Popular and ‘Best-Of’ Posts

WIND:

WIND INTERMITTENCY IS EXAGGERATED – NREL study shows US wind potential is larger and more stable than previously thought with capacity factors of 65% available, see details HERE.  Better even than Handleman Post predictions, that capacity factors of 50% can be achieved in large volume.

BEST US WIND SITES ARE BARELY TOUCHED –  HERE  – is a post showing where the best sites are why they are underutilized and how we can harvest much more wind at those sites.

WIND TURBINE STATE OF THE ART – New wind turbine technology is further reducing the cost and intermittency of wind power – HERE

RENEWABLES IN GENERAL

– COST – The cost of Renewables Is Dropping Rapidly – HERE are some great graphs showing declining costs. Here is Lazards 2019 report showing that wind and solar are the least cost energy sources. HERE is Lazards 2018 report on the cost of generation showing solar and wind as the least cost sources.  You can always get the most up to date version of this annual report by searching on ‘Lazard’s Levelized Cost’.

– GROWTH – The amount of renewable energy has been growing exponentially for decades.  Here are some good graphics illustrate that growth.

– HERE is a link to videos of an entire course on renewable energy.  The presenter is engaging making it fun and interesting.

STORAGE

– Storage is vitally important for the future of renewable energy and many think that Lithium Ion batteries will play an important role if the cost can be brought down.   Elon Musk predicts breaking the important $100 / kwhr barrier by 2025.  This is in the same ballpark as predicted by Navigant and McKinsey  prior to the Tesla announcement of the Gigafactory.

– GIGAFACTORY A conservative bet for Tesla – HERE .

– LITHIUM AVAILABILITY – And not to worry, there is plenty of Lithium – HERE .

There has been much excitement over the Tesla Powerwall energy storage system.  It is important but not for the reasons described in the press.  My recent post post on the significance of Powerwall was picked up by The Energy Collective – HERE.

ELECTRIC VEHICLES INCLUDING ELON MUSK AND TESLA

– EV EMISSIONS – Electric Vehicles pollute less even when you take into account emissions from the generation source HERE And Tesla is the lowest emitter HERE.

– TESLA IS REVOLUTIONARY – Tesla really is revolutionary. HERE

– BATTERY COSTS PLUMMET – EV batteries are the cost driver and they are coming down FAST – HERE   – A 2021 graphic HERE

EVs FOR LOAD SHIFTING – EVs combined with Load Shifting use market forces to increase the value of wind power while reducing the cost of driving. – HERE

EV RANGE IS A NONISSUE – HERE    .

The world according to Elon – Elon Musk on the Tesla road map from 2006.  And now more from Elon on the derogatory Larry Hirsh article.

SOLAR

GIGA SCALE AND EFFICIENCY INCREASES POINT TO GRID PARITY – Multiple entrants in the <20% Efficient PV module space points to impending solar grid parity.

SOLAR LAND AREA – The Land area required for solar is relatively small in comparison to the overall human footprint.

EFFICIENCY

EFFICIENT LIGHTING – Incandescent bulbs are being phased out in favor of high efficiency lights.  The most efficient is LED lighting which is dropping in price rapidly and is more efficient than CFLs – Here.

TRANSMISSION

Moving renewable energy from the best sites (eg Great Plains for wind, the Southwest for solar) to sites of highest demand such as the East Coast requires upgraded power transmission infrastructure

– EFFICIENT INTRACONTINENTAL POWER TRANSMISSION – Clean Line Energy HERE is developing HVDC transmission lines – HERE to do just that.

– LINKING THE THREE US GRIDS – The US is composed of three separate, independent electrical grids, by connecting the three grids Tres Amigas will make wider use of renewable energy possible.

BENEFITS OF AGGREGATION, A CASE STUDY – Texas’ grid expansion demonstrates a path towards higher wind penetration HERE .  Completed transmission lines nearly eliminate curtailment.

TEACHER RESOURCES

These resources help you use renewable energy as a context to teach STEM.

Calculate the area required to power the earth with solar modules.  This post discusses this and includes a spread sheet with the calculations.

