Random Thoughts – Randosity!

Elon Musk: Brilliant or Snake Oil salesman?

Posted in business, california by commorancy on September 26, 2015

I’ve read a number of comments that people consider Elon Musk and his Tesla empire as brilliance at work. But, is this really brilliance at work? Let’s explore.

Brilliance is in the eye of the beholder

Oh, Elon Musk is definitely a brilliant man, no doubt. But not for the reasons most people think. Like many entrepreneurs who head to Silicon Valley to set up an empire, Elon is yet another in a long line of them.

Most people think he’s brilliant because of his Tesla electric cars. I would be the first to consider him brilliant with electric cars had he been the first to come up with the idea or a significantly better battery technology. Unfortunately, he missed the invention boat by just slightly less than 200 years. Also, no substantial new battery technologies have emerged from Tesla. Most certainly, he’s taken this nearly 200 year old idea and capitalized on it and modernized it. Unfortunately, his push to drive mainstream electric vehicle infrastructure has been a snail’s pace journey. Though, it is farther along in part due to Tesla.

So then, where is his brilliance?

Salesman Extraordinaire

Like many people before him and many more to come, he has capitalized on the phrase ‘There’s a sucker born every minute’. This is his brilliance. This is what makes his name in the world of automobiles.

I don’t know of many people who could have actually put a distortion field around a vehicle with a top distance of approximately 250 miles and suggest charging ~$100,000 (or more) for it.

What exactly is a car designed to do?

A car is designed to take you from point A to point B offering reasonably long distance before needing to refuel. That’s a car’s primary goal. The second goal is to be able to find fuel for the vehicle readily and fill it rapidly so you can continue performing your car’s primary goal ad infinitum. We have this infrastructure in place for gas engine vehicles already. Attempting to bring cars to market without building this infrastructure first is a problem.

Yet, Elon hasn’t even really solved the first goal. While 250 miles is respectable for a commuter vehicle, it’s not so great for cross country traveling. The second goal has not at all been solved by Elon; though, it’s not for lack of trying. For someone like Elon, that has to be extremely frustrating especially considering that in order to sell boatloads of vehicles to the masses you need goals 1 and 2 solved. What makes this even harder is when consumers can go buy a gas or hybrid vehicle and get much better distance and similar amenities for far less money.

Note, I do acknowledge that there are car buyers who buy cars to drive for pleasure and recreation. This driver profile is significantly different than those who drive for transportation. However, most people in the US buy vehicles for transportation, not recreation.

So, the car makes the distance, then what?

For electric vehicles, let’s keep in mind that this part is all hypothetical. Electric infrastructure is not yet close to being satisfied. However, what’s left after the goals are satisfied is car amenities. Oh, the Tesla cars are most definitely chock full of amenities, like a 17″ touch screen display, lots of cool looking LEDs and a bunch of pick-up when you mash the accelerator. Though, pretty much any electric vehicle will offer lots of torque just because of the drive train of electric motors.

It’s gets worse still. While you’re driving that Tesla around, you quickly realize you’re passing gas station after gas station. You might pridefully think, “Wow, I never have to use another one of those again”. Instead, the thought you should be thinking is, “What happens if I run out of power?” When you do run out of power, that fleeting and mildly prideful thought quickly turns to sheer terror when you realize that you are stranded. It’s not just any old version of stranded either. You’re now stranded and you need a tow truck. In fact, you’ll pretty much wish you could push your $100k Tesla over to that gas station, fill it up and be back on the road in 5 minutes. Nope. Expect your Tesla to be towed a very long distance to the next charging station. A charging station where you’ll be stuck for the next several hours. If you want a full charge, that could be 4-6 hours. Of course, if you’re close to home, you might get away with 30 minutes or an hour to get just enough charge to get home. I don’t know about you, but I don’t relish the thought of sitting in my car for several hours waiting for the battery to charge up.

Don’t expect AAA to carry around a portable generator to ‘fill up’ your Tesla. That’s not gonna happen. Though, AAA might be willing to drag your car to the next charging station. Although, that might be a lot farther distance than you expect. Depending on your AAA plan, it might or might not cover the towing distance. So, you should definitely opt for the longest distance roadside assistance plans that Tesla offers, especially if you plan on traveling.

