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Plug In Drivers Not Missin' the Piston

This is the Kodak Moment for the Auto Industry. Electric vehicles are here to stay. Their market acceptance and growth will continue....

Monday, August 13, 2018

Tesla Model 3 Performance qualifies for Free Supercharging w/ code

Tesla Model 3 Performance, photo via Autoweek
The performance version of the Model 3 now qualifies for Free Supercharging if (and only if) you use a referral code when you buy it.

This referral program started on August 1, 2018. When it will end is not clear.

Here is my code patrick7819; feel free to use it with a Model S, Model X, Model 3 Performance, or even a Roadster.

Sunday, August 5, 2018

Elon Musk Book List - Adults and Children

Undaunted: How Elon Musk Created 3 Giant Companies And Became A Billionaire by Ivan Fernandez
Love him or hate him, he's one of the most interesting people of our time. On one hand, he has grand visions for a multiplanetary future, has delivered more zero-emission cars than all the other auto-makers combined, sells solar panels to 'fuel' those cars with sunshine, has gone up against huge entrenched interests and come out victorious where others might have balked at the attempt. On the other hand, he's outspoken on twitter, has a habit of promising things will happen in "3 months maybe, 6 months definitely" that might take years to deliver. Millions have been made and lost on Tesla stock based on his utterances in quarterly calls with analysts.

If you want to know more about the man behind SpaceX, Tesla, The Boring Company, Hyperloop, (previously) OpenAI, Neuralink and what's behind his public persona, you're not alone. There are several books written about him. Where he comes from, his parents, upbringing, siblings, influences, first principles thinking...

The book to start with (and the only one that Musk agreed to be interviewed for AFAIK) is Ashlee Vance's Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. Musk has refuted a few things in the book such as how he terminated his personal assistant when she asked for vacation time, but this is by far the most comprehensive of the Musk biographies.

Next on the list is the booklet Elon Musk: Biography of a Self-Made Visionary, Entrepreneur and Billionaire. It covers Musk's early companies Zip2, X.com, & PayPal. And how doing things in a new way has been a driving force behind each of Musk's companies be it SpaceX and the Journey to Mars, or SolarCity giving away solar panels and selling the electricity that they generate.

Next we have, Elon Musk: The Life, Lessons & Rules For Success. You generally don't become a billionaire without hard work and guiding principles. Musk often works 80 to 100 hours a week and expects others around him to "work their asses off too." All of this is in service of the vision of creating a "future that doesn't suck."

Last in this section is Elon Musk’s Best Lessons for Life, Business, Success and Entrepreneurship. Musk famously said "Failure is an option here. If things are not failing, you are not innovating enough." This book covers Musk's failures and how for most people, the fear of failure prevents the biggest successes. Success is found on the far side of failure; embrace failure, learn from it, innovate.

The Creative Gang

Musk is also included in books with other out of the box CEOs such as Steve Jobs and Jeff Bezos.

Secrets to Success in Life & Business of Billionaires is a 3 book set covering Elon Musk, Steve Jobs, and Richard Branson.

Next, we have The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos.

Books For Kids

Musk is an inspiring figure. He launches rockets, makes cool cars, digs tunnels, and was the inspiration for the modern Iron Man movie franchize. He has captured popular culture's imagination and this includes children's.

There are several books about Musk for children. Just as the first list started with a book by Ashlee Vance, so does this section. Elon Musk and the Quest for a Fantastic Future Young Readers' Edition is adapted from the full biography.

For even younger children, there's Elon Musk: This Book Is about Rockets. Becuase rockets are awesome and ones that land themselves on a barge floating at sea are even cooler. One day, they might even take us to Mars.

I hope you can find something engaging to read for yourself, a friend, or family in this list. Enjoy.

Sunday, July 1, 2018

Tesla's Race With The US Tax Credit

Tesla has now opened the Model 3 design studio up to nearly everyone in North America with a reservation for the car. This has opened the floodgates for orders. Tesla is promising 2 to 4 months delivery window for the performance version of the car, 3 to 5 months for the dual motor, and 6 to 9 months for the first production versions.

With this glut of orders can they meet the promised delivery windows, and how will this impact the US federal EV tax incentive?

The Race Is On

Phase one of the US tax incentive applies to the first 200,000 plug-in cars from a manufacturer. After hitting the 200,000th delivery, the incentive changes. It goes from being a set number of cars, to a set time period. This is when the countdown starts. Now that July is here, Tesla has just entered this next countdown phase and is in a race against the clock. In this phase, two quarters after the 200k deliver, the incentive is cut in half, from $7500 to $3750. Six months later, it is again cut in half to 1/4 of the original amount.

Tesla is likely to cross the 200k US delivery mark in early July. That's the start of the 3rd quarter, which means that the clock starts in July and the incentive will be in full force in Q3 and Q4, through the end of 2018. Tesla has to deliver as many cars as they can during this race against the clock.

Many of the Model 3 reservation holders have been on the list for more than 2 years and they have an expectation of qualifying for the full incentive amount.

Will all of the people on the list be able to take delivery this year?

To answer this we'll have to estimate two things: One, how many people have configured and ordered a Model 3; and two, how many cars can Tesla manufacture and deliver before the tax credit is hobbled.

How Many Model 3 Orders? 

About 450,000 people reserved a Model 3. About half of these were in the US. This puts the potential US pool at ~225k.

The more affordable standard range version of the car is currently not available to order. This puts people in a bit of a dilemma. If you reserved a Model 3 in 2016 and wanted the $35,000 version of the car, you have a choice. Wait for the more affordable car and miss out on the incentive or order the long range car with premium interior. Only Tesla knows for sure what the reservation holders have done once they were given the option to order. For this exercise, I want to look at the more difficult case and assume that most people on the list have ordered from the currently available long-range options. I'm calling this worst case from the manufacturing perspective because of the volume of cars that would be required this year; whereas, from a profitability perspective, this is good news for Tesla, but we'll save that aspect for another day. Given this assumption, we'll estimate that 2/3rds of the available pool order a car and expect it to be delivered this year. That is 150k cars. Tesla has already delivered about 30k Model 3 in the US. This means that they'll need to produce and deliver ~120k Model 3 during the remainder of the year.

How Many Can They Deliver?

On July 1st, according to a Reuters article, Tesla has hit the promised 5,000 Model 3 produced per week milestone and they have plans to increase to 6,000 per week. Since we don't know when Tesla will hit 6,000 per week, we'll assume a worst case of 5,000 cars per week for the remainder of this year.

There are 26 weeks left until the incentive is halved. While production is ramping, it is common to take 1 week per quarter for equipment upgrades and maintenance. This gives Tesla 24 weeks of Model 3 production at a rate of 5k per week. This results in a surprisingly familiar number, 120k.


Our (likely high) estimate of the number of people in the US that will order a Model 3 for delivery this year is 120k. Similarly, our (likely low) estimate of the number of cars that Tesla can produce during the remainder of this year is 120k.

These are just back of the napkin numbers, but they show that it's possible for Tesla to deliver cars to everyone in the US that's been on the waiting list if they order their car before the end of July.

If Tesla ramps up to 6,000 cars or more per week, this will allow them to fulfill orders in Canada or deliver cars to people who order later in the year.

