I’ve heard some good arguments against electric vehicles (EVs): The technology is still too expensive; if the electricity you charge the car with was generated by coal it’s, worse for the environment than gasoline; they take too long to recharge. They’re all relatively logical arguments that, at least for the short term, have some merit.
Toyota threw in its lot with the alternative vehicle crowd when it predicted that gasoline and diesel engines will be virtually extinct by 2050. Kiyotaka Ise, senior managing officer of the world’s best-selling automaker, said that gas-electric hybrids, plug-in hybrids, fuel-cell vehicles and electric cars will account for most of its auto sales by mid-century.
Elon Musk, founder and CEO of Tesla, has done what GM couldn’t when, 20 years ago, EV1 was introduced as the first (failed) mainstream, all-electric car. Tesla has moved electric vehicles (EVs) from cult to elite status. Seductively designed and impressively engineered, the nearly $100,000 Tesla is a must-own for one-percenters.
Could Tesla, in particular, with its to-be-released cheaper plug-in sedan, along with the other dozen major EV manufacturers, be the portent of an automotive revolution that finally displaces the vilified internal combustion engine? Or has Musk created—no small feat—a modern Maserati? (The latter celebrates its centennial on December 1, 2014.) At present, the wisdom of the stock market gives Tesla a value approaching that of GM, which produces as many cars in a week as Tesla does in a year.
Read more at: Real Clear Politics
Elon Musk would rather wait to put out an eagerly awaited product than push one out that’s not awesome.
That was apparent from the language used in Tesla’s Q3 newsletter, published Tuesday (emphasis ours):
We recently decided to build in significantly more validation testing time to achieve the best Model X possible. This will also allow for a more rapid production ramp
compared to Model S in 2012.
In anticipation of this effort, we now expect Model X [the company’s forthcoming SUV] deliveries to start in Q3 of 2015, a few months later than previously expected. This also is a legitimate criticism of Tesla – we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term. There are many other companies that do not follow this philosophy that may be a more attractive home for investor capital. Tesla is not going to change.
Tesla’s earnings beat analyst’s expectations, but some weren’t impressed by the pace of deliveries by the luxury electric-car maker. Tesla said it would deliver about 33,000 vehicles in 2015, lowering its estimate by 2,000. John Thompson, CEO of Vilas Capital Management, said on CNBC’s “Closing Bell” program that Tesla is “grossly overvalued … A company making 33,000 cars is worth half of Ford Motor Company today.”
Still, Tesla’s stock closed at $240.20 Friday, down 98 cents for the day, but up from $230.97 since Tuesday’s earnings report. Ford closed at $14.17, down 2 cents.
(Photo: Darren Brode, Shutterstock)
“It’s a puzzlement,” said the King to Anna in “The King and I,” one of my favorite musicals, particularly when Yul Brynner was the King. It is reasonable to assume, in light of the lack of agreement among experts, that the Chief Economic Adviser to President Obama and the head of the Federal Reserve Bank could well copy the King’s frustrated words when asked by the president to interpret the impact that the fall in oil and gasoline prices has on “weaning the nation from oil” and on the U.S. economy. It certainly is a puzzlement!
What we believe now may not be what we know or think we know in even the near future. In this context, experts are sometimes those who opine about economic measurements the day after they happen. When they make predictions or guesses about the behavior and likely cause and effect relationships about the future economy, past experience suggests they risk significant errors and the loss or downgrading of their reputations. As Walter Cronkite used to say, “And that’s the way it is” and will be (my addition).
So here is the way it is and might be:
1. The GDP grew at a healthy rate of 3.5 percent in the third quarter, related in part to increased government spending (mostly military), the reduction of imports (including oil) and the growth of net exports and a modest increase in consumer spending.
2. Gasoline prices per gallon at the pump and per barrel oil prices have trended downward significantly. Gasoline now hovers just below $3 a gallon, the lowest price in four years. Oil prices average around $80 a barrel, decreasing by near 25 percent since June. The decline in prices of both gasoline and oil reflects the glut of oil worldwide, increased U.S. oil production, falling demand for gasoline and oil, and the likely desire of exporting nations (particularly in the Middle East) to protect global market share.
Okay, what do these numbers add up to? I don’t know precisely and neither do many so-called experts. Some have indicated that oil and gas prices at the pump will continue to fall to well under $80 per barrel, generating a decline in the production of new wells because of an increasingly unfavorable balance between costs of drilling and price of gasoline. They don’t see pressure on the demand side coming soon as EU nations and China’s economies either stagnate or slow down considerably and U.S. economic growth stays below 3 percent annually.
