I usually don’t write about stocks because stock picking is a horrible idea for most. Those who can successfully beat the indices over the long-term (10+ years) are very rare and of those who are successful, how much of it is due to luck? Most just don’t have the time to do the research and more importantly, possess the temperament to make the right decisions under duress or euphoria.
Another problem with owning stocks is the mental bandwidth the strategy consumes. Because I own stocks, I feel that I need to think about them, almost daily. This is yet another reason that I’m a big fan of index investing now.
But, I still own stocks from my days as a stock picker and Tesla is one of them. The stock has been in the news a lot lately because it’s had a tremendous run. The stock was up about 50% in January alone. I’ve been thinking about Tesla lately. A lot.
And one of the best ways to work through your thoughts is to write them down, so today, I give you a post on Tesla.
Musk Is Cool And So Is The Model S
I don’t buy many individual stocks these days, but when I did, I mostly bought them for subjective reasons. I liked young tech companies with loads of potential to change the status quo. My strategy was the opposite of a dividend investor where everything is about numbers and a bet that things remain the same. I like change and disruption.
I also admit that I have bought stocks for ridiculous reasons. I picked up Tesla back in 2012 for two reasons:
- Elon Musk is ^$%*ing amazing. This sentiment has only grown stronger. Musk is changing transportation with Tesla. And what’s harder than producing cars? Space flight. He’s revolutionizing that too. Is there a more important human alive?
- The Model S is a beautiful car. I’m not into big, 4-door sedans, but the middle-school car freak in me loves the Tesla’s lines anyway.
So, I bought Tesla stock because I liked the guy running the company and it makes cool cars. Not exactly in-depth analysis. But, sometimes you get lucky anyway. At the time of this writing (2/7/2020), my shares are up 1,159%. The ones that I purchased in 2012 are up 2,473%.
My investment portfolio was up $83,582 in January. The 168.15 shares of Tesla that I own were responsible for $38,013 of the gain. The stock started the month at $424.50 and ended at $650.5. Craziness.
Tesla Thoughts
I bought Tesla for purely subjective reasons, but now I’ll dive into numbers. Specifically, I’ve been thinking about market cap (value of all outstanding shares) and sales numbers. Here is how Tesla’s numbers stack up to Toyota:
So, Tesla has a lofty valuation. Tesla sells 4.5% of the cars Toyota does but has a market cap of 67% as big. Tesla’s stock price has big expectations baked in.
However, these numbers don’t tell the whole story because luxury vehicles are where the money is at. Toyota makes a profit of about $2,300 per vehicle. Luxury vehicles have much higher margins. For example, Porsche makes $17,000 per car sold. Tesla doesn’t state what it’s margins are, but Tesla’s numbers will get better with time:
- Tesla is young and still investing heavily in expansion. These expenses will go down at the company matures.
- The drivetrain of an electric car has only a couple of moving parts. Electric motors make internal combustion engines look like Rube Goldberg machines. Traditional auto manufacturers spend hundreds of millions developing internal combustion engines.
- Batteries are getting dramatically cheaper.
It wouldn’t surprise me if Tesla has some of the most profitable vehicles in 5-10 years.
But right now, Tesla stock is priced very, very high.
Is My Analysis Wrong?
I was talking to Pete (aka Mr. Money Mustache) who is also a big fan of electric cars and he said that I’m looking at the wrong data:
Regarding Tesla vs other automakers, I think it makes sense not to compare the total car sales, but the total number of electric cars sold.
In this light, Tesla’s sky-high valuation makes more sense, especially if you believe the following:
- Electric vehicles are the future. Electrics made up 2.2% of sales in 2019. Within 5 years, the cost of an electric vehicle is expected to be the same as a fuel-powered vehicle and after that, electric cars become cheaper. By 2030 if not earlier, I expect that over half of passenger vehicles sold will be electric. If Tesla keeps its current share of the electric car market, its sales will explode.
- Tesla has a big head start. Other manufacturers are not sitting still, but it will take a while for them to catch up.
- Tesla will continue to innovate. The most important component of an electric car is the battery and Tesla is the clear leader in the development and production of them. Tesla seems to have amazing developments in store too.
But, Tesla is a speculative, long-term play. There are plenty of risks too:
- What if a competitor came up with vastly better battery chemistry? What is someone figures out how to use super-capacitors instead of batteries?
