MIT sacrifices its reputation at the behest of Oil and Legacy Auto companies

You get what you pay for

In a recent story in MIT Technology Review, we were surprised to read that we should not expect EVs to compete with gasoline cars on price any time before 2030.

The findings sharply contradict those of other research groups, which have concluded that electric vehicles could achieve price parity with gas-powered ones in the next five years. The lingering price difference predicted by the MIT report could stunt the transition to lower-emission vehicles, requiring governments to extend subsides or enact stricter mandates to achieve the same adoption of EVs and cuts in climate pollution.

The most quoted number for lithium-ion battery packs to reach price parity with ICE is $100/kWh, a price that has been predicted to happen by 2022 for the industry based on prices declines over the last decade (the price was about $1200/kWh in 2009).

MIT researchers contested the 2022 price was accurate, claiming they couldn’t be sustained.

The problem is that the steady decline in the cost of lithium-ion batteries, which power electric vehicles and account for about a third of their total cost, is likely to slow in the next few years as they approach limits set by the cost of raw materials.

“If you follow some of these other projections, you basically end up with the cost of batteries being less than the ingredients required to make it,” says Randall Field, executive director of the Mobility of the Future group at MIT. “We see that as a flaw.”

Well, that would be a flaw, but it flies in the face of decades of actual real world experience with high tech commodities. Computer memory for example, went through numerous boom/bust price cycles over the last 50 years, then has become so cheap that you can almost get a flash drive in your corn flakes. Hell, even oil prices have defied this thinking (in the U.S.), with gasoline currently costing about the same as it did in the 70s (adjusted for inflation).

The article then goes on to state that the adoption of EVs is going to be much slower than economists and advocates have predicted, so we are going to have gasoline cars around for at least another decade.

I started to go dig into the logic and research behind these conclusions, but decided to skip all that work, and instead go straight to the report, Insights Into Future Mobility, skipping to page 8 of the 220 page report where researchers thanked the groups who “sponsored” the “research”.

The MIT Energy Initiative gratefully acknowledges the 10 consortium members whose generous sponsorship made this research possible: Alfa, Aramco, BP, Chevron, Equinor, ExxonMobil, Ferrovial, General Motors, Shell, and the Toyota Mobility Foundation.

Representatives from all of these companies engaged with the MITEI team in extensive discussions, providing valuable critique and perspective that helped us sharpen our analysis and improve this report.

Yeah, I bet they did help “sharpen” your analysis. A study paper that basically says, “Never mind EVs, they won’t really be a thing for another 11 years, so keep burning that gasoline in the cars automakers are currently selling”, sponsored by the largest oil companies and the biggest car maker in the world.

No conflict of interest here.

Now adding MIT to my list of unreliable sources.

Remember, he gets paid for this “advice”

CNBC’s Jim Cramer, a longtime Tesla critic, says he might be about to buy a Model X — because his wife says so, 11/26/2020

Back in 2011, with Tesla Inc. shares trading down around $22, CNBC’s “Mad Money” host Jim Cramer told a caller to “cut her losses” and unload her position. “Nothing there. Don’t like that stock,” he said.

Booyah! The stock closed Monday at $336.34.

So, for those of you playing at home, assuming she had 1,000 shares, she walked away from a gain of $314,340 by listening to this chowderhead.

Apparently something funny happened over the past couple of days: “I took a ride in a Tesla this weekend that made Lisa say, that’s it, we are buying one. Enough already,” he tweeted on Monday.

This “investment expert” has been advising people about Tesla stock, and yet he never bother to check out the product?

Cramer has had plenty to say about Tesla and its boss, Elon Musk, along the way. Earlier this year, he said Musk is like P.T. Barnum and it’s “annoying.” Before that, he floated the idea of Musk being removed as CEO. More recently, he panned Tesla’s new Cybertruck as “a bit of a bust.”

Hmmm… It seems that Cramer’s job is to talk about companies he doesn’t understand, and advise gullible people about whether they should invest their money, or short the stock. Talk about “one born every minute”.

He explained in a later tweet directed at Musk that the Model X is the version that he took for a spin and it was a “fantastic ride.”


Today Ends in “Y”, so Market Watch has a Negative Tesla Story

Tesla ‘Blade Runner’ pickup truck could be so
futuristic that it leaves buyers cold 11/20/2019

Claudia Assis never saw good news come from Tesla that she didn’t interpret as bad news. This week with Tesla’s much anticipated Cybertruck debuting tomorrow, she made the rounds of Tesla critics and short sellers to find out why this was a bad thing.