Other experts (do you get a diploma for being an expert?), indicate that gas and oil prices will increase soon. They assume increased tension in the Middle East, the continued friction between the West and Russia, the change of heart of the Saudis as well as OPEC concerning support of policies to limit production (from no support at the present time, to support) and a more robust U.S. economy combined with a relaxation of exports as well as improved consumer demand for gasoline,
Nothing, as the old adage suggests, is certain but death and taxes. Knowledge of economic trends and correlations combined with assumptions concerning cause and effect relationships rarely add up to much beyond clairvoyance with respect to predictions. Even Nostradamus had his problems.
If I had to place a bet I would tilt toward gas and oil prices rising again relatively soon, but it is only a tilt and I wouldn’t put a lot of money on the table. I do believe the Saudis and OPEC will move to put a cap on production and try to increase prices in the relatively near future. They plainly need the revenue. They will risk losing market share. Russia’s oil production will move downward because of lack of drilling materials and capital generated by western sanctions. The U.S. economy has shown resilience and growth…perhaps not as robust as we would like, but growth just the same. While current low gas prices may temporarily impede sales of electric cars and replacement fuels, the future for replacement fuels, such as ethanol, in general looks reasonable, if the gap between gas prices and E85 remains over 20 percent — a percentage that will lead to increased use of E85. Estimates of larger cost differentials between electric cars, natural gas and cellulosic-based ethanol based on technological innovations and gasoline suggest an extremely competitive fuel market with larger market shares allocated to gasoline alternatives. This outcome depends on the weakening or end of monopolistic oil company franchise agreements limiting the sale of replacement fuels, capital investment in blenders and infrastructure and cheaper production and distribution costs for replacement fuels. Competition, if my tilt is correct, will offer lower fuel prices to consumers, and probably lend a degree of stability to fuel markets as well as provide a cleaner environment with less greenhouse gas emissions. It will buy time until renewables provide a significant percentage of in-use automobiles and overall demand.
In the late 1800s, the Studebaker company was the world’s largest manufacturer of wagons and buggies. When the company began making automobiles, they chose to power their engines with electricity, not gasoline. Read more at: Tulsa World
USA Today just reported that Ford is cutting the sticker price of the fully battery-powered plug-in Focus Electric by a flat $6,000. That’s on top of a $4,000 price reduction on the same vehicle a year ago. The new sticker price is $29,995 including shipping—but not including federal tax credits of up to $7,500 and state incentives that might effectively knock another $2,500 off the amount buyers pay.
Read more in TIME.
When he died, the patriot Paul Revere was embalmed in V8 juice, tanning lotion and several energy drinks. Surprisingly, he reappeared at a relatively recent conference of the Massachusetts Association of Automobile Dealers, looking fit and ready for another ride. The dealers had prayed for his second coming. They hoped that even though his previous ride was only one horsepower, he would consent to try a low-horsepower vehicle and ride the state, warning their brave residents that Tesla is online and in-store sales of electric cars coming. The dealers’ marketing folks felt that a reincarnated Revere would do wonders for their shaky image as wheeler dealers (excuse the pun). His deep, holier-than-thou, Fred Thomas-type voice (you know, the actor-turned-politician-turned-actor who now sells most anything on TV for money) would convince all but his former peer group (dead people) that Tesla was anti-American.
“What did Tesla do wrong,” asked Revere? Oh, it’s trying to sell its non-horse, torque-engine vehicles directly to modern-day patriots. Can you imagine euthanizing horsepower? Tears came to Revere’s eyes. But there’s more, paraphrasing a former automaker and cabinet officer Charles Wilson, one of the dealers indicates that what’s good for automobile dealers was and will always be good for America. What Elon Musk, the head of Tesla Motors, wants to do is eliminate dealerships. If the present case before the courts in Massachusetts is won by Tesla and Teslas are sold online, from a storefront, or shopping mall, surely Ford, Chrysler and General Motors will not be far behind. Forget capitalism, forget free markets, forget competition, even forget, Paul, your membership in the old Tea Party in Boston (you know, the taxation-without-representation crowd). Forget everything you fought for. By eliminating dealerships, Tesla will cost jobs. Dealers soon will have to close their doors. Bypassing dealers to sell cars will also first limit and then end our community philanthropy — you know, Little League teams, Fourth of July concerts, community picnics, jerseys for kids etc. Tesla’s headquarters is in California, and it’s a crazy state with Hollywood and all that. Californians act like foreigners. Tesla’s founder believes in global warming, he isn’t satisfied with life in America and he is developing a spaceship where the elite can, someday soon, travel to a second home and ruin our local economy. Losing dealers will make every community less American. Sure, vehicle costs may come down and emissions may improve, but what American is unwilling to pay extra to save his or her friendly auto dealer?
