The Green(back) Revolution: Why Tesla Is Just A Distraction

Tyler Durden's picture




 

Tesla has been outselling specific Mercedes, BMW and Audi models at similar price/quality points, and Consumer Reports has given the car glowing reviews. Is there a broader meaning in this, other than the introduction of a very well-designed luxury automobile? JPMorgan's Michael Cembalest's suggests that the Tesla’s price and its fossil fuel footprint suggest that it’s a distraction regarding the issue of transportation and related environmental efficiencies.

 

Via JPMorgan's Michael Cembalest,

The Tesla Solution

 

[Vaclac Smil and] I pulled together some charts to illustrate both of his points.

 

 

 

Note that Tesla prices are net of the $7,500 credit that buyers receive, and after Tesla benefits from ZEV/GHG credits paid to it by its competitors. In the 2nd chart, you can see that the current fossil fuel footprint of the Tesla is not much different than the Honda Civic. It’s also higher than the Civic Hybrid, a car that gets all of its electricity through regenerative braking rather from than the electricity grid.

 

Currently, the "zero-emissions" Tesla Model S generates a fossil fuel footprint that is not much different than the Honda Civic. There are scenarios in which the Tesla's imprint could be lower, but they are all in the future

An explanation of the scenario analysis in the second chart:

  • 0. Tesla, Current: see table on next page for the energy math.
  • 1. Vamp: Tesla figures out how to reduce the vampire (standby) electricity loss by 80%, an issue in the car’s software which some users report as draining ~3.5 kWh per day from the battery when the car is idle
  • 2. C->NG: Within fossil fuels, the split between coal and natural gas, which is currently 63/37, falls to 50/50 as older coal plants continue to be shut down and more natural gas plants are built
  • 3. Foss: Fossil fuels fall from their current 67% share of US electricity generation to 60%. This sounds like a small change, but they have ranged from 65% to 72% for the last 30 years in the US. For an even larger decline on a national level, more nuclear and/or a break-through on battery storage of intermittent renewable energy would probably be needed
  • 4. Therm: Thermal efficiency of coal and gas plants rise closer to theoretical maximums. However, on coal, emissions standards and greater coal plant cycling impose parasitic loads that may make theoretical maximums hard to reach.
  • 5. Assume that 1, 2 and 3 take place simultaneously
  • 6. Assume that 1, 2 and 3 take place simultaneously, and that the Tesla is used just in low-fossil fuel states

A colleague of mine here at J.P. Morgan believes that Tesla’s long-range plan is to provide proof of concept at the luxury end of the market, and then eventually commoditize the concept at lower price points. If that’s what happens, and if the electricity “ifs” shown above take place, then Tesla would merit the attention they’re getting for current annual production of 20,000 units on a base of 15 million U.S. cars sold each year.

 

Otherwise, what we may be witnessing is simply a green revolution where green represents the buying power of the Tesla’s wealthy driver rather than a substantial environmental benefit.

 

The broader point is that the oft-promised rose garden of substantially lower environmental footprints from electric vehicles may be decades away from blooming, at least in the US. In the meantime, modest improvements in the internal combustion engine, changes in driving patterns and a move away from heavier, low-mpg cars could get to a similar place.

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Wed, 05/29/2013 - 09:27 | 3607084 Mercury
Mercury's picture

...or just

#5 Assume that neither Tesla or anyone else will circumvent the laws of thermodynamics.

http://www.coyoteblog.com/coyote_blog/2013/05/bringing-skepticism-and-math-to-electric-vehicle-fuel-numbers.html

Wed, 05/29/2013 - 09:27 | 3607095 SheepDog-One
SheepDog-One's picture

Yea, but that deals exclusively with closed systems and Bernank's system is all open ended and based upon Alchemy.

Wed, 05/29/2013 - 09:35 | 3607120 BLOTTO
BLOTTO's picture

Tesla and financials don't mix...he would probably just laugh at all that bulshit as he worked on patent/invention #XXXX for the goodness of the world...

.

not the money.

