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
Coal plants are already dead and are being replaced by natural gas plants.
You gotta stop confusing these people with facts. The idiots here hate electric because they short-sughtedly see it as something the Dems love. Never mind that it’s an American company that has created a disruptive product with state of the art manufacturing inside the US. Let them remain blissfully ignorant...
Instead of pushing these glorified golf-carts by executive fiat, the manufacturers should identify and cater to their niche market.
There are some resorts and parks where conventional automobiles aren’t allowed. Those who frequent such places are likely already friendly towards these things. I know some who use golf carts on their expansive property. I bet even a volt would be a more comfortable ride.
It’s like solar power. It makes sense for small electronics (calculators and such) but it wouldn’t make sense for a typical family to limit it to all of their needs.
The Tesla Model S is a glorified golf cart? Wow..............
How far can this Model S tow a fishing boat? Can I use it to pull a trailer filled with construction materials about thirty miles from the ranch supply to my homestead?
How many miles does it get with one “fill-up?” How about with the AC or Heat cranked up? Can I stop and “top it off” in minutes?
Does it have more in common with a Car or a Golf Cart?
You gotta stop confusing these people with facts. The idiots here hate electric because they short-sughtedly see it as something the Dems love.
You’ll find these “idiots” simply don’t want to pay for your little ‘lectric toys. Hey, I had slot cars and toy trains but I gave them up when I was around 12 years old.
I’ll buy my own gasoline, animal feed and ammunition. You pay for your hobbies. Capiche?
Charged by what? Closed coal plants? No nuke plants?
Liberal Smugness.
The Elites will get the electric cars , and will be the only one’s who will be able to afford one .
You don’t think they’ll give up their Cadilac Escalades, do you?
The Elites will get the electric cars , and will be the only one’s who will be able to afford one .
You don’t think they’ll give up their Cadilac Escalades, do you? This ain’t about saving fuel or saving the planet. It’s about controling the idiots. Unfortunately for us, the idiots are happy to be controled.
My husband is a professional firefighter and was awfully pleased when I chose a Nissan Titan right before our first was born. No electric death traps in our driveway, thank you very much. You can surround the thing in airbags and my Titan will still win the safety battle.
This is a sports sedan not a truck. So it does not tow.
How many miles does it get with one “fill-up?” How about with the AC or Heat cranked up? Can I stop and “top it off” in minutes?
~300 miles, with A/C or heat cranked up. Yes you can if you stop by a supercharger station, just like you will top an ICE car at a gas station.
Does it have more in common with a Car or a Golf Cart?
It is the best automobile available today.
I’d like a Tesla. Not because they are electric but because they look fantastic and are blazingly fast due to the amount of torque the electric motors produce.
Unfortunately I don’t even make BMW money, so I won’t be having one for a long time.
We have some pretty huge solar farms out in the Ca. dessert that are working well!
I think Tesla Model S scored better than Nissan Titan in safety.
http://usnews.rankingsandreviews.com/cars-trucks/Nissan_Titan/Safety/
http://www.edmunds.com/car-news/2013-tesla-model-s-earns-highest-rating-in-federal-crash-tests.html
Lol! I did you a favor by kicking your butt. Get outside. Stop living inside all of the time.
Take the advice. It will improve your life.
You sound like my father-in-law. This magazine said this! That reviewer said that! Reviews and write ups do not matter, regardless of who is completing them. Ask a first responder, firefighter, EMT, etc. who wins in a crash. You want a safe car for your family? Ask a firefighter what he recommends. Most of the department wives drive big vehicles for a reason. I do not car shop like my FIL, walking around with Motor Trend clutched firmly in hand because I allow paid writers to tell me what I like and dislike.
It was not anyone’s opinions, but federal crash test ratings. Nissan Titan and Model S are in very different price range. Some one recommending a Titan is not in the market for a Model S.
“This is a sports sedan not a truck. So it does not tow.”
- A lot of gasoline powered sports sedans will tow.
“300 miles, with A/C or heat cranked up. Yes you can if you stop by a supercharger station, just like you will top an ICE car at a gas station”
- Of course, there’s one on every corner right next to those archaic fosil fuel service stations!
Assuming the 300 mile claim is accurate, how long will it maintain that? Rechargeable batteries are notorius for decreasing capacity. My liquid gas tank does not shrink.
“This is a sports sedan not a truck. So it does not tow.”
- A lot of gasoline powered sports sedans will tow.
“300 miles, with A/C or heat cranked up. Yes you can if you stop by a supercharger station, just like you will top an ICE car at a gas station”
- Of course, there’s one on every corner right next to those archaic fosil fuel service stations!
Assuming the 300 mile claim is accurate, how long will it maintain that? Rechargeable batteries are notorius for decreasing capacity. My liquid gas tank does not shrink.
Again, ask a first responder what crash test ratings, federal or private, mean in real life scenarios.
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