Revere was puzzled. He was a merchant way back then and he believed that competition and the free market were part of the American Dream. (To be honest, he also feared riding and did not understand how he could ride a multiple-horse powered vehicle. He had only mounted one horse.)
But he understood what the dealership folks were trying to tell and sell him. While in his heart, he was a bit ambivalent, he finally said he would do the famous ride again, and this time, because mileage capacity had increased and population of Massachusetts had grown, he agreed to try to go farther west than in his famous, poet-legitimized and sanctified ride.
But just as he gave them the okay, the dealerships received an email from a colleague in Boston that Tesla had won in the Massachusetts court. One dealer started crying. Several others criticized “those activist judges.”
Revere asked to read the email. It indicated that the Massachusetts Supreme Judicial Court unanimously determined that the Mass. State Automobile Dealers “lacked standing to block direct Tesla sales under a state law designated to protect franchises owners from abuses by car manufacturers” (Reuters, Sept. 15, 2014). Succinctly, the law was tied to the franchise relationship rather than unaffiliated manufacturers like Tesla.
The court’s finding should make it easier for Tesla to secure positive rulings in many other states. Earlier this spring, senior officials from the Federal Trade Commission strongly indicated that laws outlawing direct sales harmed consumers. Revere, after looking at the email, felt guilty that he had all but agreed to replicate his famous ride. But he was consoled by the fact that freedom and competition won out, at least in the Tesla case in Massachusetts, and that at least consumer democracy was alive and well in the state. He couldn’t help but muse on the fact that Texas, a state supposedly committed to minimal regulation and almost zero interference by government concerning businesses and citizens’ lives, turned its back on Tesla because of lobbying by dealers. Tesla cannot sell directly in Texas. But, as Ralph Waldo Emerson suggested, “foolish consistency is the hobgoblin of little minds.” After driving a Tesla (with no horsepower), Revere went back to the halo- lit neter lands happy. We haven’t heard from him since. But on faith alone, his experience with reincarnation likely would have made him a fan of Tesla’s electric cars and other alternative fuels.
It seems like a kind of Hollywood fantasy — autonomous little roadsters scooting in and out of traffic, breathlessly avoiding collisions and getting to their destination before anyone else.
Then again, it seems like the inevitable. If computers can perform medical diagnoses, accomplish instant translations for tourists and power Martian rovers, what’s so complicated about driving a car?
The self-driving car has gotten a lot of publicity lately. Google has a demonstration project and there have been the usual speculations about how long before self-drivers become a common sight. Four states have passed legislation allowing their operation and this month self-driving cars received the ultimate accolade of any new technology by being opposed by the Ralph Nader’s Consumer Watchdog, thereby joining fracking, nuclear power, GMO foods and other technological advances as being opposed by the Naderites.
Yet in truth, the idea of self-driving vehicles has been around for a long, long time. Experiments go back as far back as the 1920s. Engineers tried burying electric cables beneath the road to send signals that would keep cars on track. With the development of computers, however, research switched to autonomous vehicles with a dozen auto manufacturers and universities doing serious work.
In 1995, Carnegie Mellon University built an autonomous vehicle that traveled 3,100 miles cross-country for the “No Hands Across America” tour, with only minimal human intervention. In 2005, a Google vehicle equipped with 3D cameras, radar and a software package called Google Chauffeur won a $2 million prize in a Grand Challenge sponsored by the U.S. Department of Defense. In 2010, four self-driving vehicles designed at the University of Parma, Italy duplicated Marco Polo’s expedition by driving from Italy to China with only occasional intervention by their human drivers. Google’s fleet of a dozen self-driving cars has now logged 700,000 miles on public highways without experiencing any trouble. The only accident occurred when one of them was read-ended by another vehicle at a traffic light.