This site has lots of data from a fixed and a tracking array.  You can download the data or plot it on the site.  If it doesn’t plot data for today then select an earlier date a couple of years earlier.  It is an old site and the computers sometimes go down.

General Resources

BNEF report on the coming crash in oil.

Coffee House

10 Year Tesla Retrospective

As many know, I have deep admiration for the accomplishments of Tesla and for the technical leadership of its CEO and “Technoking“. I have seen many who normally work hard at being objective, tune out the technical accomplishments due to their disgust with unrelated behavior such as the purchase and management of Twitter (now X).

There has been a great deal of derisive press for Tesla Motors. Sadly, much of this appears to be highly biased journalism. I believe the bias comes from two places. First and foremost the auto industry plows $Billions with a B into network advertising. In an age of lagging support for news organizations it is irresponsible to ignore the influence of this money particularly since Tesla has had not advertising spend until this year and it is still very small. Secondly, the controversial CEO and “Technoking of Tesla” Elon Musk, is a polarizing figure and thus, the media focuses a great deal time driving a wedge to further polarize in order to drive eyes and clicks to their services. 

Rather than the first 10 years, I would like to see a piece on Musk about the last 10 years. M3, MY, Tesla S Plaid, MegaPack (Gateway to all renewables Grid), Rise from ~$50 B $675B market cap, Charging Network that works!

Investor Day 2023 – And Some Supplemental Information About the Tesla Lead in BEVs

LOA (List Of Acronyms) is at the bottom of the post.

TID (Tesla Investor Day) video begins at 58 minutes on this video . I will suggest timestamps of highlights below.

In this presentation they went into considerable DETAIL wrt how they will advance the transformation to BEVs.

Lets put the pundit complaints to rest first. There are complaints that there were no clear timelines or benchmarks. Tesla has been notoriously late with some projections. And for people who gamble on the stock market (<2 year timeline) that is an important concern. But for investors (> 5 year timeline) what matters is how far ahead of the competition is Tesla in Profitability, key technologies, how far ahead will they stay and for important product areas they are behind (e.g. pickup trucks), what is their plan to take or retake markets. Finally, there is a question of whether they will fail on some of their promises. Maybe some but their track record is exceptional on doing things the ‘experts’ said they cannot and delivering best in class products that are ‘worth the wait’ .

Moats: Moats are barriers to the competition. All investors love moats.

OTAUDs – OVER THE AIR SOFTWARE UPDATES

Tesla has been providing software updates, OTAUDs, to their cars reliably and securely for over 10 years. If it were easy, others would be doing it. To date, no other auto company is doing it reliably and consistently.

OTAUDs mean that the ownership experience is one of a constantly improving product.

OTAUDs offer convenience. All cars get recalls. In many cases, Tesla recalls are handled with OTAUDs so the owner does not need to take it in for service.

MOAT: It is unlikely that a Tesla owner would consider switching to a brand that did not have this feature. So for customer retention and product quality it is a formidable moat.

CHARGER NETWORK

Tesla’s charging network is, indisputably, the best by pretty much all meaningful measures. First and foremost it is reliable, easy to use, fast and available for trips along any interstate. Only about 1% of users have to wait to charge. The TID (Tesla Investor Day) section on charging was pretty darn impressive. It starts at 2:22:30 on this Video. The chargers are very fast and typically charge enough to get to the next charger in the time a typical driver takes to stretch and hit the restroom. However, other charging networks are adding chargers quickly. In some cases their specs suggest they are faster than a typical Tesla charger.

But people are reporting that the new charging networks are not sufficiently reliable to offer an anxiety free travel experience. This video of a Rivian (non-Tesla BEV) driver’s experience provides insight into why charging, other than Tesla simply is not acceptable for travel in unfamiliar routes.

A Tesla DC fast charger is about 1/3 the cost of competitors.

MOAT: Currently a reliable, convenient long distance driving experience is limited to Tesla cars. Other charging solutions have had a good deal of time to bring their networks up to comparable capability but are still struggling. It is unclear how long it will take them. But with Tesla opening their charging network to all BEVs, it appears that they are positioned to be the dominant player in this space. So other brands will have the nation’s highways made available to them but they will still be paying Tesla. So, while other cars will gain the reliable charging experience, they will be providing Tesla with an ever growing recurring revenue stream.

