Tesla Motors Inc (TSLA) Has Tesla Solved The Road Trip Problem? Seeking Alpha

15 Июн 2014 | Author: | Комментарии к записи Tesla Motors Inc (TSLA) Has Tesla Solved The Road Trip Problem? Seeking Alpha отключены
Interesting » Electric Cars

Has Tesla Solved The Road Trip Problem?

Tesla Motors (TSLA ) must deliver an electric car road trip solution equivalent to mainstream ICE cars or they will be stuck making specialty electric cars and never generate the returns many of their investors hope for.

Tesla has come a long way since delivering Model S cars in June. Dan Neil of the Wall Street Journal said, Model S goes like the very stink of hell, their factory is working, orders pour in, and CEO Elon Musk tweeted about profit. Tesla will likely deliver 20,000 cars in 2013.

An optimist looking at reservations might imagine 30,000 Teslas this year.

Given an ASP of $80k a car, Tesla’s 2013 car business looks like $1.6 to $2.4 billion. Throw in another $200 million for drivetrains and services and this year’s top line might go as high as $2.6 billion. If Tesla achieves 25% gross margins and brings 10% to the bottom line, they might conceivably earn $260 million. With shares at $34.52, and a $3.93 billion market cap, that’s a 15.1 PE. Compare this with PEs of 9.6 for Ford (F ) and BMW (BMW:GR ), 9.3 for Daimler (DDAIF:US), 7.7 for General Motors (GM ) and it’s hard to get excited about Tesla stock.

An investor might even go short, and quite a few have.

Interest in Tesla is not about where they are, but about where they are headed. If Tesla disrupts the car business, they could end up selling 5 million mainstream cars a year at a $40k ASP, and if they bring 10% to the bottom line and have a PE of 9, their share price will be a tidy $1,582.70. Investors at the current price will see a 4,584% return.

This is why the ‘longs’ buy when the ‘shorts’ sell.

Owning Tesla stock is a bet on where they are headed. Shorting the stock is a bet they won’t arrive. Smart investing involves figuring out if they will make it. To make it, Tesla must deliver mainstream cars and mainstream cars do road trips.

So investors need to know if drivers can make a road trip as quickly and conveniently in a Tesla as in an ICE car and if other companies will solve the electric car road trip problem too, diluting Tesla’s competitive advantage.

To understand if electric cars will work, we will look at several cars taking a 360 mile road trip, figuring travel time as a function of driving speed, including the time needed to stop and charge. How travel times compare will tell us how close Tesla is to solving the road trip problem, how their coming Gen III cars will work the road trip problem better, and how other manufacturers’ small battery electric cars and Level III charging compare with Tesla’s road trip solution. But first, some bits about the model.

Three hundred and sixty miles is a real road trip, say San Clemente, Ca to Mammoth Lakes for a weekend of skiing: 354 mi . Two 360 mile segments are a day’s drive crossing the US, say from the Park City, UT Holiday Inn to the Kearney, NE Holiday Inn: 727 mi . It is the kind of road trip thousands of ICE cars make every day, that today’s electric cars can’t perform.

Yes, Tesla’s Model S can make trips this long, but only in those few areas where SuperCharger stations exist. Tesla even offers a trip time calculator on their website. Our model differs from Tesla’s online calculator for reasons discussed at the end of the article but the results are similar.

For baseline we’ll use an ICE car able to drive the 360 miles at any speed between 55 and 85 MPH and assume the driver makes one stop of 30 minutes during the 360 mile journey. This is real world travel with an ICE car.

The Nissan (OTC:NSANY ) LEAF will represent a short range EV that uses Level III fast recharging. Two Tesla cars, the Model S (85 kWh battery) and the BlueStar (56 kWh battery) will let us explore Tesla’s road trip solution. Model S is Tesla’s current offering. BlueStar is Tesla’s Gen III car.

Interesting » Electric Cars

In an earlier article I describe a potential Bluestar car.

BlueStar is aimed at the BMW 3 series, is smaller than Model S and likely will use next generation Li-ion batteries. In our model BlueStar cars use upgraded 120 kW SuperCharger stations (mentioned during Tesla’s SuperCharger announcement event). BlueStar, with a smaller battery and using the 120kW SuperCharger recharges twice as fast as Model S (50% charge in

15 minutes for BlueStar vs 50% charge in

30 minutes for Model S).

We didn’t model EVs like the Ford Focus EV that use slower, Level II charging because slow charging makes road trips impractical, nor did we model range extended EVs like the Volt, Cadillac ELR, Fisker Karma and Prius Plug-in because these perform (and burn gasoline) like the baseline ICE car.

EVs start off with the highest charge recommended when rapid charging — 80% full battery for the LEAF and 77% full battery for the Tesla Model S and BlueStar. Charging stations are located along the route so that, using moderate air conditioning, the cars can make it from one charger to the next at the fastest modeled highway speed (120 miles between chargers and 85 MPH for the Tesla cars, 45 miles between chargers and 70 MPH for the LEAF). Electric cars stop and recharge at each charging station.

Calculating the stop time for charging, our model allows 1 minute to exit the highway and plug in to the charger, time to charge to the maximum recommended charge assuming 90% of the charger rated power is stored in the battery, and then one minute to unplug and return to the highway.

The following table lists the cars. The range listed for the electric cars assumes starting with the maximum recommended charge for rapid charging and moderate HVAC use. The span of range values reflects driving at different highway speeds (55 — 70 MPH for the LEAF and 55 — 85 MPH for the Tesla cars).

Comparison Cars — 360 Mile Road Trip

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