Posted on 08/18/2013 10:38:44 AM PDT by ckilmer
Last quarter, Tesla (NASDAQ: TSLA ) delivered 5,150 cars, which was well above its expectations of 4,500 deliveries. The company did so by boosting its production rate by 25% to 500 per week. If everything goes according to plan, the company's deliveries for its award-winning Model S could reach an annualized rate of 40,000 by the end next year, which is nearly double this year's expected rate. That's simply stunning growth. However, it's only the tip of the iceberg for where this company plans to be in the future.
The company has a very long road ahead of it to reach its goal to produce 500,000 vehicles annually, which is the rate CEO Elon Musk believes it can eventually reach. To get there, the company needs to capture lightning in a bottle again and produce a car that can be a mass-market success. That will happen only if consumers can drive a car off the lot in the $35,000 range -- something Tesla believes will be possible in as little as four years. While that's a bold dream, if Tesla has taught us anything, it's that it's OK to dream. So let's dream together of a world were Tesla can sell half a million cars each year.
No more pain at the pump? Americans as a whole are driving less, but we still drive a lot. Last year alone, the average American drove 9,363 miles, which is 7.5% down from the peak in 2004. While there's no telling how much we'll be driving by the time Tesla takes 500,000 gas-guzzlers off the road, we could conservatively assume that each one of those cars would have driven 10,000 miles per year. Even with using 2025 CAFE standards of 54.5 MPG as the average gas mileage of the cars being taken off the road, that's 183.5 gallons of gas being saved per car.
Overall, that's a savings of nearly 92 million gallons of gas each year. For perspective, that's just about a quarter of the 367.08 million gallons of gas Americans use per day. Thought of another way, if gas was $4 per gallon, it would save Tesla owners a collective $367 million, or about $733.94 per year. Swapping in a more gas-guzzling car would certainly boost the savings, so just think of these numbers as ballpark figures.
In fact, let's just say that Tesla was able to replace 500,000 true gas-guzzlers and knock off one day's worth of America's annual fuel consumption, or roughly shave the demand for a million gallons of fuel per day. Let's take a look at those numbers. anImage
*Based on an average of 10,000 miles driven and $4 gasoline
How much of a pinch would that be for refiners such as Phillips 66 (NYSE: PSX ) or Valero (NYSE: VLO ) ? In 2012, Phillips 66's refining and marketing segment produced $4.5 billion in earnings on $173.3 billion in revenue. Similarly, Valero's total revenue last year was $139.3 billion and its operating income was $4 billion. Clearly, the $1.47 billion in gasoline that Tesla could save each year won't put either out of business.
Oh, by the way Further, while taking a million gallons of gasoline per day out of the equation would still have some impact, odds are it would find somewhere else to disappear. In fact, just last quarter, Phillips 66 highlighted that it had increased its refined product exports to 181,000 barrels per day, or more than 760,000 gallons. By the end of this year it should have the capacity to export 370,000 barrels of refined product per day, or more than 1.5 million gallons. That additional capacity means Phillips 66 alone could easily export the amount of gasoline per day that 500,000 Teslas would save.
In fact, the U.S. has now become a net exporter of refined petroleum products because of lower U.S. demand and our competitive advantage in the marketplace. This situation is putting U.S. refiners with a strong Gulf Coast presence like Valero in a key competitive position to take advantage of future demand outside the United States. Tesla might actually be doing these companies a favor, as refined petroleum product exports are more valuable than those sold in the domestic marketplace.
Final Foolish thoughts Tesla's bold goal to sell 500,000 cars per year is a great dream, but it won't put gasoline refiners out of business anytime soon. Instead, these companies will simply have more gasoline available for the export market, which is a real positive for our economy. That's not to say half a million Teslas won't affect the energy markets, so tune in next week for a look at how that many Teslas could affect the electricity marketplace.
The only problem as far as investors are concerned is that Tesla is currently priced almost as richly as its Model S. That means investors looking to profit from the revolution in the energy markets need to look elsewhere
I don’t know why these guys didn’t bother to lisence the tesla battery with the longer range. their battery can’t be that much cheaper.
