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Earned Respect: As Other Automakers Promise, Tesla Delivers

Clean energy and climate change action advocates take note — Tesla is working hard to deliver on its sustainability promises. It is expanding EVs, solar, and battery storage on many fronts. And it has produced an all clean energy business model that no western corporation has yet to successfully emulate at scale.

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There’s been a lot of news during recent months about Tesla Model 3 production delays. And it presently appears that Tesla is manufacturing around 700 Model 3s per week.

This is still far short of Tesla’s stated goal of 2,500 Model 3s per week by the end of this Quarter. It is even further from the 5,000 Model 3 per week goal it has established for 2018. However, most other EV manufacturers are being left in the dust by this so-called ‘slow’ production ramp.

Take the Chevy Bolt, for example. Here’s a well-built EV that some claimed would steal Tesla sales. That Chevy originally stated it expected to sell at a rate of 50,000 per year. Last year, Bolt sold 26,000 worldwide. Pretty decent. But if GM had marketed the high-quality, long range car with the same fervor that Nissan markets the Leaf, it’s entirely likely that Chevy could have gotten much closer to that 50,000 goal.

(Tesla’s vision for a clean energy future is a work in progress that is refined step-by-step. Case in point — adding solar panels to the Tesla Gigafactory 1 in Nevada. Image source: Building Tesla.)

Now Bolt is selling at the rate of about 1,250 per month in the U.S. during early 2018. Chevy is assuring prospective EV customers it will ramp up production again soon. But, so far, these are just assurances. Meanwhile, Model 3, despite delays, just sold about 2,485 in February and, in all likelihood, will approach or cross the 3,000 mark during March. Another way of putting it is that a delayed Model 3 just blew Chevy Bolt sales out of the water.

It’s worth noting that top EV analysts like Zachary Shahan over at Clean Technica are speculating that despite Tesla’s stated and pursued goals, the company may well be tracking closer to its original build path of 500,000 EVs per year by 2020. A build path that practically everyone said was impossible at the time it was announced in 2013 but which expanded following unexpectedly high demand for the Model 3.

To set out a marker, Tesla sold approximately 100,000 vehicles globally during 2017. This year, depending on how quickly the Model 3 ramps up, it will likely sell between 150,000 and 250,000.

The activity of Tesla in deploying EVs and other clean technology could well be described as building and improving a plane already in flight. Tesla vehicles are produced and sold to employees during beta testing even as the production line is refined and worked out. Low rate initial production then follows. And after that, mass market production and scaling. We saw this most clearly in the launch of the Model X which, though slow, ramped up to produce the best selling all-electric SUV in the western world.

(Tesla historic quarterly production through end of 2017. Note that Model 3 will likely produce between 6,000 and 8,000 units during Q1 of 2018. Data source: Tesla. Image source: Daniel Sparks.)

The Model 3 is simpler. It is, overall, easier to produce. However, a new battery pack design appears to be the source of its initial delays. Not much has been broadly confirmed about the Model 3 battery pack. But it implies a greater energy density than past packs. And getting any production kinks worked out is critical for both Model 3 and also Tesla’s future designs like Model Y — including upgrades to the S and X.

Despite likely battery production kinks, Model 3 will probably deliver between 6,500 and 8,500 units during Q1 of 2018 or nearly twice the number of Model X’s delivered 3 quarters in. It’s also about 25 to 60 percent more than the number of Model S’s hitting roads after 3 quarters. Facts that should be taken into account.

At the same time that Tesla is working through the Model 3 production ramp, it is also continuing to innovate. Recent satellite photos reveal that the Nevada Gigafactory 1 — which is producing batteries even as it is under modular construction — is starting to add solar panels to its roof top (see image at top). These panels will reduce the amount of carbon emitted in producing each battery pack. In turn, reducing the sunk carbon cost of producing each Model 3 and, ultimately, each Model S and X. Thus increasing the already substantial net carbon reductions achieved by each Tesla clean energy vehicle vs dirty gas and diesel guzzlers.

