This is neither here nor there, but falls under the category of News of the Weird: yesterday, Tesla surpassed Toyota as the world's most valuable car company.
I don't know about you, but I didn't see that coming.
My Indiana-built Acura currently has 77,000 miles, is paid for, and has no current problems—knock on my wooden head (one of my dad jokes is to say "knock on wood" and rap my forehead). So it's going to be my ride for the foreseeable, for hard-headed (ahem) practical reasons. But I hope my next car, wherever in the hazy future it may be, will be electric. At least a hybrid.
My great-grandmother owned an electric car—they were popular in America circa 1890–1922. Demand was high in 1910. Thomas Edison thought electrics were the superior technology. My grandmother said that when her mother's car came up the drive, all you could hear were the tires crunching on the gravel.
Mike
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Featured Comments from:
JH: "Electric cars have a lot in common with nuclear power—environmentally clean until you realize you have to deal with the toxic waste. Think all cars should be electric? Well we better get hopping on recycling batteries or we will have auto scrapyards full of batteries that will make Love Canal look tame. Tesla presents a couple of more problems. There is no independent dealer or service network. You are totally dependent on the manufacturer for support. The cars are even more dependent on software than most and are creating problems actually 'wearing out' memory chips. Tesla sells you a new CPU module for $2,500 when it happens. Batteries have cooling problems and catch fire. NHTSA is looking into these problems now. [Tesla's] 'Autopilot' has killed quite a few drivers who think it really is an autopilot, but in fact its response is too slow for normal freeway traffic. That seems to be the reason they keep running into stopped vehicles and stationary objects.
"As for the stock price, all stocks are crazy right now —70–90% of all trades are done by computers in microseconds and algorithms can be tweaked to make money under virtually any circumstances. Notice how the US markets hiccup then go back to growth. Just reprogram those trading computers overnight. So I would say not that Tesla is the most valuable car company but the one that the stock market can manipulate the easiest."
Mike replies: Yes, two things would have to happen for electric cars to be a solution on a large scale: the energy source would need to be solar, and there would need to be strong central oversight for regulation of battery recycling. Unfortunately, the latter would require a strong and healthy government, which we once had but have no longer.
TC: "The misinformation in these comments about Tesla is baffling. Why all the hate for an innovative American car company and all the support for a stodgy foreign car company that seems to be innovating at a much slower rate? I'd thought that most of TOP's commenters were Americans, but I must have been mistaken."
Mike replies: Kevin Phillips, in his great book American Theocracy, makes the argument that declining superpowers have trouble moving on from the energy sources that helped them in their rise. He predicted that America would cling to oil even after it was no longer to our advantage to do so. I've thought of that book a hundred times since 2006. The first 96 pages, a section entitled "Oil and American Supremacy," is the best essay I've ever read on energy politics (I read hundreds of political books during the Bush years). I thought he should publish that section alone as a separate little book. It explains so much, including the wars in Afghanistan and Iraq. Highly recommended.
jerry: "Wow, tons of false information about Tesla in the comments (yes, I own a 26-month-old Tesla Model 3). Tesla was the most shorted stock in the world for years (no longer) because a lot of hedge fund guys though they would never survive and placed shorts as a result. Those hugely rich and successful investors then did everything possible to malign Tesla to drive the stock prices down. All those guys lost billions (yes billions) betting wrong. There are 550 car fires in the US every day. Have you ever heard any model mentioned but Tesla (for the four or five that have made the national news)? Tesla cars crash at 1/10 the rate of other cars. Don't hear about that! Idiots that let their Tesla drive without paying any attention have crashed a few times.
"Tesla (Space X) just sent two astronauts to the Space Station. Tesla will become the largest supplier of solar panels. Tesla Powerwalls are being bought by electric utilities all over the world to store electricity. Tesla has sold over a million cars now. They are building a factory in Germany right now to supply half a million cars a year to Europe. The factory in the US is building 400,000 a year, the Chinese factory is building 2,000 a week and ramping up to 10,000 a week. A Tesla costs the environment about 25% of what a Toyota Corolla costs, over the life of the car. That includes the build of car, not just the gas not burned. I've put 71,000 miles on my car and only replaced the tires at 65,000. No other maintenance costs. Batteries are supposed to last 500,000 miles, motor one million miles. And I can outrun your Ferrari."
Mike replies: Ctein bought a Tesla (I tried to talk him out of it), and, as you might expect, has strong opinions on the subject. But you've touched on some of his arguments here.