Its good on gas but I haven’t figured any MPG. I don’t drive like a kid anymore. It starts every time runs like new and drives good.
I bought it from an aging hippie turned retiring prison guard in my hometown. It was his highway driver to work and back and he took care of it.
I’ll drive it till I get hit with a repair costing more than I paid and I’ll dump it.
When I can get 14 hours at 70 MPH out of an electric vehicle, get it recharged in an 8 hour period, have it reasonably priced at around $35,000, and have it able to be worked on for a reasonable cost at the neighborhood garage, then I will consider buying an electric vehicle.
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doesn’t sound like you’re an early adapter. For myself, I’ll likely hold out for less performance if the car can come in the low 20 k range.
Benz and Toyota have 10% of Tesla each. I don't think they will be happy to share it with BMW.
Looks to be a ‘99 Caravan, probably 19 MPG. A bit better where CC lives, in the country.
They took out a $465M loan that was available to all car companies when G.W.
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you sure they took out that loan on G.W’s watch?
Its about 450 miles and we weren’t empty when we filled up the second time.
Wonder how a Tesla would do on such a trip. I also wonder how it would do if the trip were in February.
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Tesla is nowhere good as that in price and performance. but who knows what the future will bring. time will tell.
The program was started and the money was made available under G.W., but Tesla took the money in 2010 when they needed it and qualified.
http://www.teslamotors.com/blog/early-repayment-tesla%E2%80%99s-atvm-loan
I don't think that is possible. At zero RPM the motor is doing nothing but sitting there, so there's no torque.
I suspect you are correct - Elon is planning on succeeding.
I actually got to inspect a Tesla a couple days ago. These are NEAT cars with an amazing collection of technology in them. LCD panels replace all of the knobs and such for control. Several of the cars features can be controlled by a phone app (hackers must LOVE that). I really would love to own one except for the $70K price tag.
I know at least two folks in my boy scout troop who own them too! That isn’t unusual though - I live in the town where they are built.
The other Elon Musk enterprise worth noting is SpaceX. It keeps on beating the odds too! So I expect Tesla is going to surprise lots of people.
If the lady I talked too is an example - you’re wrong as can be. First - the Teslas have a couple hundred mile range on a charge (this being one of the big distinguishing features.) Second, in CA they get to rid in the Diamond Lanes. The gal whose car I got to inspect drives 40 miles each way to work every morning.
There goes your second car theory...at least for her.
Eh... Gov’t subsidized coal cars
Well, that is how the auto magazines describe it. Car & Driver, for example, provided the following specifications for the engine of the Tesla Model S..
MOTOR TYPE: AC permanent-magnet synchronous electric motor
REDLINE: 16,000 rpm
POWER: 416 hp @ 8600 rpm
TORQUE: 443 lb-ft @ 0 rpm.
The Tesla is beast and the sub 5 second 0-60 time speaks for itself. You can see the torque in that video of the Tesla smoking the BMW in the drag race. The instant torque enables the Model S to leap off the line and BMW can't catch up.
http://www.caranddriver.com/reviews/2013-tesla-model-s-test-review
That’s the inherent difference between an internal combustion engine and an electric motor. The ICE has to be running to sustain operation, while an electric motor can be at standstill, zero RPM, then respond when the electricity is applied.
If they can produce a car in that price range which has a +200 mile range I could see a few more sales as a second family car. The current crop of electric cars in that price range aren't selling because of lack of range. It all comes down to number crunching.
But not for long duration.
Okay, it’s just seems weird to me but I googled it...max torque on an electric motor occurs at zero RPM:
I’ve worked in electronics a long time. You’d be surprised what you can do with some magnets, a coil and some electrical current. But it’s a long way from being a practical motor that you can carry with you to power you and a car across the country. It’s all about the batteries.
Coming from an idiot who loves shooting his mouth off, maybe you head over to where I’m always at which is Universal and Paramount. There are no Tesla cars there. So who again is the moron?
next time, STFU about stuff you have no clue about.
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