Disclosure: I am a Tesla shareholder

Tuesday, June 26, 2018

Tesla Model 3 Dual Motor Ordered - Tax Credit Race Condition

On June 26th, 2018, Tesla opened up my ability to order a Dual Motor Model 3; and that's exactly what I did.

We ordered a blue, long range, premium interior, with Enhanced AutoPilot. We passed on the Performance option, wheel/tire upgrades, and we passed on the Full Self-Driving option. I'll explain my reasoning below. If I regret passing on the wheels or the self-driving, we can upgrade these later.

Below, I'll walk through the screenshots of the order process; but first, let's talk about the US Federal EV Tax Incentive. The incentive is reduced 3 to 6 months after a manufacturer sells 200,000 cars in the US. If my estimations are correct, then Tesla will deliver their 200,000th US car in early July, just a couple of weeks from now. This would result in the full $7500 incentive lasting through the end of the year. So, if you are in the US and want the full incentive, you need to take delivery (not just place the order) this year.

Race Condition (not the kind you find at the track)

In addition to waiting for dual motor, I had been considering waiting for the cream interior option too.  However, Tesla currently says the dual motor delivery estimate is "~3 to 5 months" and there is no sign that other interior colors (other than black and white) will be added soon. With a June 26th order date, 5 months later is November 26th. That is cutting it close to the end of the year. It does say "3 to 5", so it could be as short as 3 months, but the scariest part of that "~3 to 5 months" quote is the little squiggly character in the front. It is called tilde and, in this use, it means "about" or "approximately". This gives Tesla some wiggle room to push the delivery date around as warranted by production or force majeure.

This creates a race condition between the reduction of the incentive on January 1st, 2019 and the delivery of the car. In computer science, you generally do things in series, one after the other, in the order you want them done. Instead, if you execute tasks in parallel, then you include some sort of barrier to guarantee that all the needed tasks are complete before going on to other work that may depend on the results of these parallel tasks. When you have a bug in your code where things did not occur in the order that you expected, it could be because you have a race condition. In this case, for the car, I want the order of events to be 1) Delivery 2) New Year's Day 2019. However, there's nothing that I can do to enforce this order of events, so it's a race condition. If the events happen out of order, I'll receive half (or less) of the tax incentive.

Order Process

Here are the screenshots and my rationale. Your choices may be different, but consider this food for thought; and if you disagree with my selections, leave me a comment. If you're persuasive, I may change my order.

Select Your Car: three options
1) Long Range: Rear Wheel Drive
2) Long Range: Dual Motor All-Wheel Drive
3) Long Range: Dual Motor Performance

All-wheel drive will make it surefooted and for our needs, the dual motor car will have more than enough performance.

Select your color: Black, grey, silver, red, white, or blue.

Select your wheels. We stayed with the standard 18" aero wheels. These have better range than the 19" wheels and if you don't like the look of the aero cover, you can pop it off and the wheels underneath are not bad looking. For me, the aeros look better in person, than they do in photos, especially when the car is in motion.

Interior: There is only one option. The white seats are only available with the performance vehicle and the cream will not likely be available until next year. I'd rather have a car with black seats this year, than a car with cream seats next year.

Besides increasing my odds of getting the full tax credit, the other advantage I get by ordering now is the free Premium Communications package. The note on the right side of the screen above says that vehicles ordered before July 1st have this included.

Autopilot: We have enhanced AutoPilot V1 in our Model X and I love it. I use it nearly everytime I drive. Given this statement, you might think that I'd select Full Self-Driving. I do think the technology will be there within the next 5 years. But I am not as confident about the legislation needed to make it legal to use it. Given this uncertainty, I'll keep the $3,000 invested. Buying self-driving later will cost me $5000 instead of only $3000, but by the time I'm ready to buy it, perhaps my investments will have turned that $3000 into $6000.

There is the final price: $60,000 even with destination fee. I plan to pay cash. We've been saving for years for this and I don't like to pay interest on depreciating assets. I will, however, check around. If I can find an interest rate that is less than 1%, then I'll consider taking out a loan.

Sunday, June 24, 2018

Tesla Model 3 Matte Black Center Console Wrap

Photo via inverses2 on reddit
The Tesla Model 3 is a modern technological marvel, but it has a flaw. What is the flaw, you ask? The glossy center consule is a fingerprint magnet. The good news is that you can resolve this with a simple self-install kit from Amazon.

You can get the kit in matte black shown above, or (if you prefer) there is a brushed metal, or carbon fiber options.

Sunday, June 17, 2018

Tesla Roadster Rocket Thrusters Explained By Tesla Patent

During the annual Tesla shareholder meeting, CEO Elon Musk announced that Roadster 2020 would have a SpaceX option package that will include rocket thrusters. Later Musk tweeted a few more details:  the thrusters won’t actually combust; instead, they will expel high-pressure air to give the Tesla an extra boost of acceleration.

Industry experts and the tranche of the internet that follows Elon Musk have been speculating and arguing about these rocket thrusters since their announcement. Will they be functional, whimsical and decorative (just there to signal your extravagance), or some combination of all of the above?

SpaceX’s Falcon 9 rockets use composite overwrapped pressure vessels (COPV). These tanks are made out of a thin metal liner wrapped in carbon fiber, and they’re fairly lightweight and a great way to store a lot of pressurized air in a very small space. This is what Tesla plans to use in the Roadster. Using COPVs in vehicles is not a new idea; some buses and trucks use them to store compressed natural gas, and fuel cell vehicles use COPVs to store hydrogen, but the gases in these tanks are used as fuel for the vehicles, not expelled as direct thrust.

Problems With Air As Thrust 

When someone talks about putting an air rocket thruster on a car, the easy assumption is that these "thrusters" would be used for thrust by ejecting air and propelling the car. The experts have brought up many problems that this could cause:
  • To accelerate a vehicle in the weight category of the new Tesla Roadster, the air would need to be expelled at super high speeds. Some have calculated that the air would need to exit at more than 1,500 MPH to accelerate the Roadster. Using this at a stoplight could propel debris into the windshield of another car or a nearby pedestrian. If implemented this way, this potential hazard could prevent the thrusters from being street legal. 
  • Expelling air at high speeds would be exceptionally loud.
  • Repressurizing the tank with the large volumes of air this would require would use a lot of energy from the battery pack. 
Sam Abuelsamid, a senior research analyst at Navigant, an advisory firm for the auto industry, told The Verge, “It’s the most ridiculous thing I’ve ever heard of.”

Perhaps Tesla engineers have discovered ways to avoid all of these issues or perhaps they have something else in mind. Tesla's pending patent number US15820788 might give us a hint to the real intentions that Tesla have for these "rocket thrusters".

Tesla Patent

The patent is titled "Passive air bleed for improved cooling systems." Have you ever used a can of air spray to clean your keyboard or blow dust out of your computer? If you have, you might've noticed that the can gets cold and might even frost over. This chill is due to a thermodynamics property known as adiabatic cooling. A gas, initially at high pressure, cools significantly when that pressure is released. Tesla's patent uses this property to make a better cooling system.
Figure 5 of Tesla's Patent - a radiator employing a passive air bleed device

Figure 7 of Tesla's Patent - a drive unit for an electric vehicle incorporating an external passive air bleed device

Hot Lap, Overheating At The Track

Tesla does not make slow cars. They are known for their impressive zero to 60 and quarter-mile times. The performance demands of a hot lap are, however, very different from those of a 0-60.