Andrew J.: "Tesla produced 370,000 cars last year. Toyota produced 10 million in the same period. Bloomberg has calculated that at its present value, Tesla should have margins like a company such as Apple and should have sold more units than Volkswagen, the largest world company in number of cars sold. This seems like stock exchange manipulation. Don't buy an electric Car. Keep your Acura until the real future is here: the hydrogen car. Cheap, clean, fills up in 2–3 minutes just as a gasoline engine. Wait and see."
Mike replies: I hope I get to! One of my hopes is that I get to live to see what replaces the internal combustion engine.
Keith: "I believe that remarkably soon, maybe even within a decade, the idea of burning gasoline in an internal combustion engine for a private vehicle is going to seem quaint at best. It will be considered like lead in paint or gasoline, CFCs in the atmosphere, dumping sewage in rivers or lakes, and many other things we know are bad ideas."
Jason in Hawaii: "There’s a lot of FUD [fear, uncertainty, and doubt —Ed.] in these comments about Tesla. Say what you will about their valuation; they also passed Exxon Mobil in market cap. I would challenge anyone thinking Tesla is a flash in the pan to take one for a test ride. I did, and now I have two Model 3's in my garage. And as for the batteries, not only will they last a few hundred thousand miles, but they’re about 95% recyclable. Big oil has put out a lot of misinformation about EV's. When you corner a pit bull, it usually has a reaction. Again, Tesla surpassed Exxon Mobil; guess who feels threatened?"
Mike replies: That's what Ctein said, too. He drove a Tesla and that was it.
emptyspaces: "I think it’s important to address some misinformation I see all the time regarding the relationship between CO2 emissions from power plants and electric cars. It depends very much of where you live. You can plug your state in here to see where your power comes from. This article has an easy-to-follow map showing a state-by-state breakdown. I’ve heard it said more than once that driving an EV is worse than a gas-powered car, but it just doesn’t make sense. EVs are far from perfect, but it’s pretty clear they are a cleaner solution right now. I hope they can get even cleaner as the technology progresses."
Mike replies: Here in rural New York State, I can opt for household electricity that comes from a solar field. The rates fluctuate, and sometimes it can be a little higher than the regular grid, but neither are bad. I just paid a monthly bill for $108.
An electric car would not require much in the way of extra infrastructure for me, and my utility actually offers a "Day/Night" rate for people who will be charging electric cars at night.
I could easily use an electric vehicle for local trips—I drive a lot, because "everything is far away from everything" here, but the longest local trip I make (infrequently) is a round trip to Rochester, which is a 108-mile round trip. Add 20 miles for doodling around in Rochester and I'm at ~130 miles—easily within the range of many electrics these days. Most of my trips are shorter—shopping and errands (minimum 15 miles for those), and attending AA meetings which are scattered hither and yon. The farthest of these is a 60-mile round trip, but we usually carpool most of the way (in formerly normal times, pre-COVID-19).
Actually, given how infrequently I drive on long trips, it would make perfect sense to lease a plug-in electric as a daily driver and simply rent a car for long trips.
I would guess I'd save money (not factoring in the cost of the car), but even if I didn't it would be better for the atmosphere. In the words of the second article you linked, "the average EV driven in upstate New York has emissions equal to a (hypothetical) 231 MPG gasoline car." My current car gets 31 MPG combined (actual, not calculated).
In fact, I might be in one of the best-case scenarios for EV's...private garage, limited long-distance driving, in an area that's transitioning to solar and has an enlightened utility with sympathetic policies.
Mike, electric cars don't come with manual transmissions, AFAIK!
Won't that be a problem for a dyed-in-the-wool stick shift enthusiast? Indeed, most of them are single-speed transmissions, so there are no gears to shift.
We're coming up to 6 years of sharing an electric as our only car, and if we ever replace it, the new one certainly won't have a combustion engine.
Posted by: John Ironside | Thursday, 02 July 2020 at 08:54 AM
According to macrotrends.net, "Tesla net income for the quarter ending March 31, 2020 was $0.016B, a 102.25% decline year-over-year."
and
"Toyota net income for the quarter ending March 31, 2020 was $0.590B, a 85.33% decline year-over-year."
I wouldn't get too excited about Tesla being valued more highly. Just another dot-com company, as far as true value is concerned.
Posted by: Dave | Thursday, 02 July 2020 at 09:14 AM
Many people forget the very long history of all-electric vehicles, and some even think Tesla was first! In any case, I've driven hybrids exclusively for almost 20 years, and only recently bought a plug-in hybrid (a minivan, of all things). I've always preferred the quiet power of the electric motor over the internal combustion engine, and now I can count on 32 miles of it every day. Not buying a tankful of petrol more than twice a year is a bonus.
