174 lines
8.4 KiB
Markdown
174 lines
8.4 KiB
Markdown
---
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created_at: '2013-03-02T20:35:25.000Z'
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title: The Secret Tesla Motors Master Plan (2006)
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url: http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me
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author: mactitan
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points: 349
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story_text: ''
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comment_text:
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num_comments: 188
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story_id:
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story_title:
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story_url:
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parent_id:
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created_at_i: 1362256525
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_tags:
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- story
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- author_mactitan
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- story_5310911
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objectID: '5310911'
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year: 2006
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---
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Background: My day job is running a space transportation company called
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[SpaceX](http://www.spacex.com "SpaceX"), but on the side I am the
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chairman of Tesla Motors and help formulate the business and product
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strategy with Martin and the rest of the team. I have also been Tesla
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Motor's primary funding source from when the company was just three
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people and a business plan.
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As you know, the initial product of Tesla Motors is a high performance
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electric sports car called the Tesla Roadster. However, some readers may
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not be aware of the fact that our long term plan is to build a wide
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range of models, including affordably priced family cars. This is
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because the overarching purpose of Tesla Motors (and the reason I am
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funding the company) is to help expedite the move from a mine-and-burn
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hydrocarbon economy towards a solar electric economy, which I believe to
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be the primary, but not exclusive, sustainable solution.
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Critical to making that happen is an electric car without compromises,
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which is why the Tesla Roadster is designed to beat a gasoline sports
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car like a Porsche or Ferrari in a head to head showdown. Then, over and
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above that fact, it has twice the energy efficiency of a Prius. Even so,
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some may question whether this actually does any good for the world. Are
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we really in need of another high performance sports car? Will it
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actually make a difference to global carbon emissions?
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Well, the answers are no and not much. However, that misses the point,
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unless you understand the secret master plan alluded to above. Almost
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any new technology initially has high unit cost before it can be
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optimized and this is no less true for electric cars. The strategy of
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Tesla is to enter at the high end of the market, where customers are
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prepared to pay a premium, and then drive down market as fast as
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possible to higher unit volume and lower prices with each successive
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model.
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Without giving away too much, I can say that the second model will be a
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sporty four door family car at roughly half the $89k price point of the
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Tesla Roadster and the third model will be even more affordable. In
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keeping with a fast growing technology company, all free cash flow is
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plowed back into R\&D to drive down the costs and bring the follow on
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products to market as fast as possible. When someone buys the Tesla
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Roadster sports car, they are actually helping pay for development of
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the low cost family car.
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Now I’d like to address two repeated arguments against electric vehicles
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— battery disposal and power plant emissions. The answer to the first is
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short and simple, the second requires a bit of math:
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**Batteries that are not toxic to the environment\!**
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I wouldn’t recommend them as a dessert topping, but the Tesla Motors
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Lithium-Ion cells are not classified as hazardous and are landfill safe.
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However, dumping them in the trash would be throwing money away, since
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the battery pack can be sold to recycling companies (unsubsidized) at
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the end of its greater than 100,000-mile design life. Moreover, the
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battery isn’t dead at that point, it just has less range.
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**Power Plant Emissions aka “The Long Tailpipe”**
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(For a more detailed version of this argument, please see the [white
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paper](/display_data/twentyfirstcenturycar.pdf) written by Martin and
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Marc.)
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A common rebuttal to electric vehicles as a solution to carbon emissions
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is that they simply transfer the CO2 emissions to the power plant. The
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obvious counter is that one can develop grid electric power from a
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[variety of means](/efficiency/environmental_benefits.php), many of
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which, like hydro, wind, geothermal, nuclear, solar, etc. involve no CO2
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emissions. However, let’s assume for the moment that the electricity is
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generated from a hydrocarbon source like natural gas, the most popular
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fuel for new US power plants in recent years.
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The H-System Combined Cycle Generator from General Electric is 60%
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efficient in turning natural gas into electricity. "Combined Cycle" is
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where the natural gas is burned to generate electricity and then the
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waste heat is used to create steam that powers a second generator.