When attempting a hot lap in a Model S, Car and Driver found multiple problems with the car. At the Virginia International Raceway, the Model S went into reduced power mode in the middle of its first hot lap. In the Tesla racing community, it is common knowledge that the Model S has issues on extended runs at the race track. As Teslarati notes, the electric sedans have a tendency to overheat in one lap or less at most courses. One of the more well-known examples was when a Model S was unable to maintain full power through the mountainous "The Green Hell" Nordschleife section of the Nürburgring.

Unlike the Model S, the new Roadster will be a track car. It will be in the hypercar performance range. It will need better cooling of the high-power electronics and batteries.

Would Adiabatic Cooling Work?

Now that we know the problem the Roadster designers are trying to solve, let's look at this potential solution and see how it fits with Musk's rocket thrusters tweet.

The tweet says it will improve acceleration, top speed, braking, and cornering. Certainly, all of these things rely upon cooling. With acceleration and sustained top speed, the high voltage systems and batteries need to be cooled to prevent power reduction. With braking, the brake pads need to be cooled. In normal driving, an EV can use regenerative braking; this is not the case at the track. Hard braking when heading into a turn requires the friction brakes. Corner after corner can take its toll and really heat the brakes.

Cooling With a Side of Downforce 

If cooling, not thrust, really is the primary function, these thrusters would not, necessarily, be on the back of the car. But once you have them, they can supply some thrust, so how could it best be utilized? Since cornering and acceleration require traction, the most likely place to put them is over the tires. Here, a small amount of downforce could affect performance significantly. Allowing the tires to stick to the road allows the torque of the electric motors to be used to its fullest.

How this could help allow a Tesla to fly, I'm not sure, maybe a couple of the thrusters will point down. Maybe Musk meant figuratively flying, as in going fast. Maybe he was actually just joking. Musk did say there would be ten of the thrusters. Perhaps two over each wheel and two pointing at the ground. If there are some pointing at the ground, I just hope the button to activate the fly feature on the touchscreen looks like this:
500 points to the first commenter to identify this.

Recent Tesla Stories:

Tesla Competition: Culture Eats Strategy!


Monday, June 11, 2018

The Rules Of EV Charging

Plug-in vehicles of all types are becoming more popular. The EV community is no longer just you and a few of your friends that meet up every so often to talk about the latest in battery management systems. As an EV community, this is what we want, a growing community of EV drivers.

As EVs become more mainstream, people are not defining themselves by the car they drive, they are just trying to get from point A to point B. Today, you are more likely than ever to run into someone at a charging station that you've never met.

These new drivers might have different ideas than your local community about charging etiquette. To help clarify things, here are some clear simple rules.

The rules are:
  1. First come first served, period.
  2. Move as soon as you have enough*.
  3. Always have a plan B for charging.
  4. You are only "entitled" to use a charging station if you own it. If one you need is in use, you can ask for a favor and appeal to their sense of charity, or try to negotiate/bribe your way to a solution, but don't be an entitled jerk about it.
Let's break each of these down to understand them.

Rule 1: First Come First Serve

There are some in the EV community (and even one city) that believe that certain types of plug-in cars have more rights to the charging infrastructure than others. There are three general classes of plug-in vehicles: Plug-in Hybrids, Short Range EVs, & Long Range EVs. For those that do believe there is a canonical ordering of access rights, they tend to put whichever type of vehicle they drive at the top of this list.

I have a different opinion. I refer to it as the 14th Amendment of Charging. The 14th Amendment of the US Constitution guarantees equal protection under the law. The "14th Amendment of Charging" provides equal access for all plug-in vehicles. If the car has a plug and they have a membership to the charging network, then they have an equal right to use it. Having a gas backup option does not diminish the right of access compared to a BEV.

Rule 2: Move As Soon As You Have Enough

When you buy gas, you might "Fill'er Up", but with EV charging, filling up to 100% is generally a waste of your time. If you're on public infrastructure, when your battery is charged enough that you can get to your next destination with a comfortable cushion, then it's time to unplug and free up the spot for some else that may need it.
Charging up with enough is what I call "Lagom charging". Not to be confused with legumes; Lagom is a Swedish word that means "just the right amount". The charge rate of an EV slows as the battery pack approach full. If you don't need the range, there is no need to tolerate the slower rate. Instead, you can avoid wasting time by continuing your trip. Or if you are staying in the area, you can avoid some battery degradation by unplugging before your pack is at 100%. If you have what you need, then the rest of the charging can be done at home, overnight, while you sleep.

Rule 3: Charging Plan B

Charging stations are occasionally blocked, occupied, or down for maintenance. You should have a backup plan. Apps like PlugShare are one good source to find charging locations. Some areas are flush with charging stations and you can find another location easily. In other areas, it is more difficult.

For those more difficult areas, if you have a portable level 2 EVSE, you can grab a few Watt-hours from a friends dryer outlet or even at an RV campground. In a pinch, a standard household level 1 outlet can fill in some small gaps when used overnight.

Rule 4: Don't Be "Entitled"

If you own the charging station, then you get to decide who can use it. Otherwise, it's a public station. Coming up to a person at a public charging and telling them to move because you need/deserve/want it more, is a jerk move.

Instead, try being friendly. You already have something in common and you might actually make a friend.

Bonus Rule 5: Be Friendly 

Since you've read this far, I give you a bonus item suggested by reader Brian H.

I’d add a #5, be friendly and encouraging to fellow EV drivers, regardless of type of vehicle they drive. We all in this together to make life better. ☺

Wednesday, June 6, 2018

1 Million EVs on US Roads Will Happen This Year!

As I write this, there are about 850,000 plug-in vehicles on US roadways. The month of May added about 25,000 of these. Assuming similar sales going forward, the 1 million mark would be hit around the end of the year.

Plug-in sales will likely be better than simply linear over the remainder of the year. EV sales are growing. March of this year had 42% more sales than March of last year. Similarly, April had 47% year-over-year growth and May had 48%. This is exceptional year-over-year growth.

New plug-in cars from nearly all makers are coming out and Tesla is ramping Model 3 manufacturing as fast as they can. With a long list of people waiting for these cars, demand will not be a problem in time into the foreseeable future.

US PEV Sales Actuals & Trend - Actuals data from InsideEVs.com

This is surprisingly in-line with the 2016 prediction we made here.

January 2016 Prediction of US PEV Sales

You can expect to see articles about "2018 To Be The Year of 1 Million EVs on US Roadways" starting to show up in the media in a few months when the trend becomes more assured to occur this year, but you can always say that you saw it here first (in 2016).


Friday, June 1, 2018

Self Driving Cars: Unfortunately, Safer is Not Safe Enough

The technologist perspective is that once self-driving cars are better/safer drivers than humans, they should be adopted. Looking simply at the numbers, this is logical.

According to the Association for Safe International Road Travel, nearly 1.3 million people die due to traffic crashes each year. This is an average 3,287 deaths a day. Additionally there are 20-50 million people are injured or disabled annually.