- Maybe Waymo will perfect SAE Level-5 autonomy rendering car ownership a dinosaur causing all vehicle sales to plummet?
- Maybe Musk will smoke a crazy strain of weed and come up with a design even more insane than the Cybertruck causing Tesla to turn into a lithium fueled dumpster fire? I kid, I kid!
However, it’s’ important to keep this in mind:
At the moment Tesla is an auto manufacturer.
It’s an unusual one, but it is still just making pods to move humans quickly from Point A to Point B. Same as Ford and Honda.
Some speculate that Tesla will reach a trillion-dollar market cap before the decade is out. For this to come to fruition, one or more of the following would have to happen:
- Tesla becomes the biggest car manufacturer in the world.
- Tesla wins the race to develop true SAE Level-5 autonomy (a car that requires no driver). If Tesla perfected this, I’d expect the company to also start a ride-sharing company. Without drivers, this service would be very lucrative and also end vehicle ownership as we know it. (I REALLY hope this happens!)
- Tesla becomes something completely different. Perhaps it patents a superior battery technology and licenses it to the rest of the world.
- Building on the previous bullet point, Tesla has the potential to revolutionize how we use energy. Perhaps one day, Tesla is known as an energy storage company that used to make cars? Don’t underestimate this business.
Unknown Unknowns
…there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.
Donald Rumsfeld
I have had some great success picking stocks:
But, some of the reasons these stocks have appreciated so much are due to developments I never saw coming:
- Amazon: Most know Amazon because of its store, but most of its profits come from its cloud computing platform. I didn’t see that coming.
- Facebook: Instagram is contributing to much of facebook’s profit growth. Facebook didn’t own Instagram when I bought it. I didn’t see that coming either.
Will Tesla be selling 25,000,000 vehicles per year in 2030 and have a trillion-dollar market cap or will it be bankrupt?
I have no clue.
But, if either of these scenarios happens, it will probably be due to some circumstance or development that I couldn’t have seen coming.
However, I’m hanging on for the ride. It’s usually a bad idea to bet against Musk.
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I can’t see that private vehicle ownership is going away, at least if we continue to be a capitalist society. I think I will always want to drive/ride in my own messy vehicle and not always in one I have to share with a hundred other people every day. It’s possible it could cause families to only own one vehicle and ride-share everything else if it’s cheaper to do that than own a second or third vehicle.
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“I can’t see that private vehicle ownership is going away…”
What if it was 10x cheaper to now own a car though? This guy may be a little too optimistic regarding timelines, but I think he’s right otherwise: https://thedriven.io/2018/08/31/the-driven-podcast-by-2025-all-new-cars-will-be-electric/
People don’t make decisions based only on price. There will be ride sharing fleets. I have heard this being talked about for 10-20 years since the little smart cars first came out. Uber and Lyft went a different direction because people kept owning their vehicles.
People want to own and customize. There is also a convenience factor. Good or bad. I just know how people are who I associate with.
The future is always interesting to try to predict.
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“People don’t make decisions based only on price.”
When something is 10x cheaper, most do move to the cheaper solution. Uber and Lyft look different and cost a lot more than a robotaxi service would.
If robotaxis do come, I think cars will become like planes. Some will still own them (at a higher rate than private planes), but most will not.
You mention convenience, but not owning will be more convenient. No maintenance of any kind. No hunting for parking spots in big cities. You would get exactly the size car you need. The car would always be warm or cool. Of course, the fleet would have to reach a critical mass so you wouldn’t have to wait more than a minute or two to get your ride.
Sadly, I think it’s a lot longer off than I originally thought as SAE Level 5 autonomy is proving to be a VERY tough nut to crack.
well done on that tesla selection. i remember looking at the stock around ’12 or ’13 when it was around 30 bucks/share. i liked the innovation angle and especially power storage/batteries. they have solar too. i don’t know how the solar city project is coming along here in buffalo but like amazon they have a lot of irons in the fire. our strategy in our house is to plant a bunch of seeds/investments in companies that are gaining business/revenues. if you’re starting positions with less than 1% of a portfolio and maybe buying a couple of more times its less risky than buying a huge lump sum. some will surely turn sour but the 10x ones will make up for those losers and then some….we hope, eh?
freddy smidlap recently posted…I Just Made $300 for 30 Minutes “Work”
“if you’re starting positions with less than 1% of a portfolio and maybe buying a couple of more times its less risky than buying a huge lump sum. some will surely turn sour but the 10x ones will make up for those losers and then some….we hope, eh?”