Wed, 05/29/2013 - 10:02 | 3607220 francis_sawyer
francis_sawyer's picture

If I hear the term 'fossil fuel friendly' one more time I'm going to have an aneurysm...

Wed, 05/29/2013 - 10:32 | 3607344 tango
tango's picture

I can't believe we agree on something!  Also add "going green" (an automatic dismissal),  anthing ending with "gate", "carbon footprint" the "N" word, "Hollywood marriage" and "dude/bro/mAM, home boy - hommie"

Wed, 05/29/2013 - 13:13 | 3607881 redpill
redpill's picture

People who want to make an environmental statement buy a Leaf or a Prius.  People buy Teslas because they are very good cars in their own right.  And why would you compare a $60k-$100k luxury car to a Civic Hybrid?

Wed, 05/29/2013 - 15:43 | 3608357 tango
tango's picture

You replied to me but I think you meant it for someone else.  I did no comparisons and in fact we drive 3 Hondas (2 Accords, 1 Civic).  I do realize that technology is rapidly changing the transportation industry and what we have in 10 years may not resemble what we think in the least. 

Wed, 05/29/2013 - 10:36 | 3607356 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

fossil fuel is enough of news double speak for me

Wed, 05/29/2013 - 10:37 | 3607358 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

or technologies that as he stated "can rip the world in half".... 

 

are you of the camp that he sabotaged his own works when he realized how nazified us had become?

Wed, 05/29/2013 - 09:36 | 3607122 Oh regional Indian
Oh regional Indian's picture

Elon Musk, From a greener earth to mars and (not) back, flying dragons and everythign in between.

Theman, the company, the shit piece of technology they are selling to the rich green fool... all one giant scam.

Oh, that he is a jew is just co inky dink.

Pay me pal, just pay me.

ori

Wed, 05/29/2013 - 10:38 | 3607353 JOYFUL
JOYFUL's picture

Nice to see you around ORI... your comment is copesetic with the one I was working pon here... so I think I'll slide it in right here... I believe I remember you mentioning you were a rider too at some point!

The title of this piece is ironically accurate in a manner that for once places the implicit ironicism of the typical ZH play pon words firmly where it belongs...

in fact, thanks to the astonishing duplicity of attempts such as this one to utilize the jargon suitable to the task of inducing a  'green-gullible' goydom... to dissipate it's remaining wealth\resources upon the most inefficient, bankrupting, and self-destructive media-manipulated marketing scams, we can indeed identify just whom the modern day equivalents of the famed "Luddites" might be!

You have to luv that it takes an employee of the Morgue to deliver the goods on this 'distraction' from the really real... only a member of the pillaging classes could be entrusted with defining the [un]real cost of the goods n services which the masters of the universe proffer as the sole solution to the challenge of 'stayin alive' in the C21st... mo better ways to inflict taxation... subsidies... centralization .. and loss of local control onto a population already sufficiently cowered as to be unable to get to and from their nighttime nests wherein they recoup the energies necessary to return to their wage slave stations except via the utmostly 'modern'\costly means of idiotically in-efficient type of [social]capital-destructive conveyance....

meanwhiles...  down on what remains of  ...the farm... we find the truest measure of energy efficiencies takes the form of those formerly beloved four-legged friends - who tirelessly transform the photosynthetic bounties which the creator\source has blessed us with... into joules and other measurments of power plasticitiy ... with a seamless enthusiasm and reliability... which because it adds naught to the coffers of the kosher kleptocractic klans... is scorned and laughed at as being stone age technology...

yet

The horse has a long working life during which 1/3 of the energy it consumes as food is reusable as manure whereas 2/3 of the fuel energy used by a tractor is lost as heat and exhaust fumes...

and instead of devoting endless acres of productive land to producing un-economic(and tax subsidized) 'bio-fuels'... were one to power the transport pool with the low-input, low cost forage crops which make the most cost-efficient energy useage of said lands... well... who really cares as long as we can go over to middle eastern locales and pilfer petro-products from the sand niggers, right! After all... in return for their oil... we bring them democracy n stuff!

No need to mention that all this smoke n mirrors about 'green' cars is based upon the same ol nuclear... and\or fracking sources of 'green' energy as the socialist in chief loves to give out tax credits on scams to his wall street buddies for.