SAFETY:

Tesla makes the safest cars. Anecdotally, one recently was driven off of a 250 ft cliff in a murder suicide attempt and all passengers survived, two uninjured. BEVs in general offer design opportunities for increased safety. Tesla has, and continues to lead the way in exploiting these to provide unprecedented safety for their passengers.

• This report came out in 2018 rating Tesla as safest cars on the road –
  • More recent reports confirm that Tesla is still the leader in auto safety with their best selling Model Y at the top of the heap.
  • MY shared the highest IIHS rating ‘Top Safety Pick +’ with 8 others in 2023.
  • MY had 5 star ratings in all NHTSB categories, besting other popular BEVs such as Nissan Leaf which had lower ratings in some categories and was missing key safety features such as Crash Imminent Braking.

Folks spreading FUD (Fear Uncertainty and Doubt) love to point to the terrifying possibilities of Tesla Auto Pilot. But Tesla proudly publishes their crash statistics including comparison to the us fleet average. Contrast that to GM that posts fluff and feel good generalizations about the dangers of driving while intoxicated. What little data they post describes improvements due to technologies they have deployed but offers no general statistics for context. In other words it provides no information useful in comparing to the competition.

Power Train: See TID 1:39:38 Cost is being decreased, factory size to build them is decreasing dramatically, in-house design tools are better than what they could buy enabling faster design iteration, and last but not least, the next generation electric motors will not rely on rare earth magnets. This is important for Tesla as it reduces the chance of supply chain disruptions. Most of Rare Earths come from China. Reducing amount of silicon carbide by 75%. This reduces cost and likely makes supply chain issues less difficult.

MOAT: It is hard to say but my engineering and manufacturing background leads me to estimate they are 5-7 years ahead of the nearest competitors. In a disrupted industry even a year matters a LOT for taking and dominating market share.

LIST OF ACRONYMS

BEV = Battery Electric Vehicle

ICE = Internal Combustion Engine (Traditional gasoline and diesel cars)

FUD = Fear Uncertainty and Doubt.

TID = Tesla Investor Day – Presentation starts at 58 minutes. It is long. I have posted timestamps of many of the most significant portions.

My Tesla Source Material

I am an investor in Tesla. I continue to be of the opinion that it is an investment whose risk vs return ratio is unprecedented. I do not give stock advice but I happily share my opinions and sources so that others can learn about Tesla and decide for themselves whether it is something that makes sense for their portfolio. A friend recently asked me which sources I turn to. As I wrote them an email I realized it had sufficient value that I wanted to add it to the blog.

A few words about why I think 2023 is going to be a thrilling ride for Tesla investors. While many promises made by Musk and Tesla are over due, most of them are reaching fruition in late 2022 and 2023. NOTE: 1-7-2022 – Go to the bottom for an update wrt collapsing stock price.

• The two most modern, highest margin auto factories – Giga Austin and Giga Berlin – are in production and ramping rapidly. While Giga Shanghai continues to surprise with record productivity of roughly 1 million cars per year run rate. Tesla Fremont is the most productive auto factory in the US. Giga Austin will surpass it in about a year and a half.
• The Tesla Semi is in production and the first will be delivered to Pepsi on December 1 2022.
• Tesla grew unit sales in 2022 while all other manufacturers saw declines.
• Tesla is growing high margin auto sales at an average annual rate above 50% annually and is back-ordered. (See Note at bottom)
• The long awaited Cyber Truck, which has over 1 million paid reservations will start production summer 2023 (production equipment is being installed at giga Austin and the giga casting machine has been tested and shipped) (See Note at bottom)
• Tesla is better positioned than any other company to benefit from the Inflation Reduction Act which will yield $billions in government incentives.
• Tesla is making their own batteries and anticipate shipping vehicles with the 4680 by 2023.
• Tesla is better positioned than ANY OTHER AUTO MANUFACTURER with respect to battery supply chain. From materials to finished product, Tesla has been expecting and planning for the shortages that have now emerged and have long term contracts with suppliers and are rapidly moving to vertically integrate batteries. From raw materials processing to cathode manufacture to the manufacture of the actual batteries. Only BYD, a Chinese auto company, comes close to Tesla’s vertical integration.
• While far from certain, it is possible that the full self driving software could be out of beta in 2023. I am certain that significant advances will be made sufficient to impact the credibility and stock price.