I’ve had this exact same thought many times and it’s why I’m holding on to most of my stocks now. Surely not all will survive, but the ones that do have the potnential to do really well. Kinda like index fund investing, just on a smaller scale. I like to use Motif for these Funny Money portfolios.
Knowing what you know now, is there a point you would sell your individual stocks and put the earnings into an index fund? I mean, you are clearly at a point where you’d be in with the cool kids of buy low/sell high. Or when you say you are hanging on for the ride, does that mean you plan (currently – I realize minds can always change) you will hang on to these as long as they are around, regardless of their performance?
Yep, I’m hanging on for the long term. I’m OK if it goes to 0.
On the topic of Musk, it was recently announced that Starlink (a division of SpaceX) might break off to become a public company. It will be interesting to see if it happens. I’m also hopeful to see some more disruption in the home internet offerings. Google fiber was great in theory until the big providers kept them from expanding into certain markets.
The valuation is crazy right now but there are a lot of hypes with Tesla. Like you said, things can change and unpredictable events can happen. I’m not touching Tesla with real money but have picked Tesla for this year’s stock picking contest. We’ll see how I do at the end of the year.
Tawcan recently posted…2020 Dividend Stock Consideration
You won
Good job on a 1000% gain Carl! That’s mighty impressive!
My question for people who tout big stock market gains is always the same — Can you keep it? And, can you grow it?
Those things are easier said than done. It seems like your strategy right now is to keep holding the shares because you expect great things ahead! I hope it works out! Good luck!
Mr. Tako recently posted…Living Through The Boring Bits
Tesla is pure speculation, not investing. I notice you don’t dwell on profits. A company won’t survive long-term without making money. Well, unless said company has a lot of fan-boys and can sell the smoke and mirrors. I also notice you haven’t covered lack of build quality, cost to repair and insure, and the latest example of Autopilot that was taken away via over the air “update.” Did you know they still build autos in a tent? Yep, must be smoking something. 🙂
Well, Tesla’s 2019 was profitable: https://www.cnn.com/2020/01/29/business/tesla-earnings/index.html Not much, but a profit is a profit. However, profits are the last thing I’d look at in a young company like Tesla since they’re plowing money back into R&D, Gigafactories, and other expenses.
The build quality is worrisome. The most recent example I’ve read about is paint issues with the Model 3. However, it seems that Tesla has reacted and quickly improved. There was an auto-build expert who initially criticized the 3, but since changed his tune. I can’t remember his damn name. Maybe you know what I’m talking about?
If you’re a car guy, you surely know who Bob Lutz is though: https://www.roadandtrack.com/new-cars/a28008116/tesla-model-3-build-quality-bob-lutz/
In any case, come back in 5 years and we’ll discuss the state of Tesla again! 🙂
Yes, it was Sandy Munro of Munro Associates. His firm disassembled a Model 3 and produced reports…for profits! So far, Tesla makes more money by selling “credits” to other auto companies than autos themselves. Tesla employees and former executives have been more critical than at other auto firms. Sales in the US by Tesla have dropped in 2019 with production diverted outside the US. We have not seen recent published sales figures for outside the US yet. The Autopilot system is flawed when compared to GM’s “Super Cruise.” There are flash memory boards in Tesla autos that are rapidly overwriting data and failing prematurely. Good luck holding long term. As a Quality/Manufacturing Engineer, I don’t care to play the game of “catch a falling knife.” Let’s hope your hands don’t get too bloody. 😉 Oh, and you and I won’t be able to buy fully autonomous autos, they will be made someday however for leased operation by fleet owners.
Just curious, has your mind changed at all on SpaceX or are you similarly skeptical? Here was your comment from early 2018:
“From my experience in military/aerospace refurbishment of equipment, specifically EDM units (Engineering Development Models), refurbishment is not too far from replacement cost.. Why? The physical abuse the rocket undergoes is torturous. I had to keep an Engineering Log book for government representatives to review and inspect everything that we refurbished before equipment went back into service. I participated in heavy weight shock testing, vibration testing, thermal cycling, RMF, etc. But yeah, returning a rocket on it’s tail looks cool.”