Since there are no sources of data for comparable costs of 'automotive' vs horse consumer conveyances, all we can use in reference is the farm-based comparisons for now. But at the end of the day... the costs of runnin around in your little(gps tracking-mandated) state-licensed slave-mobile will be much higher than any mere spreadsheet analysis by the usual suspects can convey...

there's a reason that our forebears rode around ... with their firearms... and without need of ID's of any kind... it was a kind of package deal..."law enforcement" was the domain of the citizen... instead of the bureaucrat.

Get yourselves back to the real green shoots... guns...gold... and two fresh mounts... no credit cards needed for the next trip which you plan to take back to the future!

http://grist.org/sustainable-farming/2011-12-06-small-farmers-crave-hors...

http://www.motherearthnews.com/homesteading-and-livestock/farming-with-h...

Wed, 05/29/2013 - 10:44 | 3607376 Tijuana Donkey Show
Tijuana Donkey Show's picture

I have a killer hybrid, it gets great mileage, and it generates other awesome benefits. It's called a bike, and America needs to start adapting to allow more of them. Bikes are a killer option, as they burn fat, which we have in spades....

Wed, 05/29/2013 - 14:38 | 3608156 AnAnonymous
AnAnonymous's picture

It also leads to drugs addiction which is typical and well sought by 'americans'

See Lance "where is the syringe?" Armstrong's story.

Wed, 05/29/2013 - 15:14 | 3608268 Almost Solvent
Almost Solvent's picture

Pull finger. 

Release all energy into Dutch O-van.

Inhale deeply to get all cHink gas into ziphead.

Wed, 05/29/2013 - 16:44 | 3608500 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous rehypocriticated:

It also leads to drugs addiction which is typical and well sought by 'americans'

See Lance "where is the syringe?" Armstrong's story.

Very telling this guy and his drugged addictations drivel when considering his injection point of extremic propagations is neighbohourood Peoples Liberation Opium Parlour availings of wifi hotspot incessantly.

Even best, guy is Chinese citizenism Lance Armstrong equivalent in backpedaling.

Wok calling the cooking marmit black.

Wed, 05/29/2013 - 11:19 | 3607509 Oh regional Indian
Oh regional Indian's picture

Nicely said Joyful.

Horses.... man's true best friend, no doubt.

ori

Wed, 05/29/2013 - 15:04 | 3608234 FeralSerf
FeralSerf's picture

Not if you have to pick up the horse shit that would be created to transport America's 300 million or so. It would be a boon for alfalfa farmers though.

Wed, 05/29/2013 - 09:37 | 3607116 SamAdams
SamAdams's picture

You mean the laws of the EPA which is driven by certain US oil capitalists?  It is proven every day in other countries, a diesel motor can achieve better fuel efficiency than a hybrid.  I personally wrote Subaru to ask why the Forester is not available in the US with a diesel.  They told me the CEO had been trying to get it approved, but kept getting shut out by the EPA.  However, some VW's are allowed to enter?  Politics and greed are the law, not thermodynamics.

Wed, 05/29/2013 - 09:50 | 3607162 Ignatius
Ignatius's picture

I drive a '11 Jetta diesel rated at 42/30 mpg and so far it's been fine.  Good car.

Weird thing, I look at theses "Ten Best Mileage Car" lists and even though the VW diesel is highest mpg they don't put it on the list!  Corporate press, corporate agenda.

Wed, 05/29/2013 - 10:02 | 3607222 ACjourneyman
ACjourneyman's picture

I have a 2012 jetta and just got 46 for an average on the last trip.

Wed, 05/29/2013 - 11:47 | 3607610 Tijuana Donkey Show
Tijuana Donkey Show's picture

Convert them to run on waste veg oil! Get greasy!

Wed, 05/29/2013 - 14:41 | 3608144 SamAdams
SamAdams's picture

50mpg avg from a Honda diesel 4X4 SUV?  Isn't that better than the Honda Insight hybrid? 

http://www.whatcar.com/car-reviews/honda/cr-v-4x4/2-2-i-dtec-se-5dr/summary/66242

Not coming to a state near you! 

