Tesla sells 5K cars....in one quarter

[Porsche Chick]

Originally Posted by stephen wilson

The Tesla is cool, but electric only vehicles are still only practical for short commutes. The range is only 200 miles at a constant Hwy. speed, spirited driving will kill the battery very quickly. Besides, they still consume fossil fuels, just via powerplants instead of directly. Powerplants have fewer environmental controls than autos, so I don't even buy the Eco-friendly angle.

I agree, 100%.

The only truly green car is the Prius, because it harnesses Unused, FREE energy that is created by the car's inertia. It's genius engineering.

As a side note, I saw a report on an energy system that was embedded into road surfaces (it used flexing panels) to harness the energy of cars driving on the road. The flexing panels recharged batteries that were used to power buildings adjacent to the road. That is, again, harnessing energy that is free and wasted.

Simply plugging into a powerplant does not impress me.

[stephen wilson]

Originally Posted by Porsche Chick

because it harnesses Unused, FREE energy that is created by the car's inertia

I agree that regenerative braking is the real "something for nothing" solution. Of course it still requires the batteries for energy storage.


Perfect, I agree, most people don't care much how a car drives. Even my wife, who does care, bought a A5 with what I consider a completely inadequate test drive "around the block".

Chris, "normal folks" with a large disposable income. No one I know can afford a car starting at $60k to "save" money on gas. People aren't buying them because they can't afford gas!

[Daniel R]

Mazda makes a car available in Australia that has regenerative braking but uses capacitors for storage rather than expensive batteries. The car is not a hybrid, just has regenerative braking, the best feature of hybrid cars IMHO.

Originally Posted by stephen wilson

I agree that regenerative braking is the real "something for nothing" solution. Of course it still requires the batteries for energy storage.


Perfect, I agree, most people don't care much how a car drives. Even my wife, who does care, bought a A5 with what I consider a completely inadequate test drive "around the block".

Chris, "normal folks" with a large disposable income. No one I know can afford a car starting at $60k to "save" money on gas. People aren't buying them because they can't afford gas!

[Daniel R]

Perfectlap

I don't know where to begin. This is a a topic best discussed over several hours and bottles of wine.

The performance of Tesla stock is, in my opinion, really just a price of oil story. At the moment, there are only 3 things in world markets that matter. The price of energy, US dollar interest rates and Chinese economic growth.

I will cop it for my opinion here, but I believe that this alternative energy "fad" is just that. The only reason alternatives make sense at the moment is that oil is trading above $100 a barrel. Add government subsidies, cheap raw materials out of China because the Chinese government is also subsidising industry very heavily and taxes on carbon emissions and we have the perfect environment for inefficient "green" technologies to flourish.

Since other posters are talking their book, I will say that I am short oil. I personally believe that the current price is not sustainable. It is inflated by speculators and also by insatiable Chinese demand that is used for less than economically efficient purposes. Chinese GDP growth based on government expenditure financing bridges to nowhere and the construction of ghost cities with the equivalent of muni debt is not real growth. People are not leaving the farms fast enough, a middle class is not emerging, many large businesses are not sustainable without government subsidies and wages are rising due to persistent inflation which is costing China some of it's competitiveness. The China story will not end well.

The one nation to back at the moment is the US (I am Australian btw) as I believe that once the oil price falls back to the $30 - $40 a barrel that it should be the US will be back to the economic powerhouse it was and this will be possible again due to cheap energy. Unfortunately this will mean the death of renewables again, until the next oil spike anyway.

The beautiful thing is that expensive oil is disruptive and encourages us to become creative and find better and more efficient ways of spending energy. Most of our ideas are simply useless when oil returns to a normal level and subsidies dry up. There will be some technologies however (regenerative braking perhaps) that will prove to be useful even with cheaper oil and will continue to save us money and help to reduce emissions for the benefit of the environment. We saw this in the automotive industry in Europe with the oil shock in the '70's when aluminium engine blocks and double overhead camshafts were created to make engines more efficient since fuel had become so expensive. These technologies may not have been developed until much later had it not been for temporarily expensive oil.

Heed the warning, if anyone wants to buy an electric car my advice is to also buy some long-dated and deep out-of-the-money put options on oil. A great hedge for the value of your car.