If self-driving cars reduced these accidents by 10% then 130,000 fewer people would die and 200,000 to 500,000 fewer people would be injured annually. That sounds great, hundreds of thousands of deaths and injuries would be prevented each year. So logically, even 1% safer means lives saved and that we should all start letting an AI pilot our cars, right? It's not that simple.

It's About Emotions, Not Math

We are not purely logical beings. Even with a great autonomous drive system, crashes will occur. No one making a self-driving system claims that it will eliminate crashes. When crashes occur, people will be hurt and they will look for someone/something to blame. Parents and spouses of victims will demand justice.

If two human-driven vehicles are in a crash, blame will be assigned and justice will usually be metered out. When there is loss, there is someone to blame and target for anger.

When an AI-driven vehicle is in a crash, the same anger and blame emotions occur when there is injury or loss of life, but now the target is different.

Fewer Victims, but Not Necessarily From The Same Population

Say during a given period, there would have been 3000 crashes if humans were the sole drivers. Now place self-driving cars on the roads instead and say there were only 1500 crashes as a result. But the 1500 resulting crashes might not be a subset of the 3000 crashes that would have occurred. Some of them would be such as a tree falling that neither a human driver nor an AI could have avoided. But other crashes would occur that a human might have avoided.

If you are a passenger in an AI-driven car and you see an upcoming hazard but are powerless to prevent it, you will not be satisfied to know that in other locations at that same time there are self-driving cars avoiding accidents that you might not have been able to avoid. Said another way, if you are in the non-over lapping portion of the blue circle in the Venn diagram above, you are going to blame the AI for any injury or loss that occurs.

If there is an accident in the green overlapping section, you might still assume that you would have been able to avoid it since we all inflate our driving skills.

For these reasons and more, AI driving systems will be held to a near impossible driving safety standard by the public and the media. We already see this in the media today, whenever there is a crashing involving the likes of Waymo, Tesla, or Uber, the headlines make national news. The vehicles could have millions of crash-free miles, but they will be judged only by their failures. They could be performing 10X better than a human, but that is not the standard by which they will be judged.

Sunday, May 20, 2018

Tesla Model 3 Adds Options For Dual Motor

At 1:30 AM Pacific on the morning of 5/20 Tesla dropped a new version of the Model 3 design studio. As you can see in the image above, it has placeholders for the (coming any second now) dual motor AWD and the (coming later this year) standard battery options.

Still no sign of the white interior, but it should be coming soon according to Musk's tweets.

Saturday, May 19, 2018

7 Years of Nissan Leaf Ownership

Seven years of driving a Nissan Leaf. The good, the bad, and how it has aged.

On May 18th of 2011, I took ownership of a Nissan Leaf. The car that would eventually be mine was one of the first 2000 that Nissan produced. My car left Japan just hours before the Tōhoku earthquake and tsunami devastated the island country.

When the car arrived, I had no regrets. I fell in love with the smooth quiet peppy acceleration. I took friends and coworkers out for ride-&-drives and a few of them were soon owners too.

For commuting and running errands, this car was great. The range at in-town speeds is much better than the freeway speed range. For trips in the 50 to 100-mile range, you could make it work given the right infrastructure and a little patience. Anything beyond that was asking more than the car is designed for or my patience would usually allow. But that's Okay, any vehicle supports only a limited set of cases where it works well. You would not take a sports car to haul lumber or a truck and trailer to the racetrack. Cars work best when you use them in cases they are well designed to accomplish. For this car, that meant local trips. This was my commuter car and it worked great for that. We did sneak in a couple longer trips too.

Battery Degradation

The range, as reported by the car, is shown in the images below.

Fully Charged - 9 Capacity Bars - 2011 Leaf in 2018
The range that the car reports is not very reliable. The estimate is based on your recent driving style and road conditions. You could coast down a long hill and have this range estimate increase far more than it should based on just the energy regenerated. For example, the 118 miles as reported in 2011 was never a possibility under real driving conditions. This is one reason that some Leaf owners refer to this gauge as the Guess-O-Meter.

A better way to track the range is to look at the pack capacity reported by the battery management system and apply the EPA rated fuel efficiency. We've been tracking our Leaf's range this way since 2012. You can see the results in the chart below:

2011 Nissan Leaf: Range measured via LeafSpy over 7 year period

I expected some degradation in the first year. That's normal. However, I expected the degradation to level off and be very gradual thereafter. Unfortunately, as you can see in the graph below, we've had notable, nearly linear, range loss each year. There is some minor noise in the graph from seasonal temperature changes, but the trend is clear and still heading down.

With ~50 miles of range, the Leaf is never too far from home nowadays. This has been my biggest disappointment with our long-term ownership. I wanted this car to last 10 years. Nissan has done little to resolve the Leaf degradation problem even in the current 2018 Leaf models.

Our Leaf has 57,408 miles on it. This is an average of only ~8,200 miles per year. And this car was not in southern California or Arizona, it was in Oregon where we have great weather for Li-ion batteries with very few days each year over 100 F and very few below freezing.

The only consolation that Nissan offers is “refabricated” packs at a discount. This program started this month in Japan and should be rolling out to the rest of the world soon. The refabricated packs cost $2,850 USD. For comparison, new packs cost $6,200 USD for 24 kWh; $7,600 USD for 30 kWh; and $7,800 USD for 40 kWh.

This allows you to extend the life of your car, but the fundamental cause of the degradation is still there.

Missed Opportunity 

Nissan had a lead in the affordable battery-powered electric vehicle (BEV) market. The Leaf started selling 18 months before the Tesla Model S came to out in June 2012, and the Leaf was at a much more accessible price. In 2013, the Leaf was the best selling BEV, beating offerings from Mitsubishi, Ford, Honda, Tesla, and others. In 2014, the Leaf even outsold the Chevy Volt making it the best selling plug-in car in the US. Then in 2015, things changed.

Soon after the Leaf began sales in hot climate states like Arizona, some people started to notice that their batteries were quickly degrading. Nissan did not have a liquid-cooled thermal management system in the Leaf. After this problem came to light, Nissan did not redesign their pack to use an advanced liquid-cooled thermal management system. Instead, they made changes to the battery chemistry to attempt to make it more heat tolerant. The anecdotal reports on the Leaf forums said that these new batteries degraded just as fast as the old batteries. Many potential buyers (especially in warmer climates) lost faith in Nissan's EV program.

Mo Battery, Mo Heat

In 2016, Nissan bumped the battery pack capacity up to 30kWh, up from the previous 24kWh. In 2018, Nissan again bumped the pack capacity, this time to 40kWh. In both cases, Nissan opted to not install a liquid-cooled thermal management system. With more battery capacity, comes more heat; more heat means more degradation. How would these new packs age?

Now, two years later, we know the results from the 2016 upgrade. Green Car Reports quotes a study that states that the 30kWh pack declines at 3 times the rate of the 24 kWh pack. Note that I (and many others) were already disappointed with the degradation rate of the Leaf. And now, in a newer car, it was even worse!

And how will the 40kWh pack perform? Nissan has taken steps to slow the degradation, but you might not like their solution. In the 40kWh cars, Nissan throttled the rapid charging rate. This was dubbed RapidGate by Transport Evolved. Slowing the charging rate limits the usefulness of the car for things like road trips. If you are just using the car for short trips, this is not a problem, but potential buyers need to understand the limitations or they might be severely disappointed with their purchase.

