2016 Shareholder Highlights

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Elon Musk and JB Straubel Talking About the AC Propulsion Prototype Car

I attended in person the almost four hour shareholders meeting in Mountain View, CA.  This meeting was more of a Tesla history lesson than a shareholders meeting.  At times I was very bored as I have been following Tesla since 2007, and a lot of the information was unnecessarily long.  The large recognition of a variety of Tesla employees was nice to see as Tesla is not just Elon. There were a few interesting tidbits during the history lesson and the 30 minutes of Q&A.

Model 3 Supercharging Fees

Elon stated the Model 3 will have a fee to use the superchargers.   The pricing model is unknown and could be a simple upfront fee or a pay per use model.  The 60kWh version of the Model S had a simple $2,000 fee to enable supercharging.

Model X Regrets

Elon admitted that the Model X was over engineered.  He regretted not launching a simpler Model X and following up future versions of the car with these new features.  He also admitted to a lot of problems with the falcon wing doors, and that the remaining issues are software related for a various corner cases when the doors should or should not open.

I really liked that Elon acknowledged this mistake;  I am much more comfortable with honest leaders who both recognize and publicly admit errors.  I also think that if the Model X had a simpler base version with standard doors and standard seats, a lot more vehicles would have been sold.

Model S and X as Technology Leaders

The Model S and Model X will always be the technology leaders and will be continually improved.

Building the Machines that Build the Machine

Elon also demonstrated a huge amount of interest in building the machines that build the machine. He used the analogy of integrated circuit (IC) design to car factory design.  When designing an IC, the designer and software make tradeoffs between speed, size, and power consumption of a chip.  The process is very complex today as the individual components and wires are extremely small.  During this analogy, Elon referred to both the slow rate that cars are leaving the factory and the number of layers in an IC.  With these references, I can speculate that Elon thinks that there are ways the factory robotic process can be combined.  Very simplistic ideas could be that multiple robots are working on a car at the same time; perhaps one robot is above the car, another below the car and a third on the side of the car.

The New Model S Nose

On display at front was an older Model S, a new Model S with the new nose, and a Model X.  I don’t really have a strong opinion about the new nose.  From all the Model Xs I have seen in California, I have found that the new nose looks better on some colors than others.

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Model X Launch Event

I watched the livestream of the Model X launch event.  In typical Tesla fashion, the event started 50 minutes late.

The Model X looks like a cousin of the Model S.  The feature that caught my eye the most was the new nose design.  The styling of the Model S nose has always been my least favorite part of the car, so a change is good in my book.

New Nose on the Model X

New Nose on the Model X

The Model X is clearly geared as a family car / SUV / Minivan.  Elon highlighted the following features:

  1. Safety.  Great safety rating like the Model S
  2. Additional safety features using the cameras that will automatically brake the car before a potential accident.
  3. A true HEPA air filter including a bioweapon defense mode button!
  4. Falcon wing doors that let the 2nd row passengers get in and out of tight spaces.  Perhaps the 2nd row passengers can get out but I’m not sure the driver can.
  5. Comfortable 2nd row seating
  6. Lots of luggage space for a family
  7. Ability to pull a large trailer
  8. A rack on the rear hitch for carrying bicycles, skis or snowboards while being able to open the rear door.

Although a large market exists for mini vans and family size SUVs, I’m not personally interested in this kind of a vehicle.  Over the years I’ve owned a series of more rugged SUVs for the outdoors.  The Model X appears to lack the following features for someone who enjoys the outdoors:

  1. The ability to fold down the 2nd row seats to create a flat cargo bed for carrying large objects, and being able to sleep comfortably in the rear of the car.
  2. Either a roof rack or at least 10 1/2 feet between the front and back windshields for carrying a paddle board or other large objects.
  3. A lower end price point.  A true SUV is a car that can take a lot of abuse, and I would not really be interested in paying $100,000 for a car in this category.

The Tesla team has developed some very sophisticated features for a large vehicle for a young family. But at this point, I don’t for see myself buying a Model X, but I’m looking forward to seeing one in person and driving one as a service loaner.

Google’s Open Solar Calculator

Google announced a new free tool, Project Sunroof, that allows homeowners in a few select markets (parts of the San Francisco Bay Area), Boston and Fresno to analyze the cost and benefits of installing rooftop solar panels.

The process is very simple, you simply go to this page and enter in the address.  The software told me “Project Sunroof has not reached” my current house, but can show data for a house I used to own in Sunnyvale, California.   Using satellite data, Google shows an overview of your roof.   The tool estimates the amount of roof of your home that would receive direct sunlight.