I’d also be curious to know your thoughts on electric cars and autonomy.
I still stand behind what I wrote. Year in, year out, I’d own LMT before SpaceX. Do you think StarLink is going to be profitable with satellite internet? Iridium and Direct TV wasn’t.
in the article you linked to (https://www.cnn.com/2020/01/29/business/tesla-earnings/index.html), it says “On a strict accounting basis the company posted yet another loss for 2019.” In fact, the company has lost money for all 15+ years that it has been in business. Tesla’s own 10-K documents show them in the red. Unfortunately, CNN chases the clicks and posts a misleading headline. This quarter (Q1-2020) is going to be pretty bad too, I think, but we’ll see what happens. The stock price is definitely disconnected from reality.
Disclosure: I bought shares years ago and sold at $309 in 2018. Haven’t invested in Tesla stock since.
I’m surprised Tesla isn’t losing more money. In 2019, it expanded operations with the continued buildout of factories. The company also deployed funds to start Model Y, semi, and in-house battery production. Then there’s the design and development of the truck.
In 5-10 years, I think the picture will look very different because we’ll be looking at a mature company.
I acknowledge that an investment in Tesla is speculative.
Come back in 2025 and let’s see where we’re at!
I have mixed emotions about a guy like Musk. All the stuff you said about him is true, but there is also another side. If you believe some of the stuff written abut him, sounds like he is a horrible person to work for. I lump Jobs and Bezos similarly. Successful, driven people that have changed or are changing the world, although Musk’s impact is better for mankind than Bezos. My point being, great minds, but probably wouldn’t your first choice as a boss, father, or husband. Maybe it’s the nature of the beast, so driven and consumed by their mission that there is no time to be good at the other stuff. Better them than me, I’d rather be better at the other stuff.
I love your blog, reading for a while. Please refer to the level of automation as SAE Level 5 and SAE Level of Automation. We’re a nonprofit who came up with it and would appreciate if our brand is given credit for it. SAE International. The original link in case you or your readers are interested: https://www.sae.org/news/2019/01/sae-updates-j3016-automated-driving-graphic
Ahhh, thank you for letting me know! I just update the post!
Mostly a index (VTI) investor, but Tesla is one of the few stocks I own individually. I started accumulating shares in 2013 and have added on dips over the years. Always keeping it to around 5% of net worth. I currently have 500 shares.
My view of the stock, Elon and Tesla are similar to yours. I think the traditional auto makers are in real trouble and have been terribly slow to react. Their current offerings can’t even compete with the 2013 Model S when it comes to the combination of range and price. None have invested in their own battery factories or charging networks to the degree tesla has either. The reason they’re in such trouble is they have billions of dollars invested in infrastructure to build combustion engines. If EVs are successful these become stranded assets at the same time they need to be investing billions into battery and EV production, all while maintaining profitability.
Those that say tesla is overvalued based on the number of cars Tesla produces compared to a vW or Toyota are missing the point. In 1930 would you rather be invested in livery stables or Ford. Horse sales probably exceeded car sales 100 to 1 that year, clearly the livery stable was the better investment.
Lastly, you mention the battery business potential in passing and focus on the auto side. Elon has said he eventually expects the energy storage business to be as large or larger than the auto business. The energy storage business is production constrained. If Tesla had unlimited battery supply they’d be cranking out electric semi trucks and utility scale energy storage products. Tesla did the world’s largest battery storage product in Australia a few years back and its been widely successful in stabilizing the country’s electric grid and saving the utility millions of dollars compared to the price of operating peaker plants to meet demand variability. Replacing peaker plants with battery storage has huge potential, as does the residential solar roof and home battery storage.
I totally agree with your last point. More than anything Tesla is a technology company. They have a lot of irons in the fire. It could end up that 20 years from now they’re not evening making cars any more, but I’m betting they’ll be doing something profound, life altering, and widely profitable.
First, congratulations on your success. 500 shares of Tesla is worth just north of $400,000 this morning. #wow
“If EVs are successful these become stranded assets at the same time they need to be investing billions into battery and EV production, all while maintaining profitability.”