Posted by: MarkB | Thursday, 02 July 2020 at 09:28 AM
Tesla has surpassed Toyota? Maybe on the stock market, but certainly not in real, intrinsic value. I don't think it ever will. Toyota means quality. Tesla - not so much ...
Posted by: Anton Wilhelm Stolzing | Thursday, 02 July 2020 at 09:58 AM
For what it's worth, I'd be extremely skeptical about that valuation of Tesla. I know next to nothing about the auto business, but their does seem to be an aroma of snake oil around the company. Elon Musk has promised fully functional self-driving cars "real soon now" for the last 3 years, and Teslas will still crash into things left to their own devices. Tesla's reporting to investors seems to involve more than a little smoke 'n' mirrors from what I read. And never underestimate the capacity of greedy investors for self-deception when sexy new tech stuff is involved. Theranos is my go-to example for this tendency.
Posted by: Geoff Wittig | Thursday, 02 July 2020 at 11:25 AM
Mike, my advice is to not test drive an all electric car, lest you be tempted by the torque that is instantly available.
Posted by: R. Edelman | Thursday, 02 July 2020 at 01:19 PM
Tesla is way overvalued.
Worse, apparently a large Tesla is a bigger burden on the environment than a small gasoline car.
Lots of hype, aggressive and nasty marketing tactics and [...] a wacko innovator.
Posted by: John | Thursday, 02 July 2020 at 02:29 PM
Yea, the stock exchange thinks Tesla, who makes a few thousand cars a year that have the record of faults on the first 90 days, and is on a fast forward escape plan from bankrupcy consuming capital like crazy is worth more than Toyota that produces and sells 10 million year after year on a profit. Which goes to prove the shortcomings of that institution. Remember that it's doing great now while the companies that trade there are on a big crisis and the real economy slumps.
I won't be here in 2040, when internal combustion engines will be prohibited in Europe. Until then, I plan to enjoy those cars as much as I can. Yes, they do produce CO2, like the generators that produce the electricity that fuels electric cars, only in a different place. And after reading those climate change gurus that say that we should drop every combustion engine because C02 is present in the atmosphere in 440 parts per million (that's a terrifying 0,044%) of which human emissions account for 14%, all I hope is that someone makes them pay for all the hype, the misguided investments, absurd laws, terror prophecies etc.
I can't buy an electric car that costs almost twice as its equivalent gas competitors, but if I could, I wouldn't until refuelling an electric is as simple, straightforward as the other, and stations for that are as commonly available.
A friend of mine, travelling this winter through Germany, was stuck in a highway at night in an horrendous traffic jam. Four hours into that, a service truck with gas and diesel came and refueled the cars running out of gas, so that they could heat themselves and get out. Imagine doing that with an electric.
Posted by: max p | Thursday, 02 July 2020 at 02:31 PM
Electric cars are certainly ready for daily use, but the US charging infrastructure isn't up to the task of recharging them on a grand scale. An EV with extended range hogs too much lithium and carries too much battery weight than is ideal for frequent short trips.
For the past three years, I've been running a personal experiment. Two almost identical cars sit in my driveway, a hybrid and a plug-in hybrid. The hybrid gets around 38 mpg in city and suburban use. The plug-in, aided by 75 cents worth of AC shore power nightly, had a long-term running average of 73 mpg before I switched the tires to a less efficient style. Now it's trending around 70 mpg. My overall fuel and juice cost is about 4 cents per mile.
The cars are the Ford C-Max, equipped with the same hybrid engine and system as the more popular Fusions. I prefer hatchbacks and uniqueness, so I chose the C-Max. Though it works much like the Prius, it's a musclecar by comparison, with 195 HP and an 8-second 0-60 time. The chassis is excellent; this fat Focus steers with precision and sticks to the road not unlike my old GTI. Unlike the Prius, it's a heavy car, tipping two tons with me in it. So it rides like a little LTD, smooth and serene, even when the gas engine is working.
Plug-in hybrids let you keep your cake and eat it too. On local trips around town, they're EVs. But there's no range anxiety- mine also has a 600-mile-plus range on the hybrid side. The battery is relatively small, and can be charged overnight with no special equipment. In three years everyday use, I haven't seen a downside... oh, yeah, you don't get to shift. But I can choose three levels of energy regeneration, and switch between power sources to save the RV for traffic and stoplights.
