U.S. customers have reserved a Tesla Roadster. While U.S. demand is likely to exceed production capacity in 2009, this special allocation of 250 euro-spec roadsters will be reserved for the first European customers.

Tesla Motors Vice President of Sales, Marketing & Service, Darryl Siry, talked about Tesla’s expansion plans and the attractiveness of the European market on the company blog at http://www.teslamotors.com/blog3/?p=75 , stating “since we launched the Tesla Roadster in the US, there has been extraordinary interest from European customers and media. Now that we are in production, we are excited to offer this groundbreaking car to Europeans who want to be the first on the continent to drive a car with extraordinary performance, beautiful styling, and zero emissions.”

The first official display of the Tesla Roadster in Europe will be at the Top Marques Monaco event from April 24th through April 27th. Information on the event can be found at http://www.topmarquesmonaco.com. Tesla officials will be on hand to greet customers and media.