Below is my summary of sources. You will notice I am a big fan of youtube. I often listen to these content providers while commuting or out walking the dog.

This first youtuber (Steven Mark Ryan SMR) is my daily listen.  This recommendation comes with a caveat.  HE IS OBNOXIOUS.  I disagree with his politics, and his sexist stage persona is an obnoxious Aussie with the maturity of a 15 year old boy.   

But he is spot on with respect to Tesla and he gets to the point more quickly than the other youtubers whom I listened to daily during my year off (2020 school year).  I don’t have enough time to listen to them as frequently.  I recommend SMR if you don’t get triggered by his manner.  https://www.youtube.com/watch?v=RXwWN4m7TjY   I listen to this guy on my morning drive to school.  PS – It is not unusual for Musk to comment on his posts on social media.  IOW, he seems to have Elon’s seal of approval. – – This is late but on track for delivery summer 2023 and has over 1 million paid reservations – https://www.youtube.com/watch?v=psXWyO32aWk&t=287s . This video was made in 2020 during the darkest days of covid, when the world was shutting down. He was right. https://www.youtube.com/watch?v=qbexbb4tSF4 If you are in a hurry, fast forward to 7:10 and while watching it keep in mind that the Shanghai factory is now producing about 1 million cars per year !

This is a link to my blog.  At the top is a categorized listing of some of my ‘greatest hits’ many of which were published in mainstream blogs nationally and internationally.  Most of my recent posts are more of a laboratory notebook.  I am using it to collect my thoughts and bookmark important sources.

https://handlemanpost.wordpress.com/

This is another youtuber I like.  He is smart and appealing.  He does a good job of reporting the latest Tesla and EV news.  He has a broader view than just Tesla.  I like to catch him on my commute home.  Unfortunately he often releases his videos about the time I get home.  https://www.youtube.com/watch?v=O3nv6hV2VT4

Sandy Munro = Good source for manufacturing and design details https://www.youtube.com/watch?v=S1nc_chrNQk&t=355s  – – Musk interview/design review ==> WATCH THIS IF YOU WANT AN UNFILTERED VIEW OF ELON MUSK – https://www.youtube.com/watch?v=YAtLTLiqNwg&t=1163s

The Limiting Factor – This guy does deep dives into manufacturing technology (gigapress) and battery supply chain (how are batteries made).  Policy makers have referred to his videos as one of the sources used in developing the Inflation Reduction Act.  While no fee is required to watch his videos, I have voluntarily supported him with monthly contributions for years.  https://www.youtube.com/watch?v=FaIBdVdu0wo&t=382s 

Rock Stock Channel – Battery supply chain – Answering the question: where will all the lithium, graphite and nickel come from?  https://www.youtube.com/watch?v=qGssgXksNH8&t=2s

Daily Drone fly-overs of the two new factories in Austin https://www.youtube.com/watch?v=elLqkwm6Qd4&t=12s and Berlin https://www.youtube.com/watch?v=6FVbPeaUlgQ&t=1148s

These two factories are ramping and producing at a rate of about 75,000 annually.  By the end of next year they are expected to be at a 250,000 run rate each.  At full production (probably end of 2024) they will be about 1 million each and they both are on large plots of land sufficient to build multiple comparably sized factories.  – GigaBerlin Footprint https://twitter.com/gigafactory_4/status/1278453854141648898/photo/1 – – ONE OF THE MOST AMAZING DRONE VIDEOS EVER – https://www.youtube.com/watch?v=7-4yOx1CnXE&t=9s

Here are some honorable mentions:

Rob Maurer – Been doing this a long time.  Good with spreadsheets, numbers and latest Tesla news.  Nice guy but kind of boring.  I listened to him a lot during my year off.  Now I usually reserve him for earnings calls.  He is more financial, not as good with the technical aspects.  https://www.youtube.com/watch?v=MxVwNnGd1dM

Dave Lee – Kind of the Mr. Rogers of the Tesla space.  Most of his work consists of long interviews.  When you have the time and want to deep dive he is good.  Now I rarely have time for his full length interviews.  But he also does shorts to clarify important things that are going on.  However he really doesn’t bring much to that party that the other guys aren’t already covering.  https://www.youtube.com/watch?v=lbbRkQuZA8A&t=1206s

James Stephenson – Good projections and interesting charts – For example 2:15 on this video https://www.youtube.com/watch?v=9IQZqJbfIjY

THIS IS NOT INVESTMENT ADVICE, DO YOUR OWN DUE DILIGENCE

NOTES ON FALLING STOCK PRICE 1-7-2023 – The Tesla stock price has dropped precipitously over the last year. Why has the stock turned down so rapidly. There are several factors: 1) Interest rates are climbing making financing cars expensive. 2) Gasoline prices are dropping, making the value proposition of BEVs less compelling 3) Many Tesla owners are also stock holders. When the stock went up dramatically, many people could afford Tesla’s who could not before so they bought more which further goosed the stock. Now, the opposite is the case, stock prices are dropping so people have less money to spend on cars. 4) Musk’s Twitter debacle. It remains to be seen how this will pan out in the long run but near term it has alienated a number of Tesla owners. The question is, has it brought in new addressable market.

My investment horizon is 2025 and I have little worry over that timeframe. However I had thought we were going to see a sizable increase in 2023 and I am less hopeful about that. However for my long term investment thesis I think that this delayed gratification will have a sizable payback. Electric vehicles are a disruptive technology. This graph shows adoption curves for disruptive companies. Apple and Android are popular examples of disruptive technologies. When they emerged, with their smart phones, the legacy cell phone manufacturers (Palm, Nokia) were crushed and Apple rode the wave to become the highest market cap company in the world. Generally the disrupting companies are favored during a recession and the disrupted companies suffer the most harm. Tesla has $20 billion in cash with very little debt and positive free cash flow. The legacy auto makers are heavily in debt and make little to no profit on BEVs. Tesla makes more profit on the cars they sell than any auto maker, and they do not advertise. They are positioned to catapult to the lead in the auto industry during this recession.

2023 Will Be A Big Year For Tesla

The below is not investment advice. I offer my opinion. The purpose of the information below is to provide motivation to research the stock in order to formulate their own views. I am very bullish on Tesla and but it is important that each person do their own due diligence.

As a long time renewable energy advocate, I have been thrilled to see Tesla disrupting the auto industry and forcing them to go All-In on EVs or die. I have compiled a number of links below that shed some light on why my thesis is that they will meet their growth target of 50% annually for the rest of the decade and become the world’s dominant auto manufacturer and energy storage provider.

Revenue growth graph below looks like what companies project on business plans but rarely actually succeed in producing. Note that in Q2, their most productive plant in Shanghai was shut down for a month due to Covid.

By the end of the decade I expect Tesla will be the largest company in the world as measured by: Market Capitalization, Profitability, and total revenues.

Top 10 Reasons I Think Tesla Will Continue to Grow Its Profits, Revenues and Market Cap

1. By far highest gross margins on vehicles
2. Large demand backlogs without advertising e.g. Cyber Truck has over 1 million pre-orders. 6 month backlog on Model Y long range.
3. Highest performance production car, outperforming much more costly super cars. e.g. the Model Y family sedan does 0 – 60 in 4.7 seconds.
4. Extremely safe .
5. Best at manufacturing cars. Austin factory currently ramping is the largest in the US and will produce nearly twice as many cars annually as the current leader, Tesla Fremont.
6. Lowest cost batteries –
7. By far most robust battery supply chain
8. Attracts the best engineering talent.
9. Best charging network (by far)
10. Best positioned to benefit from the Inflation Reduction Act (IRA) – to the tune of $ Billions annually.