Great point. And Tesla has capitalized on this a bit. For example, I think Musk bought the Fremont factory for pennies on the dollar from GM.
The potential for energy storage is massive! I can’t wait to hear what Musk has to say at Battery Day in April. The amazing thing about Tesla and batteries is the breadth of the work it’s doing with them; research, production and management software. Crazy.
What do you think of the newer pure electric plays like Rivian and Lucid?
Finally, have we met? ColoradoTribe? I’d love to sit down and talk to you in person about all of this. We’re having a meetup in Longmont tomorrow: https://www.meetup.com/NoCoMustachians/events/268634326/ I’m also in Denver on a regular basis if that’s more convenient.
Thanks Carl, TSLA stock has been a crazy ride as you know. I white-knuckled it down to $180 just 8 months back and managed not to panic sell. There is a good online community of Tesla investors on the Tesla Motors Club message board (investor subforum). Real wealth of knowledge there that helped me stay long.
Familiar with Lucid or Rivian, but have not done a deep dive on either. I know Rivian has a contract to make EV delivery vans for Amazon, which is nice.
We have not met, though I’ve been following your blog for years and live just down the road in Louisville. I actually retired from company work about the same time as you. Much appreciate the invite, I went ahead and RSVP’s and look forward to continuing the EV discussion over a beer tomorrow!
Best,
Justin
Awesome about tomorrow. What’s your favorite style of beer?
And did you have something to do with this?!??: https://www.teslarati.com/tesla-sillion-battery-cell-startup-acquisition-rumors/
🙂
Lately I’ve been enjoying more lagers (Wibby IPL is a favorite), the newfangled hazy/juicy IPAs, and some of the sours that aren’t too funky. I’ll be sure to bring something up from one of the breweries in town.
Thanks for sharing your thoughts on Tesla! I’m a big fan of the Model S. I remember seeing it at $99 per share and not knowing how to value it. But I almost bought it to bet on Musk, similar to your reasoning. Wish I had of. Anyways, you raise some great points about the future of Tesla. I liked the comparison to other electric vehicles. Of course, we don’t know what will happen, but if it does become the biggest vehicle manufacturer by 2030, your returns could be looking even more amazing. I almost still want to buy a small position. It’s hard to pull the trigger with the current evaluation.
Reverse The Crush recently posted…9 High Paying Part Time Jobs To Free Up More Time
Yeah, the Model S is a spectacular vehicle! Some day, I will have one. An old, used one, but still…
“It’s hard to pull the trigger with the current evaluation.”
Yep. It’s very speculative at this point. The company is changing quickly and will look vastly different by 2025. 2030? Who the hell knows!
I bought 1,000 shares of TSLA at $18/share and sold it at $30/share. I thought I was a genius! I then proceeded to GENIUSLY short it at $30 and gave back all of my gains from the first trade. When I had emotionally recovered enough to buy it again, the price was $180/share. Thankfully, I bought 100 shares. Sadly, I’ve sold a few shares here and there on the way up and hold just a measly 5 shares at this point.
Ryan @ RoseRelish.com recently posted…A Major Life Change
Uggh! Wow. That totally sucks! But who knows? Perhaps Tesla will be bankrupt in a couple of years, the stock will go to $0, and you’ll be ahead of me!
1500 Days – Appreciate your stuff. It’s educational and entertaining.
Many Teslas showing up on the roads all around me … Modesto, CA. My neighbor’s son started working for them about a month ago. I haven’t had a chance to talk with him on how it goes. I have interviewed a co-worker, JF, who bought a model S in Dec ’16 or ’17, just in time to get the CA electric car kick-back before it was reduced Jan 1st. I’ve known him for about eight years and this is his fourth car. His previous three were a Lexus, Mercedes and BMW. Here are some of his more memorable comments on his experience in owning and driving his Tesla Model S:
Me (DJ): JF, how do you like your Tesla?
JF: “DJ, I love that car! I will never not own a Tesla for the rest of my life!”
Me: Does that self-driving technology really work?
JF: “Oh, yeah. Don’t tell anyone, but this morning when I drove here, once I hit the highway, I never even drove the car!”
Me: What?
JF: “Yeah, I was reading my e-mails. Once I’m on the highway, I just put it in self-driving mode and chill.”
Me: What?