Below is a screen shot of a satellite view of my former home in the center.  I had no large trees, and the entire house is colored yellow.  The slope of the garage facing towards the north is dark yellow.  No locations are purple, which would indicate shade.    Small sections of the neighbor’s house to the south are purple.

Source Google / Project Sunroof

Source Google / Project Sunroof

Google estimates the house receives 1,917 hours of usable sunlight per year and that 2,297 square feet of roof is available for solar panels.  The house was around 1,400 square feet but Project Sunroof also added in the garage roof and the very large awning along the west side of the house.  The name Sunnyvale indicates correctly that the climate is very sunny.

To get an accurate analysis, you also need to enter your average monthly electric bill.  That amount without air-conditioning and an electric car is relatively consistent month to month.  But this tool does not help you figure out what your bill would be if you added in an electric car.

Just for grins, I ran a test if the average electric bill for month was $100.  The system responded that the recommended solar installation size would be 3.75kW or 225 square feet and would cover 99% of the yearly usage.

The next section outlines the cost in terms of lease, loan or buy.

Cost Estimations on Sunnyvale Home

Cost Estimations on Sunnyvale Home

The tool lists the leasing costs first.  Sure there is no up front cost but your electricity will never be free.  If possible the best solution is to buy the panels and in eight years the initial upfront cost is recovered, and all electricity from then on will be free.  If someone does not have enough money to buy outright they can also take out a loan in order to eventually get free electricity from the grid.  The advantages of a lease over a loan is that the minimum maintenance and repair costs with solar are covered by the leasing company.

After the estimates are given, five solar companies are listed that you can contact.  Curiously enough Elon Musk’s Solar City is not on the list.  The press often states he is good friends with Larry Page of Google.

If the name Google (or Alphabet) was not behind this product, very little press would have occurred.  Many other solar providers have tools like this to determine the viability of solar panels, so this website is not new.  The only thing different is that you do not need to provide any contact information before beginning.    Any encouragement to keep people putting up solar panels is a great thing.

 

 

 

Musk Biography Highlights

I read the new biography by Ashlee Vance on Elon Musk. Vance covers a lot of material about Elon, Tesla, SpaceX and Solar City.   I liked but did not love the book. Vance emphasized the chronology of these companies and a somewhat superficial look into the character of Elon.  This book only lightly covers his personal relationships (two wives, three divorces) and his business relationships at his companies.  Walter Isaacon’s book on Steve Jobs was more satisfying.

For this blog post, I am pulling out a few of the book’s interesting quotes which are in blue.

Silicon Valley Characteristics

Being a Silicon Valley native and successful entrepreneur, I related to many of the stories about all three of his companies trials and tribulations.  Startups need people who have intense focus and drive. I have also found a correlation between a challenging upbringing and career success. The CEO often needs to be the center of attention and many key employees achieve little public recognition.

At five and six, he had found a way to block out the world and dedicate all of his concentration to a single task.

For a number of years, there was no respite. You get chased around by gangs at school who tried to beat the shit out of me, and then I’d come home, and it would just be awful there as well. It was just like nonstop horrible.”

Tesla made its debut in the New York Times … While the story was a coup for Tesla, Musk didn’t appreciate being left out of the article entirely. “We tried to emphasize him, and told the reporter about him over and over again, but they weren’t interested in the board of the company,” Tarpenning said. “Elon was furious. He was livid.”

Lyons also saw an exhausted, stressed-out Musk spit coffee across a conference room table because it was cold and then, without a pause, demand that the employees work harder, do more, and mess up less. Like so many people privy to these performances, Lyons came away with no illusions about Musk’s personality but with the utmost respect for his vision and drive to execute.

“He has the ability to work harder and endure more stress than anyone I’ve ever met,” Gracias said.

“The mantra was that one great engineer will replace three medium ones,” Lloyd said.

For employees like Gwynne Shotwell and J. B. Straubel, working with Musk means helping develop these sorts of wonderful technologies in relative obscurity. They’re the steady hands that will forever be expected to stay in the shadows.

Greed versus Innovation

“I think there are probably too many smart people pursuing Internet stuff, finance, and law,” Musk said on the way. “That is part of the reason why we haven’t seen as much innovation.”

In the last few decades, a lot of smart people have focused on making money instead of building things.  In earlier decades there were not as many opportunities to make large sums of money so rapidly, so smart people focused more on jobs that they enjoyed.