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Natural gas recovery is 97.5% efficient, processing is also 97.5%
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efficient and then transmission efficiency over the electric grid is 92%
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on average. This gives us a well-to-electric-outlet efficiency of 97.5%
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x 97.5% x 60% x 92% = 52.5%.
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Despite a body shape, tires and gearing aimed at high performance rather
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than peak efficiency, the Tesla Roadster requires 0.4 MJ per kilometer
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or, stated another way, will travel 2.53 km per mega-joule of
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electricity. The full cycle charge and discharge efficiency of the Tesla
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Roadster is 86%, which means that for every 100 MJ of electricity used
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to charge the battery, about 86 MJ reaches the motor.
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Bringing the math together, we get the final figure of merit of 2.53
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km/MJ x 86% x 52.5% = 1.14 km/MJ. Let’s compare that to the Prius and a
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few other options normally considered energy efficient.
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The fully considered well-to-wheel efficiency of a gasoline powered car
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is equal to the energy content of gasoline (34.3 MJ/liter) minus the
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refinement & transportation losses (18.3%), multiplied by the miles per
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gallon or km per liter. The Prius at an EPA rated 55 mpg therefore has
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an energy efficiency of 0.56 km/MJ. This is actually an excellent number
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compared with a “normal” car like the Toyota Camry at 0.28 km/MJ.
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Note the term hybrid as applied to cars currently on the road is a
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misnomer. They are really just gasoline powered cars with a little
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battery assistance and, unless you are one of the handful who have an
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aftermarket hack, the little battery has to be charged from the gasoline
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engine. Therefore, they can be considered simply as slightly more
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efficient gasoline powered cars. If the EPA certified mileage is 55 mpg,
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then it is indistinguishable from a non-hybrid that achieves 55 mpg. As
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a friend of mine says, a world 100% full of Prius drivers is still 100%
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addicted to oil.
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The CO2 content of any given source fuel is well understood. Natural gas
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is 14.4 grams of carbon per mega-joule and oil is 19.9 grams of carbon
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per mega-joule. Applying those carbon content levels to the vehicle
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efficiencies, including as a reference the Honda combusted natural gas
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and Honda fuel cell natural gas vehicles, the hands down winner is pure
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electric:
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**Car** **Energy Source** **CO2 Content** **Efficiency** **CO2
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Emissions** Honda CNG Natural Gas 14.4 g/MJ 0.32 km/MJ 45.0 g/km Honda
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FCX Nat Gas-Fuel Cell 14.4 g/MJ 0.35 km/MJ 41.1 g/km Toyota Prius Oil
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19.9 g/MJ 0.56 km/MJ 35.8 g/km Tesla Roadster Nat Gas-Electric 14.4 g/MJ
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1.14 km/MJ 12.6 g/km
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The Tesla Roadster still wins by a hefty margin if you assume the
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average CO2 per joule of US power production. The higher CO2 content of
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coal compared to natural gas is offset by the negligible CO2 content of
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hydro, nuclear, geothermal, wind, solar, etc. The exact power production
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mixture varies from one part of the country to another and is changing
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over time, so natural gas is used here as a fixed yardstick.
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**Becoming Energy Positive**
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I should mention that Tesla Motors will be co-marketing sustainable
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energy products from other companies along with the car. For example,
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among other choices, we will be offering a modestly sized and priced
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solar panel from [SolarCity](http://www.solarcity.com/), a photovoltaics
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company (where I am also the principal financier). This system can be
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installed on your roof in an out of the way location, because of its
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small size, or set up as a carport and will generate about 50 miles per
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day of electricity.
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If you travel less than 350 miles per week, you will therefore be
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“energy positive” with respect to your personal transportation. This
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is a step beyond conserving or even nullifying your use of energy for
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transport – you will actually be putting more energy back into the
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system than you consume in transportation\! **So, in short, the master
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plan is:**
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1. Build sports car
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2. Use that money to build an affordable car
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3. Use that money to build an even more affordable car
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4. While doing above, also provide zero emission electric power
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generation options
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Don't tell anyone.
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