India, going green, is potential gold

Electric rickshaw TeslaMondo

Born to be negligibly wild!

Tesla’s pornographically-named car is likely headed for India, says CIO Jay Vijayan. Both China and India are fixer-uppers for sure, India arguably worse, but they’re both potential home runs for Tesla. Here’s a TeslaMondo comparison:

China: Big automotive market, plenty of wealthy customers, smoggy air, emerging government policies on cleaning it, and a willingness to prop EVs with specific rule-making.
India: Big automotive market, plenty of wealthy customers, smoggy air, lots of government “green” rhetoric that so far hasn’t grown teeth, and a problematic 100 percent import duty.

Tesla plans to chat with Indian officials about that duty. An Indian assembly plant might be the ticket. “We have identified India is one of the potential markets in Asia to have a local assembly plant, but we need a definite policy from the government to support electric vehicles in the future,” Vijayan told the Economic Times.

Both nations lack EV infrastructure, but India arguably lacks ANY infrastructure. TeslaMondo has already written about India’s extreme challenge in civil engineering — specifically, finding civil engineers in the first place. India’s young and educated aren’t keen on gritty careers in roads, bridges, electrical delivery etc. Understandably, they’re keen on a clean work environment and good pay. That means computer-based careers, and likely outside of India.

The worst electrical blackout in world history? Two years ago. India.

But India does have fledgling environmentalism. It comes from the lower classes and trickles upwards — generally the opposite of American environmentalism, where it’s vogue to be “green.” It’s not vogue in India. It’s a matter of survival. The Indian agricultural sector is fighting to keep industry off its turf. Long story short: India is slowly coming around.

Another intriguing tidbit in India: Locally-based Mahindra and Mahindra makes electric vehicles, and has also expressed interest in studying Tesla’s patents. Perhaps Mahindra and Tesla will team up to build a duty-free Model 3. It even rhymes, at least in English.

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Tesla shows it’s the leader in PPS

Chicken little TeslaMondoThat’s “Panic Per Share.” Today everyone is panicking simply because a Tesla-friendly analyst, Adam Jonas from Morgan Stanley, followed the well-known Model X delay to its logical conclusion and adjusted his 2015 earnings per share forecast for TSLA. The fact that he reiterated his $320 price target means little when you’re dealing with Chicken Little stock traders.

Separately, Tesla says the Model X falcon wing doors are not a prime culprit in delaying the vehicle’s launch from Q1 to Q3 next year, contrary to press reports yesterday. And the origin of those press reports? Morgan Stanley’s Adam Jonas. Vast sums of money are ebbing and flowing through TSLA for every word uttered, typed, emailed or posted by two men: Elon Musk and Adam Jonas. Madness! It’s time for yet another collective shrug of the shoulders and shake of the head from TSLA longs.

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Model G will indeed haul ass, and cargo

Waiting for Model X, TeslaMondo

Waiting for Model Godot

Towing capability? Check.
Roof rack? Check.
Bike rack? Check.
Brain-warping acceleration, as offered in the “D”? Check.

That’s the gist of Tesla’s latest update to folk who have a Model Godot on reserve. This is good news, for it means Tesla’s SUV will offer capabilities of a mainstream SUV. And it will penetrate the air with “unprecedented” aerodynamics, maximizing range. But will it have side mirrors or side cameras? That was fodder for discussion this spring, but not a peep on the subject has been heard since, as the world waits for NHTSA to come around to looking at the calendar and noticing it’s the 21st century. And this roof rack solution — how the heck, given those falcon wings? Well, Tesla has already reinvented the guts of the automobile. Apparently the gang is equally intent on reinventing the exterior.

As we age, we often wish we could slow down the clock. Well, Model X surely has some of us wishing we could accelerate the darned thing. This wait is unbearable.