Robots Destroying Mankind

He opened up about the major fear keeping him up at night: namely that Google’s cofounder and CEO Larry Page might well have been building a fleet of artificial-intelligence-enhanced robots capable of destroying mankind. “I’m really worried about this,” Musk said. It didn’t make Musk feel any better that he and Page were very close friends and that he felt Page was fundamentally a well-intentioned person and not Dr. Evil. In fact, that was sort of the problem. Page’s nice-guy nature left him assuming that the machines would forever do our bidding. “I’m not as optimistic,” Musk said. “He could produce something evil by accident.”

Having lived in Silicon Valley my entire life, I have seen this subject come up every decade or so.  Although machines are becoming more and more capable, they cannot think and are not conscious.  A good example is that self driving cars cannot discern the difference between a piece of paper or a rock on the road.

Living on Mars to Save Mankind

Turning humans into space colonizers is his stated life’s purpose. “I would like to die thinking that humanity has a bright future,” he said. “If we can solve sustainable energy and be well on our way to becoming a multiplanetary species with a self-sustaining civilization on another planet— to cope with a worst-case scenario happening and extinguishing human consciousness— then,” and here he paused for a moment, “I think that would be really good.”

Although I think continuing to explore space, rockets, and planes is a good thing, I do not agree with Elon that focusing on moving to Mars is a particularly good use of human effort.  First of all, the best approach to help humanity is not with technology but to focus on compassion and understanding other points of view.  In the technology area, I think we should focus on maintaining our existing planet instead of trying to find a way to get to and live on Mars.  A lot of my interest in Tesla is that I believe EVs can help prevent more climate change particularly when paired with solar.

Protest at Tesla

Dramatic Signage and Symbolism in Front of Tesla Headquarters

Dramatic Signage and Symbolism in Front of Tesla Headquarters

Three men are protesting in front of Tesla headquarters in Palo Alto with a giant Grim Reaper.  I drove by and picked up a piece of their literature, they weren’t particularly conversational.

Silicon Valley only occasionally has protests.  In the past labor problems have occurred with janitors and recently with the company bus drivers. This protest is from Carpenters Local 713.  They are requesting:

“requiring the General Contractors and all their sub-contractors pay the Carpeter Area Standard Wages and Benefits on all jobs all the time”.

I have no opinion on this particular issue as I know few if any details, but I have sympathy for middle and lower income folks trying to make a living wage in such an expensive area.  The same sign has also been spotted at San Jose State University and the Sacramento Natural Foods Co-op.

Front of Flyer

Front of Flyer

Back of Flyer

Back of Flyer

Supercharger Abuse Notes

Elon Musk near the end of the Q&A section at the annual shareholder meeting accidentally created a bit of a PR challenge amongst current and future Model S owners.  The comment was as part of a response to a question on the battery swap program available near the Coalinga supercharger.

“So, free long distance forever is what the Superchargers are providing. There are few people who are like, quite aggressively using it for local Supercharging, and we also send them just a reminder note that it’s cool to do this occasionally but it’s meant to be a long distance thing.”  Elon Musk

Executives have always made confusing statements in front of people but now with video technology and the internet, these statements can cause more problems than before.

This small statement has lead to a ton of speculation on what Elon meant.  Few Model S owners are particularly worried that they will receive a note from Tesla, or that Tesla will begin to charge them for supercharging anytime soon.  The most interesting part of the discussion is what business model will happen down the road for more widespread EV adoption.

But here are a few of the many questions the confusing statement invited:

  1. What is supercharger etiquette?

Supercharging does have some etiquette guidelines.  The biggest error is leaving your car in a stall for a long time after the charging is complete.  Tesla’s web page states:

“How long can I park at a Supercharger?

We ask our customers to use courtesy while charging. Once your Model S has reached the range necessary to get to your next destination, please move your vehicle so other Model S owners can charge.”

With the Tesla app on the phone, you are notified when your car is charged.  In highly underused superchargers, at odd hours, or off-season, there is no rush to move your car.

2.  Exactly who are these supercharger abusers?

Busy Supercharger in San Juan Capistrano

Busy Supercharger in San Juan Capistrano

No one yet has come forward admitted to having received a note from Tesla.  The speculation mill has mentioned taxi drivers using a supercharger near the Amsterdam airport.  The other speculation is around a supercharger in Southern California.  The San Juan Capistrano supercharger is near the coast and has been very busy.

3.  Is supercharging only for long distance travel?

Superchargers were primarily built for long distance travel.