If you are considering a Nissan Leaf, I'd lease it rather than buying, at least until Nissan has a car with a proven long-term track record. A lease will allow you to own the car for a few years, a time period well within the battery lifespan before there is significant cumulative degradation, and then walk away from it as the batteries slump. Another option to consider is a used Leaf. It would certainly have some range loss, but as I said above, if you are aware of the limitations and only plan to use the car in a manner consistent with its capabilities, then you can likely pick up a used Leaf on the cheap and replace the battery pack if/when you need to.

2019 Might Be Better

Nissan sold off their battery division in 2017. PushEVs reports that the 2019 Leaf will use an LG Chem cells similar to those in GM vehicles. With these new cells, I assume that Nissan will finally install a liquid-cooled thermal management system and uncork the rapid charging rate. We'll find out later this year.

Our Last Year of Leaf Ownership

A new electric car will take the Leaf's charging spot in our garage this year. We have a day-1 reservation for a Tesla Model 3 and we plan to trade in or sell our Leaf. Tesla's vehicles have had long-term studies that show 90% capacity remaining after 150,000 miles. We excepted to keep our Leaf for 10 years; with the degradation rate we're experiencing that is no longer an option. Perhaps the Model 3 is a car that will go the distance.


Nissan had an early lead in the affordable electric car market. When stepping into a new technology, issues are common. The important thing for a company to do is to acknowledge the issues and rapidly make improvements. Nissan did not do this. They stubbornly stuck to their inferior thermal management system despite the clear evidence that it was producing poor battery life. It's disappointing to see them squander the early mover advantage that they had. This was the first Nissan that I had ever purchased. Initially, for several years actually, I loved it. If things had gone differently, they could have had a customer for life. Instead, my next car will bear a different badge. I hope the 2019 Leaf has much better long-term reliability and that Nissan can maintain some of the goodwill that they built with the Leaf.

You can read my 6-year review here.

Sunday, May 13, 2018

When Will The Federal Tax Credit For Tesla End? [April 2018 Update]

We've had an ongoing series here to track the US sales of Tesla cars to determine when they'll hit the 200,000 mark. This is an important sale for the US EV Tax Credit and it looks like this milestone sale will be happening within the next few months.

The April sales numbers (as estimated by the InsideEVs scorecard), have been added to our chart below.
As you can see, our trendline predicts that the 200,000th sale will occur early in July of this year. If this is when the milestone sale occurs, what will it mean for the incentive?

How Long Will The Incentive Last?

The tax incentive does not stop as soon as the 200,000th car is sold. Instead, the 200k sale starts a phase-out period. The incentive stays in full effect for the rest of the quarter with the 200k sale and for the next quarter. Then the incentive is at 50% for 6 months and then 25% for 6 months.

Possible US Incentive Phase Out Scenario for Tesla
So, if you want to buy a Tesla and receive the full $7500 federal tax credit (assuming you qualify), then (if this prediction is correct) you need to take delivery of your Tesla this year.

Earlier Predictions

In January of 2017, our model predicted that Tesla would sell their 200,000th US vehicle in April of 2018. April has come and gone and the model was too optimistic. Ironically, our prediction was considered pessimistic compared to the other predictions made at this time. Remember, the Model 3 had not yet started production and Musk was making ambitious promises.

By October 2017, it was clear that Model 3 production was not off to a flying start. The car that was designed to be easier to build than any previous Tesla, had plunged the company into "production hell" and accordingly our model had moved the milestone 200k vehicle to June of 2018.

As the rest of 2017 ticked by, our model kept the milestone delivery in solidly in June. By February 2018, it seemed clear that Tesla could hit the milestone in late Q2, but doing so would be a bad idea. First, hitting the incentive late in a quarter hastens the phase-out, but more importantly, it would mean that the full incentive would not be in effect for Q4 2018. If production continues to grow, Tesla could deliver more than 100,000 cars in the last 3 months of this year. That is 100,000 people that would be disappointed not to receive the full tax credit. So, how do you continue to ramp production, while also delaying the 200k US delivery? Send cars to Canada. Which is precisely what Tesla has begun to do.

Thursday, April 19, 2018


We just received an email from Tesla that we'll be receiving a Tesla Powerwall 2. Thank you to everyone that used our referral code. This will go well with our 12 kW of solar PV. I'll blog the install and show you how it impacts our energy utilization.


Tuesday, April 10, 2018

Should I Charge To 100%? Electric Car FAQ

As I write this, for the past 27 months, EV sales have been higher every month. That means there are many new EV drivers out there on the roads today. Charging is one of the subjects of frequently asked questions for new owners:

Should I charge to 100%?
Should I drain the battery before charging?
Should I plug in every day?
Will charging make the battery degrade?
How should I charge to prolong my battery life? ...

Let's look at each of these.

Q: Should I charge to 100%?

A: Only when you need it.

When you need a full charge, for a road trip for example, then, by all means, charge to 100% but this should not be your normal daily charge level. 

Each battery chemistry is a little different. Today's electric cars use Lithium-Ion batteries. Li-ion is "happiest" in the middle third of its charge range. This is where the electrons and ions of Lithium are relatively balanced between the anode and the cathode. 

For daily driving, if you can keep the charge within the middle third you'll maximize your battery life. So for daily driving, charge up between 70 to 80% and avoid discharging below 20%. This will put most of the battery usage in this sweet spot for extending battery life.  

Q: What If I Do Need a 100% Charge?

A: Time the charge so the car does not sit at 100% for long.

When you do need to charge to 100%, there are a couple things you should know:
  1. Charging slows down as the pack approaches full especially with DC fast charging. It can take as long to go from 80% to 100% as it did to go from 40% to 80%. 
  2. Don't stay at a 100% charge for too long: Letting the battery sit at 100% for an extended period of time will result in battery degradation. So plan your charging such that you can hit the road soon after the battery hits 100% full. 

Q: What if I Need to Store My EV?

A: Leave the battery at about a 60% charge. And leave it plugged in if your car allows you to stop charging at less than 100%.

When your car will be sitting for a long time, you don't want to leave it at 100% charge. You do, however, want to have the car plugged in so it can run battery thermal management as needed. So to store your car, set the battery charge at or near 60% and plug in the car.

For one example, here's some of the relevant text from the Tesla Model 3 manual.

Charging Q&A

Here are the quick answers to each of the questions we started with:
  • Should I charge to 100%? No.
    Only charge to 100% for road trips and don't leave the car sitting at 100%.
  • Should I drain the battery before charging? No.
    Li-ion batteries don't suffer from memory effects like Nickel-Cadmium batteries.
  • Should I plug in every day? Yes.
    Set the charge level where you need it and plug in anytime you can. A plugged-in EV is a happy EV.
  • Will it make the battery degrade? No.
    Modern EVs have software that prevents you from damaging the battery in any significant way by your charging habits. You can extend the life a little with careful considerations, but the car is for your use and fun. Charge it however you need to in order to get around as you need. 

More Details

If you want to read more about the impacts of depth-of-discharge (DOD) and battery state-of-charge (SOC) on battery longevity here is an excellent paper on the topic.