1. Tesla has their pick of the best engineers in the world.
2. Tesla makes the safest, highest performance cars in the world.
3. Tesla is now recognized as the most advanced manufacturer of automobiles. Ford says so (5:45), VW says so . Each of their new factories – Shanghai, Berlin and Austin TX are well beyond what any other auto company has in operation. Freemont makes more cars than any car factory in the country. Austin is ramping and will have about the capacity of Freemont.
4. Tesla leads in batteries. Without batteries you cannot grow an EV business. In addition to being the largest customer to the battery majors including CATL, Panisonic, and LG Chem, Tesla is ramping production of their own 4680 battery.
5. Tesla leads in innovation – examples include the gigacasting and octovalve.

The top selling autos in CA are now made by Tesla. NOT just the top selling EVs but the top selling autos of any type. https://cleantechnica.com/2022/08/29/tesla-model-y-model-3-two-best-selling-vehicles-in-california/ Tesla generally dominates any market it enters to the degree that they can supply the units. They are ramping production rapidly.

New factories (Austin and Berlin) are starting to ramp, Shanghai continues to expand capacity. https://electrek.co/2022/07/20/tesla-tsla-reports-massive-increase-production-capacity-across-all-factories/

‘Experts’ Have failed to recognize EVs are a disruptive technology and are rapidly having to make major corrections to their growth projections: https://insideevs.com/news/606721/ev-adoption-above-expectations/

There have been a few who understood that the auto industry was going through a ‘disruption’ and have been remarkably prescient in their predictions. In 2010, the year that the Nissan Leaf was introduced, Tony Seba Predicted that Electric Vehicles would dominate the auto industry by 2028. His prediction is looking to be right. https://www.youtube.com/watch?v=MAFoqo3Jbro .

In this video, Seba provides examples of industry disruptions and how, historically they always happen faster than the experts predict and usually lead to the replacement of legacy companies with new companies. https://www.youtube.com/watch?v=O-kbzfWzvSI&t=2313s

BERLIN FACTORY

Giga Berlin is now ramping https://www.youtube.com/watch?v=bgLEDcBr_Fg It is expected to have a run rate of 500,000 cars by end of 2023 with an additional line being added that will boost it to 1 million cars per year, presumably by end of 2024

https://www.tesmanian.com/blogs/tesmanian-blog/tesla-giga-berlin-produces-luxury-model-ys-concludes-new-street-research-with-a-530-pt-on-tsla

FREMONT AND AUSTIN FACTORIES

Tesla’s first factory in Freemont CA is bursting at the seams. It has a capacity of about 650,000 cars per year. https://www.youtube.com/watch?v=Bfb1dGJ9Zzc

Giga Austin has just been turned on and is ramping. It is about 3/4 of a mile long, has 4 floors and is 80 ft high. It is currently producing cars at a rate of about 1000 per week. When fully ramped, end of 2024, this factory is expected to produce 1.5 million vehicles per year including 500,000 (my estimate) cyber trucks per year. It is currently producing Model Y and by mid 2023 will also produce Cyber Trucks.

Complete Dominance in the US market. https://cleantechnica.com/2022/08/26/us-electric-vehicle-market-growing-yet-tesla-still-dominates/

TESLA SHANGHAI

The first phase of the Shanghai plant was built in one year, 2019. This is what changed me from a Tesla Watcher to a Tesla investor. I knew that Tesla made great cars but the question was could they scale to a global production capacity. They did it in Shanghai and now have a total of 4 car plants around the world. Shanghai has already been expanded twice and now makes over 1 million cars per year. https://www.youtube.com/watch?v=7qMDDjq10YQ

Tesla Growth and Revenue

Tesla makes 1/4 as many cars as GM yet is equally profitable.

Battery Materials in Crisis

Electric Vehicles (EVs) made up 6% of the cars sold last year. In 2022 estimates are for a significant increase. However, just as the US went to war over oil in the middle east, we are setting ourselves up for trouble in the battery supply chain. The US is producing a tiny fraction of the battery chemicals needed at current production rates. As production skyrockets for the rest of the decade, will we work to avoid the strategic vulnerability that we experienced with oil?