Meanwhile, the Tesla Semi — which was announced just 112 days ago — is already entering Tesla’s factory vehicle fleet to haul freight in the form of Nevada Gigafactory produced battery packs shipped to the California production plant. So it seems that the all-electric Semi has shortly started its own live testing prior to expected sales during 2019. And the Semis, like the solar panels are helping to further improve Tesla’s already substantial carbon emissions reductions.

In other words, Tesla’s work in progress model is working. It is producing. It is testing, and improving. It is delivering. Clean energy Model 3, Model X, Model S and the Semi are not just concepts. These are designs in operation that are being sold and used even as their production paths are expanded. This is what actual delivery of innovative, cutting edge, climate change impact reducing products looks like. The form an actual value-driven (as opposed to solely profit-driven), sustainability-driven business model takes. The rest of the auto industry should be standing at attention.

Respect.

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32 Comments

  1. Syd Bridges

     /  March 8, 2018

    Thank you for this update, Robert. Considering the complexity of manufacturing such an innovative product, the slower ramp up is hardly surprising. Indeed, many such advances sadly never see the light of day at all. So I agree that Elon Musk is achieving remarkably well.

    As for batteries and the problem that they use rare materials like lithium and cobalt, this story in sciencedaily caught my eye.

    https://www.sciencedaily.com/releases/2018/03/180307153947.htm

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    • Syd Bridges

       /  March 8, 2018

      A proton battery using a carbon electrode would seem to solve the scarcity problem.

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      • A company I have shares in is 1/3 of a consortium building Battery gigafactories and is also a Graphite miner in Tanzania with excellent relationship with the Government.
        It’s proprietary technology uses NO Cobalt or Nickel. And will have a battery recycling plant associated with each factory (recycle waste as well)
        Another investment has a pilot battery recycling plant being commissioned in Canada.
        Also has patented Titanium/Lithium anode that is far superior to the Graphite one
        Cobalt has been a secondary often ignored mineral in Silver mines etc, no longer being ignored. So not a problem, expect prices to drop as all the mines and recyclers come on board.
        Then we have the Graphene Battery , prototyping working and the owners have now bilt and in operation a Graphene manufacturing plant.
        Samsung has announced a Lithium Sulfer Graphen ball battery .
        Another research crew has a Fe/Oxygen replacement for the Cobalt that provides far higher density and speed of charging – theoretical up to 8 times energy density from same volume of Lithium.
        Shortage of materials is no problem, Lithium producer shares have been tapering off in price due to greatly increased availability and more mines and greatly improved extraction and processing techniques and battery technologies are exploding to utilise the cheapest and most readily available materials with improved performance

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        • There’s a lot of news about new battery tech. Meanwhile, lithium energy density keeps rising and costs keep falling. It’s possible one of these new techs could break out. And, if so, if it could achieve economies of scale and realize actual improvements, that would be a good thing. But this issue reminds me a bit of the old ‘silicon isn’t the best material for computers’ argument.

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    • Cobalt is not a problem:

      https://cleantechnica.com/2018/02/11/nope-cobalts-not-problem-ev-revolution-will-march/

      The production chain is expanding with demand.

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    • Lithium is not rare. And its production chain is also rapidly widening.

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  2. david distefano

     /  March 8, 2018

    (Tesla clean energy vehicle vs dirty gas and diesel guzzlers.)

    i have read this site for a number of years because of the the info it gives to its readers which i find very important,though at times depressing. this is my first comment. the house my wife and i live in has 40 solar panels. the car my wife drives to work has always had at least 35mph on the freeway since 90% of her daily commute is freeway. we try to reduce our carbon footprint as much as possible. as a retiree, to add income to my pensions and social security, i have taken my hobby of landscape photography to the highest level. to get into the back country and the many long miles of very rough dirt roads we take, we have a ford f-350 diesel dually that carries a heavy duty camper. yes it only gets about 14mpg but on average we drive about 9,000 miles a year. on this and other sites(see beginning of comment) trucks like mine are given a very bad rap, but there is nothing out there in the ev market that can do what i need. so people if you see an f-350 dually with camper don’t think bad of us. some of us really do care about this planet.