Modeling of Lithium-Ion Battery Degradation for Cell Life Assessment

It explains that shallow discharging offers longest battery life. An EVs typically only allow 85% of the battery to be user exposed. So when your car says that it is 100% charged, that is 100% of the "user portion" of the capacity. This is done to prolong battery life.

The paper further shows that full discharge cycles, like those used in many consumer electronics, allows for the longest runtime, but the battery generally has significant degradation within 2 or 3 years worth of charge cycles. This is okay for something that you replace every 2 or 3 years, but would not be good for a car.

Saturday, March 31, 2018

Moats: Why Tesla Can Do What Other Car Companies Only Dream About

A moat surrounds a medieval castle to protect it from attackers
Castel of Brede, photo by Lionel Lourdel 
In modern business parlance, a moat is something that protects a business from competition or gives it an advantage. A moat could be a trade secret, patented product or process, or an asset that represents a significant capital investment. A moat could be a partnership, an exclusive license, a government granted limited-monopoly, or any barrier to a resource or market. The term was popularized by Warren Buffett. He covers moats in his book Buffett Beyond Value and says that he doesn't invest in businesses unless they have one or more moats; otherwise, it's a quick race to the bottom.

"In business, I look for economic castles protected by unbreachable moats." ~Warren Buffett

This story is about Tesla's moats, but I don't mean to imply that Buffett would invest in Tesla. Tesla is far from the value investments of the Berkshire Hathaway portfolio. Rather, Buffett's comments are to demonstrate the importance of moats. Morningstar even has a guide called Why Moats Matter. Understanding the moats a business employs is clearly important to understanding the business and its future. 

In no particular order, here's a list of Tesla's moats: mall stores, direct sales, Supercharger network, brand loyalty, EV mindshare, mission-driven, Tesla Energy, Panasonic partnership, rockstar status CEO, electric motor technology & manufacturing, battery technology & manufacturing, software development, connected cars, AI, talent magnet, fleet learning, SpaceX, vertical integration, over-the-air updates, mobile ranger service, Gigafactory, investor expectations, first mover advantage.

These moats enable Tesla to do things that other automakers cannot even consider. Some of these moats are wider than others. Let's group them and look at them in more detail. If you know of any Tesla moats missing from the list, let me know below.

Stores & Direct Sales

When you buy a Tesla product, you buy it from, well, Tesla. This might seem like a silly statement, but that is not how most car companies operate. Traditional automakers have dealerships. Dealerships are not owned by the manufacturer, they're locally owned businesses. In most states, the automakers are legally forbidden from owning a dealership. Dealerships are middlemen. This means that when you pay for a car, you must pay a price that allows both the manufacturer and the dealership to make a profit on the sale.

Tesla has stores in shopping malls. This allows you see their cars in a familiar and comfortable place. The Tesla employees in the store are not commissioned salespeople. They are there to answer questions, not to "get you into a deal today". There is no haggling; the cars have a Hobson's Choice price: Take it, or leave it. You pay the same price as Elon Musk's mom would pay, the same price as any Tesla board member would pay. This matches well with the online shopping model that Gen Y and younger are accustomed to.

Additionally, Tesla can sell their cars, solar, and energy storage products all under one roof. There's likely to be significant overlap in customers for these products.

* Moats: Mall Stores, Direct Sales

Connected Cars & Over-the-Air Updates

All of Tesla's cars have wireless service. The original cars had 3G, today they have 4G LTE, and when 5G is the standard they'll come equipped with that (or maybe something better). This connectivity allows the navigation system to have up-to-date maps and real-time traffic. Every smartphone has had this feature for over a decade, but in cars, this is still a rarity. In other cars, maps could be years out of date and/or cost hundreds of dollars to update.

The maps and traffic data are nice, but the real advantage of a connected car is software updates. Tesla is constantly improving their software (more on software later) and when a new version is released, after a couple taps on the screen, your car is updated to the latest and greatest. This keeps the ownership experience exciting. You can recapture a bit of the "new car smell" when a new feature or easter egg is added.

* Moats: Connected Cars, OTA Updates, Refreshed SW keeps cars relevant

No Dealerships

A dealership's agenda might not be the same as the manufacturer's and it is not likely the same as yours.

We just discussed over-the-air updates. These are an example where a dealership might have a different interest than you or the manufacturer. Over-the-air updates are convenient for owners; you just wake up to a vehicle with updated software. Well, dealerships in many states could prevent a manufacturer from implementing this feature in their cars. Why? Because that is considered "servicing the vehicle" and the dealership agreement guarantees that all manufacturer service is contracted to the dealership. The dealerships want you to bring your car in often so they have a chance to upsell you on service or to a newer car. If a manufacturer pushes updates over-the-air, they might find themselves in a lawsuit or two with the dealership associations as Tesla has been, albeit for different reasons.

Dealerships make most of their money from service. Anything that prevents a car from coming into the shop is a missed opportunity for them to profit from the customer. Electric vehicles already require far less maintenance than gas cars, if wireless software updates were allowed too then there would be even fewer reasons for the car to visit the dealership on a regular basis.

With Tesla owning their own stores and service centers, Tesla is able to set their own direction without a complex web of multi-state dealership agreements. This gives them flexibility and allows them to define the ownership experience for their vehicles.

* Moat: Ownership of customer experience, No margin sharing

Panasonic Partnership

Tesla and Panasonic are partners in battery and solar technology and manufacturing.

Panasonic announced it would invest more than  $1.6B into the Tesla Gigafactory 1 battery plant. Gigafactory 1 supplies the battery cells for Tesla Model 3, Powerwall, and Powerpack products. Panasonic directly manufactures the 18650 cells that are used in the Model S and X.

Panasonic is also a partner in Gigafactory 2 for solar roof production.

Tesla currently has a hot brand and they are shipping a lot of Panasonic technologies. Panasonic certainly is looking at Tesla as a growth area for their products. Many other automakers are using LG Chem batteries. This means that Panasonic has a vested interest in seeing Tesla survive and grow. This could mean that Panasonic would be willing to invest more into Tesla if cash infusions are needed as Tesla hits bumps in the road getting to mass market production.

* Moats: Strong technology and financial partnership with a behemoth

EV Mindshare

It seems like nearly all headlines about electric cars (any electric car) mentions Tesla. The car being reviewed is either a "Tesla Killer" or "How Does Car X Compare To The Tesla ..."  This was true for the new Leaf, the Jaguar iPace, the Porsche Mission E, and nearly any other new EV coming to market.

This is no different than hybrids and the Toyota Prius. Any new hybrid that comes out is compared to the Prius, because Prius is the benchmark for hybrids. Similarly, Tesla is the benchmark for electric cars. Over the next decade, many automakers will make EVs and they will all be compared to Tesla (range, price, styling, performance...).

As more automakers bring EVs to market, they will be playing the game on Tesla's court.

* Moats: First Mover Advantage, home field advantage, de facto standard

Mission-Driven, Brand, & Rabid Fans

Tesla has a fanbase that other car companies dream about. They have Apple-like devotion with people lining up to buy Tesla's first affordable mass production vehicle. Why does Tesla have such devoted fans? There are as many reasons as there are fans. However, I'll suggest one important reason: Tesla is mission-driven. They are an uncompromised pure-play.