Now I'll keep some powder dry to defend the backlash...

[haz]

Cant wait for my brothers Model S to arrive i october. He also bought a bunch of stocks before this summer, so thats nice. I have driven it twice now and the instant torque from standing still is something that cannot be explained in words.

[Perfectlap]

I would agree that the eco and cost savings claims of hybrid and EV cars are inflated. But the benefits will improve over time. The thing is people want to disrupt the status quo. People who appreciate technology and engineering (often the the educated wealthy) think it ridiculous that we are still filling up cars with gasoline and diesel while so many other things in their daily lives can be plugged in. Obviously this creates more strain on our dilapidated power grid and has the potential to explode electrical costs but that too highlights the urgency to address infrastructure and to find new ways to produce electric power. In my book we should be importing engineers by the truckload every day to do nothing but developing ways to capitalize on natural gas to produce cheap electricity, nat gas is a commodity we have no short supply. T. Boone Pickens is going to have his work cut out for him in taking on the coal lobby and the Koch brothers who spend billions to keep it a coal or nuclear only choice.

As far as the price of oil, I would agree that these cyclical spikes force us to reconsider the way we produce and spend energy, but the harm far outweighs the benefits. Only a few see a net benefit from high oil prices while its effect on aggregate demand spill over to every single consumer in what became a consumer economy long ago. But at the same time I don't blame the professional traders, they go short like yourself just as often as they go long. The problem is with these outside investors that play the market in only one direction, up. Much like the minuscule number of retail investors who will ever short a stock, they provide the market with a never-ending supply of capital with each paycheck's 401K contribution. Blind money that pushes price action and volume higher. The market for oil seems to have gotten in their heads that even though this economy is consuming less oil than ever before, that other economies will deliver on the peak oil theory. And few are betting against the Chinas of the world. Even if China has their long over due hard landing, the long-term picture is obvious, they have become the world's factory -- that title is going to demand more of every type of commodity and technology. As long as that's the case speculation in oil and other industrial and agricultural commodities will continue to push prices higher. You would in essence have to prove absolutely that China, India, and the rest are all farce to convince speculators to trade these commodities with a mindset that there will always be enough for all. How do you prove an unknown, the future level of demand? impossible.

As far as the U.S. with regards to our current woes. These were decades in the making and long pre-date spikes in oil. The U.S. worker has become less vital to U.S. commerce. Back in the early 20th century Henry Ford doubled the average worker's pay and declared that he would share a mind-boggling dividend with these very workers. His competitors thought he lost his mind and declared that he would single-handedly ruin the economy. And today most CEO's would laugh at ever contemplating such ideas of "sharing the wealth". The important thing is that factory jobs is what allowed Henry Ford to double worker pay with a single phone call, those factory jobs have left our shores and have been replaced with low paying service jobs. Unless we can claw those back this decades in the making decline, first from automation and now from outsourcing, will only collide with higher and higher costs of living. We created a short term solution to falling wages and a drastic gap income inequality with a securitization bonanza of all forms of borrowing, but this alchemy met its predictable demise and we were back to square one of falling middle class wages. U.S. corporations and banks are not overly concerned with the gap in incomes and the weak domestic demand domestic it creates since these U.S. multi-nationals, as well as major banks have untapped foreign markets for their goods and project financing that now account for half of more of total revenues. Even during a protracted U.S. recession, they can have their best years ever. The one bright side is that we still have the most liquid and transparent financial markets, which will always be China's downfall, which means we have good odds at continuing to be the place to park money safely for global investors. No matter how bad things here may get, investors will see other markets as worse. Europe is trying to sustain an inherently flawed Euro that bars weak states from devaluing their currency to get back to even after austerity, Latin America will always be an unpredictable bubble to bust cycle pegged to Chinese demand, China will have have three sets of cooked books, and few other economies are large enough to handle what our financial institutions can easily accomodate. In essence we will become a giant Switzerland with over-priced healthcare, much lower quality of life and a huge military.

Originally Posted by Daniel R

Perfectlap

I don't know where to begin. This is a a topic best discussed over several hours and bottles of wine.