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    • Since day one, I have promoted primarily systemic solutions to the climate crisis. I have urged people to vote and to get involved in political processes that will afford people the choices to stop being captive consumers of carbon based fuels. This primarily involves voting for politicians who support a rapid expansion of individual access to renewable energy and the democratization of energy in general.

      These changes involve a process. We were all here in western civ born into societies that were dominated by fossil fuel based energy. That is now changing. We have more choices. We are able to start to reduce our individual impact by doing things like purchasing solar panels for our homes or electric cars. And if we continue to forge ahead on the path that we are on now, you and your children and grandchildren will be able to buy electric trucks or access other forms of renewable transport.

      Given this focus, why would I blame you? You are more a victim than anything else. You did not choose to be born into a world where your only option for long distance travel is a diesel truck. Instead of personalizing this, let’s keep working to change everyone’s situation.

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    • Mblanc

       /  March 10, 2018

      Many of us are waiting for the opportunity to go electric David, you are far from alone. The wait is quite distressing now, when the tech is clearly very close

      Massive respect for all those who have already transitioned, but we really need a wide range of options to come to market, because needs vary.

      Liked by 1 person

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  3. Greg

     /  March 9, 2018

    Thank you again for following this inspiring story with updates. I would add a couple of things. While Musk is ramping up production he is rethinking and redesigning how a factory works such that it is a product in of itself. Multiple factories and vehicle types such as the Y and pick-up will follow in the coming years and these will seem light years ahead in their production process compared to his original roadster and what other “state-of-the-art” factories are doing today. Add, in the learnings from SpaceX, Tesla Energy, and eventually the Boring company, and the synergies will be remarkable. Others are now responding in an increasingly impactful way. With Porsche’s recent announcement of over $7 billion in electrification, for example, we see the ripple effect, a multiplier if you will, of Tesla’s investment as there is no way we would be seeing these kinds of capital outlays and about- faces coming from other automakers in the electric space if it had not been for Tesla’s competitiveness. I should add that the vote by the Tesla Board to compel Musk to stay onboard, before shareholders this month, is designed to create about 10x the value of the company in 10 years. If you want to make some very real money in a good way and help shape a carbon free future this company continues to offer a rare and compelling opportunity.

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    • Greg

       /  March 9, 2018

      Let’s hope this freshwater research is wrong. “After collecting and analyzing data from the waters of 17 countries, he has concluded that freshwater bacteria could be emitting nine gigatons of CO2 annually worldwide. That is about four times more than other scientific estimates, and equivalent to the annual emissions associated with worldwide consumption of fossil fuels.”

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      • kassy

         /  March 9, 2018

        Off course this is just a feedback process since the bacteria just recycle the carbon they encounter but we do make the emissions worse by adding nutrients and by increasing the temperature of the water bodies through AGW.

        All his measurements are relatively recent so they are modern measurements with our current rate of carbon pollution and warming.

        Especially for northern hemisphere freshwaters this loop must have been smaller in the past due to more freezing.

        It’s too bad the article only mentions the upper bound of his calculations. I wonder what the lowest estimate is (in the TED talk he mentions 2 GT missing from the carbon budget as his starting point for the research).

        It would also be instructive to see which steps he uses in the calculations.

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      • As you warm the Earth, the carbon sinks become less efficient. However, the present annual rate of atmospheric carbon accumulation doesn’t reflect a net 20 GT carbon per year emission. My opinion is that this research is incorrect and overstated — not taking into account full carbon cycle feedbacks. If this were the case we’d see massive CO2 plumes in the satellite imagery coming off these bodies of water as opposed to where we see them now — from the industrialized regions of the world.

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        • Mblanc

           /  March 10, 2018

          Great context RS, reassuring words in difficult times. Not that we are not in trouble, obviously, but it is good to have someone with strong background knowledge to do an initial assessment of all these alarm bells going off.

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        • I reread the article.