The very best used C-Maxes resell for around $20K, which is what my new, loaded one netted for after the federal and state tax incentives that you won't get on a used car. After six years and 70,000 miles on both cars, the only repair beyond regular maintenance was a faulty rear seat belt latch. If mine was gone tomorrow, I'd just have to go out and buy another. These cars used to be off my radar, and they didn't develop any cult or mystique. They just work, and work extremely well.
Posted by: John McMillin | Thursday, 02 July 2020 at 03:13 PM
Looked at some Toyota electrics but my old VW diesel pickup gets better fuel mileage and is still working well after over a million, 175,000 miles on it. (2nd engine - if that matters now)
Can get every part needed and the camper shell makes it comfortable for road trip camping.
Posted by: Daniel | Thursday, 02 July 2020 at 05:39 PM
Fundamentally, an electric motor has a tiny number of moving parts, compared with the complexity of an internal combustion engine/transmission. I can't imagine that the cost and reliability of the dramatically simpler design won't ultimately win, once better batteries become available.
Posted by: stan | Thursday, 02 July 2020 at 06:28 PM
Just a question on a comment. If something declines by 100%, it goes to zero. If it declines more than 100%, it goes below zero. If Tesla’s income has dropped 102%, how can it still be $16million?
Posted by: Ilkka | Thursday, 02 July 2020 at 07:26 PM
I do hope you recognise the Detroit electric in your illustration as the car that Donald Duck's ultra-wealthy Uncle Scrooge drives ...
[You, Sir, are awarded fifteen life points. --Mike]
Posted by: Bear. | Thursday, 02 July 2020 at 07:35 PM
Apparently Tesla made the bottom of the list in the J.D. Power initial quality rankings. Jeez.
[I pointed that out to Ctein, but he was sanguine about it. He said that if you research it, you'll find that Tesla is very responsive to warranty concerns, and then after you (and they) get everything sorted, after that the cars tend to be very reliable. Sort of opposite the way it is with gasoline cars. This is just what he told me, I know nothing about it myself. --Mike]
Posted by: Gary | Thursday, 02 July 2020 at 11:45 PM
Replying to max p: You say "Yes, they do produce CO2, like the generators that produce the electricity that fuels electric cars, only in a different place." Wrong. In the UK 54% of electricity comes from renewable and low-carbon sources, and that figure will only increase.
Posted by: David Evans | Friday, 03 July 2020 at 04:44 AM
I just bought a BMW i3s rex.. (The one with the range extender.) Tiny compared to my normal carriage, a BMW 7, but the 7 rarely carries more than 2 people. My average journey is about 40 miles. The i3 should do that twice on battery power alone; and with the small engine I don't fear getting range anxiety as it will always get me to a filling station if need be.
The i3 gets a full charge overnight from a standard household socket but then it rarely would need a full charge, as I expect to top it up as often as possible.
Posted by: Paul Mc Cann | Friday, 03 July 2020 at 05:42 AM
My Kia Niro is electric, and identical to the gas version in everything except the noise, the shifting and bucking of a multispeed transmission, and the stops at gas stations. Oh, and it's WAY quicker. Same seats, same space inside, same roof racks for canoes, same everything, but my "gas" bill is $2/week. If we were able to go on a cross-country trip (cant: COVID), we could take my wife's petrol-powered toxicar.
Posted by: Luke | Friday, 03 July 2020 at 07:33 AM
Battery disposal problem for electric cars is same as nuclear waste problem for nuclear power: very small problem (battery problem bigger than nuclear waste problem) made into very big pretend problem by people who do not understand or have reason to pretend.
Petrol car, if average 7l/100km of petrol (good average: not giant SUV), driven for 320,000km over life, emits more than 50tonnes CO2. That is just from fuel. Total emissions perhaps 80tonnes including manufacturing. Electric car, same distance, under 30tonnes including manufacturing, all emissions from power generation (using current power, not only clean power).
That is a big problem: battery disposal is not. But of course no one cares: hard sums are hard and CO2 will kill only most of our grandchildren, so we let tiny problem prevent solution of big problem: why should we care?
Zyni Moë
Posted by: Zyni Moë | Friday, 03 July 2020 at 10:33 AM
Okay. The myriad negative opinions about electric cars here has made me double down on looking for one (and to also pursue some modest solar power). Can I click through to the Hyundai, etc. dealers and build one so that you can get some of the proceeds? I'm serious.