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Drilling for sound bites in Norway

Musk ONS TeslaMondoInterviewed at the Offshore Northern Seas conference in Norway — and oil and gas convention, incidentally — Elon managed to eke out some sage words in between interruptions from his enthusiastic but antsy interviewer. The quotes are verbatim. Everything else is paraphrased.

Why are you here, at an oil and gas conference?
Because Norway is big into electric vehicles.

Why is Norway so big on Tesla?
One reason is strong government EV incentives. However, Denmark has strong incentives without the big sales numbers. The difference is that Norway has very vocal Tesla enthusiasts.

Tell us about the Gigafactory
“In order to make a lot of electric cars, you need a lot of batteries, and the lithium-ion battery capacity of the world, I mean in terms of production capacity, is really not big enough yet, nor does it make the most advanced type of batteries that we really needed for long-range electric cars. So in order to solve that problem, we found there was really no choice but to build a really enormous factory, called the Gigafacory, so-named because we’re targeting about 50 gigawatt hours of output.”

And not just for cars, right?
“About a third of the output of the Gigafactory is intended as stationary storage, primarily to be paired with renewables, but also to do grid buffering in non-renewable situations . . . I think we’ll see a really huge demand for stationary storage . . . It’s worth noting that the world could be powered many times over by solar, if you had enough battery capacity to pair with it . . . You could power the entire United States with about, say, 150 to 200 square kilometers of solar panels. Take a corner of Utah. And there’s not much going on there. I’ve been there.”

What kind of a threat do you think you are to the oil and gas industry?
“I don’t think we’re much of a threat. I mean yet. The more obvious threat is that we’re going to run out of hydrocarbons to mine and burn . . . It’s getting harder and harder to find hydrocarbons and much more expensive to extract them . . . There are time extensions on the game, but the game is going to come to an end . . . If you’re in non-renewables, it’s like you’re stuck in a room where the oxygen is gradually depleting . . . The solar resource is the thing that’s really going to preserve the long-term future, not so much the oil and gas . . . In the future, we’ll look back — and by the future, I’m not talking about super-far in the future. I’m talking about toward the end of the century — we will look back on gasoline-powered cars the same way we look back on coal, as some sort of quaint anachronism that’s in a museum.”

Why did you give away patents?
“When I was first starting out, developing technology, I got lots of patents and felt this was a good thing, and then I sort of discovered that a patent was really like buying a lottery ticket to a lawsuit, so it’s like, I’d rather not buy those tickets. And you look at the battle between Apple and Samsung, and who’s really winning there? You know, the lawyers are winning, certainly, but neither of those two companies. And in the case of Tesla, I thought, would Tesla ever sue some other car company if they were using our patents, to try to make them stop making electric cars? We would never do such a thing. So why pretend that we would?”

Does sharing patents boost Tesla’s business somehow? A rising tide lifts all boats?
“Maybe it can lift the industry as a whole. And I think it generated some good will, and I think that good will is helpful. You never know where it pays off.”

When will people go to Mars en masse?
About 25 years, once the ticket price falls below $500,000.

How does one go about really reducing the costs of a venture?
“Well, you have to innovate. You have to do different things. And there has to be tight feedback loop on innovation. And one of the things that’s advantageous in the way SpaceX operates is that the engineering team and the production team are in the same facility, and there is good communication back and forth, so as the engineers see they’ve built something that’s difficult to manufacture, they can adjust their design quickly to make it easier to build. And so the pace at which we’re able to do new versions of the rocket is much faster . . . There must be an expectation of innovation. Establish an expectation of innovation and the compensation structure must reflect that . . . There must also be an allowance for failure  . . . If you punish people too much for failure, they will respond accordingly and the innovation you’ll get will be very incremental.”