“Superchargers are used for long distance travel, conveniently located along the most popular routes in North America, Europe and Asia. “

4.  What about superchargers in more urban areas?

Yes, there are many superchargers in large urban areas such as Los Angeles and the San Francisco Bay area.  Tesla has also stated that they can be used for those without a garage or definitive parking space.

“..we’re putting Superchargers in cities, not just between cities. Amm, this is obviously important in places like, aaa…you know, Beijing, Shanghai, London, San Francisco, aaa…New York, aaa…where at times people may have a challenge with aaa…having a…a…a fixed parking space. I mean…so…so that’s maybe the wiring thing, it’s more like some of those people don’t have a definitive parking space. Amm, they might have street parking or something, you know.”  Elon Musk Q1 2014

There are also no definitive statements from Tesla that folks without garages cannot use superchargers for daily driving.  I myself have met 3 people who only supercharged for this reason.  One in a far flung ex-burb area in California and two in the San Francisco area.  None of these folks, myself or anyone else has heard that superchargers cannot be used for daily driving by any Tesla personnel before this statement by Elon.

5.  Can you save money by only supercharging?

Technically, you will save on your electricity bill.  But driving and sitting at a supercharger gets old fast and likely would pay less than a minimum wage; electricity is generally not that expensive, and much cheaper than an equivalent tank of gasoline.

6.  How much does it cost Tesla in energy for us to use their supercharger?

A reasonable average commercial flat rate for energy in California is $ 0.20 / kWh.  If a Model S is driven 100,000 miles at an average of 300 Wh / mile and only supercharged the cost to Tesla is $6,000.

100,000 miles * 300 Wh / mile * $0.2 / kWh * kWh / 1000 Wh  = $6,000

7.  What about other supercharger costs?

Tesla does not buy land for their superchargers.  They do however bring in the equipment and pay the construction and maintenance costs.

8.   Is Tesla tracking our every move?

Tesla can collect quite a lot of information about our traveling habits.  Their privacy policy does include this statement:

“Charging station information: We collect information regarding the charge rate and charging stations used by you (including outlets) in order to analyze which charging stations are being utilized, how long and efficient battery charges are, and where additional charging stations are needed.”

So yes, Tesla can know if you are charging at a residential location and at a local supercharger.

9.  Is supercharging using sustainable energy?

Rocklin Superchargers With Solar Panels

Rocklin Superchargers With Solar Panels

Elon did announce that superchargers will be charged with solar panels where possible; unfortunately the solar panel additions have been very slow and only a handful of locations have them.  Elon also stated at the 2015 shareholder meeting that all the extra electricity the superchargers use will be bought from renewables.

10.  Does frequent supercharging hurt the battery?

Supercharging in general does not hurt the battery.  But I have heard but cannot verify from multiple sources including within Tesla that very frequent or only supercharging does have a small amount of increased battery degradation.

11.  What about Vehicle To Grid Charging (V2G)?

The idea behind V2G is to use the battery’s charge to add capacity to the grid during peak usage hours.  Theoretically in the future, a Model S owner could go to the supercharger fill up the battery for free and sell the electricity back to their power company.  In a sense, using a Model S with V2G could operate like a Powerwall to play grid arbitrage.  V2G technology is not available yet.

12.  Will supercharging have a cost sometime down the line?

I feel it is quite possible that supercharging will have a cost sometime down the line for the 3rd or 4th generation of vehicles.  With the Model S, supercharging was an option for the 60 kW version and not available for the handful of 40 kW versions that were sold.

13.  Is supercharging sustainable with more cars on the road?

With Model S and the upcoming Model X at a high price point, the typical owner has significant resources and likely will not try to save pennies by abusing superchargers.

The next generation car is targeted to cost $35,000.  This car will be aimed at a different demographic that may consider it worth their time to save $10 for a fill up.  But more importantly many of these owners will likely live in apartments or condominiums without dedicated parking spaces.

Perhaps a different supercharging cost will occur for generation 3.  A lot of different charging models could take affect for a different class of vehicles.  Perhaps other car companies could use the superchargers and would be included in a new pricing model.

14.  Has Tesla changed their message?

There has been some heated discussion if Tesla has changed their message.  The message that superchargers are free forever has now subtly been changed to free for long distance travel.  Exactly what their message is today is not completely clear.

15.  So exactly what is supercharger abuse?

No one exactly knows the answer to this question.  A handful of people do use supercharging regularly even though they have a way to charge at home.  Perhaps Tesla considers these folks “abusers” ?