JF: “Yeah, somedays I don’t even remember driving!”
Me: What about the long charging lines I’ve heard about on the news.
JF: “DJ, I’m sure they are real, maybe in the Bay Area where there is a denser Tesla driving population and less charging stations, but I’ve never waited in line.”
Me: Never? From what I’ve read, it can take 15 -30 minutes to recharge, why wouldn’t a driver plug their car in and walk to Starbucks and get a coffee and lose track of time?
JF: “You get a text telling you your charging is almost done.”
Me: What?
JF: “Yeah, you can set it up for what ever warning time you want, 10 min, 5 min, 3 min, whatever, or all of them.”
Me: Wow, but don’t some people still miss unplugging their car and then you have to wait for the jerk?
JF: “I’ve never experienced it. I guess it could happen, if a person had so much money, they didn’t care about the over-time surcharge.”
Me: What, an overtime surcharge?
JF: “Yeah, The charge at the station only goes to 80%, and then you get charged for not unplugging.”
Me: What?
JF: “Yeah, the charging station only charges the car to 80% and then stops charging, and charges you $1/minute for every minute you haven’t unplugged your car. So, I guess, if you had so much money and you didn’t care about giving away $1/minute over-time surcharge then you could leave the thing plugged in for longer than needed. But, I’m not that wealthy, so I’m ready to unplug my car as soon as it’s done charging.”
Me: Wow, who charges the $1/minute?
JF: “Tesla. It shows up on your bill.”
Me: Wait, so Tesla sells you the car, and then sells you the electricity from their charging stations, and charges $1/minute if you don’t unplug your car at 80% and stops charging?
JF: “Yes.”
Me: That’s genius.
There was a lot more in this conversation, but this entry is a bit long, so I’ll leave it here. The short addition is JF decided a year ago to put in Tesla solar panels and a power wall. His wife thinks he has lost his mind.
Whoah, very interesting conversation! Especially this:
JF: Yeah, somedays I don’t even remember driving!
And this:
Me: Wait, so Tesla sells you the car, and then sells you the electricity from their charging stations, and charges $1/minute if you don’t unplug your car at 80% and stops charging?
Tesla is also going to make loads of money from over-the-air software updates like performance increases, autonomy, and infotainment features (one reason for those big screens!).
1500 Days. I forget … nice compounding! Ever notice how long it takes to save/invest that first $100k (~30 years) or $500k (~38 years). Versus, the next $100k (~1 yr), or $500k (~3 yrs). And the next $500k (~3 yrs). It’s crazy! Something my parents once told me: “DJ, we take out what we are going spend at the beginning of the year, our RMD, and by the end of the year, the account is more than what we started with. It’s weird, in a good way!” Or, “DJ, the key to retirement is to not retire from something, retire to something!”
Yeah, once that snowball gets rolling, it’s hard to stop!
“DJ, the key to retirement is to not retire from something, retire to something!”
Yep. Humans weren’t meant to sit on a couch all day.
Tesla is going to loose big time and disappoint its cusotmers. You are correct that there are a lot of expectation, based on fully automated assembly lines which did not occur.
Electric vehicles are past. There are tones of reasons, but main ones: there are not enough proven reserves to produce enough vehicle batteries. The batteries production and disposal is
catastrophe for the planet. Infrastructure is not there to support electric vehicles, nor the governments are planning to invest in it.
At the very best the Tesla stock’s will flat out but likely they will fall. There are no dividends to support the valuation on the horizon.
Its great that you managed to catch speculative wave but I doubt whether it is heading for the shore 🙂
Financial Independence recently posted…January 2020 update ($566,569 -$8,517 or -%1.5)
“there are not enough proven reserves to produce enough vehicle batteries”
Can you back this up with any data? From what I have read, there are proven lithium reserves for decades to come. Tesla’s new prism cell for China-made Model 3’s does away with cobalt. Also, Tesla is expected to announce a battery back that lasts a million miles this year.
“Infrastructure is not there to support electric vehicles, nor the governments are planning to invest in it.”
The beauty of electric cars is that you can refuel at home. And as sales of electric cars continue, I believe that the markets will take care of the issue of commercial charging. Consider that traditional gas stations make most of their money from retail sales, not the sale of fuel. Now consider that with electric cars, a car charging station has a captive audience of customers for longer. It makes sense that charging stations will pop up all over the place when the demand is there.