BTW, my better half drives a 2WD Honda 2.2L CR-V.  It averages 24 mpg..... :-)

Wed, 05/29/2013 - 10:01 | 3607216 Zerozen
Zerozen's picture

Diesels are not common in the U.S. because diesel is more expensive than gasoline, quite a lot more. In Europe and Asia, diesel is cheaper than gasoline, although granted diesel is also subsidized/less taxed as compared to gasoline (at least in Europe).

Ignoring subsidies for the moment though, the fundamental reason for this difference between the US and the ROW is that our refining system here was built to fuel a gasoline economy. It's built to produce gasoline, not diesel. Diesel is essentially a by-product. Hence, the automobile market follows suit.

European and Asian refineries are built to churn out diesel and don't produce much gasoline.

It doesn't change because building new or modifying existing refineries is very, very expensive.

Wed, 05/29/2013 - 10:16 | 3607289 Straw Dog
Straw Dog's picture

But the whole of the trucking industry uses dieel, that's a huge diesel market. Cars use the same diesel as trucks, supply of diesel should not be a problem.

Wed, 05/29/2013 - 10:25 | 3607322 Ignatius
Ignatius's picture

In my area diesel now costs same as regular gas though it was more for several years.

Can't use truck diesel.  It's called '#2 diesel' w/lower sulphur content.

Wed, 05/29/2013 - 12:17 | 3607705 Sale Away Soon
Sale Away Soon's picture

For accuracy’s sake, diesel is a lot more costly in the UK, and much of Europe, than petrol (gasoline ;)), currently £1.39 against £1.32 per litre here in the south of England.  That said, my BMW 640d returns an average 32 mpg, will hit 60 mph in around 6 seconds and gets electronically reined in at something short of 160 mph.  What’s not to like??

Wed, 05/29/2013 - 12:20 | 3607717 Ignatius
Ignatius's picture

Speedometer on Jetta goes to 160, but tires rated 130mph so goes soft around 115.

Wed, 05/29/2013 - 13:18 | 3607892 SamAdams
SamAdams's picture

Sounds great, except you can't buy one in the States.

I think the price comments fail to realize:  $ increase < mpg increase

A 5% increase per gallon for diesel over gasoline, can increase mpg 20+% as a result of higher compression & energy density.  

Wed, 05/29/2013 - 12:37 | 3607765 malek
malek's picture

Nonsense.

Diesels are not common in the US, first because low-sulfur Diesel (required for modern direct injection diesels) was introduced only a few years ago in the US - many years later than in Europe. (And only that needed modifying refineries.)

And secondly because some emission limits tailored to gasoline catalytic converter engines make it extremely difficult (and even impossible without using low-sulfur Diesel) to comply with for Diesel engines - that's mainly originating in the state of California.

However I've learned you are free to buy a used Diesel in a state with less strict emission limits (unless your desired car maker doesn't even import Diesel models at all) and register it in California.
If you prefer a new car, try to find a dealer which does a one week registration in another state and then sell it to you (OK, you may need to pay sales tax twice then).

Wed, 05/29/2013 - 15:07 | 3608241 piceridu
piceridu's picture

Diesal is a dirty word in California and has a negative conotation...if you live in So Cal, especially in the coast cities, watch the faces change on the tofu crowd when you tell them you drive a diesal car.

Wed, 05/29/2013 - 10:00 | 3607205 thisandthat
thisandthat's picture

http://www.lowtechmagazine.com/ecotech-myths.html

Quote:

The 2010 Nissan Leaf and Mitsubishi i-MiEV have exactly the same range as the 1908 Fritchle Model A Victoria: 100 miles (160 kilometres) on a single charge

From here: http://www.lowtechmagazine.com/2010/05/the-status-quo-of-electric-cars-b...

Anyway... so high tech but they can't even come up with an hardware switch (or a zero loss soft switch), for the price?