Some on Wall Street were sounding skeptical about the new Tesla Inc. pickup truck, the Silicon Valley car maker’s first foray into the top auto segment in the U.S.

“We expect focus to be on how well the actual design resonates with pickup buyers,” Emmanuel Rosner at Deutsche Bank said in a note Monday.

There’s a risk the vehicle would be so futuristic as to not attract “traditional pickup buyers, leaving it a lower-volume niche product,” Rosner said.

Yes, that would be a worry if Tesla was trying to sell to “traditional pickup buyers”, who would not drive a Tesla if it came free with a case of Pabst Blue Ribbon. Tesla’s customer base are people who want a pickup truck that isn’t coating the insides of their lungs (and their children’s lungs) in a way that would make a bare-handed coal miner leery. Oh, and contractors who don’t want to pay 25¢ a mile to haul around their tools, including a generator to power said tools, when they can pay under a dime a mile and power their tools with their truck.

Back in March, Tesla revealed the compact SUV Model Y just ahead of its first-quarter results. Many analysts faulted Tesla for that timing, and the reveal renewed concerns about production issues. The stock fell 5% after the Model Y unveiling.

True. The stock fell to around $280. Of course this week it is trading at $350+, so I don’t think the “concerns” were lastingly concerning.

“After the model Model Y launch fizzled on concerns this will cannibalize the Model 3, we expect a similar response to the truck,” said Craig Irwin, an analyst with Roth Capital Partners.

In 24 hours after the reveal of the Model Y, 5 million people had watched the livestream on Youtube. Contrast this with the 50,000 who watched Ford’s Mustang Mach E reveal. We seem to have a different idea of “fizzled”.

Roth Capital can’t seem to make up its mind what it believes. They rated Tesla a buy at $208 this past June, but then rated it a sell October 29th, with a target rating of $249. Tesla closed that day at $323, and as I write this is trading at $353.

“We do not expect initial truck production until mid-2021, around a year after first Model Y production,” Irwin said in a note. Tesla could also walk back from prior suggestions that the “cybertruck” would start at less than $50,000 and with the 400-500-mile range, he said.

Tesla “could” do that. They also “could” build robotic fire ants and send them to Mars, then bury fickle analysts in the mounds covered Karo Syrup­. I don’t expect that idea to begin production until mid-2021.

Debunking yet another ill-informed, or deliberately misleading, anti-EV screed

These “articles” are now popping up about once a quarter. The latest is from the site “Seeking Alpha” which, as best as I can tell, is a major disinformation site for people into shorting stocks. The article, Tesla Model 3 Costs More to Charge Than a Gasoline Car, starts right off with a title that is misleading on its face. Normally, I wouldn’t deign to quibble over such an error, but as the author has either failed to properly research his topic, or simply wasn’t going to let facts get in the way of his agenda, I will make an exception.

Yes, a Model 3 costs more to CHARGE than a gasoline car does, since a gasoline car doesn’t require charging of anything other than its 12v battery, and does that with its onboard alternator, powered by its gasoline engine. The correct title for his assertion would be “Tesla Model 3 Costs More to Fuel Than a Gasoline Car“, which even then would be wrong in all but the most narrow of circumstances.

To save time, I will rebut the writer’s summary.

Investors who take it for granted that electric cars are cheaper to run, need to think again.

And if they do, they would come to the same conclusion. Setting aside, his cherry-picked fuel numbers and bizarre assumptions about battery life, EVs have no transmission, no radiator, no muffler, no catalytic converter, no fuel pump, no water pump, no oil pump, no timing belt, no oxygen sensor, and of course, no internal combustion engine. This means the number of moving parts in an EV drivetrain is about two orders of magnitude less than an ICEV; a dozen or so, versus thousands. Fewer moving parts means less things to wear out and fail. In four years of EV driving I have paid for a set of tires, and a cabin air filter. My results are hardly atypical. So, on to the next assertion.

A comparison between Tesla Model 3 and the three leading hybrid cars of calendar year 2018 from Toyota, Honda and Hyundai proves otherwise.

Our writer then compares the M3 to three hybrids, instead of three gasoline cars. The major point of switching to EVs is to STOP burning gasoline, which produces health/environment damaging pollutants. Hybrids are great, and a step in the right direction, but they still burn petrochemicals, and produce exhaust which damages your lungs and warms the planet. (Oh, and one of the hybrids, the 2018 Honda Insight, won’t be out until the Summer). To compare fuel costs with a just 3 (2 actually) hybrids, but ignore health and environmental costs, is disingenuous at best, evil at worst.

At the current typical Supercharger price of $0.24 per kWh, a Tesla Model 3 is $0.06 per mile. At the current gasoline price of $2.65, the 50+ MPG hybrids are $0.05 per mile.