In any case, time will tell who is correct. Check back in with me in about 5 years.
Hi there,
I thought I answered your questions yesterday, but they did not appear.
Here we go again:
There are about 15 million metric tones of lithium. Lithium density is 534 kg/m3 => 8 billion kg of lithium.
https://www.statista.com/statistics/268790/countries-with-the-largest-lithium-reserves-worldwide/
A 70kWh Tesla battery uses 63kg of Lithium Carbonate Li2CO3, of which 19% or 12kg is Lithium.
The USA has 270 million registered cars – quite a few a heavy duty, but for argument sake we neglect it. Known reserves will provide enough resources for 667 million cars.
Currently we have 1.4 billion cars on the planet. Lithium has other uses. So there are no enough lithium for all.
“Infrastructure is not there to support electric vehicles, nor the governments are planning to invest in it.”
I will elaborate. Standard socket at home – 110 volt outlet (NEMA 5-15) is included as standard equipment with all new Tesla cars. This provides approximately two to four miles of range per hour of charge depending on the car. If you keep it charging 24 hrs it will only charge up 100 miles.
More importantly power consumption 3-7 KWt per car. If you have two – 6-14 kWT. Standard house has about 11-20 KWT. Essentially you need to upgrade transformers and last mile infrastructure to move to electric cars.
Nobody is going to hand around gas /charging station for an hour two-three times a week. It is a waste of time.
IMHO, As long as there is no government intervention the electric cars will remain niche segment for pretensions people with too much money in their pockets.
Financial Independence recently posted…January 2020 update ($566,569 -$8,517 or -%1.5)
Are those known reserves? Lithium shortages won’t be an issue for a very long time. I’d guess that in a decade or two, someone will come up with a successor and this worry about lithium will be for naught.
110-volt outlets? Most folks I know who have electrics charge with Level 2 chargers. But the good news is that the average American drives less than 30 miles per day, so 110 volts (always plugged in when home) is just fine for most.
The cool thing about this argument is that time will decide who is correct. Come check back in about 2025 and then again in 2030 and we’ll see who was correct! 🙂
If you are here in 2025 I will be disappointed. It is not a true freedom, if you relying on income from a blog or other activities. By the way the amount of cookies from the blog are insane!
While it is true that an average Joe does not drive more than 30 miles, it is also true that average human temperature is a hospital is 98F. Level 2 is 7KWt, you need to upgrade the entire network in neighborhood if everybody else will go electric. No government on the planet is doing it so this tells me that are not getting ready for all electric future in next 5-`10 years.
I don’t think either of us a right here. The future is somewhere else entirely.
Financial Independence recently posted…January 2020 update ($566,569 -$8,517 or -%1.5)
How come you state on your blog that you expect Western Europe to ditch fuel-burning cars (you should mention China too):
“Dabbed as wish list the UK government declared intention to ban sales of new fossil fuel powered cars by 2035. Britain plans to ban the sale of new petrol and diesel cars by 2035, including hybrids. I think the rest western europe will follow soon.”
But then you leave comments like this on my blog?
“Electric vehicles are past. There are tones of reasons, but main ones: there are not enough proven reserves to produce enough vehicle batteries. The batteries production and disposal is
catastrophe for the planet. Infrastructure is not there to support electric vehicles, nor the governments are planning to invest in it.”
Cognitive dissonance?
Tesla is really very awesome company it’s really great brand which always makes everyone surprise and as for this thank you Mr. 1500 Days for sharing this great information to us it’s really very nice to read this try amazing post daily bases which make us inspired and motivated 🙂
Yeah I agree but first and foremost it’s about investments and taking risk
Thanks for sharing your thoughts on Tesla! I’m a big fan of the Model S. I remember seeing it at $99 per share and not knowing how to value it.
I really enjoyed reading your thoughts about Tesla.
Honestly, I personally don’t invested in the individual Tesla stock, but I do think that the company itself is a great resource. Moreover, I believe that the product they sell is a superior product, and very well designed. The only downside, and I’m sure Tesla will figure this out in the years to come, is that the battery charge simply doesn’t last very long when you’re talking about taking a road trip. This car is excellent for inner city use, however.
Cheers!
Fiona