Wed, 05/29/2013 - 10:35 | 3607354 tango
tango's picture

We forget that almost all new technologies do not arrive neatly packaged, error-free and bright and shiny.   They start out rough, get better, improve, etc, until they become such a part of the fabric of reality that we don't notice them anymore.   TESLA can be viewed as simply another step on the path to sustainability - a tiny step but an important one. 

Thu, 05/30/2013 - 13:48 | 3610961 thisandthat
thisandthat's picture

100 years is hardly new technology... check this link to see why electric cars never went anywhere.

Wed, 05/29/2013 - 10:24 | 3607320 daxtonbrown
daxtonbrown's picture

If you are paying close to $100k for a car, that extra money required economic activity whose waste stream I highly doubt is counted towards the car emissions.

Wed, 05/29/2013 - 10:47 | 3607391 HowardBeale
HowardBeale's picture

If you're a friend of Bernanke's, that economic activity wasn't much: control-P

Wed, 05/29/2013 - 10:50 | 3607405 DogOfSinope
DogOfSinope's picture

The fact that this report comes from JPM is reason enough to conclude that the thruth is exactly the opposite. I'm ordering the Modes S catalog now!

Wed, 05/29/2013 - 11:07 | 3607471 Svendblaaskaeg
Wed, 05/29/2013 - 11:37 | 3607557 MacGruber
MacGruber's picture

Pretty weak analysis.

  •  Last time I checked hardly anyone drives a Civic sized vehicle, a car that is about half to a third average curb weight to most vehicles.
  • Tesla performance is not even the same league as a Civic, the S Model is comparable in performance to a 335xi or S4, the sports car was faster off the line than a Porsche 911
  • The comparision relies upon our shitty electric grid. The raw efficiency of the vehicle itself is far better than a internal combustion engine. Internal combustion performance is 20-40% efficient, after losses in the transmission you are looking at about 10% efficiency at the wheels. Electric motors are 60-80% efficient and in future models there likely won't be a transmission.

These are the same bullshit arguements that are put forth as to why CAFE standards could never be changed, the technology will never be there, this is all a pipe dream. We're forever doomed to burn gasoline at 20mpg, so just give up was the tale. Tesla may seem like a distraction now, but they are pushing the performance envelope of the technology to get engagement. Electric cars are the future, and if the U.S. continues to put its head in the sand it will be yet another lost industry that we won't play in.

Wed, 05/29/2013 - 13:14 | 3607888 Matt
Matt's picture

Electricity is not a source of energy. You cannot compare the efficiency of electricity to gasoline, without including the step where you harness energy from a source, turn it into electricity, then use that electricity to charge a battery; all stages with losses.

Wed, 05/29/2013 - 14:44 | 3608168 MacGruber
MacGruber's picture

Electricity is not a source, agreed. All I was saying is this is an apples to oranges comparison, you can't compare the delivery of the energy, either as electrons or liquid fuel, in one case and not in the other.

If they want to include the cost/impact of eletricity generation and transmission then to make the analysis valid you have to include all the losses involved in refining and transporting the gas - we'll exclude discovery and extraction for both since coal has to be found and extracted for electricity the same as oil does for gas. 

I can tell you that refining and transporting gas isn't the cheapest, cleanest, energy conserving process on the planet. Boiling the crude in a refinery is by itself a hugely wasteful process. There are no free lunches either way.

Wed, 05/29/2013 - 20:38 | 3608991 Matt
Matt's picture

However, the power plant is likely burning coal, oil or natural gas too, so these extraction, refining and transportation steps exist for both electricity and gasoline. The electricity simply adds another set of steps to the process. 

Even if the power comes from hydro, nuclear, wind or solar, a great deal of consumption of oil, gas or coal was involved in making the equipment to harvest energy.

Whatever the losses involved in gasoline are, the losses involved in electricty are all of those, PLUS the losses of turning energy into electricty, usually transporting it, then storing it and releasing it. 

Wed, 05/29/2013 - 09:25 | 3607086 duo
duo's picture

I hate to break this, but A/C uses 700-1200W whether you're moving or not.

Wed, 05/29/2013 - 09:28 | 3607091 new game
new game's picture

well, looky at me, I'm saving the earth!

if you give one shit about it all, pedal your fat a$$ to the club...