The performance of Tesla stock is, in my opinion, really just a price of oil story. At the moment, there are only 3 things in world markets that matter. The price of energy, US dollar interest rates and Chinese economic growth.

I will cop it for my opinion here, but I believe that this alternative energy "fad" is just that. The only reason alternatives make sense at the moment is that oil is trading above $100 a barrel. Add government subsidies, cheap raw materials out of China because the Chinese government is also subsidising industry very heavily and taxes on carbon emissions and we have the perfect environment for inefficient "green" technologies to flourish.

Since other posters are talking their book, I will say that I am short oil. I personally believe that the current price is not sustainable. It is inflated by speculators and also by insatiable Chinese demand that is used for less than economically efficient purposes. Chinese GDP growth based on government expenditure financing bridges to nowhere and the construction of ghost cities with the equivalent of muni debt is not real growth. People are not leaving the farms fast enough, a middle class is not emerging, many large businesses are not sustainable without government subsidies and wages are rising due to persistent inflation which is costing China some of it's competitiveness. The China story will not end well.

The one nation to back at the moment is the US (I am Australian btw) as I believe that once the oil price falls back to the $30 - $40 a barrel that it should be the US will be back to the economic powerhouse it was and this will be possible again due to cheap energy. Unfortunately this will mean the death of renewables again, until the next oil spike anyway.

The beautiful thing is that expensive oil is disruptive and encourages us to become creative and find better and more efficient ways of spending energy. Most of our ideas are simply useless when oil returns to a normal level and subsidies dry up. There will be some technologies however (regenerative braking perhaps) that will prove to be useful even with cheaper oil and will continue to save us money and help to reduce emissions for the benefit of the environment. We saw this in the automotive industry in Europe with the oil shock in the '70's when aluminium engine blocks and double overhead camshafts were created to make engines more efficient since fuel had become so expensive. These technologies may not have been developed until much later had it not been for temporarily expensive oil.

Heed the warning, if anyone wants to buy an electric car my advice is to also buy some long-dated and deep out-of-the-money put options on oil. A great hedge for the value of your car.

Now I'll keep some powder dry to defend the backlash...

[Daniel R]

I agree with almost everything you have said. The educated wealthy leading the charge towards alternatives... absolutely. I have a number of friends who fit that bill, putting solar panels on their roofs and buying hybrids, they are often hippies at heart but with plenty of money.

While natural gas may be the answer in the near future, the infrastructure necessary to make this a reality doesn't quite exist yet. Pushing electric cars too prematurely might just be putting the cart before the horse. In the decade (or possibly longer) or so that this will take, more time can be spent on R&D improving battery and capacitor technology. I know that a university in my city is studying capacitors and apparently the latest research is in experimental capacitors with 200 times the capacitance of current, commercially available capacitors. This, along with all the other developments we can look forward to, will eventually make electric cars a viable alternative, even with oil back near its long-run average price.

Back to the oil price, I agree that spikes are bad for the economy. Volatility in energy markets is never a good thing, although it is a fact of life that we cannot do much about. Talking about AD you sound like a Keynesian, I am closer to the Austrian school myself. I agree that there is too much "dumb money" on the bid side in the oil market, along with the trading banks manipulating the market buying the physical and selling futures a few months out - banking the contango until delivering against the futures contract. Again, probably not the bankers fault, idiotic buying in the futures market allows such a disproportionately large contango to exist that can be arbitraged.

In terms of China however, they are plain wrong. China cannot continue on this trajectory, period. The interesting thing is that after this period of sustained expensive energy, all of the investments in alternatives that only made sense with $100 oil and government subsidies, will still be a part of the energy mix when oil falls. The capex is already spent and I would not thing running and maintenance costs of solar panels or wind farms are anything more than negligible. This all points to an exacerbated fall in oil prices once the world works out there is far too much productive output, or "stuff" in layman's terms, than the current "real" wealth of the world can afford. It will just culminate in a huge hangover from bringing forward productive capacity before it was needed, and we will just have to sit tight and wait until real demand can catch up.