Indeed, as things stand now, the biggest obstacle to widespread adoption may be the predictable human reluctance to have the wheel taken out of their hands. One poll in Germany found that while 22 percent of respondents had a positive attitude toward driverless cars, 44 percent were skeptical and 24 percent were actively hostile toward the idea.
So aside from inspiring a hundred high school science projects and proving that computer geeks can do just about anything, what would be the advantage of self-driving vehicles? Here are a few of the possibilities:
Greater fuel efficiency: Advocates say that the precision achieved by automated vehicles in evening out traffic flows would cut down on national gasoline consumption. Instead of some cars dawdling in the fast lane while others weave in and out, traffic would follow a much more orderly pattern. Estimates are that a large fleet of self-driving vehicles could cut national fuel consumption by as much as 10 percent.
The advance of non-gasoline fuel systems: Since the experiments with trolley-like electronic tracks of the 1920s, self-driving systems have been associated with electric cars. While it will be perfectly possible to mount self-driving equipment on a gasoline-powered car, the “wave of the future” seems to be associated with non-gasoline vehicles. Google’s self-driver runs on electricity as do nearly all other experimental models.
Fewer accidents: Although humans may be reluctant to admit it, the vast majority of accidents are caused by driver error. The 360-degree visibility and unblinking vigilance of self-drivers could be a vast improvement. Many new cars are already beginning to incorporate some of the features with rear-view cameras and automatic braking. The 2014 Mercedes S-class offers options for self-parking, automatic accident avoidance and driver fatigue detection. One website that projects the self-driving future even suggests that the main job losses would be among: 1) hospital emergency room services, 2) auto repair shops and 3) trial lawyers specializing in auto accidents!
Peer-to-peer sharing of traffic information: The end point of self-driving would be a peer-to-peer information-sharing system whereby individual vehicles would be warned of congestion and traffic tie-ups and routed away from them. A 2010 study conducted by the National Highway Traffic Safety Administration projected that an amazing 80 percent of all traffic accidents could be avoided by such a peer-to-peer system that smooth out traffic patterns and prevent cars from bumping into each other on congested highways.
More efficient traffic lights: How much time and gas is wasted by cars waiting for the light to change when no cars are coming in the crossing lane? Computerized systems linked to self-drivers could do wonders to hasten traffic flow and ease the time needlessly spent waiting for red lights.
Driving services for people who cannot drive: Many elderly and handicapped people cannot drive under ordinary circumstances, but could manage a vehicle in which they program it to tell it where they want to go. One of Google’s first early adapters was Steve Mahan, a California resident who is legally blind. This YouTube video shows him running a series of errands through his neighborhood, including a visit to a drive-in taco stand. All this might seem that it would increase driving and add to the nation’s fuel consumption until you consider that many of these people are already serviced by elaborate jitney systems that spend a great deal of time making empty runs. Once again, self-drivers would add precision and efficiency to the system.
Mass public transit — the possibility of a whole new personal mobility system: At the end point of this new technology is the vision of a whole new transportation system where far fewer vehicles would be needed to get people where they want to go. Driving this vision is the statistic that the average car is parked 90 percent of the time. If these vehicles could be put to more efficient use — something along the lines of bike-sharing on city streets — then the need for vehicles might be drastically reduced. Particularly in urban settings, more efficient matching of vehicles and passengers would cut down on the need for street parking. Uber, the San Francisco company that matches passengers with drivers of vehicles for hire, is now operating in 200 cities in 42 countries around the globe. The fuel savings it creates through matching efficiency are phenomenal.
Much of the fruits of these innovations are still in the future, but don’t put it past innovators like Google to make it happen quickly. In 2012 the Nevada Department of Motor Vehicles issued the country’s first license to a Toyota Prius modified with Google technology. Florida and Michigan have also issued permits for road testing. Next January, Google will launch 200 gumdrop-shaped vehicles completely void of steering wheel, brake and gas pedal that will begin cruising the streets of Mountain View, Calif., in an experiment supervised by the California DMV.
The future may be closer than we think.
France currently grants new car buyers a credit of 6,300 euros ($8,400) if they purchase an electric vehicle. But if a new bill submitted to Parliament by France’s Minister for Ecology, Sustainable Development and Energy is approved, customers will be eligible for an additional bonus of 10,000 euros if they switch from a diesel powered vehicle to an electric one. That’s a total of 16,300 Euros or about $22,000.
Our Mission: Fuel Freedom Foundation is working to reduce the cost of driving your existing car or truck by opening the market to cheaper fuel choices at the pump.