Tesla is not reluctantly making EVs just to meet a state mandate. They didn't recall and crush EVs from the late 90s. They don't have a 100-year history of making gas-burning cars that have put billions of metric tons of CO2 into our atmosphere. They haven't participated in a conspiracy to shut down public transportation. They were not caught cheating on emissions tests.

Tesla makes exciting cars that are fun to drive!

They also make solar panels that can charge the car with energy from the giant fusion reactor in the sky known as the Sun. They make storage batteries so the stored solar energy can power your house after the sun goes down.

People are inspired by Tesla. Their many many fans give them free advertising. Fans make ad videos, write blogs, record Tesla podcasts and YouTube channels. Tesla held a competition for the best fan ad and there were hundreds of submissions. One couple loves Tesla so much, they had a Tesla-themed wedding. Few brands have such devotion.

* Moats: Devoted fan base, dedicated brand, free from historic stains, free fan-based marketing


SpaceX is not part of Tesla, but Elon Musk is at the helm of both companies and they have more cross-over than is initially apparent. Their cross-overs include aluminum fabrication and AutoPilot as well as less direct connections too.

When the engineers at Tesla run into a tough problem, they can literally call rocket scientists. “That’s cross-fertilization of knowledge from the rocket and space industry to auto, back and forth; as I think it’s really been quite valuable,” Musk said on a Tesla earnings call.

Aluminum Fabrication: When you are making rockets, you want them light and strong. Seams are generally weak points. SpaceX uses a specific friction stir welding process that fuses metal parts together without melting them. The end result is stronger and lighter than a traditional aluminum weld, with just 10% waste metal.

AutoPilot: SpaceX's rockets have to operate autonomously for much of their flights, including landing on drone ships at sea. This is very different than navigating city streets, but both of them need to interpret the data from the sensors. Raw data from radar and sonar are very noisy and false positives are common. Decoding these signals is tricky and vitally important. Sharing hard-learned lessons here improves both systems.

Marketing: SpaceX launched a Tesla Roadster into space. This was a huge marketing success. Most aerospace companies would have just used a dummy-load for this type of test launch. So for just the small cost of a used Roadster and a mannequin, Tesla and SpaceX had the most talked about launch in the last decade. According to Reuters, Apple's and Google's corporate brands dropped in an annual survey while... Tesla's rocketed higher after sending a red Roadster into space.

Starlink: Starlink is a satellite broadband communication project by SpaceX. It is to provide low-cost, high-performance satellite-based internet connectivity. SpaceX has just launched the first of the low-earth orbit satellites and plans to put nearly 12,000 of them into orbit by the mid-2020s. The first obvious customer for this service is Tesla. Today, Tesla has to pay for the LTE connection in each of their vehicles. After Starlink is up and running, Tesla can use this network for all of their connected car activities. The service wouldn't be free to Tesla, but it would be one of Musk's companies paying another one of Musk's companies.

Mapping is an important part of autonomous car tech. There are no publicly announced plans, but it's possible that SpaceX satellites could help provide some of this information to Tesla.

* Moats: Access to SpaceX's advanced materials scientists. Access to cross promotions. Possible highly affordable connected car internet service.

Recruiting Talent

If you were fresh out of school and wanted a job at a car company, would you rather work at one of the legacy car companies or at Tesla? Tesla is an innovative Silicon Valley company that makes sexy fast cars. If you want to work in battery tech, AI, automation, or many other fields, Tesla is the place that is treading new ground.

In March of 2018, Tesla was on LinkedIn’s list of top companies that American professionals want to work for, placing 5th and outranking Apple and Disney. Tesla is listed along with tech companies, not automakers. They are (and they are perceived as) a tech company that makes cars, rather than just a car company.

Over 500,000 people applied for jobs at Tesla in 2017. With this many candidates, Tesla is able to hire the cream of the crop. To do things that have never been done before, you have to hire highly skilled people.

* Moat: Desirable employer

Vertical Integration

Most car companies today are predominantly assembly and branding companies. Other than the internal combustion engine, they do very little of the engineering. Instead, they rely on their suppliers. In many cases, even the car designs are outsourced. This means legacy automakers are buying parts and buying others' innovations. Cars generally have 15% or less margin at wholesale, whereas the component suppliers may have 50% margins.

Tesla certainly has suppliers too, but they manufacture far more of their car's components than other automakers. Tesla designs and manufactures their own electric motors and they have vastly improved upon the AC Propulsion motor they started with a decade ago. By controlling the manufacturing of their parts -- especially batteries -- from start to finish, Tesla could create a significant cost advantage.

* Moats: Vehicle design, vehicle engineering, product margin


Tesla's cars are often described as "computers on wheels". They are software controlled. This allows new features to be added, upgrades, improved user interfaces, voice control, and more. The big screen is central to the car and not a de minimis afterthought. Tesla has a large in-house software team to deliver these features that are vital to the driving and ownership experience of Tesla.

Other automakers contract their software to outside firms for various tasks. This means that the navigation “look and feel” may be different from the entertainment system’s.

* Moats: Talented in-house software engineering (see recruiting talent above)

Fleet Learning & AI 

All of Tesla's cars have their full AutoPilot sensor suite of cameras, radar, and sonar. As we discussed above, Tesla's vehicles are connected cars. This means they can receive new software over-the-air. This allows Tesla to test their AutoPilot updates in shadow mode on hundreds of thousands of cars driving millions of miles before rolling them out to customers. Even cars that don't have enhanced AutoPilot or self-driving features enabled are helping to contribute to Tesla's validation efforts. Tesla has more than 300,000 cars on the road around the world gathering valuable feedback for their AI.

Compare this to the autonomous drive efforts of any other company. Other companies have a couple dozen cars on the road with engineers or safety drivers behind the wheel. It takes a long time to get a million+ miles of validation under those conditions. Then the software gets an update and the validation effort has to start all over.

* Moats: Massive fleet of fully instrumented cars

Supercharger Network

One of the drawbacks to EV driving is the difficulty of locating charging facilities while on road trips. Tesla has solved this problem. In most regions where they sell the cars, there is a vast Supercharger network. You simply type the address in for your destination and the car will plot a route for you, showing you each stop that you'll need to make along the way. You can drive from Seattle to Miami or LA to Portland, Maine using Tesla Superchargers all along the route to recharge your car.

Today, there is no other plug-in car that can make such a claim. CHAdeMO and CCS charging stations are clumped in urban areas on the coasts with a large charging wasteland betwixt and between.

Additionally, Tesla's Supercharger network is reliable and easy to use. With other networks, you have to join and carry a card, fob, or app that you have to tap, scan, or activate. With Tesla's network, you just plug in. The protocol for determining who you are and what, if any, fees apply happens automatically when the car is connected.

Reliability and availability are vital to a charging network. If you show up at a location near empty, expecting to charge, only to find the charging station broken down or occupied, this can ruin your trip. Tesla Supercharger stations generally have 6 or more charging stalls. Most have 10+ and a few have as many as 50 charging stalls. So if a stall or two are down for repair, there are still plenty of spots where you can charge. If you're curious about a Tesla Supercharger location along your route, you can tap on it in the car and it will show you how many stalls are there, how many are operational, and how many are occupied. Other networks generally only have 1 charging stall per location. If it is not working or blocked, you're out of luck.