In terms of the US economy, I agree that having a manufacturing base is critical to economic strength. My bet is that we are only seeing the beginning of these currency wars. The US was first to the punch and has been rewarded handsomely. Europe is handcuffed in this respect, as you mentioned, but it will not be long before every nation in the world is debasing to try and "stay ahead". Of course there can be no winner to this game, so the next move is to start "trade wars". Embargoes and tariffs will be rife, decades of work by the WTO will be undone, a breakdown of globalisation will ensue.

Just my 2c

P.S. Are you an economist, Perfectlap? I am a financial markets guy myself, but I consider armchair economics a hobby that goes well with friends and wine.

Originally Posted by Perfectlap

I would agree that the eco and cost savings claims of hybrid and EV cars are inflated. But the benefits will improve over time. The thing is people want to disrupt the status quo. People who appreciate technology and engineering (often the the educated wealthy) think it ridiculous that we are still filling up cars with gasoline and diesel while so many other things in their daily lives can be plugged in. Obviously this creates more strain on our dilapidated power grid and has the potential to explode electrical costs but that too highlights the urgency to address infrastructure and to find new ways to produce electric power. In my book we should be importing engineers by the truckload every day to do nothing but developing ways to capitalize on natural gas to produce cheap electricity, nat gas is a commodity we have no short supply. T. Boone Pickens is going to have his work cut out for him in taking on the coal lobby and the Koch brothers who spend billions to keep it a coal or nuclear only choice.

As far as the price of oil, I would agree that these cyclical spikes force us to reconsider the way we produce and spend energy, but the harm far outweighs the benefits. Only a few see a net benefit from high oil prices while its effect on aggregate demand spill over to every single consumer in what became a consumer economy long ago. But at the same time I don't blame the professional traders, they go short like yourself just as often as they go long. The problem is with these outside investors that play the market in only one direction, up. Much like the minuscule number of retail investors who will ever short a stock, they provide the market with a never-ending supply of capital with each paycheck's 401K contribution. Blind money that pushes price action and volume higher. The market for oil seems to have gotten in their heads that even though this economy is consuming less oil than ever before, that other economies will deliver on the peak oil theory. And few are betting against the Chinas of the world. Even if China has their long over due hard landing, the long-term picture is obvious, they have become the world's factory -- that title is going to demand more of every type of commodity and technology. As long as that's the case speculation in oil and other industrial and agricultural commodities will continue to push prices higher. You would in essence have to prove absolutely that China, India, and the rest are all farce to convince speculators to trade these commodities with a mindset that there will always be enough for all. How do you prove an unknown, the future level of demand? impossible.

As far as the U.S. with regards to our current woes. These were decades in the making and long pre-date spikes in oil. The U.S. worker has become less vital to U.S. commerce. Back in the early 20th century Henry Ford doubled the average worker's pay and declared that he would share a mind-boggling dividend with these very workers. His competitors thought he lost his mind and declared that he would single-handedly ruin the economy. And today most CEO's would laugh at ever contemplating such ideas of "sharing the wealth". The important thing is that factory jobs is what allowed Henry Ford to double worker pay with a single phone call, those factory jobs have left our shores and have been replaced with low paying service jobs. Unless we can claw those back this decades in the making decline, first from automation and now from outsourcing, will only collide with higher and higher costs of living. We created a short term solution to falling wages and a drastic gap income inequality with a securitization bonanza of all forms of borrowing, but this alchemy met its predictable demise and we were back to square one of falling middle class wages. U.S. corporations and banks are not overly concerned with the gap in incomes and the weak domestic demand domestic it creates since these U.S. multi-nationals, as well as major banks have untapped foreign markets for their goods and project financing that now account for half of more of total revenues. Even during a protracted U.S. recession, they can have their best years ever. The one bright side is that we still have the most liquid and transparent financial markets, which will always be China's downfall, which means we have good odds at continuing to be the place to park money safely for global investors. No matter how bad things here may get, investors will see other markets as worse. Europe is trying to sustain an inherently flawed Euro that bars weak states from devaluing their currency to get back to even after austerity, Latin America will always be an unpredictable bubble to bust cycle pegged to Chinese demand, China will have have three sets of cooked books, and few other economies are large enough to handle what our financial institutions can easily accomodate. In essence we will become a giant Switzerland with over-priced healthcare, much lower quality of life and a huge military.