          It stated 9 GT of CO2 not 9 GT of carbon. Total global annual CO2 emission from fossil fuels is in the range of 35 GT due to the molecular weight of oxygen.

          I still doubt that net release is even 9 GT CO2 when taking all carbon cycle feedbacks into account. However, it is likely that warming does hurt the carbon sink, as noted above.

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  4. http://www.nationalgeographic.com.au/animals/more-sharks-ditching-annual-migration-as-ocean-warms.aspx

    This year has been strange,” Kajiura says. “Last year was unusually warm all winter: The water temperatures never got below 23 degrees Celsius. This year, the temperatures have risen dramatically to 26 degrees Celsius. It’s now even hotter than this time last year

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  5. I don’t know if it has been posted, but interesting times ahead as China and India seek to get rid of smog and pollution and China especially has achieved much, however the flip side

    https://e360.yale.edu/features/air-pollutions-upside-a-brake-on-global-warming

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    • Andy_in_SD

       /  March 9, 2018

      Yup, Faustian bargain.

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    • Aerosols don’t brake warming to a higher proportion compared to what would otherwise be these countries planned emissions over the next two decades.

      In other words, the net warming from continued fossil fuel burning is considerably higher — by at least an order of magnitude long-term. Approx 0.5 watts per meter squared for aerosols as oppposed to 9+ watts per meter squared for continued fossil fuel burning.

      The real Faustian bargain is that proponents of coal burning claim greater negative aerosol impacts than are actually achieved thus generating an unjustifiable and irrational fear of cutting emissions.

      Liked by 1 person

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  6. Vic

     /  March 9, 2018

    A fascinating talk here on some of the societal, political and economic changes that likely await us as the impending decades unfurl. Reminiscent of Tony Seba’s work only much broader in scope. 1h45m.

    The Third Industrial Revolution: A Radical New Sharing Economy

    “The global economy is in crisis. The exponential exhaustion of natural resources, declining productivity, slow growth, rising unemployment, and steep inequality, forces us to rethink our economic models. Where do we go from here? In this feature-length documentary, social and economic theorist Jeremy Rifkin lays out a road map to usher in a new economic system.

    A Third Industrial Revolution is unfolding with the convergence of three pivotal technologies: an ultra-fast 5G communication internet, a renewable energy internet, and a driverless mobility internet, all connected to the Internet of Things embedded across society and the environment.

    This 21st century smart digital infrastructure is giving rise to a radical new sharing economy that is transforming the way we manage, power and move economic life. But with climate change now ravaging the planet, it needs to happen fast. Change of this magnitude requires political will and a profound ideological shift.”

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  7. Connecticut Gordon

     /  March 9, 2018

    Is there any reason for the week on week drop in production of the Model 3 as shown by the Bloomberg estimates? That could suggest new issues?

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    • Connecticut Gordon

       /  March 9, 2018

      I meant to add week on week over the past month

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    • My opinion is that the model tends to wag a bit when new VIN batches are announced. However, it appears that there might have been a slow-down in production during February following a spike closer to 1,000 per week. This is pure speculation and cannot be confirmed currently one way or the other.

      Stepping back, I’d say that it’s likely that we continue to see production surges and slow-downs as Tesla tries to refine the lines and the production process. We saw this with the X and I don’t think it’s reasonable to expect the 3 ramp would be perfectly smooth. I provided a similar analysis in December.

      Likely, they’ll start to surge again in the second half of March as Q1 end nears.

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      • Mblanc

         /  March 10, 2018

        I’d echo RS here, for as long as I’ve followed them, Tesla’s production numbers have been lumpy.

        It seems to be a function of this radical new approach. It is extraordinary to actually follow production like this, I have never seen such a focus on (almost) week by week numbers, on specific vehicles.

        Building unprecedented vehicles in an unprecedented way.

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  8. Connecticut Gordon

     /  March 10, 2018

    Thanks to Robert and Mblanc

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  1. The Electrical Vehicle Revolution Keeps Expanding | robertscribbler

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