We Tesla Fanatics have visions of: TM, the “S,” the market, the future. Yesterday I read this article about batteries, EVs, manufacturing, the marketplace by John Peterson.

Mr. Peterson answered some feedback to his article. Another of his concerns is the financial viability of TM.

“R&D is slowly grinding down the cost of batteries. The idea that changes in battery performance or cost will come quickly is the great lie of the EV world. It simply can't happen, no matter how fervently you wish upon a star.”

“Batteries are not a fuel source. They're fuel tanks that let you substitute electricity from coal for oil. Unfortunately they're a fuel tank that costs several thousand dollars per gallon of gas equivalent.”

“Batteries are very good at increasing the efficiency of an automobile. When they're used as efficiency devices they reduce the total amount of fuel burned from all sources. As a fuel tank substitute, batteries cost thousands of dollars per equivalent gallon of tank capacity. When batteries are used as fuel tank substitutes the total amount of fuel burned from all sources does not change. It simply moves from the car to a coal burning power plant.”

“After next week's earnings report, Tesla will be trading at twenty -three times book value. Even Apple, the greatest tech company success in history, only trades at FIVE times book value.”

Perhaps Mr. Peterson is playing the devil’s advocate – Perhaps not. So, what do you think? Please be specific.

Volker.Berlin | 03. toukokuu 2012

I think a great buying opportunity for Tesla stock may be around the corner. :-)

JOHN HOLLINGSWORTH | 03. toukokuu 2012

While Apple may only trade at FIVE times book value other companies trade much high - IBM 15x and Google 18.4x. Seems Mr. Peterson may be using statistics in a misleading way. I would also like to show the proof behind the statement that you burn an equivalent amount of fuel whether in a take of gas or electricity generated from other sources. I think he is discounting the energy conversion efficiency difference between and ICE and electric motor. Agreed if the ICE and electric motor had the same conversion ratio there would be no difference but that is not the case.

EcLectric | 03. toukokuu 2012


You asked for it!

My wife likes to buy purses. Nice... expensive purses. Whenever she gets a new one, I always say something like "wouldn't you rather carry around an old purse, and have some money to carry around in it?". This is an old issue. Spend or save? Offense or defense? I like to use the old 'alien encounter' approach to determining which is right or wrong. If an alien encountered my wife with a colorful, useful purse with no money in it, would they think her better off than the 'ideal' wife carrying a paper bag with some 'Ben Franklins' in it? They would probably scold the ideal wife for hiding the 'art' within the paper bag instead of sharing it.

What does this have to do with Mr. Peterson? He is at the prime age for defense. He is in the business of defense. He wants to have a paper bag full of Benjamins.

So, if you are middle aged, healthy, and your neighbor didn't just die from a sudden stroke... don't invest in TSLA. If you were into electric when electric wasn't cool, now that electric is cool... again - invest in some nice safe oil stocks.

TSLA is not a good investment if your interest is in safeguarding the financial interests of yourself and your clients (in his case).

On the other hand, if you know someone who just suddenly died without getting to do 'all the fun things they were going to do'. If you plan to see a different future with the planet left in a more natural state. If you don't want to send people off to die in the desert for your monetary and physical security - then maybe TSLA is a good investment.

Liz G | 03. toukokuu 2012

I personally take offense to the idea that you are just " coal for oil.."

My Tesla will run on very little "coal" as we are putting in solar panels. And many Teslas will also run on Wind, Solar, Hydroelectric, Nuclear (yes I know that's questionably green) but not all power comes from coal. So a blanket statement like that is just false and misleading.

Plus, as has been stated in other forums, batteries allow for sources of electricity to evolve. ICE's don't (excluding biodiesel).

As to whether or not the stock will go up or down, ^O^, who knows, but I follow the idea that you should invest in a company you believe in. And I believe that Tesla has a good shot of succeeding.

ThomasN | 03. toukokuu 2012

Yet another Peterson article... | 03. toukokuu 2012

I have read Peterson's articles over the last year. I generally file these articles under FUD. I am invested in Tesla by both reservation and stock. My home was converted to solar PV 4 years ago with net metering. Both my cars are plugin hybrids. I have not paid an electric bill since installation. As I see it, the heavy shorting of TSLA stock is an investment opportunity. I am pleased with Tesla's business plan. To paraphrase Gandhi- First they ignore you-Then they ridicule you-Then they fight you-Then you win. Entrenched interests protect the status quo. I am long on TSLA.