Other automakers are generally not investing in charging networks. They see themselves as automakers, not fuel suppliers. Since their business is not dependent on selling EVs, they are content to let this remain as someone else's problem.

Tesla, on the other hand, is growing a vast network of Superchargers around the globe where they will be able to sell energy above the local residential rate (while still cheaper than gasoline). Tesla has said that charging will not be a profit center for the company, but the revenue will certainly help to pay for expansions of the Supercharger network. Tesla has more than 1200 locations where you can fast charge, with more location coming online every week.

* Moats: Building thousands of Supercharging locations is both time and capital intensive. Network ease of use & reliability. Revenue stream from 'fueling' vehicles.

Workplace & Destination Charging

While we're on the topic of charging, it is important to mention destination charging. There are hotels, bed & breakfasts, wineries, restaurants, ski lodges, malls, and other places that have Level 2 charging for Tesla vehicles. These are often a free amenity at these locations for patrons. These locations want well-heeled Tesla drivers to visit their establishment.

Tesla recently expanded this program and is now offering Level 2 chargers free to employers too.

Other car companies are far behind in providing charging support at this level.

* Moats: Vast network of workplace and destination charging stations


Tesla has a giant battery factory in Nevada. By footprint, it is one of the largest buildings in the world. When it is in full operation, this one factory will make more batteries annually than all of the world's combined factories made in 2013. Tesla has plans for similar factories in Asia and Europe as well.

These factories require a massive outlay of capital. They require a commitment to battery-powered cars as the next generation of personal transportation. Other automakers are only tepidly dabbling in EVs. They are making low-volume "compliance" cars and some are still working on fuel-cells or hail-mary internal combustion solutions.

* Moats: Biggest battery factory in the world, with more coming. Significant capital expenditure.

Investor Expectations 

Why is it that Tesla can spend billions of dollars on battery factories and global Supercharger networks? Whereas, if other automaker CEOs hemorrhaged cash at this rate, they'd be fired faster than a Tesla in Ludicrous mode. The simple answer is the expectation of the board of directors and the shareholders. People who invested in legacy automakers bought into a stable business that pays regular dividends.

Tesla investors, on the other hand, bought into a growth company. They are not looking for Tesla to be profitable today, or anytime soon. Tesla's investors are looking for top-line growth rather than bottom-line profits. Today, Tesla has about 20% of the luxury car market. If they can expand into affordable cars, semis, small crossovers, performance cars, pickup trucks, and who know what else with a similar market share, Tesla could be one of the most valuable companies in the world. And as we discussed above, owing to direct sales and vertical integration, Tesla has the ability to sell cars with better profit margin than any other automaker can. Or so goes the hope of people (like me) who are invested in Tesla.

Amazon is a good comparison. For years Amazon sank their revenue back into their growth rather than paying out dividends to investors. In May 1997, Amazon went public at $18 per share. As I write this, the stock is nearly $1500 per share. And that's after 3 stock splits. Amazon investors were looking for growth, not profits and dividends. Today, Tesla investors have the same growth mentality. As market darlings, Tesla can raise capital by issuing shares, bonds, or taking loans. This allows them to pursue big efforts as long as they are delivering growth.

* Moats: Investor expectation of growth rather than quarterly profits

Rockstar CEO

Love him or hate him, Musk is by far the most widely known CEO of a car company since Henry Ford. This fame and fandom allow Musk to put out a message and have it echoed through his social media presence. When he tweets, it is news. The Boring Company, another of Musk’s ventures, has sold hats, flamethrowers, fire extinguishers, and now lifesize LEGO-like interlocking bricks made from tunneling rock. Fans have bought and will buy these because they are fans and want to signal their devotion to the Musk tribe.

This media attention can be a double-edged sword. When Tesla misses a deadline or a Tesla vehicle is in a crash, it gets as much media attention as Tesla's successes do. But for a company, the only thing worse than too much media attention... is *no* media attention.

Musk's past accomplishments, circle of friends, and current status allow him to raise money. This is important until Tesla's vehicle production is at a volume that would allow them to be consistently profitable (about 1 year from now by our estimation).

* Moats: Media attention, Ability to raise capital


In addition to trying to reinvent personal transportation, auto sales methods, and home energy, Tesla is trying to reinvent the way that cars are manufactured. This is "the machine that builds the machine".

In 2016, Tesla acquired German automation company, Grohmann Engineering. This was one step to reinvent the auto factory. Musk has said that their factory will look so radically different from traditional factories that it would seem like an alien dreadnaught. Staying true to Tesla's Silicon Valley root Musk said, "It might look like a giant chip pick-and-place machine...".

Musk has said that if you look at the rate that cars come off the end of the line in today's auto factories, it's slower than "grandma with a walker". Musk would like his factory to move at least at a jogging pace. He wants the robots to be moving so fast that air drag is a relevant factor.

Musk has even talked about Tesla selling their factory designs as a product.

Today, however, companies like GM, Ford, and Toyota are not impressed with the speed or quality of Tesla's manufacturing and have no intention of trading in their factories for a Tesla Dreadnaught.

The results of the current version 0.5 Dreadnaught are not Earth-shattering, but that does not mean that it won't eventually be revolutionary. For example, when Nicolaus Copernicus first introduced his heliocentric system, it was not well received. In fact, initially, it did a worse job at predicting the movements of the planets than the existing Earth-centric Ptolemaic system. That was because the Ptolemaic system had been refined for 1400 years and it had been finely tuned to account for all of the perturbations in the night sky.

Today Toyota's Kaizen method is vastly superior to Tesla's Dreadnaught. The modern car manufacturing process is a big improvement over the assembly line that Ford used, but it is an evolution of that same 100-year-old method. The question is, once refined, will Dreadnaught be the system that replaces it?

The modern assembly line was designed around people operating it. Robots have replaced many of the people on the line, but the robots are retrofitted into a system made for people. Dreadnaught, on the other hand, is a system that is designed around robots. This is not all that different from the clean slate design of Tesla's cars. They are not gas cars retrofitted with batteries and motors. They were designed from the beginning to be electric.

Dreadnaught could be the system that allows manufacturing to make a leap forward, or it could be an expensive failed experiment. Time will tell.

* Moats: None yet, but maybe Dreadnaught 3.0 will make the manufacturing world take notice.


Tesla has looked at all the objections that someone may have to buying an electric car and they have done their best to resolve them. They have made EVs that are cool, fast, and fun. They have made road trips possible. They have made home and destination charging convenient. They are working on battery and vehicle manufacturing to increase the volume and bring down the cost. They have allowed you to "drive on sunshine". Tesla has created a compelling narrative that is far beyond just the vehicles they sell.

In the process of resolving the objections to electric vehicles, Tesla has created a long list of moats. Tesla's moats are not unbreachable, but some of them are far outside the culture of the traditional automakers or beyond the template that the investors impose upon them. Even the automakers that are making EVs are trying to compete with the car's features or price. They don't even know how to compete with the Tesla narrative. It seems Tesla will stand apart from the crowd for many years, even after the legacy automakers become fully committed to electric cars.

Disclosure: I'm long Tesla