Thu, 05/30/2013 - 13:54 | 3607213 thisandthat
thisandthat's picture

Ride an horse - bikes aren't anywhere near as ecological...

ps: from the downvoting of an undisputable truth, it's obvious assholes are aplenty here on ZH - oh, and I ride a bycicle, btw... (aluminium frame - you know how much energy -and clean water- it takes to produce it?)

Wed, 05/29/2013 - 09:27 | 3607096 EscapeKey
EscapeKey's picture

I'm sorry, but this is just plain stupid. The article reads as if sponsored by big oil.

Tesla specialize in high-end vehicles, but even so, modern gas vehicles did not get their efficiency overnight. This round of EVs are on the back of design which relatively speaking is still in its cradle.

Furthermore, as he said - vehicle count increases, scale of manufacturing dictates that price will come down.

 

Wed, 05/29/2013 - 09:30 | 3607105 new game
new game's picture

anything with gov subsidy is plain and simple fukked up!

Wed, 05/29/2013 - 09:32 | 3607114 EscapeKey
EscapeKey's picture

I'm not arguing whether government distorts the market, it obviously does. I'm simply pointing out that using the high-end segment of a quickly developing market, and using it as the basis of your argument frankly comes across ever so slightly biased.

Wed, 05/29/2013 - 09:40 | 3607135 new game
new game's picture

interesting take; hmmm, well, i made a shit ton on ethanol, then china rev merg lith ion and now high end elec cars??? maybe...

but the fade will set in when, of course, the economics is realized, unless oil goes to 200, which in turn would be a boom for the rich because they will have the money to buy one these.

Wed, 05/29/2013 - 09:49 | 3607159 DCFusor
DCFusor's picture

Though I want one - That Tesla is one georgeous car - I DO have a Volt, charge it with solar panels, and for whatever reason, nope, the Volt doesn't discharge its battery when idle in the driveway, unless it's very hot (over 100) or very cold (under 25f).  And that, only a little bit.  It uses 300w to "idle" in traffice, roughly.  In the Volt, the AC doesn't materially reduce the battery range - perhaps a couple miles.  The heater, though, is a total bitch - works out to about 8hp worth of drain, so I preheat the car before I leave home.

While my Volt only gets around 40-50 miles on a charge, heck, that's what the gasoline engine is for - long distances, instant refill, and it can be programmed to keep charge in the battery so you can run electric at the other end of the trip - which is far nicer in cities.

I thought Tesla had fixed that "runs down the battery while parked in a rich collectors garage" thing awhile back - the article is disingenuous on more than one level.  All new cars have teething issues, and nearly all new car companies (and some established ones) fail - yet somehow, Tesla just paid back all the fed loans what, 9 years early?

Elon has stated from the get-go that no, there's not a shortage of sports cars for rich people, and the current models aren't his goal, but stepping stones to get to the point he can build cars that are more affordable for the masses.  I really enjoyed his interview with Charlie Rose and Bob Lutz (who is the designer of the Viper, the later Corvettes, and the king of too much horsepower and too much gas consumption, while being an AGW denier) - they played well off one another, and Bob admitted admiration for Musk and gave him credit for pushing GM into making better cars, no kidding - and if you know Lutz, that was quite a statement.

Long but worth watching.  Sorry for all you GM haters out there, I know some of you have a reason beyond getting burned on the bankruptcy.  And it's on you if you hate me for shorting GM into bankruptcy enough to buy a Camaro, which I traded for my Volt.  If you don't get the freebies - you're just dumb, you're paying anyway...

http://www.charlierose.com/view/interview/11984

 

 

Wed, 05/29/2013 - 09:36 | 3607111 Mercury
Mercury's picture

It will stay in the cradle too (and with any luck be strangled there as well).

Dust-to-dust the Ford F-150 (for years one of the if not the single best selling vehicle in America) has a smaller environmental footprint than the Prius.

There are actually physical limits to how little energy you can expend to get several thousand pounds of mass to move at 60 mph. and you can’t make water flow uphill.

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