Electric Vehicles

Falling Gas Prices: Will This Impact Tesla’s Plans?

Who would have thought that the Organization of the Petroleum Exporting Companies (OPEC) would suddenly become so irrelevant? This powerful group controlled the production and price of a barrel of oil for decades and as you can see by the chart below they are under enormous economic pressure as well as, for the first time, significant competition for production.

Oil Price Chart 2

The United States, once so oil-dependent, is now emerging as one of the top producers of crude oil in the world. The price of a barrel of oil has fallen over half since July. As a result we have falling gas prices, which for most people is good news. Many of us are dependent on our cars to get us to work, school, run necessary errands, even take vacations. Gas has been a significant line item in the household budget. It’s now taking less of a bite out of that take home paycheck.

One of the big attractions of an electric vehicle is the owner never needs to buy gas. It was indeed a big factor in my total cost of ownership spreadsheet analysis when I decided to purchase my Model S. So how will what we might call “cheap gas” impact Tesla’s plans and how do I feel about that as a Tesla owner?

Tesla is more interested in eliminating carbon emissions, not necessarily saving people money at the pump. Their mission statement includes the following.

Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.

Current Model S buyers are not cash constrained and don’t watch the pump price as they drive their current cars. The Tesla Model S and others on the drawing board is about a completely reimagined version of the automobile. Disruption of the old guard of car manufacturing and built in Silicon Valley.

Clearly the Tesla Model S and the forthcoming Model X will only attract high end buyers. The success of these cars as well as the Gigafactory which will mass produce batteries at a much lower cost, are required before the Model 3 can become a reality. The Model 3 will be much more affordable and, if successful and in the target price zone car-buyers need, it will be the game-changer needed to propel electric vehicle adoption.

Tesla’s work means they are light years ahead of any typical gas car manufacturer when it comes to EV’s. No internal combustion car company could make the Tesla. It’s much harder to change than it is to start from scratch when it comes to innovation. That’s why Sears could never have become Amazon. They are simply not even on the same planet. The Tesla car is a design marvel and great design always wins. Think Apple over Microsoft.

History has shown that when consumers can save at the pump they don’t automatically spend the difference somewhere else. It’s also important to remember that despite less money being spent on fuel, the cost of maintenance, both economic and in time remains unchanged. EV’s require little to no service.

This change in gas price is so dramatic that I believe consumers who are right now looking at their 2015 budgets, might just entertain the concept of holding off to the side a fund for the Model 3.

Do lower gas prices make my economic analysis less compelling today than when I did it two years ago? No question about it. But my buyer’s remorse matches my emissions output; zero.

 

Owning Model S – Book Review

UnknownThe Model S is in it’s infancy compared to global automotive standards. The Corvette is over 60 years old, this year the Mustang hits 50 and Rolls Royce was founded 110 years ago. In contrast, the Model S is less than two years old, so at that young age there’s not much history to report. We hear almost as much talk about Elon Musk, Tesla Motor’s CEO, and Tesla stock than the car; except that is, from the drivers.

Nick J. Howe is not really an unusual Model S driver, he has just taken it to an entirely new level. He’s been focused on Tesla and the concept of the Model S years before it hit the production line. He and I are in the same camp because we own and drive a Model S, but that’s where the similarity ends. Mr. Howe has been cataloging data, making observations and connecting with other Tesla enthusiasts on forums since the very early days. He has taken all that knowledge and insight and written it down in a book, Owning Model S: The Definitive Guide to Buying and Owning the Tesla Model S. That’s a mouthful. I prefer shorter titles.

The book is modest looking as trade paperbacks go. Glossy but sturdy paper stock covers the shiny pages on the interior. It has that self-published look and feel throughout. Not a bad thing, but I am looking forward to the day when someone will publish a rich, large volume dedicated to this innovation. I’m talking coffee table style. Hardcover, printed in Italy on acid free paper in 12 color. There’s a challenge.

We have all heard the idiom, “Never judge a book by it’s cover.” Here’s a prime example. This volume is jam-packed with details, tips, personal anecdotes and resources that validates the author’s claim as the “definitive guide.”

I was hard pressed to come up with many things not covered in some manner by Mr. Howe. He goes from the dawning of Tesla Motors, to his excitement of the experience of configuring and ordering the car to the excruciating wait (downplayed in the book) until delivery day. This is only the beginning. He goes on to cover every feature, detail and how it impacts everyday use. It’s actually more of a deconstruction of the entire concept than a guide to the car. He’s giddy  over the car’s obvious performance elements but doesn’t shy away from reporting the glitches uncovered early on as well as what he feels is missing inside the cabin. He wants interior brace handles, clothes hooks, cup holders, etc. Personally I love the minimalist expression of the car and am happy the creature comforts of the past were rejected by Tesla designers. The Model S looks like a sexy gas car at first glance, but when you look more closely you see something entirely different. The cool thing is no one really expects it to be an EV.

His writing approach strikes a smart balance between practical and scientific. I use scientific purposely. The technology age would not officially emerge for decades beyond Nikola Tesla and his magical experiments. Tesla was more of a sorcerer and was convinced he could bend the laws of nature to his liking. The Model S is a technology device embedded in a mode of personal transportation and to leave out discussion on these things would be a mistake. Howe breaks down the power train, regenerative braking and the battery into simple English so we can all understand and appreciate what went into designing the car and why it handles like no other.

I learned a lot of little things about the car that I’m now incorporating into my routine or cataloging away for a day when it will be very useful. The getting ready for delivery section might seem trivial, but this is not your normal car and you need to be ready or you will be somewhat frustrated. The writing style is short sentences. Lots of breaks, bullets, illustrations, diagrams and emphasis boxes. It’s feels like a PowerPoint presentation at times, but you can easily find what you’re looking for thanks to an exhaustive table of contents and a good index. I hate it when authors don’t include an index.

One of my favorite items in the book is Decoding Your VIN. It’s the geek in me.

VIN Decoded

One Thing Bothers Me

I do have to say that I would like people to stop referring to supercharging as “free for life.” If you have an 85Kw battery then your Model S is activated for supercharging at the factory. The $10,000 premium paid for the additional electricity storage likely has a predicted supercharger usage factored in. Today’s price to activate supercharging on a 60Kw battery is $2,500. True enough there is no additional cost for plugging-in once you make that one time payment, but if we use Mr. Howe’s formula of 8,000 miles driven equals $300 in electricity cost, then a 60Kw driver would need to plug exclusively into a supercharger over the course of driving 66,000 miles to break even. Unlikely, if not impossible.

I found myself referring back to this book several times to remind me of something or add clarity to what I thought I already knew. Thank you Mr. Howe for doing all the hard work. If you own are will be soon owning a Model S, this book is worth the investment. For me it goes right into the glove box of my Model S. Or should we really call it the J1772 adaptor box?

Roger Pressman, founder of teslaaccessories.com and very early Model S adaptor is to be thanked for recognizing the value in this material and working to get it published.

Get your copy of Owning Model S here.

Read a prior post on another book about the Model S. Tesla Model S: Best Car Ever

My calculations on the Total cost of ownership of a Model S

Model S Registered in all 50 States

Edmunds.com has reported that the Model S from Tesla now has registrations in all fifty states. Nice job Illinois.

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