Supercharger prices vary based on locations, since different states have completely different tariffs for electricity. It can be argued that 24¢/kWh is an average, but even then this ignores the fact that the majority of EV owners charge at home, where the national average is about 12¢/kWh, which means the M3 costs 3¢ a mile to run, not 6¢. Superchargers are used for long distance travel, not day-to-day commuting. The average driver in the U.S. drives 35 miles per day or less.

Then you have to add that the Model 3 has at best half the range and takes at least 10-20x as long to recharge that inferior range.

Yes, the Prius and the Ioniq get around 550 miles on a tank of gas, but again, burning gasoline means damage to people’s health and the environment. How much are your lungs worth? How about you children’s lungs? As to the 10-20x slower, this is technically true, in a narrow range of real world circumstances.

Yes, pumping gasoline is faster than recharging, if you consider only the time from putting the nozzle into the tank and pulling it out. But hey, next time you pull in for gas, time from the moment you pull in, until you pull out. Did you have to wait on a pump? I am guessing depending on the time for day, a fuel stop could be as fast as five minutes, or as long as fifteen minutes. Did you run into the bathroom for nature’s call, or to wash the smell of gasoline off your hands? Did you spill gasoline on the ground, or your shoes/clothes?

Yes, you can drive 550 miles without stopping, which would be almost eight and a half hours at typical highway speeds, but who does that? Most people drive 2-3 hours and then stop for a bathroom break, or food, or because the kids are going stir crazy. These stops average how long? 20-30 minutes? Three hours of driving in an M3 is 130-195 miles, or about 2/3s of the car’s range tops, meaning that when you stop at a Supercharger station for a break, you can replace most, if not all, of your lost range.

I am sure there are masochists out there with bladders the size of a camel’s hump who can drive eight hours straight, but I don’t believe there are many.

Of course, the Model 3 also costs twice as much, and you have to assign an approximate $1,000 per year to battery depreciation, alone more than driving on gasoline for a year.

I was utterly puzzled as to where our writer got this $1000 a year battery depreciation number? Now, it is an inescapable fact that driving ANY new car off the lot causes as 20-30% loss in value the first year, and it continues to depreciate over time. But $1000 a year for just the battery? So, let’s look at his key basis for this statement:

It is understood that you should not have to pay for a new EV battery within the first ten years, if for no other reason because of warranty and general expectations of reliability. However, at some point the day to buy a new battery will come. Perhaps not at the 10-year mark, but otherwise at 15, 20 or 25 years.

In a gasoline car, you are not worrying about the expense of switching out the gasoline tank after a decade or two or three. If you had to do it, the cost would be tiny anyway.

Okay, on average, how many people keep their cars longer than ten years? By this time, your car has accumulated about 150,000 miles, and most people I know are looking for a newer model (whether new or used). So, by his own admission, the battery is not a problem for the expected life of the car. But just for fun, let’s look at the outliers, the folk who keep their car for 15 years. By that time, the battery may have seen its range degrade to the point it needs to be replaced.

However, in a Tesla Model 3, you are talking about a battery close to 80 kWh. We know Tesla said that its cost (by some narrow definition) was falling below $190 per kWh. However, counting all costs and adding a profit margin plus labor, we can safely say that the price (not cost) would be at least $250 per kWh all-in.

So at $250 per kWh, we are talking $20,000 as the total price for the 80 kWh battery, perhaps including installation and disposal, if necessary.

Well, the math makes sense, if one assumes that the cost of batteries will remain the same as it is today, which is a bet I would not take.

In 2010, the average cost of a battery pack was $1,000/kWh. Yet, today it is (using his number) $250/kWh, a 75% reduction in 8 years (more if you factor in inflation). Battery costs are falling as demand increases due to economies of scale. There is no reason to assume that this will not continue for another decade yet. A state of the art PC cost around $8,000 back in the early 80s, yet you can have one (three, or so, orders of magnitude better) today for under $500. It is not unreasonable to expect battery pack prices to fall another 75% in the next 15 years, which means that when our frugal driver is looking for another battery pack for his 15 year old Model 3, it will set him back $5,000, not $20,000.

Oh, and a question for the reader to ponder: How often has the rate you pay for electricity fluctuated wildly from month to month? How often has it almost doubled over the course of a year? It doesn’t happen. Why? Because electrical rates are set by regulatory agencies, not by the utility companies. Gasoline, on the other hand…..

In the end, we find that the entire premise of this article is either ill-informed, or deliberately misleading.