Crow | 03. toukokuu 2012

Ask Peterson whether he is long in a battery company that uses a technology that competes with Lithium Ion. He's a fraud.

Brian H | 04. toukokuu 2012

"When batteries are used as fuel tank substitutes the total amount of fuel burned from all sources does not change. It simply moves from the car to a coal burning power plant.”

The masses work out to about the same, so it becomes a question of TOC. The gas savings/yr at $4/gal would be about $13,000 over 8 yrs. Other $ equivalents are the factors discussed in the Tesla Rumors analysis, such as other fluids, servicing, and depreciation. Some of those are speculative at the moment. Then there are the other "goods" (defined functionally in economics as anything people are willing to pay for or substitute for equal values).

This gets into intangibles, like time not spent at "smelly gas stations", evidently a very valuable benefit to many -- both in terms of $/hr valuation of personal time, and enjoyment/distaste. Similar values implicitly apply to other benefits (multiple-occupant lane access, drive quietness, acceleration pleasure (the "toy" aspect, as well as safety issues), etc.

Others assert personal $$$ value in the benefits to the environment, but this is an appeal to charity, and community values, which has a much narrower "toe-hold" on economic substitution valuation. Not enough 'history' and demonstrated free-market pricing exists to directly include it, though for "first adopters" it may be crucial in some % of cases. For someone dealing with pragmatic choice of commuter vehicle, it's a nice bonus, but would a daily commuter willingly pay (e.g.) $2,000 more a year to specifically avoid direct local tailpipe emissions? Surveys suggest not; 'climate change' concerns, in particular, rank last on every public poll of personal and political priority among the general public. And even lower than last when costs are attached to the choices.

So Elon's assertion that the car has to compete on its merits as a car for a given outlay makes sense. The TeslaRumors analysis shows a TM S 85kwh costs out at 5 yrs at about $40K, the same as a BMW 5. That's the real place that the market rubber meets the road.

David M. | 04. toukokuu 2012

Peterson is based in Switzerland. He couldn't care less about America's dependence on foreign oil. He also believes most people should take public transportation. Easy to do in a country 1/3 the size of New England.

Disclosures aside, anyone who is on the warpath against a new, Green alternative technology for automotive fuel, has a competing interest at heart.

That's just common sense. Otherwise, live and let live - why not?

Tiebreaker | 04. toukokuu 2012

We should stop discussing Peterson's articles here. It is always the same article with a different title. As usual he takes some data and twists the analysis to fit his interests. Ignores all other. He is a street-corner pusher for hybrid cars, because he is heavily invested in a company that has led-based battery tech for hybrids. He doesn't disclose that, because he is not obligated, since he doesn't mention that company in his articles.

''Nuff now...

petero | 04. toukokuu 2012

I am a pessimist but not yet in the gloom and doom category. The two most intriguing points of Mr.Peterson’s article, to me, were:

1. Battery manufacturers want to make solid profits from premium batteries. He doesn’t see the price of premium batteries dropping. This may be true, perhaps as battery technology improves the price will still be high but there will improvements in power, range, weight, charging, etc.

2. Financial strength of TM. Production, inventory, are going to be very draining.

Lastly, with the price of solar panels and installation has dropped, performance increased, over the past 7 years - it will be viable to install and run your “S” for nada! He did not touch on this energy sourcee.

Mark K | 04. toukokuu 2012

Practicing FUD, or serving his own financial interests ... these monikers are too kind.

Mr. Peterson is a passionate, and skilled ... liar.

The sno-cone truck story as his opener is classic Machiavelli. He attempts to establish a false pedigree, so that once inside the enemy's den, he can coolly and methodically stab all those foolish enough to trust him.

A dangerous guy, really.

Physics on the other hand, has this wonderfully inexorable way of crushing liars.

Crow | 04. toukokuu 2012

He has no credibility. I wish people would stop reading his articles and posting about them on this forum. Maybe we should start a "Peterson is a _______" thread and let everyone opine on the best adjective to describe him. We could do a poll.

BruceR | 05. toukokuu 2012

Can I be first? "____is a snake oil salesman."

Trying to make a buck by dissing competitive technolgies.