Any collaboration between SpaceX and the oil industry? Asteroid mining? Drilling on Mars?
“The most likely Mars architecture that I think makes sense is a methane/oxygen system. Methane is the lowest-cost source fuel on Earth. And with rockets, you can’t really make a rocket electric because it’s got to react against something. Once it gets to a vacuum there’s no air or land or water to react against, so you have to burn something really. So I think a methane-based system is going to be what makes the most sense. Once you get to Mars, I think there will be some drilling activity, particularly to find out if we can get to underground lakes. To find water that’s heated by the Mars central core. That would make it a lot easier to develop propellant on Mars. Critical to any Mars colonization is the ability to generate fuel on Mars. You need to generate methane on Mars, which you can do because Mars has a CO2 atmosphere and there’s a lot of frozen H20 around.”

What changes would you make if you were CEO of an oil and gas major?
Invest in renewables.

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EV expert knows what’s best for Tesla

Gigafactory advice for TeslaThe latest infusion of well-meaning advice comes from Tony Posawatz, who worked on the Chevy Avalanche, Cadillac Escalade and Chevy Volt for GM — then briefly served as CEO of Fisker. In an interview with Benzinga, Posawatz did what every unsolicited Tesla advisor does:

1. Gives props to Tesla while also propping his own résumé as an automotive expert.
2. Points out the same old challenges that Tesla has already openly acknowledged.

And so what was the point of the interview with Posawatz? Answering that might be the biggest challenge of all. Why write about it on TeslaMondo? Because it’s perfect for the ongoing Father Knows Best series.

Want an example of Posawatz propping his own résumé as an automotive expert? When Benzinga asked him about the “D” unveiling, here’s the preamble to his answer: “Well, many people asked me, because of my deep understanding of the auto business as well as the new technologies that are emerging from vehicle electrification to the autonomous driving to many of the new business models that are coming — have asked me my thoughts.” Sounds like a man who is on the job market, yes? Anyway, every issue raised by Posawatz is old hat by now, already confronted. Here are the biggies:Tony Posawatz TeslaMondo

Issue 1: The Gigafactory’s battery tech might become stale too fast. Already confronted by Tesla here and here.
Issue 2: Tesla can’t rely on ZEV credits. Already confronted by Tesla (scroll to “Outlook” section).
Issue 3: Building cars is expensive, so Tesla should seek more partnerships. Well, Tesla has already contracted with Toyota and Daimler, has partnered with Panasonic, has chatted with Apple, and will soon provide patented technology to other marques, according to Musk. So Tesla is hardly isolationist. Even Tesla’s proprietary Superchargers need not be proprietary, Musk has said.

More from the Father Knows Best series:

Lux Research
Battery guys
Daimler, Bosch
Battery guru


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Swapalease sees high Model S demand

“You want out. I want in.” That’s the slogan at swapalease, a broker that lets people take over each other’s leases. Well, it turns out a lot people want “in” to a Model S. In fact, Model S consideration is 350 percent higher than other high-end sedans, according to the executive vice president of swapalease. Lest we forget, Tesla will let you out of a Model S lease without penalty within the first three months, per Tesla’s new “happiness guarantee.” But for those who can’t use that exit, it appears swapalease is a useful backup exit.

Why exit a Model S lease? Who knows. Job disruption, job disruption and job disruption probably round out the top three reasons. But why would anyone want to take over a Model S lease, or any other lease? Why not just start fresh with a new car and a new lease? Consider these scenarios, which could apply to any brand including Tesla:

1. The original lessee put down $5k to knock down his lease payment, but now he’s opting out. You can take over that lease with the low payment, but without the money down. Ka-ching!
2. The original lessee opted for a long lease, which resulted in a lower payment than a short lease. You can take over the lease toward the tail end, using the car for just a short period with the low payment. Ka-ching!
3. You need a car for six months before you fly back to your home country. But nobody offers six-month leases. No problem. Take over a lease with six months left on it. That’s potentially a lot better than buying a car and hoping to get out of it without losing your shirt. Ka-ching!
4. You want to bypass a long wait for a hard-to-get vehicle from a dealership.
5. You need a pair of cheap sunglasses and a Beach Boys CD. Surely the original lessee left those behind. Score!