Let’s not even discuss the shame of riding shotgun in that tow truck with your Tesla dragging behind you. For those of us continuing on our journeys in our gas or hybrid vehicle watching that Tesla in tow, be thankful you are still using the existing infrastructure that’s available.

Where is that infrastructure? (aka. the Apple syndrome)

While it’s easy to find gas stations, it can be almost impossible to find workable charging stations.

Like Apple, Elon is heavily trusting that infrastructure can be built timely. Elon is relying on the same idea as Apple. When Apple introduces a new technology that no one else is using, Apple hopes other manufacturers will quickly adopt and use it within 1-2 years. Sometimes that works, sometimes it doesn’t. Though, technology transitions every 12 months in computers. So, it’s feasible that manufacturers could transition to include that new technology reasonably quickly.

For Elon, relying on this concept is a bad idea. Fuel station infrastructure is no where near this nimble. It might take 10-20 years before a vision of charging stations all across the country is realized. Let’s understand why. The Tesla cars (and many other electric vehicles) require 240v to charge in any reasonable time frame (4-6 hours). To set up a charging station requires digging up the pavement, running cabling, installing charging stations and tapping into the mains (which also, of course, requires power usage metering and approvals by the local power company). It probably even requires building permits by the city and county. It may even by subject to zoning or approvals by the county or city.

Here’s where Elon’s vision (and brilliance) fails. Yes, I know that he’s been desperately trying to build infrastructure to support his business model, but that’s been an extremely tough row to hoe. Trying to get the tried and true gasoline industry to do anything around or for electric vehicles is like trying to ask McDonald’s to advertise for Burger King. Not gonna happen. I’ve yet to drive into a single gas station and find a charging station. Yet, it makes perfect sense to marry these two refill stations if for nothing other than standardization. People would naturally expect to find fuel of all types, including electric charging stations at the corner ‘gas’ station. But, nope. These charging stations are, instead, popping up on shopping center parking lots and on corporate business parking lots.

This means you either need a map to find them or you just have to already know where they are. Worse, it means leaving your expensive Tesla sitting in an empty parking lot where it can be broken into or, worse, stolen.

Having Elon’s company take that fight to Washington is not going to be much more successful either. The government has no incentive to help Elon realize a vision of electric vehicle infrastructure. Why? Because electric vehicles are no more clean than gas vehicles. Instead of exhaust coming out of that catalytic convertor tailpipe attached to your vehicle, it’s now coming out of stacks of coal or natural gas power plants that have no catalytic converter. Electric vehicles just push those emissions somewhere else. This short-sightedness is what will ultimately doom the electric vehicle supply chain. Of course, that’s a problem that isn’t of much concern to Elon. His concern is making sure people continue to buy his expensive short distance cars. After all, $100k for a vehicle is not exactly chump change.

Snake Oil

Back in the day, salesmen would ride into town attempting to sell a concoction of ingredients that would “fix your ailments”. While those days are mostly long past, with the exception of ‘As Seen On TV infomercials’, Elon’s Teslas are at once a bit cool and a bit snake oil. Selling his $100k vehicles with the idea that you can drive long distances is almost certainly a form of snake oil. He’s more than happy to go right ahead and pull that wool right over your eyes in hopes you forget all about those pesky infrastructure problems while traveling.

Unfortunately, you’ll learn the hard way when your car runs out of power in the middle of an interstate or worse, in some rural back road with no cell service. Good luck in finding a power charger in the middle of nowhere on someone’s farm. Thinking about visiting Burning Man in your new Tesla? You might want to think again or you should consider dragging a diesel power generator along, because you’re not going to find any access to a power grid in the middle of the Nevada desert (or in any place close to Burning Man). Though, if your car does run out of power at Burning Man, you might find some kind person willing to let you charge your vehicle off their generator, for a fee. Or, you might not.

What about Fuel Cell vehicles?

Fuel cells are a great concept. Unfortunately, they have several significant failings including fuel and the infrastructure to obtain that fuel (same problem as electric vehicles). Fuel cells require hydrogen. Not only is it next to impossible to find hydrogen fuel anywhere, it’s expensive. Why? Like electricity creation, the extraction of hydrogen requires burning fossil fuels. Perhaps using even more than in electricity creation.