Which is it you ask? Well, I will quote one last key sentence and let you decide:

Disclosure: I am/we are short TSLA.

Well, in the interest of fairness,

Disclosure: I own two EVs.

Slanting a story to the point of lying

Caught this story by the Financial Times and was shocked at the lengths the “reporter” went misinform the public. To be fair, perhaps Peter Campbell and Nathalie Thomas are just that ignorant, but if that is the case, they should not be reporting on stories like this.

Problems started with the headline:

Tesla truck will need energy of 4,000 homes to recharge, says study

Wow, the energy of 4,000 homes to power a single truck? That is staggering. Or is it? The key data point missing from the headline is the time factor. Energy for 4,000 homes for how long? Well, quick back of the envelope math tells me that assuming they were talking about the long range truck, which has a 1,000 kWh battery, we are at 250 watt-hours per home. So, how long will 250 wH last in a U.K. home? That depends on how much the home consumes. According to the Office of Gas & Electricity Markets, The average U.K. home consumes between 1,900-7,100 kWh per year. If I take the median value of those numbers, I get 4,500 kWh, or 12.3 kWh per day, or roughly 513 wH per hour. Based on those assumptions, we are running our 4,000 homes for less than 30 minutes.

Now, the energy to run 4,000 homes for just less than a half hour is an impressive amount of energy, but now we have context to our numbers, something the original headline did not convey. If I chose, I could have used the same absence of time context to make the headline “scarier” by using the lowest value of electrical consumption from OFGEM, run them for only a second, and then written:

Tesla truck will need energy of 15.9 million homes to recharge, says study

Way scarier headline, and just as true as the first one.

Okay, off to a bad start. Let’s go with the first three paragraphs:

One of Europe’s leading energy consultancies has estimated that Tesla’s electric haulage truck will require the same energy as up to 4,000 homes to recharge, calculations that raise questions over the project’s viability.

The US electric carmaker unveiled a battery-powered truck earlier this month, promising haulage drivers they could add 400 miles of charge in as little as 30 minutes using a new “megacharger” to be made by the company.

John Feddersen, chief executive of Aurora Energy Research, a consultancy set up in 2013 by a group of Oxford university professors, said the power required for the megacharger to fill a battery in that amount of time would be 1,600 kilowatts.

Here some context is implied, if we assume 30 minutes is the time the are talking about our 4,000 houses running, and we use that median consumption value of 4,500 kWh per year. But the article doesn’t tell us this, violating the first rule of math: “show your work”.

We are then introduced to this John Feddersen chap and his four year old consulting company made up of some Oxford professors. We are not told who Aurora Energy Research is funded by, their purpose, or the academic disciplines of these professors. When I popped over to AER’s web site I found that they are, in fact a consulting firm, with 15 directors, whose academic expertise consisted of eight economists, three business admins, one mathematician, one philosophy/French major and one mechanical engineer. What was completely lacking from a consulting firm that specializes in the entire spectrum of energy generation would be anyone with actual engineering expertise in any of the relevant fields. How much weight do I give Mr. Feddersen’s opinion on the technical aspects of Tesla’s batteries, chargers, and drive trains when he is an economist. not an electrical, chemical or materials engineer?

Tesla declined to comment on the calculations.

Well, one can understand why Tesla will not take time out of its busy schedule to rebut the opinions of people lacking the expertise to understand the rebuttal.

Mr Feddersen used the example of the Tesla truck to highlight the need for greater debate around how grid infrastructure will need to be adapted to meet demand for electric vehicles.

“There are smart and dumb ways to incorporate this level of capacity requirement into the system, but either way, fully electrified road transport will need a large amount of new infrastructure,” he told the Financial Times.

Certainly true. Also true: There are smart and dumb ways to write an article about this subject, but either way you need competent reporters talking to actual experts in relevant fields in order to write them.

National Grid, which oversees Britain’s electricity system, has suggested that in the most extreme scenario, electric vehicles could create as much as 18 gigawatts of additional demand for power at peak times in the UK by 2050.

Right, so what are the other scenarios? The more realistic ones that are not “the most extreme”? In the most extreme scenario I can foresee, a previously undetected asteroid the size of the moon could slam into the Earth in the morning and annihilate all human life on the planet. However, should I plan my breakfast cereal purchase according to that scenario, or a more reasonable one that involves being around to eat my Fruit Loops™?

Industry experts believe strains on the system could be reduced by using “smart chargers” that only re-boot vehicle batteries when the grid is able to cope, rather than at peak times, such as after work.

One “recharges” vehicle batteries, one does not “re-boot” them. And that, boys and girls, says all we need to know about the “expertise” of this article.