Saturday, December 2, 2017

Tesla's Multi Billion Dollar Proof Of Concept

A few years ago, the Kansas City Royals won the World Series almost exclusively relying on "small ball" to win.

Tesla could do the same thing here and I feel like we have been set up but in a good way,  a VERY good way. It now appears that Musk's grand plan was to provide EVs at cost in order to provide proof of concept to get the real financing he has been after all along.

Musk who has done what most considered impossible, upstaging the late great Steve Jobs. His latest wowzy is by far the most far reaching of his career and all of a sudden, everything he has done up to this point makes sense.  The Solar City purchase, Space X technology and the Supercharger Network.  Musk has laid the groundwork to put the trucking industry on its nose and the #1 benefactor will be us.

Musk's announcement of the fully electric tractor truck was expected but the a long haul capability with 30 minute recharge AND a maximum 80,000 lb weight was not.  The logistics of pulling this off is almost unfathomable!  The power requirements boggles the mind. The mind blowing challenge of providing the network required to support nationwide access to charging sta... Hey, Wait a minute!!

Is is possible that this was Musk's grand plan all along?  Did it EVER make sense to put out a 100 million dollar charging network that literally had no chance of ever paying for its ongoing operational costs much less its installation costs?  How crazy is it to mortgage the entire company (or group of companies) to build this network?  Was it really for the cars?

But what if everything Musk has done up to this point was simply his way of demonstrating viability for a multi Billion dollar investment to build a nationwide fueling support infrastructure combining Super Chargers bolstered by Solar to compete against the Diesel Fueling network?

What did the Supercharger Network do?

** Proved that a quick nationwide build out of charging stations was possible

** Provided financial data that allowed Tesla to accurately cost out a much more powerful truck charging network.

** Gives them real experience with Solar along with LSI Battery Storage.

When you add that up, it becomes obvious that Musk is not crazy. He is simply doing what he always does; seeing several years beyond what we can see and not providing us what we want but providing us what we need.

Its been the long accepted notion that the trucking industry would be the toughest and last to convert to electricity. Most felt it would never be done citing Fuel Cells as the likely answer despite the viability of the technology being at least a decade or more up the road.  Well, guess what?  Again, Tesla is proving that the past is the past and has nothing to do with what can be done.  Tesla has proven it can put together an end to end solution; a solution that will finally put Tesla into the black in a way that no other company could even imagine.  Just as printer companies sold millions of printers at or below costs just to reap profits on the ink refill cartridges; Telsa promises a two year pay back to trucking companies based on a huge reduction in fuel and maintenance costs that will still provide plenty of room for profit.

Armed with all of this, it should be an easy road for Tesla, right?  Well, no. Not even close.  Before, Tesla was nibbling away at the personal transportation sector with its cars and the very limited market share it had was simply not a major concern for the oil companies.  Tesla trucking changes all that. It is an "in your face" assault on Big Oil's greatest and most profitable cash cow and they won't go down without a fight.

I expect to see a lot of roadblocks thrown up by Big Oil as Musk attempts to get charging stations installed at truck stops around the country.  The alternative would be setting up truck only SC stations or expanding existing sites that have the room ( anyone notice the uptick in footprints of some of the latest SC stations?) . This would be costlier and difficult especially in areas where space is a premium. Truck stops just by their nature have a LOT of space and adding charging stations would not affect their ability to handle truck volumes significantly. 

As always, the naysayers group is very large and vocal. Many have doubts of the recharge times or the range of the trucks in certain circumstances.  But I would think that Tesla would be starting with with short hauls from major shipping ports where power is plentiful but still not as plentiful as diesel exhaust.

But the impact to our health especially in urban areas around major shipping ports would be massive. It would only be a matter of time (not very long I am guessing) before Tesla moves into transit buses.  This is something we need to get behind.

Waiting for others to do it is simply not working. Collecting Maple Syrup in below 0ยบ has more activity.  There are a few other companies that are putting large platform vehicles but their pace in the US has been slow. Maybe its the product, maybe its simply they don't have Elon Musk.  Whatever the reason, its been a slow slog.

I have to hand it to Tesla. Just when I thought the "hype ceiling" had been reached, Musk proved me wrong. I can't wait to see what he comes up with next.


  1. Go Royals....and I think you're right Dave. Genius.

    1. Thanks Tom! and now we can stop scratching our heads over Tesla's P&L statements! :)