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Amateur Tesla ads only dilute the brand

Tesla ad TeslaMondo

“Gallons of Light” promo. A bit sappy, yes?

Tesla’s lack of traditional advertising is the best advertisement of all. But amateurs try to create Tesla ads anyway. TeslaMondo’s opinion is that even the best of the bunch look like medicore mainstream car ads — nothing befitting a maverick car company. Cute kids, mountain roads and sunsets are good enough if you’re peddling Nissan Leafs, but we’re talking Tesla here. This company needs something radical. And unfortunately, the most radical of all ad campaigns is . . . no campaign at all.

Attempt Number One
Attempt Number Two
Attempt Number Three
Attempt Number Four
Attempt Number Five
Attempt Number Six
Attempt Number Seven
Attempt Number Eight
Individual Store Attempt


BMW taps streetlights as chargers

“Motion to allow BMW to tap into our street lights, all those in favor say aye . . . “

Maybe you’ll hear that in your town hall someday. BMW wisely seeks to piggyback on existing infrastructure and has already started experimenting with streetlight chargers in Germany. In a few years, maybe you’ll be able to charge your EV via streetlight. Slowly. And for a fee, payable by mobile app.BMW streetlights TeslaMondo

“Seamless charging infrastructure is essential if we want to see more electric vehicles on the road in our cities in the future,” Peter Schwarzenbauer, Member of the Board of Management of BMW AG, told Reuters.

These chargers would not be proprietary. Many EVs could BMW brand image TeslaMondouse them. TeslaMondo supports all efforts to broaden EV appeal, so heck yes, BMW, this all sounds great. But watch out for BMW backlash. Some municipalities in the US might not take kindly to them fancy car drivers trying to take over the town — or something like that. Whereas Tesla’s fresh brand image gets it a free pass anywhere, BMW’s image could use a little massaging. The company is associated with great driving machines but not-so-great characters behind the wheel. So perhaps these forthcoming municipal proposals would have a better chance of approval if they didn’t have any particular brand attached to them.


Why the Model S has restrained styling

Franz von Holzhausen at Churchill Club TeslaMondoSpeaking at the Churchill Club — a Silicon Valley business/tech forum — Tesla’s design chief Franz von Holzhausen explained why the Model S isn’t more exotic-looking. The moderator’s question comes at the 11:00 mark. Here’s the response:

“If you look at where we were in time, six years ago, electric cars were, like I said, a glorified golf cart. That was the impression. You didn’t have a competitive set, and the ones that were aspiring to be in this marketplace tended to be all over the map. We knew, as we developed the Roadster, that we had a really great recipe. You could have performance, and you could have range. You could have everything that a typical, normaily-aspirated engine vehicle could deliver and better, cleaner. Efficiency was great. No emissions, etc.”

“Knowing that we had that underneath the skin, we needed to create a product — and I thought it was really important — to create a product that attracted people to the technology, because this technology, you know — we take it a little bit for granted now, but back then it was new to everybody and really pretty scary to anybody beyond an early adopter. If we created the Jetsons-mobile, we would have catered to the early-adopters and stopped right there. We would not have been able to appeal to more of a mass market and had a confident car that could carry itself next to BMW, Audi, Mercedes, Lexus and these types of products and have the owners feel confident in their daily life with this product. And that’s what we wanted. I refer to the moth and the flame. Be attracted to the product regardless of what’s underneath the hood, then learn about the technology and be engrossed in that. Learn how it changes their life . . .”

“We were building a brand at the same time, and it’s really tough to build a brand off a niche, high-end, expensive sports car. We preferred building a brand off a sedan, and this was really kind of the shoulders, and they needed to be broad shoulders that the brand could build off of and sustain itself over time and build into new produce like Model X and forward-looking into Model 3 etc., — really sustain ourselves until we could get to even more affordable, mass-market electric vehicles.”