For all of the same reasons as listed above for electric infrastructure, hydrogen fuel will suffer the same fate. On top of that, fuel cells are heavy. Placing this entire battery infrastructure in a vehicle forces the vehicle to weigh a lot more than a gas or electric powered vehicle. The heavy weight limits maximum speed, limits how much you can carry and makes the vehicle more dangerous in a wreck (both from weight and from the hydrogen perspective… think of the fiery Hindenburg). Wrecking a fuel cell vehicle could lead to a rapid and intense fire that quickly consumes the entire vehicle.

At this juncture in our transition towards alternative fuel vehicles, those vehicles that make the most sense offer gas powered generators to recharge along the way. These vehicles make the most logistical sense for anyone considering cross-country travel. At least with a gas powered generator, with a little gas from AAA, you can get back on your way in a few minutes. With electric only, expect your car to be towed. Let’s not even discuss AAA and fuel cells.

Salesman of the Decade

Suffice it to say that Elon’s claim to fame should be as a salesman. A very good salesman at that. How many other salesmen could possibly build a car that has no infrastructure, offer a 250 mile maximum distance and still rake in over $100k for a car? Not many.

I’m not saying that the Tesla vehicles aren’t well made. In fact, it seems that they are very well made. It’s not the quality of the vehicle that matters here. What matters is the ultimate convenience to use the vehicle. If the primary two goals are not being met, then it is very difficult to justify buying this car. For example, many apartment complexes offer no charging stations at all and have no intention of installing any. This means that if you want to own an electric vehicle and you live in apartment, you’re forced to charge it in some parking lot somewhere away from where you live. This also means you need transportation to and from your car. If your complex has garages, you might be able to get away with charging with 110v, but that might take two days to fully charge. Again, not feasible.

Elon’s task should have been infrastructure first, then cars. Instead, he chose the opposite path. Build the cars, sell them and hope the infrastructure follows. So far, that’s been more of a pipe dream than reality. Yes, more and more charging stations are appearing, but at no where near the rate it should be to fully support an electric vehicle future. But, one thing is perfectly clear, Elon epitomizes the perfect salesman and should probably be named Salesman of the Decade.

Power Grid

Finally, it’s definitely wise to discuss the aging power grid. As more and more vehicles transition to sucking their power from the grid, that means more load on the grid. We’re talking 240v loads. Just how many of these cars can the local grid actually support? We might need to talk to the owl. Hopefully, it’s more than 3. Eventually, the grid infrastructure may become overloaded and not be capable of handling that load. I’d expect to see a lot of grid growing pains as electric vehicles become more commonplace. As gas cars become replaced by electrics, that’s ever more load on the grid. We do not yet know the ramifications of or the peak of that load. Though, one thing is certain. When we do find that peak on the grid, we’ll start seeing blackouts, burnouts and exploding transformers until the power company can get it back under control. Power companies are almost never proactive in adding capacity. Capacity costs money and until that capacity is reached, it is not deemed a problem.

There is a lot of old infrastructure out there built long ago that handles the grid. Yet, putting more and more heavy device users onto the grid, such as a Tesla, could mean failing grids. Failing grids from which the power companies are not willing to touch until they’re forced to. Old gear is almost never replaced until it fails. I’d expect power companies to remain complacent until this whole issue comes riding back to bite them in the ass. And, bite them hard it will.

These are all things that Elon is not considering when he is selling his vehicles on the market. He just wants to sell vehicles, not worry about whether the grid can support the number of vehicles he wants to sell this year or whether there’s enough chargers around the country to support cross country travel. Yes, he puts up the pretense that he’s looking into the battery swap program, but what is the status of that program? I’d also like to know how Tesla plans to personally handle stranded motorists when one of their cars runs out of power.

There are far too many questions unanswered here to really call Elon a brilliant visionary. Instead, I’ll stick to the term salesman extraordinaire. Like most salesman, it’s about making the sale. Not about actually delivering on the promises you made to the customer during the sales process. In answer to the question whether he’s selling snake oil or selling brilliance, I’ll end by saying he’s a little of both, but only as far as sales.

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