Ukraine is Elon Musk’s Fault

Shall we once again put a negative spin on Elon Musk’s accomplishments, finding only fault as our country works desperately to kill the golden goose that is trying to lay golden eggs. Musk is leading his corporations to do more to restore our national pride and economy than any other person, company or government. The rise of electric vehicles is being led, unambiguously by Tesla. And our country’s return to being the worlds #1 space power is also fully the doing of SpaceX, a Musk company. The first of these threaten’s Russia’s oil based economy and the second, their only world prestige, as they are now, thanks to SpaceX, a space faring has been.

Elon Musk saved the US space program eliminating our dependence on Russia for manned space travel and catapulting the US back to leadership in space. And is saving the US government and taxpayers Billions in the process with their lowest cost, safest space transport. This has rendered Russia a has been bit player on the world stage with the exception of their oil production and military might.

But the real terror to Putin is what Musk is doing in Electric Vehicles. Elon Musk has led his company to do more to reduce reduce dependence on oil than any other company or country. Tesla has accelerated the transition to Electric Vehicles by at least 1 decade, probably 2, possibly 3. Electric vehicles are disrupting the personal transportation industry and Musk’s long term, strategic investments are at the heart of this transformation. And sadly, this is, no doubt at the heart of Putin’s act of desperation.

Russia has historically become belligerent when oil prices rise. And with the popularity of large SUVs, With or without the other auto companies, Tesla is leading us off of oil. Russia has only a few years left before oil prices collapse and takes their country down with them. Ukraine is a desperation hail Mary by Putin. Ukraine is rich in natural resources and that is the motivation for this disgraceful war.

Forget about Elon’s Twitter account and judge the man by his actions. He is a powerful force for good.

Latest news – The largest Auto plant in the world makes EVs, just opened in Austin and when ramped will make about 2 1/2 percent of all autos manufactured in the world. – – Fast forward to 2:30 https://www.youtube.com/watch?v=n27HYIDSYpc

Tesla is doubling their Shanghai plant to 2 million cars per year. Construction of the addition set to begin in one month. This plant will produces .7 million cars per year now and when the expansion is completed (about 1 year) will produce about 2 million or roughly 2 1/2 percent of all passenger vehicles in the world – that brings Tesla up to 5% of all cars each year. https://www.teslarati.com/tesla-second-gigafactory-shanghai-report/

The New Tesla Berlin plant is now manufacturing cars. They are awaiting final approvals to sell the cars they manufacture there. This plant will start at 500,000 per year and if environmental concerns can be resolved will expand to at least 1.5 million cars per year or a little under 2% of all vehicles per year. Go to 22:00 Minutes – https://www.youtube.com/watch?v=u3AIbjhPQO4

Tesla’s Freemont plant continues to modernize and expand capacity. In the unlikely event that no future plants are announced, Tesla already has in place or under way, enough production capacity to become the largest auto manufacturer in the world by unit sales, revenues and market cap (they already can tick this box) by 2025.

With Tesla moving to the #1 spot in auto sales by 2025 and Chinese auto makers showing themselves to be highly capable in the BEV market, there are 2 things that are clear:

1 – Any economy reliant on oil for its existence (Russia for example) is doomed.

2 – We have hit the tipping point and BEVs will rapidly displace Internal Combustion cars, much faster than expected. The only think limiting the transition is the ability to ramp supplies of battery materials such as lithium.

Toyota Now In The Game

https://abc11.com/toyota-battery-plant-lithium-greensboro-randolph-megasite/11305258/?ex_cid=TA_WTVD_FB&utm_campaign=trueAnthem%3A+Trending+Content&utm_medium=trueAnthem&utm_source=facebook

Hertz / Brady Deal – Tesla Goes Mainstream

With the Hertz / Brady deal, Tesla has gone mainstream. Until now, Tesla was the brand of tech savvy retirees, rich and famous virtue signaling and geek chic well-to-do 20 somethings. With about 1% of sales in the auto industry, a high sticker price and not a lot of uptake with the tale-gating crowd, there were legitimate concerns about when the market would saturate for Tesla. That all changed with the October 25th Hertz Rent-a-Car announcement of the purchase of 100,000 Teslas over the next year. With Tom Brady as the spokesman featured in a nationwide add campaign aimed squarely at the flag waiving, middle America, Tesla has been catapulted from niche to possibly the most recognizable, desirable car on the planet.