Von Holzhausen explained in another video that the Tour de France inspired him with the idea of fluid muscularity. Sure enough, the Model S is understated, fluid and muscular — not unlike a champion bicyclist.

For rabid fans who liken the Model S to the second coming of Christ, please note that, in fact, the Model S was born in a little tent — a manger, if you will — on the SpaceX property. Yes, that was the design studio at the time. Humble beginnings indeed. “We started in a little tent in the back of a rocket factory . . . we kind of equated ourselves to a garage band playing in a big stage.”


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Tesla will leave the mall (part II)

Criswell predicts TeslaMondo* Back in March, TeslaMondo predicted that Tesla will eventually escape its supply constraints and then find it useful to step out of the mall, adopting a dealer-like retail model aimed at selling en masse. That means stocking some inventory for quick turnaround, taking trade-ins and securing on-the-spot financing via competitive bidding to banks — functions vital to dealerships but alien to Musk et al. The prediction goes that once Tesla moves to cheaper products, it will attract middle-class, need-based buyers who cannot order a car and wait a couple of months. Those buyers need wheels TODAY. Their other car was just totaled. Or the boss deleted the company car benefit. Or they just got a $2,000 repair estimate for a 1999 Camry. That kind of thing. Tesla will need to provide wheels to these people pronto, or see them go elsewhere out of sheer necessity.
* On Oct. 14, Elon Musk speculated that Tesla might eventually shift to a “hybrid” retail system of both Tesla-owned stores and franchised dealers.
* On Nov. 6, AutoNation’s CEO* predicted Tesla will eventually cave in and use franchised dealers in Tesla’s quest for high-volume business.

OK, so perhaps Tesla will indeed gravitate to the middleman as predicted here.

But wait. Automakers are trying to dodge that same middleman. Ford and GM tried to go factory-direct in 1999. This past June, the Alliance for Automobile Manufacturers openly slapped middleman protectionism: “At the request of local dealer groups, states set up a labyrinth of protectionist laws that make the car-buying experience difficult and costly for our customers,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which represents 12 automakers but not Tesla. “It’s understandable why Tesla or future competitors would want a simpler sales process. When we look at the big picture, we may be at a tipping point. If dealer groups continue their push for more onerous franchise laws, we will be forced to keep an open mind about how best to serve new-car buyers in the future.”

So while Tesla is saying it might need dealers, other automakers seem eager to avoid them.

So where is this headed? Somewhere in the middle? Will the likes of Tesla and Ford both end up with “hybrid” retail models comprising some factory-owned stores and some independent dealers? How would that work? Surely pricing would have to remain static across the board, lest customers simply gravitate to the factory-direct outlets. Finger-pointing would likely emerge as the independent dealers decry alleged favoritism toward factory-direct outlets. “Hey, how come we can’t get any Model 3 inventory but your factory stores get a dozen every month?” That kind of thing.

A hybrid system might be ugly, but no uglier than the status quo. Auto retailing is immutably ugly, and deeper automaker involvement will not fix that ugliness. In fact, automakers are already heavily involved in much of the sticky stuff that happens at car dealerships. Consider the myriad judgement calls behind the scenes at service departments. Is your issue covered under warranty or not? That’s decided by a factory rep., not the dealer’s service manager. How about your loan? Do you qualify for the zero-percent promotion? Again, a factory rep is behind the curtain, whispering to the dealer’s finance department. You return your lease and get a bill for $1,000 in excess wear and tear. That bill didn’t come from the dealer, y’all. So the middleman isn’t to blame for all of your store-level agita. Some of it goes right up the ladder. So a factory-run store won’t cure ugly unless the factory is REALLY on top of its game. So far, Tesla has mastered customer experience. Will growth, and a hybrid retailing system, ruin all of that? Criswell declares: “We are all interested in the future, for that is where we are going to spend the rest of our lives …”

*By the way, if you want a Tesla but have a trade-in, Tesla refers you to, um, AutoNation.