But then, having continued my perseverating on this e-car thing just now, what is the deal with my fellow Americans' taste for big vehicles? Why, for example, is the Ford C-Max (beloved of one TOP reader, above) now retired? And so too its larger Focus brother? The VW e-Golf, as well. Why can't I get a sporty little hatchback with 180mi range?? Every cool car I find seems not to be sold in the US market, or not to have taken hold here.
This feels like the Olympus u4/3rds death all over again. Oh and SLRs vs DSLRs vs mirrorless, but with worldwide political stakes. And Tesla seems like the Sony A7xxx of cars, for better and for worse.
Americans and oil and belief that they need big things. Sigh. I'll look to find the book chapter you mention. Allegorically, though, it's probably all explained in the beginning of Paul Thomas Anderson's "There Will Be Blood." Those 15 minutes. The writhing breach birth of an oil man and his original stain on our American soil. All Cain and no Abel. That is the America I'm coming to know.
Oh but then computer hardware and software and upgrades and its meh-ness and stupid complexity and utter crappitude! In a car. My guess is, other than managing the battery life and battery efficacy, electric cars could/should be outrageously simple. A turn of the switch, a variable resistor, a current controller. Find me someone that can plop an electric motor into an '82 Golf GTI. (Yeah, I was one of those clueless dreamers that just wanted someone to make a digital film thingie that could slot into a 70s SLR.)
Anyway, enough from me. Add the Hyundai link or car.whatever.com so I can click through!
Posted by: xf mj | Friday, 03 July 2020 at 12:13 PM
We lease a Chevy Bolt for my wife's six-mile each way commute. The motor has about 20 moving parts compared to a gas-powered engine's 2,000. With that kind of order-of-magnitude simplicity, the difference in maintenance costs alone make me confident that in 10 years, you won't see many gas powered cars on the road. Our maintenance schedule for the three year lease? Replace the wiper fluid and buy tires when the current ones wear out. That is it. Oh, eventually a wheel bearing will act up. But probably not during our three year-lease period.
The only thing that keeps me from being a complete fan-boy is that the range of the Bolt won't get us to family in NYC on a single charge. But as soon as that problem's licked? Watch out. Oh, did I mention that we make our own electrons with solar panels in the back yard? Yeah, it's like waking up every morning with a full tank of free gas. I wouldn't want to be in the gas station business. At all. When these puppies take over, it's going to be like when gas powered autos took off about 110 years ago. Suddenly, there were no horse drawn carriages in NYC and buggy whip makers were on the wrong side of history for the first time since chariots ruled the Steppe.
I am kind of interested to see whether Elon Musk can keep his mouth shut long enough to join Henry Ford in the pantheon of American entrepreneurs. But the first cracks in the gas dam are there and hoo-boy.
Posted by: Benjamin Marks | Friday, 03 July 2020 at 02:26 PM
Good point, Mike. If you are not charging your EV with solar, you may be creating a worse environmental impact than driving a gas powered car.
If you live in much of the US, your EV is being charged by a power plant burning coal or at best natural gas, belching out CO2.
Even with photovoltaic solar, the environmental impact of the manufacture of solar cells in not inconsequential.
Better to drive a small car like your Acura or my Honda CR-V and simply drive less. But as we know, people, Americans especially, love their gas-guzzlers!
Posted by: JimH | Friday, 03 July 2020 at 04:40 PM
My guess about resistance to Tesla is that is comes from (a) the incessant proselytization of many of its owners and (b) the often horrible online behavior of the current CEO. But no matter how irritating Musk is and no matter how many reports of how shoddy some of the body work is on their new cars, it’s hard to deny that they are true innovators that are pushing the old guard kicking and screaming into the future. It’s hard to imagine we would have the choices today - and in the next 10 years - were it not for Tesla.
Posted by: emptyspaces | Saturday, 04 July 2020 at 07:19 AM
Used EV batteries aren't thrown away, buried or ground up into some toxic pulp. They may have lost enough of their storage capacity that they no longer perform up to original spec, but they still can charge and release energy. So they're repurposed as stationary power banks, where the weight-to-capacity equation isn't so demanding. What happens at the end of those reuses, I can't say. I do want to minimize my consumption of battery materials and creation of waste, which is one reason I'll stick with the hybrid options and their smaller batteries.
Posted by: John McMillin | Saturday, 04 July 2020 at 01:28 PM
The biggest problem with Tesla at the moment seems to be Elon Musk.
Posted by: Earl Dunbar | Saturday, 04 July 2020 at 08:55 PM
And the problem with companies with their value dominated by a volatile share price driven by speculation is......
LOL
cheers
Arg
Posted by: Arg | Sunday, 05 July 2020 at 09:40 AM