Make no mistake, this is not about the added sales. Yes, Hertz is ordering 100,000 cars. But Tesla was already backordered over 1/2 a year. And this despite 2021 sales being on track to increase by about 60% over 2020. And this while sales of the competition are down. But there is more, this is also the endorsement of EVs as the future, as EVs cost of ownership being lower despite higher up front cost and of EVs being a joy to drive.

Hertz is reemerging from the Covid induced bankruptsy and Hitting the ground running. They are dusting off their 1970’s OJ Simpson playbook that catipulted them to #1 in the 1970’s. This time Tom Brady is the headliner. And the mainstream media has instantly pivoted in response. While it may not be a Tesla spend, it is definitely a Tesla induced advertising spend and suddenly the talking heads are all about Tesla is #1

$25,000 Tesla . . . Model 3 is Close

Elon said no Model 2 ==> 3 Will be the compact model. Consider, battery costs are expected to drop by over 50%, that buys $4000.

Currently 3 does not use the gigacastings and is in relatively low production levels. Increasing volume by an order of magnitude offers another $3000 at least.

3 shares many components of the Y which will also continue to scale so there will be considerable supply chain economies of scale. Figure another $1000 per car benefit.

Further, if Tesla is willing to trade margins for volume, per unit profits will drop but total profits will increase. Figure $3000.

Standard range + is currently ~$37,000. Probably Elon is basing his $25,000 on a FSD version and that means deleting the steering column and controls which should enable them to squeeze out another couple of thousand but lets just say $1000 to stay conservative.

• 4680 Battery – – Cost Reduction 4000
• Volume mfg. 3000
• Supply Chain Leverage 1000
• Margin flexibility 3000
• Other cost saving design tweaks 1000

$44,000 – 12,000 = $32,000

If they pass the tax credit of $7,500 then $24,500 for end user.

For FSD versions additional component deletes such as steering wheel and pedals will offer additional cost reductions.

Special thanks to MyTeslaWeekend for corrections and comments

This post inspired by = = https://www.youtube.com/watch?v=a0rldRLR9xM

Tesla New Factory Roadmap – My Projection

Food for thought – In Berlin, Musk said one car body every 45 seconds taking into account 25% downtime at Berlin. This looks about right when compared to video of the gigapress at Fremont. They have 8 gigapresses = 4 press pairs. This works out to about 130,000 cars per press pair or around 525,000 cars at Berlin. Looks like 12 presses possibly 14 going in at Austin. Say 12 to be conservative. But not all are going in immediately. So figure 8 by year end there. = 1 million run rate at Austin by end of 2022. Both sites have room for additional factories. Some time ago Musk said that the two sites would cover expansion through 2024. So, while some are disappointed at no announcements of new factory sites until 2023, I like it. They have trained crews at both sites. I would prefer to see those folks start building new factories same site. Should go up in under a year now that everyone from foundation diggers to local authorities know the drill.

So, I’m guessing – Between 2 and 4 additional factories at Berlin and Austin and three more at sites around the world including one on the East Coast of the US and NV expanded to cover complete site for TeslaSemi. And figure faster run rates as the factories are tuned. Say 600k per factory. 3 Austin, 2 Berlin, 1 East Coast USA, 1 India and 1 more China. By end of 2026. Add in Shanghai and Fremont ramped to 800k each and we end up with 6.5 million vehicles / year run rate by end of 2026 . ASPs will be down but Profits will stay same or higher per car. AND – Expect JV with at least 1 Japanese car maker or another plant in Japan by then so make it 7.2 Million by then. Could be more but hard to imagine it will be fewer than that. And then there is the energy business . . .

Overview of Giga Texas –