Fortunately just a handful of Tesla owners feel it is their right to supercharge whenever and wherever they please.  One colorful blogger wants to use a close to home supercharger near his home in order to get back at his electric company by charging at the supercharger tied to the same electric company.  In every group of people, there will always exist a few who will try to maximize their advantages in a given system without much consideration for others.

Summary

The real question goes beyond the Model S, Model X, generation 3 and Tesla:

How do we facilitate wide EV adoption amongst drivers who do not have a dedicated place to park their car?

Perhaps Tesla’s statement should for the supercharger should be something like:

Charging at home is very convenient, inexpensive, and easy.  Superchargers are free forever for road trips.  If you have problems charing regularly at home or work, feel free to charge at a convenient supercharger,  but please be considerate of other drivers.

2015 Shareholder Meeting

I attended today my first Tesla shareholder meeting. For somewhat bizarre reasons, I did not become a shareholder in Tesla till last year when I bought some shares.  The amount is quite small (far less than 1% of my net worth) and has no bearing on the honesty of my blog.

Unlike traditional dull shareholder meetings in the past, this meeting was quite enjoyable.  The business part was over quickly and included a warm thanks from Elon to the retiring CFO.  Elon gave a short overview speech and answered about 10-15 questions from the audience.

After the official meeting, I went to charge my car at the new supercharger located in the parking lot.  As I was chatting with a fellow shareholder I met at a supercharger in Oregon, I noticed the CTO JB Straubel talking to some owners.  I took the opportunity to join in the conversation and ask some questions myself.

Model S / Autopilot

Elon mentioned that Teslas (not 100% sure if Roadsters are included) have been driven 1 billion miles as of today June 9, 2015, and that the new 70D is about 1/3 of Model S sales.  Elon has been testing the autopilot features and will be released to Beta customers by or near the end of the month.

Model X

Elon did say the Model X is coming in 3 to 4 months and had a photo of it on the screen.  I think the following quote is quite telling:

“The Model X may be a better SUV than the Model S is a sedan”.

Powerwall

Both Elon and JB expressed dissatisfaction with the current information available about the Tesla Energy products.  Elon announced that the Powerwall now has a significant increase in power output making it a more usable solution for backup power in case of a power outage; a typical home can now run everything except air conditioning.  Price with install for an existing solar customer will be $4,000.  They are prioritizing deliveries to existing Tesla customers with solar.

I asked JB about the huge interest Tesla is seeing for the Powerwall as my return on investment with existing solar is 18 years.  He said there are very specific markets:  Germany, Australia, and South Africa where the economics make sense. He also mentioned the large interest in the Powerpack product for utilities. If they need to expand, they can add Powerpacks to existing substations.  This advantage saves physical space and wires.  JB mentioned keen interest among specific utilities.

Superchargers

The new Mountain View supercharger was opened up.   I charged at my 86th supercharger today.

New Supercharger Cable

New Supercharger Cable

Tesla had representatives hanging around to talk to the customers.  The only real difference now is that the charging cable is liquid cooled, flexible, thinner and lighter.  The cable is the same width as the one we use at home.  In California and warmer climates, the existing supercharger cables work fine, but in colder climates the existing cables can get very stiff.

These cables will support more voltage than today’s cables.  So eventually we will be able to charge above 120V.

Elon clarified that superchargers are really for long distance trips.  He acknowledged that there are some people using them for daily driving, and mentioned that a few are getting notes to that effect.  An owner can technically and legally use only superchargers for daily driving.

Elon did say that eventually all superchargers would be powered from renewables.  Where possible and appropriate they will have solar panels, or they will buy electricity from other renewable sources.

Battery Swap

Tesla does not think there is much interest in battery swapping.  The initial 200 people that were invited to the Beta of the station at Harris Ranch, only 4 or 5 swapped their batteries and only did it once.  Tesla has now invited all the owners in California, and they are receiving about the same amount of interest as the initial group.

Space X

A shareholder asked Elon if SpaceX will ever go public as he wanted to own the trifecta of Elon’s companies (including Solar City).  Elon said that wall street lives quarter to quarter and that model does not work with long times for launching rockets.  He said that “Space X will go public once they have regular flights to Mars”.

Conclusion

The shareholder meeting was quite an enjoyable event.  Listening to Elon and his clear vision of “sustainable transport” and a few interesting tidbits was well worth the short drive.  The extra treat was to be able to ask a couple of questions directly to the CTO.  Just being around two very intelligent people doing interesting and valuable things is inspiring.